Omalizumab biosimilar (BiosanaPharma)

Total revenues in Q1 2024 increased to $37 million compared to $16 million in the same period last year. Gross margin in Q1 2024 increased to $17 million, by $40 million compared to the same period last year. Alvotech signed new commercialization agreements for its high concentration interchangeable biosimilar to Humira® in the U.S. and for its proposed biosimilar to Prolia® and Xgeva® in the U.S. and Europe. Alvotech raises topline revenue guidance to $400-$500 million and tightens guidance for bottom line range for 2024 to $100-$150 million. Management will conduct a business update conference call and live webcast on Wednesday May 22, 2024, at 8:00 am ET (12:00 pm GMT). REYKJAVIK, Iceland, May 21, 2024 (GLOBE NEWSWIRE) -- Alvotech (NASDAQ: ALVO, or the “Company”), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, today reported unaudited financial results for the first three months of 2024 and provided a summary of recent corporate highlights. “This year is turning out to be the busiest in Alvotech’s history. We secured U.S. Food and Drug Administration (FDA) approval of AVT04, our biosimilar to Stelara® in the U.S., signed a key strategic partnership and commercialization agreement for our high concentration interchangeable biosimilar to Humira® in the U.S., under private label, as well as a new commercialization agreement in the U.S. and Europe for AVT03, our proposed biosimilar to Prolia® and Xgeva®. In addition to the U.S. private-label commercialization agreement, our partner Teva is making great progress on discussions positioning our Humira® biosimilar on formularies in the U.S.,” said Robert Wessman, Chairman and CEO of Alvotech. “Pipeline development progressed briskly as well. On top of the recently announced results from our confirmatory patient study for AVT06, our biosimilar candidate to Eyela®, we’ve now announced positive top-line results from the confirmatory patient study for AVT05, our proposed biosimilar to Simponi® and are thus on track to file marketing applications for at least three biosimilar candidates in the second half of this year. Joel Morales, Chief Financial Officer of Alvotech, added: “Based on rapid progress in commercialization and development, we raise our revenue guidance for 2024, to $400 - $500 million and tighten our guidance for EBIDTA to $100 - $150 million for the full year.” Recent Highlights Alvotech and its commercialization partner in the U.S., Teva Pharmaceuticals (“Teva”), announced that the FDA approved AVT04 (ustekinumab-aekn) for marketing in the U.S. as a biosimilar to Stelara, under the tradename Selarsdi. The biosimilar has been launched in Canada, will be launched in Japan imminently in May, and is expected to be launched in Europe in Q3 2024 and in the U.S. in February next year. Alvotech announced a U.S. strategic partnership agreement with Quallent Pharmaceuticals (“Quallent”), a subsidiary of Cigna group. Alvotech’s high-concentration interchangeable biosimilar to Humira (adalimumab) will be distributed under Quallent’s private label. As this is the first high-concentration, citrate-free biosimilar to Humira granted an interchangeability status by the FDA, Alvotech will have interchangeable exclusivity for the high-concentration presentation 40mg/0.4mL. Alvotech signed a commercial partnership agreement with Dr. Reddy’s Laboratories Ltd. (“Dr. Reddy’s”), for the commercialization of AVT03, Alvotech’s biosimilar candidate to Prolia® and Xgeva® (denosumab). The commercialization agreement includes an upfront payment to Alvotech with subsequent payments upon certain development and commercialization milestones as well as royalties on product sales. Dr. Reddy’s commercialization rights are exclusive for the U.S. and semi-exclusive for Europe. Alvotech announced positive top-line results from a confirmatory clinical study for AVT05, a proposed biosimilar to Simponi® and Simponi Aria® (golimumab). Alvotech is the first company to announce positive topline results of a clinical trial using a proposed biosimilar to Simponi and Simponi Aria and is one of only two companies known to have initiated such a patient study. Financial Results for First Three Months of 2024 Cash position and sources of liquidity: As of March 31, 2024, the Company had cash and cash equivalents of $64.8 million, excluding $25.0 million of restricted cash. In addition, the Company had borrowings of $978.1 million, including $37.6 million of current portion of borrowings, as of March 31, 2024. Product Revenue: Product revenue was $12.4 million for the three months ended March 31, 2024, compared to $15.7 million for the same three months of 2023. Revenue for the three months ended March 31, 2024, consisted of product revenue from sales of AVT02 in select European countries and Canada, launch of AVT02 in the U.S and launch of AVT04 in Canada. License and Other Revenue: License and other revenue was $24.4 million for the three months ended March 31, 2024. No license and other revenue were recognized during the first three months ended March 31, 2023. The license and other revenue of $24.4 million was primarily attributable to the recognition of a $6.5 million research and development milestone due to the approval of AVT04 in Europe and $16.8 million relative to research and development milestone due to the CTA submission for the AVT16 clinical program. Cost of product revenue: Cost of product revenue was $20.0 million for the three months ended March 31, 2024, compared to $39.1 million for the same three months of 2023, as a result of sales in the period, including the launch of AVT04 in Canada, tempered by lower production-related charges and other costs associated with FDA inspection readiness. Cost of product revenue for the period is disproportionate relative to product revenue due to the timing of new launches and elevated production-related charges, resulting in higher costs than revenues recognized for the period. The Company expects this relationship to continue normalizing with increased production from the scaling and expansion of new or recent launches. The Company estimates that the anticipated increase in sales volumes will result in a greater absorption of fixed manufacturing costs. Research and development (R&D) expenses: R&D expenses were $49.9 million for the three months ended March 31, 2024, compared to $50.9 million for the same three months of 2023. The slight decrease was primarily driven by a one-time charge of $18.5 million relating to the termination of the co-development agreement with Biosana for AVT23 recognized during the three months of 2023, and a $17.8 million increase in direct program expenses mainly from five biosimilar candidates, AVT03, AVT05, AVT06, AVT16 and AVT23 that are in clinical phase. General and administrative (G&A) expenses: G&A expenses were $15.5 million for the three months ended March 31, 2024, compared to $22.2 million for the same three months of 2023. The decrease in G&A expenses was primarily attributable to $3.7 million in lower 3rd party services, lower insurance premiums and less headcount, coupled with a $1.9 million decrease in expenses for share-based payments. Finance income: Finance income was $0.8 million for the three months ended March 31, 2024, compared to $1.2 million for the same three months of 2023. This was primarily attributable to interests received on bank accounts resulting from lower cash balances versus the same period in the prior year. Finance costs: Finance costs were $184.1 million for the three months ended March 31, 2024, compared to $207.6 million for the same three months of 2023. The decrease was primarily attributable to lower fair value of derivative liabilities from $179.1 million for the three months ended March 31, 2023, to $140.9 million for the three months ended March 31, 2024, partially offset by an increase in interest charged on additional borrowings and convertible bonds issued during 2023. Exchange rate differences: Exchange rate differences resulted in a gain of $6.5 million for the three months ended March 31, 2024, compared to a loss of $1.7 million for the same three months of 2023. The increase was primarily driven by the movements in the exchange rate of foreign currencies, predominantly Icelandic krona and euros. Income tax benefit: Income tax benefit was $6.4 million for the three months ended March 31, 2024, compared to $29.4 million for the same three months of 2023. The decrease was mainly driven by a decrease in operating losses and an unfavorable foreign currency translation effect during the three months ended March 31, 2024 due to the weakening of the Icelandic krona against the U.S. dollar. Loss for the Period: Reported net loss was $218.7 million, or ($0.89) per share on a basic and diluted basis, for the three months ended March 31, 2024, compared to a reported net loss of $276.2 million, or ($1.24) per share on a basic and diluted basis, for the same three months of 2023. As mentioned above, the net loss for the period is heavily impacted by the fair value costs associated with our derivative liabilities. Business Update Conference Call Alvotech will conduct a business update conference call and live webcast on Wednesday, May 22, 2024, at 8:00 am EDT (12:00 pm GMT). Registration for the conference call and access to the live webcast is found on https://investors.alvotech.com/events/event-details/q1-2024-earnings, where you will also be able to find a replay of the webcast, following the call for 90 days. About AVT02 (adalimumab) AVT02 is a monoclonal antibody and has been approved as a biosimilar to Humira® (adalimumab) in over 50 countries globally, including the U.S., Europe, Canada, Australia, Egypt, Saudi Arabia and South Africa. It is currently marketed in multiple European countries as HUKYNDRA and LIBMYRIS, in Canada as SIMLANDI and in Australia as ADALACIP. Dossiers are also under review in multiple countries globally. About AVT04 (ustekinumab) AVT04 is a monoclonal antibody and a biosimilar to Stelara® (ustekinumab). Ustekinumab binds to two cytokines, IL-12 and IL-23, that are involved in inflammatory and immune responses [1]. AVT04 has been launched in Canada as JAMTEKI and has received market authorization in Japan as USTEKINUMAB BS (F), in the EEA as UZPRUVO and in the U.S. as SELARSDI. Dossiers are also under review in multiple countries globally. About AVT03 (denosumab) AVT03 is a human monoclonal antibody and a biosimilar candidate to Prolia® and Xgeva® (denosumab). Denosumab targets and binds with high affinity and specificity to the RANK ligand membrane protein, preventing the RANK ligand/RANK interaction from occurring, resulting in reduced osteoclast numbers and function, thereby decreasing bone resorption and cancer-induced bone destruction [2]. AVT03 is an investigational product and has not received regulatory approval in any country. Biosimiliarity has not been established by regulatory authorities and is not claimed. About AVT05 (golimumab) AVT05 is a biosimilar candidate for Simponi® and Simponi Aria® (golimumab). Golimumab is a monoclonal antibody that inhibits tumor necrosis factor (TNF) alpha. Elevated TNF alpha levels have been implicated in several chronic inflammatory diseases such as rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis [3]. AVT05 is an investigational product and has not received regulatory approval in any country. Biosimilarity has not been established by regulatory authorities and is not claimed. About AVT06 (aflibercept) AVT06 is a recombinant fusion protein and a biosimilar candidate to Eylea® (aflibercept), which binds vascular endothelial growth factors (VEGF), inhibiting the binding and activation of VEGF receptors, neovascularization, and vascular permeability [4]. AVT06 is an investigational product and has not received regulatory approval in any country. Biosimilarity has not been established by regulatory authorities and is not claimed. Sources [1] https://www.ema.europa.eu/en/documents/product-information/uzpruvo-epar-product-information_en.pdf [2] https://www.pi.amgen.com/-/media/Project/Amgen/Repository/pi-amgen-com/Prolia/prolia_pi.pdf [3] https://www.janssenlabels.com/package-insert/product-monograph/prescribing-information/SIMPONI-pi.pdf [4] https://www.regeneron.com/downloads/eylea_fpi.pdf Use of trademarks Humira is a registered trademark of AbbVie Inc. Stelara is a registered trademark of Johnson & Johnson Inc. Prolia and Xgeva are registered trademarks of Amgen Inc. Stelara, Simponi and Simponi Aria are registered trademarks of Johnson & Johnson Inc. Elyea is a registered trademark of Regeneron Pharmaceuticals Inc. About Alvotech Alvotech is a biotech company, founded by Robert Wessman, focused solely on the development and manufacture of biosimilar medicines for patients worldwide. Alvotech seeks to be a global leader in the biosimilar space by delivering high quality, cost-effective products, and services, enabled by a fully integrated approach and broad in-house capabilities. Alvotech’s current pipeline contains eight biosimilar candidates aimed at treating autoimmune disorders, eye disorders, osteoporosis, respiratory disease, and cancer. Alvotech has formed a network of strategic commercial partnerships to provide global reach and leverage local expertise in markets that include the United States, Europe, Japan, China, and other Asian countries and large parts of South America, Africa and the Middle East. Alvotech’s commercial partners include Teva Pharmaceuticals, a US affiliate of Teva Pharmaceutical Industries Ltd. (US), STADA Arzneimittel AG (EU), Fuji Pharma Co., Ltd (Japan), Advanz Pharma (EEA, UK, Switzerland, Canada, Australia and New Zealand), Cipla/Cipla Gulf/Cipla Med Pro (Australia, New Zealand, South Africa/Africa), JAMP Pharma Corporation (Canada), Yangtze River Pharmaceutical (Group) Co., Ltd. (China), DKSH (Taiwan, Hong Kong, Cambodia, Malaysia, Singapore, Indonesia, India, Bangladesh and Pakistan), YAS Holding LLC (Middle East and North Africa), Abdi Ibrahim (Turkey), Kamada Ltd. (Israel), Mega Labs, Stein, Libbs, Tuteur and Saval (Latin America) and Lotus Pharmaceuticals Co., Ltd. (Thailand, Vietnam, Philippines, and South Korea). Each commercial partnership covers a unique set of product(s) and territories. Except as specifically set forth therein, Alvotech disclaims responsibility for the content of periodic filings, disclosures and other reports made available by its partners. For more information, please visit www.alvotech.com. None of the information on the Alvotech website shall be deemed part of this press release. Please visit our investor portal, and our website or follow us on social media on LinkedIn, Facebook, Instagram, X and YouTube. Alvotech Forward Looking Statements Certain statements in this communication may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements generally relate to future events or the future financial operating performance of Alvotech and may include, for example, Alvotech’s expectations regarding competitive advantages, business prospects and opportunities including pipeline product development, future plans and intentions, results, level of activities, performance, goals or achievements or other future events, regulatory submissions, review and interactions, the potential approval and commercial launch of its product candidates, the timing of regulatory approval, and market launches. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “aim” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Alvotech and its management, are inherently uncertain and are inherently subject to risks, variability, and contingencies, many of which are beyond Alvotech’s control. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the ability to raise substantial additional funding, which may not be available on acceptable terms or at all; (2) the ability to maintain stock exchange listing standards; (3) changes in applicable laws or regulations; (4) the possibility that Alvotech may be adversely affected by other economic, business, and/or competitive factors; (5) Alvotech’s estimates of expenses and profitability; (6) Alvotech’s ability to develop, manufacture and commercialize the products and product candidates in its pipeline; (7) actions of regulatory authorities, which may affect the initiation, timing and progress of clinical studies or future regulatory approvals or marketing authorizations; (8) the ability of Alvotech or its partners to respond to inspection findings and resolve deficiencies to the satisfaction of the regulators; (9) the ability of Alvotech or its partners to enroll and retain patients in clinical studies; (10) the ability of Alvotech or its partners to gain approval from regulators for planned clinical studies, study plans or sites; (11) the ability of Alvotech’s partners to conduct, supervise and monitor existing and potential future clinical studies, which may impact development timelines and plans; (12) Alvotech’s ability to obtain and maintain regulatory approval or authorizations of its products, including the timing or likelihood of expansion into additional markets or geographies; (13) the success of Alvotech’s current and future collaborations, joint ventures, partnerships or licensing arrangements; (14) Alvotech’s ability, and that of its commercial partners, to execute their commercialization strategy for approved products; (15) Alvotech’s ability to manufacture sufficient commercial supply of its approved products; (16) the outcome of ongoing and future litigation regarding Alvotech’s products and product candidates; (17) the impact of worsening macroeconomic conditions, including rising inflation and interest rates and general market conditions, conflicts in Ukraine, the Middle East and other global geopolitical tension, on the Company’s business, financial position, strategy and anticipated milestones; and (18) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in documents that Alvotech may from time to time file or furnish with the SEC. There may be additional risks that Alvotech does not presently know or that Alvotech currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Alvotech does not undertake any duty to update these forward-looking statements or to inform the recipient of any matters of which any of them becomes aware of which may affect any matter referred to in this communication. Alvotech disclaims any and all liability for any loss or damage (whether foreseeable or not) suffered or incurred by any person or entity as a result of anything contained or omitted from this communication and such liability is expressly disclaimed. The recipient agrees that it shall not seek to sue or otherwise hold Alvotech or any of its directors, officers, employees, affiliates, agents, advisors, or representatives liable in any respect for the provision of this communication, the information contained in this communication, or the omission of any information from this communication. ALVOTECH INVESTOR RELATIONS AND GLOBAL COMMUNICATIONS Benedikt Stefansson, Senior Director alvotech.ir@alvotech.com Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income or Loss Three months ended March 31, 2024 Three months ended March 31, 2023 USD in thousands, except for per share amounts Product revenue 12,430 15,864 License and other revenue 24,422 - Other income 42 19 Cost of product revenue (19,957) (39,095) Research and development expenses (49,868) (50,864) General and administrative expenses (15,488) (22,198) Operating loss (48,419) (96,274) Share of net loss of joint venture - (1,164) Finance income 783 1,226 Finance costs (184,063) (207,600) Exchange rate differences 6,532 (1,748) Non-operating loss (176,748) (209,286) Loss before taxes (225,167) (305,560) Income tax benefit 6,438 29,380 Loss for the period (218,729) (276,180) Other comprehensive loss Item that will be reclassified to profit or loss in subsequent periods: Exchange rate differences on translation of foreign operations (820) 648 Total comprehensive loss (219,549) (275,532) Loss per share Basic and diluted loss for the year per share (0.89) (1.24) Unaudited Condensed Consolidated Interim Statement of Financial Position USD in thousands 31 March2024 31 December2023 Non-current assets Property, plant and equipment 235,394 236,779 Right-of-use assets 127,440 119,802 Goodwill 11,779 12,058 Other intangible assets 19,370 19,076 Contract assets 10,356 10,856 Investment in joint venture 18,494 18,494 Other long-term assets 2,285 2,244 Restricted cash 25,000 26,132 Deferred tax assets 318,223 309,807 Total non-current assets 768,341 755,248 Current assets Inventories 92,236 74,433 Trade receivables 41,252 41,292 Contract assets 30,059 35,193 Other current assets 62,900 31,871 Receivables from related parties 1,038 896 Cash and cash equivalents 64,811 11,157 Total current assets 292,296 194,842 Total assets 1,060,637 950,090 Unaudited Condensed Consolidated Interim Statement of Financial Position USD in thousands 31 March2024 31 December2023 Equity Share capital 2,604 2,279 Share premium 1,726,610 1,229,690 Other reserves 38,883 42,911 Translation reserve (2,348) (1,528) Accumulated deficit (2,424,574) (2,205,845) Total equity (658,825) (932,493) Non-current liabilities Borrowings 940,593 922,134 Derivative financial liabilities 330,976 520,553 Lease liabilities 110,585 105,632 Contract liabilities 88,913 73,261 Deferred tax liability 1,610 53 Total non-current liabilities 1,472,677 1,621,633 Current liabilities Trade and other payables 50,175 80,563 Lease liabilities 11,161 9,683 Current maturities of borrowings 37,550 38,025 Liabilities to related parties 24,532 9,851 Contract liabilities 46,258 59,183 Taxes payable 1,096 925 Other current liabilities 76,013 62,720 Total current liabilities 246,785 260,950 Total liabilities 1,719,462 1,882,583 Total equity and liabilities 1,060,637 950,090 Unaudited Condensed Consolidated Interim Statements of Cash Flows USD in thousands Three months ended March 31, 2024 Three months ended March 31, 2023 Cash flows from operating activities Loss for the year (218,729) (276,180) Adjustments for non-cash items: Long-term incentive plan expense - 6,449 Depreciation and amortization 7,190 4,841 Change in allowance for receivables - 18,500 Change in inventory reserves (5,379) - Share of net loss of joint venture - 1,164 Finance income (783) (1,226) Finance costs 184,063 207,600 Share-based payments 2,828 - Exchange rate difference (6,532) 1,748 Income tax benefit (6,438) (29,380) Operating cash flow before movement in working capital (43,780) (66,484) Increase in inventories (12,424) (3,766) Increase in trade receivables 40 2,952 Increase / (decrease) in liabilities with related parties 14,539 (573) (Increase) / decrease in contract assets 5,634 895 Increase in other assets (2,959) 5,246 Increase in trade and other payables (28,927) (18,600) Increase in contract liabilities 4,176 616 (Decrease) / increase in other liabilities (7,139) (4,477) Cash used in operations (70,840) (84,191) Interest received 26 21 Interest paid (4,403) (1,845) Income tax paid (186) (116) Net cash used in operating activities (75,403) (86,131) Cash flows from investing activities Acquisition of property, plant and equipment (4,069) (11,327) Acquisition of intangible assets (543) (2,548) Restricted cash in connection with amended bond agreement 1,132 - Net cash used in investing activities (3,480) (13,875) Cash flows from financing activities Repayments of borrowings (1,629) (50,812) Repayments of principal portion of lease liabilities (2,338) (1,525) Proceeds from new borrowings - 60,421 Gross proceeds from equity offering 138,049 136,879 Fees from equity offering (5,743) (4,141) Proceeds from warrants 4,841 6,365 Net cash generated from financing activities 133,180 147,187 Decrease in cash and cash equivalents 54,297 47,181 Cash and cash equivalents at the beginning of the period 11,157 66,427 Effect of movements in exchange rates on cash held (643) 2,236 Cash and cash equivalents at the end of the period 64,811 115,844

Total Revenues in 2023 were $93.4 million, up 10% from previous year Product Revenues in 2023 were $48.7 million, compared to $24.8 million in 2022, with Q4 2023 product revenues of $18.9 million, up by 37% from the same period last year Alvotech’s Simlandi™ biosimilar to Humira® (adalimumab) was approved in the U.S. as the first high-concentration biosimilar with interchangeable status Sales of Alvotech’s Jamteki™ biosimilar to Stelara® (ustekinumab) started in Canada with launches expected in Japan in Q2 and Europe in Q3 Positive top-line results were announced from a confirmatory efficacy study for Alvotech’s proposed biosimilar to Eylea® (aflibercept) and PK studies for proposed biosimilars to Prolia®/Xgeva® (denosumab) and Simponi®/Simponi Aria® (golimumab) REYKJAVIK, Iceland, March 20, 2024 (GLOBE NEWSWIRE) -- Alvotech (NASDAQ: ALVO, or the “Company”), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, today reported financial results for full year 2023 and provided a summary of recent pipeline and corporate highlights. Management will conduct a business update conference all and live webcast on March 21, 2024 at 8:00 am ET (12:00 pm GMT). “We are pleased with the recent launch of our second product, our biosimilar to Stelara® (ustekinumab) as Jamteki™ in Canada and look forward to further expected market launches globally in Q2 and Q3 this year. U.S. FDA approval of Simlandi™, our high-concentration citrate-free biosimilar to Humira® with interchangeable status and exclusivity, was another major milestone. We remain convinced that Simlandi’s product characteristics have the potential to change the dynamics of the rapidly developing U.S. adalimumab market,” said Robert Wessman, Chairman and CEO of Alvotech. “We also met several major clinical development milestones, with positive top-line results from the confirmatory efficacy study for our proposed biosimilar to Eylea® (aflibercept) and from the pharmacokinetic studies for our biosimilar candidate to Simponi® and Simponi Aria® (golimumab) as well as our biosimilar candidate to Prolia® and Xgeva® (denosumab), further illustrating the advantage of Alvotech’s portfolio strategy and integrated biosimilars development and manufacturing platform.” Recent Highlights Pipeline Alvotech and its commercialization partner in the U.S., Teva Pharmaceuticals, announced that the U.S. Food and Drug Administration (FDA) approved AVT02 (adalimumab-ryvk) for marketing in the U.S. an interchangeable biosimilar to Humira, under the tradename Simlandi. Simlandi is the first high-concentration, citrate-free biosimilar to Humira that has been granted interchangeability status by the FDA and will qualify for interchangeable exclusivity for the 40mg/0.4ml injection. Alvotech and its respective commercialization partners announced approval of AVT04, a biosimilar to Stelara (ustekinumab) in Canada and the European Economic Area (EEA). AVT04 was launched in Canada by JAMP Pharma on March 1, 2024, under the tradename Jamteki. Launch of AVT04 in Japan is expected in May 2024 and in Europe in Q3 2024. The market entry date for the U.S. is February 21, 2025, pending FDA approval which is expected by April 16, 2024. Alvotech announced positive top-line results from a pharmacokinetic (PK) study for AVT05, a biosimilar candidate to Simponi® and Simponi Aria® (golimumab). The study, which assessed the PK, safety and tolerability of AVT05 compared to Simponi in healthy adult subjects, met its primary endpoints. In 2023, combined worldwide revenues from sales of Simponi and Simponi Aria were about $2.2 billion [1]. Alvotech announced positive top-line results from a confirmatory study for AVT06, a proposed biosimilar to Eylea® (aflibercept). The confirmatory clinical study that compared AVT06 with Eylea in patients with neovascular (wet) Age-related Macular Degeneration (AMD) met its primary endpoint, with results demonstrating therapeutic equivalence with Eylea. In 2023 cumulative global sales of Eylea were about $5.9 billion [2]. Alvotech announced positive top-line results from a PK study for AVT03, a biosimilar candidate to Prolia® and Xgeva®, which both contain denosumab. The PK study met its primary endpoints. A confirmatory efficacy study for AVT03 in patients is currently underway, as well as a PK study comparing AVT03 to Xgeva® in healthy adult subjects. In 2023 cumulative global sales of Prolia and Xgeva were approximately $6.2 billion [3]. Corporate Alvotech accepted an offer from a group of domestic and international investors for the sale of 10,127,132 of its ordinary shares for an approximate value of $166 million at a purchase price of $16.41 per share or ISK 2,250. Intended uses of the net proceeds are for general corporate purposes and working capital, to strengthen production capacity and to support expected biosimilars launches. Alvotech announced the appointment of Christina Siniscalchi as interim Chief Quality Officer. Christina has for over ten years served in senior quality positions for Alvogen and its manufacturing site in Norwich, NY, most recently as Alvogen’s Chief Quality Officer, and previously worked at Mallinckrodt Pharmaceuticals. Financial Results for Full Year 2023 Cash Position and Sources of Liquidity: As of December 31, 2023, the Company had cash and cash equivalents of $11.2 million, excluding $26.1 million of restricted cash. In addition, the Company had borrowings of $960.2 million, including $38.0 million of current portion of borrowings. Giving effect to the sale of 10,127,132 of Alvotech ordinary shares for an approximate gross value of $166 million, the cash and cash equivalents totaled approximately $172 million on a proforma basis as of December 31, 2023. Product Revenue: Product revenue was $48.7 million for the year ended December 31, 2023, compared to $24.8 million for the same period in the prior year, reflecting increased sales volume in select European countries during 2023, almost doubling the product revenue from 2022. License and Other Revenue: License and other revenue decreased by $15.5 million, which is primarily attributable to the recognition of $44.5 million research and development milestone during the same period in the prior year, due to the completion of the AVT04 main clinical program. This was partially offset by the recognition of $31.6 million research and development milestone during 2023 due to the CES completion of the AVT06 program. The remainder of the decrease is principally due to the net impact of the licensing arrangements changed during the year. Cost of product revenue: Cost of product revenue was $160.9 million for the year ended December 31, 2023, as a result of the successful launch of AVT02 in select European countries, Canada and Australia. Cost of product revenue for the period is disproportionate relative to product revenue due to the timing of new launches and elevated production-related charges, resulting in higher costs than revenues recognized for the period. The Company expects this relationship to normalize with increased production from the scaling and expansion of new or recent launches. The Company estimates that the anticipated increase in sales volumes will result in a greater absorption of fixed manufacturing costs. Prior to the recognition of cost of product revenues, costs from pre-commercial manufacturing activities were reported as R&D expenses. Research and Development (R&D) Expenses: R&D expenses were $210.8 million for the year ended December 31, 2023, compared to $180.6 million for the same period in the prior year. The increase was primarily driven by a charge of $18.5 million relating to the termination of the co-development agreement with Biosana for AVT23, and a $42.5 million increase in direct program expenses mainly from three biosimilar candidates, AVT03, AVT05 and AVT06, that entered clinical development in 2022. These increases were partially offset by a decrease of $30.6 million primarily related to programs that have completed clinical phase, and non-recurrence of pre-commercial manufacturing activities. General and Administrative (G&A) Expenses: G&A expenses were $76.6 million for the year ended December 31, 2023, compared to $186.7 million for the same period in the prior year. The decrease in G&A expenses was primarily attributable to a $83.4 million non-cash share listing expense, and $22.9 million of transaction costs recognized as a result of the Business Combination, and a $13.4 million of IP-related legal expenses incurred during the year ended December 31, 2022. This decrease was partially offset by a $3.7 million net increase in other general administrative expenses due to incremental costs from operating as a public company. Lastly, the Company recognized $10.8 million of G&A expenses for share-based payments, resulting from the granting of Restricted Share Units (RSUs) during the year ended December 31, 2023, compared to $6.5 million during the year ended December 31, 2022. Share of net loss of joint venture and impairment loss on investment in joint venture: The increase by $4.6 million in share of net loss of joint venture year over year is due to an increase in losses incurred by the Joint Venture during the year ended December 31, 2023, as compared to December 31, 2022. In 2023, an impairment of $21.5 million was recognized on the joint venture investment based on discussions between Alvotech and CCHN to buy back Alvotech's interests in the joint venture. Finance income: Finance income was $4.8 million for the year ended December 31, 2023, compared to $2.5 million for the year ended December 31, 2022. The increase is primarily driven by interest received on cash and cash equivalent held in our bank accounts. Finance costs: Finance costs amounted to $267.2 million for the year ended December 31, 2023, compared to $188.4 million for the year ended December 31, 2022. The increase is primarily related to a $49.2 million increase in interest on debt and borrowings due to the additional financing obtained since December 31, 2022, including the annualized impact of prior year financing, and a $35.4 million increase in fair value of derivative liabilities. This is partially offset by $16.0 million in charges related to the closing of the Business Combination in 2022. Exchange rate differences: Exchange rate differences resulted in a loss of $5.2 million for the year ended December 31, 2023, compared to a gain of $10.6 million for the year ended December 31, 2022. The decrease was primarily driven by the movements in the exchange rate of foreign currencies, predominantly Icelandic krona and euros. Income tax benefits: The income tax benefit increased by $61.3 million for the year ended December 31, 2023, compared to the same period for 2022. This increase was mainly driven by $34.7 million deferred tax credit corresponding to an increase in operating losses and a $26.7 million favorable foreign currency impact on the strengthening of the Icelandic krona against the U.S. dollar, increasing the U.S. dollar value of Icelandic tax loss carry-forwards that the Company expects to fully utilize against future taxable profits. Loss for the Period: Loss for the period was $551.7 million, or ($2.43) per share on a basic and diluted basis, for the year ended December 31, 2023, as compared to a loss of $513.6 million, or ($2.60) per share on a basic and diluted basis, for the same period in the prior year. Business Update and Conference Call Alvotech will conduct a business update conference call and live webcast on Thursday, March 21, 2024, at 8:00 am ET (12:00 pm GMT). A live webcast of the call will be available on Alvotech’s website in the Investors Section of the Company’s website under News and Events – Events and Presentations, where you will also be able to find a replay of the webcast, following the call for 90 days. In order to listen to the webcast please register in advance using the link on Alvotech’s Investor Relations website under News and Events – Events and Presentations. About AVT02 (adalimumab) AVT02 is a monoclonal antibody and has been approved as a biosimilar to Humira® (adalimumab) in over 50 countries globally, including the U.S., 27 member states of the European Union, Norway, Lichtenstein, Iceland, the UK, Switzerland, Canada, Australia, Egypt, Saudi Arabia and South Africa. It is currently marketed in multiple European countries as Hukyndra™ and Libmyris™, in Canada as Simlandi and in Australia as Adalacip. Dossiers are also under review in multiple countries globally. About AVT04 (ustekinumab) AVT04 is a monoclonal antibody and a biosimilar to Stelara® (ustekinumab). Ustekinumab binds to two cytokines, IL-12 and IL-23, that are involved in inflammatory and immune responses [4]. AVT04 has been launched in Canada as Jamteki and has received market authorization in Japan as Ustekinumab BS (F) and in the EEA as Uzpruvo™. Dossiers are also under review in multiple countries globally, including in the U.S. About AVT03 (denosumab) AVT03 is a human monoclonal antibody and a biosimilar candidate to Prolia® and Xgeva® (denosumab). Denosumab targets and binds with high affinity and specificity to the RANK ligand membrane protein, preventing the RANK ligand/RANK interaction from occurring, resulting in reduced osteoclast numbers and function, thereby decreasing bone resorption and cancer-induced bone destruction [5]. AVT03 is an investigational product and has not received regulatory approval in any country. Biosimiliarity has not been established by regulatory authorities and is not claimed. About AVT05 (golimumab) AVT05 is a biosimilar candidate for Simponi® and Simponi Aria® (golimumab). Golimumab is a monoclonal antibody that inhibits tumor necrosis factor alpha. Elevated TNF alpha levels have been implicated in several chronic inflammatory diseases such as rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis [6]. AVT05 is an investigational product and has not received regulatory approval in any country. Biosimilarity has not been established by regulatory authorities and is not claimed. About AVT06 (aflibercept) AVT06 is a recombinant fusion protein and a biosimilar candidate to Eylea® (aflibercept), which binds vascular endothelial growth factors (VEGF), inhibiting the binding and activation of VEGF receptors, neovascularization, and vascular permeability [7]. AVT06 is an investigational product and has not received regulatory approval in any country. Biosimilarity has not been established by regulatory authorities and is not claimed. Sources [1] Based on Johnson & Johnson’s Q4 and Full-Year 2023 Results [2] Based on Regeneron’s Fourth Quarter and Full Year 2023 Financial and Operating Results [3] Based on Amgen’s Fourth Quarter and Full Year 2023 Financial Results [4] [5] [6] [7] Use of trademarks Humira is a registered trademark of AbbVie Inc. Stelara is a registered trademark of Johnson & Johnson Inc. Prolia and Xgeva are registered trademarks of Amgen Inc. Stelara, Simponi and Simponi Aria are registered trademarks of Johnson & Johnson Inc. Elyea is a registered trademark of Regeneron Pharmaceuticals Inc. About Alvotech Alvotech is a biotech company, founded by Robert Wessman, focused solely on the development and manufacture of biosimilar medicines for patients worldwide. Alvotech seeks to be a global leader in the biosimilar space by delivering high quality, cost-effective products, and services, enabled by a fully integrated approach and broad in-house capabilities. Alvotech’s current pipeline contains eight biosimilar candidates aimed at treating autoimmune disorders, eye disorders, osteoporosis, respiratory disease, and cancer. Alvotech has formed a network of strategic commercial partnerships to provide global reach and leverage local expertise in markets that include the United States, Europe, Japan, China, and other Asian countries and large parts of South America, Africa, and the Middle East. Alvotech’s commercial partners include Teva Pharmaceuticals, a US affiliate of Teva Pharmaceutical Industries Ltd. (US), STADA Arzneimittel AG (EU), Fuji Pharma Co., Ltd (Japan), Advanz Pharma (EEA, UK, Switzerland, Canada, Australia and New Zealand), Cipla/Cipla Gulf/Cipla Med Pro (Australia, New Zealand, South Africa/Africa), JAMP Pharma Corporation (Canada), Yangtze River Pharmaceutical (Group) Co., Ltd. (China), DKSH (Taiwan, Hong Kong, Cambodia, Malaysia, Singapore, Indonesia, India, Bangladesh and Pakistan), YAS Holding LLC (Middle East and North Africa), Abdi Ibrahim (Turkey), Kamada Ltd. (Israel), Mega Labs, Stein, Libbs, Tuteur and Saval (Latin America) and Lotus Pharmaceuticals Co., Ltd. (Thailand, Vietnam, Philippines, and South Korea). Each commercial partnership covers a unique set of product(s) and territories. Except as specifically set forth therein, Alvotech disclaims responsibility for the content of periodic filings, disclosures and other reports made available by its partners. For more information, please visit None of the information on the Alvotech website shall be deemed part of this press release. Forward Looking Statements Certain statements in this communication may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements generally relate to future events or the future financial operating performance of Alvotech and may include, for example, Alvotech’s expectations regarding competitive advantages, business prospects and opportunities including pipeline product development, future plans and intentions, results, level of activities, performance, goals or achievements or other future events, regulatory submissions, review and interactions, the potential approval and commercial launch of its product candidates, the timing of regulatory approval, and market launches. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “aim” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Alvotech and its management, are inherently uncertain and are inherently subject to risks, variability, and contingencies, many of which are beyond Alvotech’s control. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the ability to raise substantial additional funding, which may not be available on acceptable terms or at all; (2) the ability to maintain stock exchange listing standards; (3) changes in applicable laws or regulations; (4) the possibility that Alvotech may be adversely affected by other economic, business, and/or competitive factors; (5) Alvotech’s estimates of expenses and profitability; (6) Alvotech’s ability to develop, manufacture and commercialize the products and product candidates in its pipeline; (7) actions of regulatory authorities, which may affect the initiation, timing and progress of clinical studies or future regulatory approvals or marketing authorizations; (8) the ability of Alvotech or its partners to respond to inspection findings and resolve deficiencies to the satisfaction of the regulators; (9) the ability of Alvotech or its partners to enroll and retain patients in clinical studies; (10) the ability of Alvotech or its partners to gain approval from regulators for planned clinical studies, study plans or sites; (11) the ability of Alvotech’s partners to conduct, supervise and monitor existing and potential future clinical studies, which may impact development timelines and plans; (12) Alvotech’s ability to obtain and maintain regulatory approval or authorizations of its products, including the timing or likelihood of expansion into additional markets or geographies; (13) the success of Alvotech’s current and future collaborations, joint ventures, partnerships or licensing arrangements; (14) Alvotech’s ability, and that of its commercial partners, to execute their commercialization strategy for approved products; (15) Alvotech’s ability to manufacture sufficient commercial supply of its approved products; (16) the outcome of ongoing and future litigation regarding Alvotech’s products and product candidates; (17) the impact of worsening macroeconomic conditions, including rising inflation and interest rates and general market conditions, conflicts in Ukraine, the Middle East and other global geopolitical tension, on the Company’s business, financial position, strategy and anticipated milestones; and (18) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in documents that Alvotech may from time to time furnish with the SEC. There may be additional risks that Alvotech does not presently know or that Alvotech currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Alvotech does not undertake any duty to update these forward-looking statements or to inform the recipient of any matters of which any of them becomes aware of which may affect any matter referred to in this communication. Alvotech disclaims any and all liability for any loss or damage (whether foreseeable or not) suffered or incurred by any person or entity as a result of anything contained or omitted from this communication and such liability is expressly disclaimed. The recipient agrees that it shall not seek to sue or otherwise hold Alvotech or any of its directors, officers, employees, affiliates, agents, advisors, or representatives liable in any respect for the provision of this communication, the information contained in this communication, or the omission of any information from this communication. ALVOTECH INVESTOR RELATIONS AND GLOBAL COMMUNICATIONS Benedikt Stefansson, Senior Director alvotech.ir@alvotech.com FOR MORE INFORMATION Please visit our investor portal, and our website or follow us on social media on LinkedIn, Facebook, Instagram, X and YouTube. Consolidated Statements of Profit or Loss and Other Comprehensive Income or Loss for the years ended 31 December 2023, 2022 and 2021 USD in thousands, except for per share amounts 2023 2022 2021 Product revenue 48,699 24,836 — License and other revenue 42,735 58,193 36,772 Other income 1,948 1,988 2,912 Cost of product revenue (160,856) (64,095) — Research and development expenses (210,827) (180,622) (191,006) General and administrative expenses (76,559) (186,742) (84,134) Operating loss (354,860) (346,442) (235,456) Share of net loss of joint venture (7,153) (2,590) (2,418) Impairment loss on investment in joint venture (21,519) — — Finance income 4,823 2,549 51,568 Finance costs (267,157) (188,419) (117,361) Exchange rate differences (5,183) 10,566 2,681 (Loss) / gain on extinguishment of financial liabilities — (27,311) 151,788 Non-operating (loss) / profit (296,189) (205,205) 86,258 Loss before taxes (651,049) (551,647) (149,198) Income tax benefit 99,318 38,067 47,694 Loss for the year (551,731) (513,580) (101,504) Other comprehensive income / (loss) Item that will be reclassified to profit or loss in subsequent periods: Exchange rate differences on translation of foreign operations (86) (6,111) (305) Total comprehensive loss (551,817) (519,691) (101,809) Loss per share Basic and diluted loss for the year per share (2.43) (2.60) (0.92) Consolidated Statement of Financial Position as of 31 December 2023 and 2022 USD in thousands Non-current assets 31 December 2023 31 December 2022 Property, plant and equipment 236,779 220,594 Right-of-use assets 119,802 47,501 Goodwill 12,058 11,643 Other intangible assets 19,076 25,652 Contract assets 10,856 3,286 Investment in joint venture 18,494 48,568 Other long-term assets 2,244 5,780 Restricted cash 26,132 25,187 Deferred tax assets 309,807 209,496 Total non-current assets 755,248 597,707 Current assets Inventories 74,433 71,470 Trade receivables 41,292 32,972 Contract assets 35,193 25,370 Other current assets 31,871 32,949 Receivables from related parties 896 1,548 Cash and cash equivalents 11,157 66,427 Total current assets 194,842 230,736 Total assets 950,090 828,443 Consolidated Statement of Financial Position as of 31 December 2023 and 2022 USD in thousands Equity 31 December 2023 31 December 2022 Share capital 2,279 2,126 Share premium 1,229,690 1,058,432 Other reserves 42,911 30,582 Translation reserve (1,528) (1,442) Accumulated deficit (2,205,845) (1,654,114) Total equity (932,493) (564,416) Non-current liabilities Borrowings 922,134 744,654 Derivative financial liabilities 520,553 380,232 Other long-term liability to related party — 7,440 Lease liabilities 105,632 35,369 Long-term incentive plan — 544 Contract liabilities 73,261 57,017 Deferred tax liability 53 309 Total non-current liabilities 1,621,633 1,225,565 Current liabilities Trade and other payables 80,563 49,188 Lease liabilities 9,683 5,163 Current maturities of borrowings 38,025 19,916 Derivative financial liabilities — — Liabilities to related parties 9,851 1,131 Contract liabilities 59,183 36,915 Taxes payable 925 934 Other current liabilities 62,720 54,047 Total current liabilities 260,950 167,294 Total liabilities 1,882,583 1,392,859 Total equity and liabilities 950,090 828,443 Consolidated Statements of Cash Flows for the years ended 31 December 2023, 2022 and 2021 USD in thousands Cash flows from operating activities 2023 2022 2021 Loss for the year (551,731) (513,580) (101,504) Adjustments for non-cash items: Gain on extinguishment of SARs liability — (4,803) — Share-listing expense — 83,411 — Long-term incentive plan expense 78 5,492 17,955 Depreciation and amortization 24,210 20,409 18,196 Impairment of property, plant and equipment — — 2,092 Impairment of other intangible assets 1,779 2,755 3,993 Change in allowance for receivables 18,500 — — Change in inventory reserves 8,341 — — Loss on disposal of property, plant and equipment 365 — — Impairment loss on investment in joint venture 21,519 — — Share of net loss of joint venture 7,153 2,590 2,418 Finance income (4,823) (2,549) (51,568) Finance costs 267,157 188,419 117,361 Loss/(Gain) on extinguishment of financial liabilities — 27,311 (151,788) Share-based payments 18,033 10,317 — Exchange rate difference 5,183 (10,566) (2,681) Income tax benefit (99,318) (38,067) (47,694) Operating cash flow before movement in working capital (283,554) (228,861) (193,220) Increase in inventories (11,304) (32,412) (29,412) Increase in trade receivables (8,320) (3,576) (28,813) Increase / (decrease) in liabilities with related parties 2,161 56 (453) (Increase) / decrease in contract assets (17,393) (9,218) 15,286 Increase in other assets (802) (17,194) (4,363) Increase in trade and other payables 31,772 16,442 14,318 Increase in contract liabilities 35,396 19,396 21,470 (Decrease) / increase in other liabilities (5,182) (21,384) 5,160 Cash used in operations (257,226) (276,751) (200,027) Interest received 3,649 568 16 Interest paid (57,254) (35,372) (28,004) Income tax paid (1,354) (834) (155) Net cash used in operating activities (312,185) (312,389) (228,170) Cash flows from investing activities Acquisition of property, plant and equipment (33,234) (37,880) (20,462) Disposal of property, plant and equipment 133 379 — Acquisition of intangible assets (13,239) (11,122) (20,171) Restricted cash in connection with amended bond agreement — (14,914) — Net cash used in investing activities (46,340) (63,537) (40,633) Cash flows from financing activities Repayments of borrowings (99,367) (34,714) (37,496) Repayments of principal portion of lease liabilities (8,269) (11,147) (7,350) Proceeds from new borrowings 278,831 193,678 113,821 Transaction cost from new borrowings (9,004) — — Gross proceeds from private placement equity offering 136,879 — — Gross private placement equity offering fee (4,141) — — Proceeds from warrants 6,390 — — Proceeds on issue of equity shares — — 185,856 Transaction costs for amended borrowing agreements — (12,102) — Gross proceeds from the PIPE Financing — 174,930 — Gross PIPE Financing fees paid — (5,562) — Proceeds from the Capital Reorganization — 9,827 — Proceeds from loans from related parties — 160,000 — Repayment of loans from related parties — (50,000) — Net cash generated from financing activities 301,319 424,910 254,831 Increase / (decrease) in cash and cash equivalents (57,206) 48,984 (13,972) Cash and cash equivalents at the beginning of the year 66,427 17,556 31,689 Effect of movements in exchange rates on cash held 1,936 (113) (161) Cash and cash equivalents at the end of the year 11,157 66,427 17,556