Alvotech, Iceland’s largest pharmaceutical company by revenue, is currently navigating a challenging period. The company specialises in developing and manufacturing biosimilar medicines and reported strong revenue growth for the first nine months of the year. However, it is also facing significant manufacturing challenges, which have led to a decline in its stock price. The company is one of the key leaders in the nation’s life sciences industry, alongside other notable companies like Kerecis, which also generates substantial revenue in the health products sector.
Financial Performance: Growth and Financing
Alvotech’s latest financial results reveal significant top-line growth. Alvotech announced total revenues of $420 million for the first nine months of the year, a 24% increase compared to the same period last year. This performance contributed to a book profit of $136.5 million, a stark turnaround from the $164.9 million loss reported for the same period in 2024.
However, this growth is set against a backdrop of high operational costs. The company’s research, development, and administrative expenses amounted to approximately $216 million during the same nine-month period.
To support its ongoing operations, Alvotech confirmed that it is utilising a new $100 million (approximately 12.7 billion krónur) working capital financing facility. This comes as the company reported holding $43 million in cash at the end of September, with total debts amounting to $1.1 billion. Following the results, Alvotech revised its full-year revenue forecast to between $570 and $600 million.
Manufacturing Setbacks and Market Reaction
The positive financial report was overshadowed by recent regulatory challenges and the market’s reaction. Alvotech’s stock dropped nearly 10% in initial trading after the results were published, hitting an all-time low of 634 Icelandic krónur.
This dip is an extension of a sharp decline that began earlier when the U.S. Food and Drug Administration (FDA) rejected the company’s marketing application for AVT05, a biosimilar for the arthritis drug Simponi.
The FDA’s decision was based on a 13-page inspection report from last summer, which has now been made public. The report outlined ten significant issues at the company’s Reykjavík manufacturing facility, including:
- Repeated detection of mould and filamentous fungi between January 2023 and December 2024.
- Physical deficiencies in the plant, such as “sticky floors,” puddles under tanks, and debris.
- Concerns regarding quality control processes and documentation.
The Path Forward
Alvotech’s leadership has stated that addressing the FDA’s observations is a “top priority.” CEO Róbert Wessman emphasised the company’s commitment to resolving the issues and resubmitting its application.
In a contrasting development, Alvotech noted that the UK’s regulatory agency (MHRA) did grant marketing approval for the same drug, which will be marketed as Gobivaz.
The company also highlighted new market approvals in Japan and Europe for other biosimilar candidates, indicating that while the U.S. setback is significant, its global operations continue to advance.
Financial data is taken from Keldan, and the Image is from Alvotech.com