Alvotech (ALVO) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Market and product strategy

• Rapid change underway with multiple product launches and filings, providing visibility into future years.

• 100% focus on biosimilars, with growing acceptance from payers in the U.S. and globally.

• Private label deals, such as with Cigna's Quallent, are becoming a key channel alongside traditional PBM partnerships.

• Order book for Humira biosimilar increased to 1.3 million doses, with material contributions from both PBM and private label channels.

• High confidence in delivering remaining 2024 revenues due to binding purchase orders and clear order cycles.

Commercial and market developments

• Cigna's $0 copay for private label Humira is driving rapid patient uptake, with 20% switching in five weeks.

• Express Scripts plans to remove branded Humira from formularies in January 2025, signaling a shift toward biosimilars.

• Expansion into other PBMs and molecules like Stelara and Simponi is actively pursued, with private label deals expected to proliferate.

• Stelara biosimilar launch in the U.S. is set for early 2025, with less competition and faster uptake anticipated compared to Humira.

• Ex-U.S. launches for Stelara are underway, with gradual but material revenue contributions.

Financial performance and outlook

• Recent refinancing extended debt maturities to 2029, reduced cost of capital, and added $140 million in cash.

• Current debt stands at $1.035 billion with $180 million in cash; no additional capital needs anticipated for the near term.

• Expectation to achieve free cash flow positivity by year-end 2024.

• Q2 product margins were just under 17%, with EBITDA margins guided at 25%-30% for 2024 and further expansion expected.

• Milestone revenues are a recurring part of the business model, with continued contributions expected into 2025 as new BLAs are filed and products launched.