Q2 2024 Earnings AUGUST 16, 2024 Disclaimer This presentation ("Presentation") does not contain or constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security of Alvotech (the "Company") to any person in the United States or in any jurisdiction to whom or in which such offer or solicitation is unlawful. Any trademarks, servicemarks, trade names and copyrights of the Company and other companies contained in this Presentation are the property of their respectiv ...

Financial Performance - Product revenue for the six months ended June 30, 2024, was $65.9 million, a significant increase from $22.7 million for the same period in 2023[7]. - License and other revenue rose to $169.7 million for the six months ended June 30, 2024, compared to a loss of $2.5 million in the same period of 2023, driven by multiple R&D milestones[8]. - Operating profit for the six months ended June 30, 2024, was $43,447 thousand, a turnaround from an operating loss of $189,101 thousand in the prior year[28]. - The Group's revenue for the six months ended 30 June 2024 was $235.6 million, a significant increase from $20.3 million in the same period of 2023[53]. - Product revenue recognized in 2024 was $65.9 million, compared to $22.7 million in 2023, while license revenue surged to $68.1 million from $7.6 million[53]. - The total comprehensive loss for the six months ended June 30, 2024, was $153.4 million, reflecting the company's ongoing operational challenges[44]. Expenses and Losses - Research and development expenses decreased slightly to $97.5 million for the six months ended June 30, 2024, from $99.6 million in the same period of 2023[11]. - General and administrative expenses were reduced to $29.6 million for the six months ended June 30, 2024, down from $41.9 million in the same period of 2023[12]. - The net loss for the six months ended June 30, 2024, was $153.5 million, or $(0.61) per share, compared to a net loss of $86.6 million, or $(0.39) per share, for the same period in 2023[12]. - The company reported a loss for the period of $(153,504) thousand for the first half of 2024, compared to a loss of $(86,854) thousand in the same period of 2023[28]. - For the six months ended June 30, 2024, the company reported a net loss of $153.5 million, compared to a net loss of $86.9 million for the same period in 2023, reflecting an increase in losses of approximately 76.7%[44]. Cash and Borrowings - As of June 30, 2024, Alvotech had $10.9 million in cash and cash equivalents and borrowings of $1,055.9 million, including $999.0 million in current borrowings[7]. - The company entered into a $965 million Facility in June 2024 to improve capital costs and address upcoming debt maturities[17]. - The Group's total outstanding borrowings increased to $1,055,913 million as of June 30, 2024, compared to $960,159 million at the end of 2023, reflecting a 10% increase[83]. - Cash used in operating activities was $(126,000) thousand for the six months ended June 30, 2024, slightly improved from $(128,002) thousand in the same period of 2023[37]. - The company had cash and cash equivalents of $10.9 million as of June 30, 2024, with current assets less current liabilities amounting to ($917.3) million[44]. Assets and Equity - Total assets increased to $1,068,478 thousand as of June 30, 2024, up from $950,090 thousand at the end of 2023, reflecting a growth of approximately 12.4%[31]. - The total equity position improved to $(605,922) thousand as of June 30, 2024, compared to $(932,493) thousand at the end of 2023, indicating a reduction in accumulated deficit[34]. - The accumulated deficit reached $2,359.3 million, up from $2,205.8 million as of December 31, 2023, indicating ongoing financial challenges[44]. Share Issuance and Financing - Alvotech issued approximately 22.1 million new shares on July 1, 2024, corresponding to approximately $221.1 million from the conversion of 2022 Convertible Bonds[20]. - The company recognized a capital contribution of $144.6 million during the first half of 2024, contributing to its equity position[44]. - The Group issued approximately 22.1 million new shares from the conversion of 2022 Convertible Bonds, corresponding to an aggregate value of approximately $221.1 million[50]. Regulatory Approvals and Collaborations - Alvotech's AVT04 biosimilar to Stelara received FDA approval in April 2024, with commercialization expected to start on or after February 21, 2025[13]. - The company announced a collaboration with Dr. Reddy's Laboratories for the commercialization of AVT03, a biosimilar candidate to Prolia and Xgeva, with exclusive rights in the U.S.[45]. - The FDA also approved SIMLANDI, an interchangeable biosimilar to Humira, which had U.S. sales of nearly $12.2 billion in 2023[49]. Inventory and Costs - The Group's inventory balance increased to $96,574 million as of June 30, 2024, up from $74,433 million at the end of 2023, representing a 30% increase[77]. - The Group recognized $32.0 million in cost of inventory within cost of goods sold during H1 2024, compared to $16.5 million in H1 2023, indicating a 94% increase[76]. Financial Ratios and Tax - The effective tax rate for the six months ended 30 June 2024 was (3.5)%, compared to 36.5% in the same period of 2023, reflecting a tax charge and a tax benefit, respectively[60]. - The weighted-average interest rate of outstanding borrowings was 12.80% for H1 2024, slightly up from 12.73% for the twelve months ended 31 December 2023[82].

Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were $36.9 million, a 132% increase from $15.9 million in the prior year, driven by milestone revenues from the AVT16 program and European approval for AVT04 [29] - Product revenues in Q1 were $12.4 million, down $3.4 million from the prior year, due to resource allocation for FDA inspection readiness [29] - Gross margin improved from negative $23 million in Q1 2023 to positive $17 million in Q1 2024, an increase of $40 million [30] - Adjusted EBITDA for Q1 2024 was negative $38 million, an improvement of $27 million year-over-year [31] - The company raised its revenue guidance for 2024 to between $400 million and $500 million and tightened EBITDA guidance to $100 million to $150 million [32] Business Line Data and Key Metrics Changes - The company has received binding purchase orders for over 1 million units of its Humira biosimilar, indicating strong market commitment [9][17] - AVT04, the biosimilar to Stelara, has been launched in Canada and is set to launch in Japan and Europe, with expectations for revenue growth throughout 2024 [30][36] - The company plans to file three additional biosimilar candidates in major markets this year, including AVT03 for Prolia and Xgeva, and AVT05 for Simponi [39] Market Data and Key Metrics Changes - The partnership with Quallent, a private label unit for Cigna, allows Alvotech's Humira biosimilar to be offered at zero out-of-pocket costs, enhancing market access [7][15] - The company is positioned to compete effectively in the U.S. market for biosimilars, particularly with the interchangeability designation for its products [63] Company Strategy and Development Direction - Alvotech aims to transition from an R&D-focused company to a full-scale global commercial biologics company, with multiple product launches planned for 2024 [13] - The company is focused on expanding its portfolio and establishing itself as a preferred partner in the biosimilars market [10] - The strategy includes ongoing business development efforts to secure partnerships for future pipeline programs, including AVT33, a biosimilar candidate to KEYTRUDA [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the evolving pharmacy benefit biosimilars landscape in the U.S., which is expected to drive growth for Alvotech's products [8][16] - The company anticipates a significant increase in product revenues as commercial partners launch AVT02 and AVT04 in various markets [34] - Management highlighted the importance of achieving positive adjusted EBITDA for the first time in the company's history in Q2 2024 [34] Other Important Information - The company has established a global commercial presence through partnerships, now totaling 19 partners across over 90 markets [27] - Alvotech is exploring refinancing options for its current debt to enhance financial flexibility and support long-term growth [40] Q&A Session Summary Question: Is the guidance revision primarily due to the private label deal with Quallent? - Yes, the guidance change was driven by contracting outcomes in the U.S., particularly related to AVT02 [44] Question: Can you clarify the 1 million purchase orders for Humira biosimilar? - The 1 million units refer to pens, confirming that these are expected to be sold in 2024 [60] Question: How significant is the interchangeability designation for market share? - Interchangeability is viewed as a significant advantage, reducing conversion friction and providing exclusivity until May 2025 [63]

Q1 2024 Earnings MAY 22ND, 2024 Disclaimer This presentation (“Presentation”) does not contain or expressed or implied by such forward-looking statements. future litigation regarding the Company’s products and product to, Adjusted EBITDA and certain ratios and other metrics constitute an offer to sell, a solicitation of an offer to buy, or a These forward-looking statements are based upon estimates candidates; (17) the potential impact of the ongoing COVID-19 derived therefrom. These non-IFRS financial meas ...

Alvotech (NASDAQ:ALVO) Q4 2023 Earnings Conference Call March 21, 2024 8:00 AM ET Company Participants Benedikt Stefansson - Senior Director of Investor Relations & Global Communications Robert Wessman - Chairman & Chief Executive Officer Anil Okay - Chief Commercial Officer Joel Morales - Chief Financial Officer Ming Li - Chief Strategy Officer Conference Call Participants Balaji Prasad - Barclays Carl Byrnes - Northland Capital Markets Kirsty Ross Stewart - Citi Thibault Boutherin - Morgan Stanley Patrik ...

PART I [Key Information](index=8&type=section&id=Item%203.%20Key%20Information) The company faces significant financial, developmental, and operational risks, including a history of losses and material control weaknesses [Risk Factors](index=8&type=section&id=D.%20Risk%20factors) The company's viability is challenged by substantial debt, recurring losses, regulatory hurdles, and identified material weaknesses in financial controls - The company has a limited operating history, has incurred significant losses since its 2013 inception, and anticipates continued significant losses in the immediate future; the accumulated deficit was **$2,205.8 million** as of December 31, 2023[21](index=21&type=chunk) - Alvotech has substantial indebtedness, totaling **$960.2 million** as of December 31, 2023, which could adversely affect business operations and financial returns[35](index=35&type=chunk) - Recurring losses and the need for additional funding raise substantial doubt about the company's ability to continue as a going concern, as noted in the independent auditor's report[20](index=20&type=chunk)[29](index=29&type=chunk) - **Material weaknesses** have been identified in internal control over financial reporting, which could affect the reliability of financial statements if not remediated[20](index=20&type=chunk)[280](index=280&type=chunk) - The company is dependent on partners like Teva, STADA, and Advanz for the commercialization of its products in major markets[20](index=20&type=chunk)[130](index=130&type=chunk) [Information on the Company](index=71&type=section&id=Item%204.%20Information%20on%20the%20Company) Alvotech is a vertically integrated biotech firm specializing in biosimilar development and manufacturing through a global partnership network [History and Development of the Company](index=71&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Founded in Iceland in 2013, the company focuses on a fully integrated platform for biosimilar development and manufacturing - Alvotech hf. was founded in 2013 in Reykjavik, Iceland, to focus on developing and manufacturing biosimilars for the global market[362](index=362&type=chunk) Capital Expenditures (USD in millions) | Year | Amount | | :--- | :--- | | 2023 | $33.2 | | 2022 | $37.9 | | 2021 | $20.5 | [Business Overview](index=72&type=section&id=B.%20Business%20Overview) The company's strategy centers on its integrated platform, diverse biosimilar pipeline, and strategic commercial partnerships for global distribution - Alvotech's strategy is to leverage its integrated platform to develop high-quality biosimilars and commercialize them through a global network of partners in over 90 markets[390](index=390&type=chunk) Key Product Pipeline Status | Product | Reference Product | Status | | :--- | :--- | :--- | | **AVT02** | Humira (adalimumab) | Approved in >50 markets, including U.S. (interchangeable), EEA, UK, Canada; Launched in >20 markets | | **AVT04** | Stelara (ustekinumab) | Approved in Japan, Canada, EEA; Launched in Canada; U.S. FDA review expected by April 16, 2024 | | **AVT06** | Eylea (aflibercept) | Confirmatory clinical study showed positive topline results in Jan 2024 | | **AVT03** | Prolia/Xgeva (denosumab) | Positive top-line results from PK study announced Jan 2024; Confirmatory patient study ongoing | | **AVT05** | Simponi/Simponi Aria (golimumab) | Positive topline results from PK study announced Nov 2023; Efficacy study results expected in 2024 | | **AVT23** | Xolair (omalizumab) | In-licensed from Kashiv; Confirmatory clinical efficacy study is ongoing | - The company has established key strategic commercial partnerships for global reach, including with Teva for the U.S, STADA and Advanz for Europe, Fuji Pharma for Japan, and JAMP Pharma for Canada[390](index=390&type=chunk)[419](index=419&type=chunk)[428](index=428&type=chunk)[435](index=435&type=chunk)[437](index=437&type=chunk)[441](index=441&type=chunk) - Alvotech and AbbVie entered into settlement and license agreements in March/April 2022, resolving all IP disputes regarding AVT02 and allowing for a U.S. launch on July 1, 2023, in exchange for royalties[447](index=447&type=chunk)[449](index=449&type=chunk) [Organizational Structure](index=102&type=section&id=C.%20Organizational%20Structure) Alvotech is a Luxembourg-based parent with wholly-owned subsidiaries in key locations and a joint venture in China - The company's main operating subsidiary is Alvotech hf. in Iceland; other key subsidiaries are located in Germany, Switzerland, the UK, and the USA[549](index=549&type=chunk) - Alvotech has a 50% stake in a joint venture with CCHN in China, but is currently in discussions to sell its interest back to the partner[549](index=549&type=chunk)[446](index=446&type=chunk) [Property, Plants and Equipment](index=102&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The company owns its primary R&D and manufacturing facility in Iceland, which is undergoing a major expansion, and leases other global offices - The main manufacturing and R&D facility in Reykjavik, Iceland, is owned by the company and is being expanded to double its size to **280,000 square feet**, with completion expected in 2024[552](index=552&type=chunk) - The company leases additional facilities globally, including an R&D center in Zurich, Switzerland; cell line development and analytical sites in Jülich and Hannover, Germany; and a U.S. regulatory affairs office in Virginia[555](index=555&type=chunk)[556](index=556&type=chunk)[557](index=557&type=chunk) [Operating and Financial Review and Prospects](index=104&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Financial performance shows growing revenue but continued operating losses, with liquidity dependent on financing and partner payments [Operating Results](index=108&type=section&id=A.%20Operating%20Results) The company's net loss increased to $551.7 million in 2023, driven by higher R&D and finance costs despite nearly doubled product revenue Consolidated Results of Operations (USD in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Product revenue | 48,699 | 24,836 | — | | License and other revenue | 42,735 | 58,193 | 36,772 | | **Operating loss** | **(354,860)** | **(346,442)** | **(235,456)** | | **Loss for the year** | **(551,731)** | **(513,580)** | **(101,504)** | - Product revenue grew **96% YoY to $48.7 million** in 2023, driven by increased sales volume of AVT02 in Europe[586](index=586&type=chunk) - R&D expenses increased by **16.7% to $210.8 million** in 2023, primarily due to a contract termination charge and increased clinical development spending[591](index=591&type=chunk)[592](index=592&type=chunk) - General & Administrative expenses decreased by **59.0% to $76.6 million** in 2023, mainly due to the absence of one-time share listing expenses from 2022[593](index=593&type=chunk) - Finance costs increased by **41.8% to $267.2 million** in 2023, driven by higher interest on debt and a change in the fair value of derivative liabilities[597](index=597&type=chunk) Adjusted EBITDA Reconciliation (USD in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Loss for the year | (551,731) | (513,580) | (101,504) | | Adjustments | 260,754 | 308,402 | (79,213) | | **Adjusted EBITDA** | **(290,977)** | **(205,178)** | **(180,717)** | [Liquidity and Capital Resources](index=119&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity is strained by operating losses, with a material uncertainty regarding its ability to continue as a going concern - As of December 31, 2023, the company had cash and cash equivalents of **$11.2 million** and an accumulated deficit of **$2,205.8 million**[630](index=630&type=chunk) Cash Flow Summary (USD in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Cash used in operating activities | (312,185) | (312,389) | | Cash used in investing activities | (46,340) | (63,537) | | Cash generated from financing activities | 301,319 | 424,910 | - In February 2024, the company raised gross proceeds of approximately **$166 million** through a sale of Ordinary Shares[637](index=637&type=chunk)[656](index=656&type=chunk) - Management has determined that there is a **material uncertainty** that may cast significant doubt about the company's ability to continue as a going concern[657](index=657&type=chunk)[848](index=848&type=chunk) - Total outstanding borrowings as of December 31, 2023, amounted to **$960.2 million**, including Senior Bonds, Convertible Bonds, and loans from Alvogen[646](index=646&type=chunk) [Critical Accounting Estimates](index=123&type=section&id=E.%20Critical%20Accounting%20Estimates) Key estimates involve revenue recognition from complex licensing deals, valuation of derivatives, and assessing deferred tax assets - Revenue recognition for out-licensing contracts is critical, requiring estimation of variable consideration and allocation of the transaction price to performance obligations[663](index=663&type=chunk)[664](index=664&type=chunk)[665](index=665&type=chunk) - The valuation of derivative financial liabilities, such as warrants and conversion features, is a key estimate determined using option-pricing models[666](index=666&type=chunk) - Valuation of deferred tax assets requires significant judgment regarding the probability of future taxable profits being available for utilization[668](index=668&type=chunk)[669](index=669&type=chunk) [Directors, Senior Management and Employees](index=125&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The company is led by founder Robert Wessman, with an eight-member board and a workforce of 1,026 primarily focused on R&D and operations [Directors and Senior Management](index=125&type=section&id=A.%20Directors%20and%20senior%20management) Leadership includes founder Robert Wessman as Executive Chairman and CEO, with an eight-member board of which three are independent - Robert Wessman is the founder and serves as Executive Chairman and Chief Executive Officer[673](index=673&type=chunk) - The Board of Directors is composed of eight members; **three directors are independent** under Nasdaq standards[707](index=707&type=chunk)[680](index=680&type=chunk)[682](index=682&type=chunk)[685](index=685&type=chunk) [Compensation](index=127&type=section&id=B.%20Compensation) Executive compensation includes salary, bonuses, and equity awards, with independent directors receiving fees and restricted stock units 2023 Executive Compensation (USD in thousands) | Key employees | Salaries and benefits | Pension contribution | Other long-term benefits | | :--- | :--- | :--- | :--- | | Robert Wessman CEO | 1,491 | 26 | — | | Other Leadership Team Members | 5,020 | 346 | 9,456 | | **Total** | **6,511** | **372** | **9,456** | 2023 Director Compensation (USD in thousands) | Director | Board fees | Other long-term benefits | | :--- | :--- | :--- | | Richard Davies | 156 | 104 | | Ann Merchant | 113 | 104 | | Linda McGoldrick | 81 | 104 | | Lisa Graver | 71 | 104 | | **Total Paid** | **421** | **416** | - The company adopted the Alvotech Management Incentive Plan in 2022, authorizing the grant of shares, RSUs, and options, with an initial share reserve of **5.79% of share capital**[701](index=701&type=chunk)[702](index=702&type=chunk) [Board Practices](index=130&type=section&id=C.%20Board%20Practices) The eight-member board has five standing committees, including a fully independent Audit and Risk Committee, and oversees risk management - The board has five standing committees: Audit and Risk, Compensation, Nominating and Corporate Governance, Strategy, and Corporate Sustainability[709](index=709&type=chunk) - The Audit and Risk Committee consists of three independent directors: Dr. McGoldrick (Chair), Ms. Merchant, and Mr. Davies[710](index=710&type=chunk) [Employees](index=132&type=section&id=D.%20Employees) As of year-end 2023, the company had 1,026 employees and contractors, with 87% dedicated to R&D, quality, and technical operations Employee Headcount by Function | Function | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Manufacturing | 575 | 512 | 360 | | Administrative | 131 | 129 | 104 | | Research and development | 320 | 306 | 268 | | **Total** | **1,026** | **947** | **732** | Employee Headcount by Geography | Geography | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Iceland | 839 | 745 | 557 | | European Union | 74 | 79 | 94 | | United States | 14 | 28 | 23 | | Elsewhere | 99 | 95 | 58 | | **Total** | **1,026** | **947** | **732** | [Major Shareholders and Related Party Transactions](index=133&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) Ownership is highly concentrated with two shareholders holding over 71%, and the company engages in significant related party transactions [Major Shareholders](index=133&type=section&id=A.%20Major%20Shareholders) Ownership is highly concentrated, with Aztiq and Alvogen collectively owning approximately 71.6% of ordinary shares Beneficial Ownership of Major Shareholders (as of Feb 15, 2024) | Shareholder | Number of Shares | Percentage | | :--- | :--- | :--- | | Aztiq Pharma Partners S.à r.l. | 101,165,374 | 37.91% | | Alvogen Lux Holdings S.à r.l. | 90,005,334 | 33.73% | - The two largest shareholders, Alvogen and Aztiq, collectively own approximately **71.6% of the company's Ordinary Shares**, giving them significant influence over shareholder approvals[350](index=350&type=chunk) [Related Party Transactions](index=135&type=section&id=B.%20Related%20Party%20Transactions) The company engages in numerous transactions with related parties, including facility leases and financing arrangements, overseen by the Audit and Risk Committee - The Board has adopted a written policy for the review and approval of related person transactions, overseen by the Audit and Risk Committee[729](index=729&type=chunk) - The company has significant lease agreements with related parties for its facilities in Iceland, including a 15-year lease for its new 140,000 sq ft facility expansion[731](index=731&type=chunk) - In July 2023, an affiliate of major shareholder Aztiq acquired **$30.0 million in Tranche A convertible bonds** as part of a larger private placement[734](index=734&type=chunk) [Financial Information](index=136&type=section&id=Item%208.%20Financial%20Information) The company does not anticipate paying dividends and is not currently party to any material legal proceedings - The company does not anticipate paying any cash dividends in the foreseeable future, intending to retain all available funds to support business development and expansion[736](index=736&type=chunk) - The company is not currently a party to any legal proceedings that management believes are likely to have a material adverse effect on the business[740](index=740&type=chunk) [Additional Information](index=138&type=section&id=Item%2010.%20Additional%20Information) This section covers material contracts, tax considerations for investors, and highlights potential PFIC and CFC risks for U.S. shareholders [Material Contracts](index=138&type=section&id=C.%20Material%20Contracts) Key contracts include amended Senior Bonds with a 12% coupon and 2022 Convertible Bonds with a $10.00 per share conversion price - On November 16, 2022, the company amended and upsized its Senior Bonds, issuing $70.0 million in new bonds with a **coupon rate of 12.00% per annum**[750](index=750&type=chunk)[751](index=751&type=chunk) - In December 2022, the company issued convertible bonds maturing in December 2025, convertible into Ordinary Shares at a price of **$10.00 per share**[755](index=755&type=chunk) [Taxation](index=140&type=section&id=E.%20Taxation) This details Luxembourg and U.S. tax considerations, including significant risks for U.S. holders related to potential PFIC or CFC classification - Non-resident holders of shares are generally not liable for Luxembourg income tax on dividends or capital gains, with certain exceptions[760](index=760&type=chunk) - There is a risk that Alvotech could be treated as a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes, which would result in adverse tax consequences for U.S. Holders[354](index=354&type=chunk)[355](index=355&type=chunk)[778](index=778&type=chunk) - Because the company's corporate structure includes a U.S. subsidiary, its non-U.S. subsidiaries will be treated as **Controlled Foreign Corporations (CFCs)**, which may have tax implications for certain U.S. Holders[357](index=357&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=146&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency, interest rate, credit, and inflation risks, with currency fluctuations being most significant - The company is exposed to foreign exchange risk, with significant assets and liabilities in EUR, GBP, ISK, and CHF; a **10% fluctuation of the ISK against the USD** can have a significant impact[796](index=796&type=chunk) - Interest rate risk is primarily related to cash holdings, as the majority of the company's borrowings are at fixed interest rates[797](index=797&type=chunk) - Credit risk from trade receivables is considered low due to the high credit quality of the company's large multinational collaboration partners[798](index=798&type=chunk) PART II [Controls and Procedures](index=148&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective as of year-end 2023 due to identified material weaknesses in internal control [Disclosure Controls and Procedures](index=148&type=section&id=A.%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of December 31, 2023, due to material weaknesses - The CEO and CFO have concluded that as of December 31, 2023, the company's disclosure controls and procedures were **not effective** due to identified material weaknesses[804](index=804&type=chunk) [Management's Annual Report on Internal Control Over Financial Reporting](index=148&type=section&id=B.%20Management's%20Annual%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management concluded internal controls were not effective due to insufficient staffing, inconsistent control operation, and inadequate segregation of duties - Management concluded that internal control over financial reporting was **not effective** as of December 31, 2023[807](index=807&type=chunk) - Identified material weaknesses include: 1) insufficient number of trained professionals in internal control; 2) inconsistent operation and documentation of controls; and 3) ineffective controls over segregation of duties and IT general controls[808](index=808&type=chunk) - Remediation activities underway include hiring qualified individuals, enhancing governance, redesigning controls, and implementing a new ERP system[810](index=810&type=chunk)[811](index=811&type=chunk) [Corporate Governance and Other Matters](index=150&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) As a foreign private issuer, the company follows home country governance practices and has implemented a cybersecurity risk management program [Principal Accountant Fees and Services](index=150&type=section&id=16C.%20Principal%20Accountant%20Fees%20and%20Services) Total fees paid to the independent auditor, Deloitte ehf., were $3.34 million in 2023 and $3.29 million in 2022 Principal Accountant Fees (USD in thousands) | Fee Type | 2023 | 2022 | | :--- | :--- | :--- | | Audit Fees | 2,876 | 2,615 | | Audit-Related Fees | 365 | 656 | | Tax Fees | 97 | 20 | | **Total** | **3,339** | **3,291** | [Corporate Governance](index=151&type=section&id=16G.%20Corporate%20Governance) As a foreign private issuer, Alvotech follows Luxembourg governance practices in lieu of certain Nasdaq rules on board independence and shareholder approval - The company is a **foreign private issuer** and follows home country governance practices in lieu of certain Nasdaq rules[824](index=824&type=chunk) - Exemptions include not requiring a majority-independent board and not requiring shareholder approval for certain security issuances[824](index=824&type=chunk)[825](index=825&type=chunk) [Cybersecurity](index=152&type=section&id=16K.%20Cybersecurity) The company has a cybersecurity program overseen by the Audit and Risk Committee and did not identify any material threats in 2023 - The company's cybersecurity risk management program is designed to identify, mitigate, and manage threats, with oversight from the Audit and Risk Committee[828](index=828&type=chunk)[831](index=831&type=chunk) - A Cybersecurity and Risks Council, including the CIO and Director of Cybersecurity, is responsible for managing cyber risk exposure[831](index=831&type=chunk) - In 2023, **no identified cybersecurity threats** were deemed reasonably likely to materially affect the company's business, results of operations, or financial condition[830](index=830&type=chunk) PART III [Financial Statements](index=154&type=section&id=Item%2017.%20Financial%20Statements) The audited financial statements are presented fairly, but the auditor's report highlights substantial doubt about the company's ability to continue as a going concern - The independent auditor's report includes a "Going concern" paragraph, noting that the company's recurring losses from operations raise **substantial doubt** about its ability to continue as a going concern[848](index=848&type=chunk) Consolidated Statement of Financial Position (USD in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **950,090** | **828,443** | | **Total Liabilities** | **1,882,583** | **1,392,859** | | **Total Equity** | **(932,493)** | **(564,416)** | Consolidated Statement of Profit or Loss (USD in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total Revenue & Other Income | 93,382 | 85,017 | 39,684 | | Operating Loss | (354,860) | (346,442) | (235,456) | | **Loss for the year** | **(551,731)** | **(513,580)** | **(101,504)** |

Financial Performance - Total revenues for Alvotech in 2023 were $93.4 million, representing a 10% increase from the previous year[1] - Product revenues reached $48.7 million in 2023, nearly doubling from $24.8 million in 2022, with Q4 2023 product revenues of $18.9 million, up 37% year-over-year[1] - The company reported a loss of $551.7 million for the year, or ($2.43) per share, compared to a loss of $513.6 million, or ($2.60) per share, in the prior year[15] - Total operating loss for 2023 was $354.9 million, compared to a loss of $346.4 million in 2022[28] - Basic and diluted loss per share for 2023 was $(2.43), slightly improved from $(2.60) in 2022[28] Revenue Breakdown - License and other revenue decreased to $42.7 million in 2023 from $58.2 million in 2022[28] - Combined worldwide revenues from sales of Simponi and Simponi Aria were approximately $2.2 billion in 2023[4] Research and Development - R&D expenses increased to $210.8 million in 2023, up from $180.6 million in the previous year, driven by new clinical development costs[10] - Research and development expenses increased to $210.8 million in 2023, up from $180.6 million in 2022[28] - Positive top-line results were reported from a confirmatory efficacy study for AVT06, a proposed biosimilar to Eylea, demonstrating therapeutic equivalence[5] Asset and Equity Position - Total assets as of December 31, 2023, were $950.1 million, compared to $828.4 million in 2022[30] - Total equity decreased to $(932.5) million in 2023 from $(564.4) million in 2022[30] - Non-current liabilities rose to $1.6 billion in 2023, up from $1.2 billion in 2022[30] Cash Flow and Liquidity - Cash and cash equivalents decreased significantly to $11.2 million in 2023 from $66.4 million in 2022[30] - Operating cash flow before movement in working capital was negative at $(283,554), worsening from $(228,861) in the prior period[31] - Net cash used in operating activities was $(312,185), slightly down from $(312,389) in the previous year[31] - Cash used in operations totaled $(257,226), compared to $(276,751) in the prior period, indicating a reduction in cash outflow[31] - Cash and cash equivalents at the end of the year were $11,157, compared to $66,427 at the beginning of the year, indicating a significant decrease[34] Expenses and Costs - General and administrative expenses decreased to $76.6 million in 2023, down from $186.7 million in 2022, primarily due to a non-cash share listing expense[11] - Share-based payments increased to $18,033, up from $10,317, reflecting a growth of 74% year-over-year[31] - Finance costs rose significantly to $267,157, compared to $188,419 in the previous period, marking an increase of 42%[31] - Interest paid increased to $(57,254), up from $(35,372), representing a rise of 62%[31] Strategic Developments - Alvotech's Simlandi™ biosimilar to Humira was approved in the U.S. as the first high-concentration biosimilar with interchangeable status[1] - Sales of Jamteki™, a biosimilar to Stelara, commenced in Canada, with launches expected in Japan in Q2 2024 and Europe in Q3 2024[2] - Alvotech accepted an offer for the sale of 10,127,132 ordinary shares for approximately $166 million to strengthen production capacity and support biosimilar launches[6] Other Financial Metrics - The increase in trade and other payables was $31,772, up from $16,442, showing a growth of 93%[31] - The company experienced an impairment loss on investment in joint ventures amounting to $21,519, with no prior period loss reported[31] - The company reported an income tax benefit of $(99,318), compared to $(38,067) in the previous period, indicating a larger tax benefit[31]

Alvotech (NASDAQ:ALVO) Q3 2023 Earnings Conference Call November 29, 2023 8:00 AM ET Company Participants Benedikt Stefansson - Senior Director of IR and Global Communications Robert Wessman - Chairman and CEO Anil Okay - Chief Commercial Officer Joel Morales - CFO Conference Call Participants Mikaela Franceschina - Barclays Niall Alexander - Deutsche Bank Thibault Boutherin - Morgan Stanley Operator Welcome to Alvotech's Earnings Call for the First Nine Months of 2023. At this time, all participants are in ...

First Six Months of 2023 Results and Business Update August 31, 2023 © ©AL AVLOVTOETCEHC. HA.L ALL RLI GRHIGTHST RSE RSEESREVREVDED Disclaimer ...

Alvotech (NASDAQ:ALVO) Q2 2023 Earnings Conference Call August 31, 2023 8:00 AM ET Company Participants Benedikt Stefansson - Director of IR & Global Communications Robert Wessman - Chairman & CEO Anil Okay - Chief Commercial Officer Joel Morales - CFO Conference Call Participants Carl Byrnes - Northland Capital Markets Thibault Boutherin - Morgan Stanley Niall Alexander - Deutsche Bank Andrew Baum - Citi Operator Welcome to the Second Quarter 2023 Earnings Call for Alvotech. At this time, all participants ...