Alvotech Reports Financial Results for First three Months of 2023 and Provides Business Update - Revenue for the first three months of 2023 increased to $15.9 million, compared to $0.8 million for the same period in 2022

Alvotech Reports Financial Results for First three Months of 2023

and Provides Business Update

REYKJAVIK, Iceland, May 19,

2023 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 2023 and provided a summary of recent corporate highlights.

It is with great pride that we have built a biosimilar-focused platform

that now includes five biosimilar candidates that have reached in-patient studies, including AVT02 which is already marketed. I believe that we are well positioned to participate in the promise of global

biosimilars for the long-term. And while we are a global company that has launched our first product in 17 markets around the world, we remain committed and focused to bringing AVT02, a proposed high-concentration, interchangeable biosimilar to

Humira , to patients in the United States, after regulatory approval, said Robert Wessman, Chairman and CEO of Alvotech. We continue to work collaboratively with the FDA regarding

both Biologic License Applications for AVT02 and are preparing for all possible scenarios, including resubmission of the first AVT02 BLA and hosting a possible reinspection of our manufacturing facility, which we would anticipate in 2023, if

Alvotech received from the US Food and Drug Administration (FDA) a complete response letter (CRL) for the Company s Biologics License Application (BLA) for AVT02, a high-concentration biosimilar candidate for Humira (adalimumab). The CRL noted that certain deficiencies conveyed following the FDA s recent reinspection of the company s Reykjavik facility must be satisfactorily resolved before the

application may be approved. Alvotech s second BLA for AVT02, which contains data to support

approval as a biosimilar and additional information supporting a potential interchangeability designation, has a Biosimilar User Fee Amendment (BsUFA) goal date of June 28, 2023.

Satisfactory outcome of the facility reinspection remains the key requirement for approval of both BLAs. Alvotech has requested a meeting with the FDA s Office of Pharmaceutical Manufacturing Assessment (OPMA) for clarification on the status of

any potentially outstanding deficiencies noted in the recent inspection of the company s manufacturing facility.

In May 2023, a confirmatory patient

study was initiated for AVT05, a proposed biosimilar to Simponi and Simponi Aria (golimumab). The objective of the study is to

demonstrate clinical similarity of AVT05 to Simponi in terms of efficacy, safety, immunogenicity, and pharmacokinetics in adult patients with moderate to severe rheumatoid arthritis. In 2022,

combined net revenues worldwide from sales of Simponi and Simponi Aria were nearly U.S. $2.3 billion according to quarterly

filings by the manufacturer of the reference products. Currently Alvotech is aware of only one other company that has initiated a study to support a biosimilar candidate for Simponi and

In April 2023, Alvotech continued to strengthen the organization with the

appointment of Sarah Tanksley to the Board of Directors of Alvotech hf., the operating entity for Alvotech s manufacturing site, and Sandra Casaca as the company s Chief Quality Officer, based

on-site in Iceland. With over 25 years of experience, Sandra has held senior leadership positions in quality at leading companies including Bristol-Myers Squibb, Amgen, AbbVie and Atara.

In March 2023, Alvotech provided Biosana Pharma a notice of termination for the global licensing agreement between the two companies covering the co-development of AVT23, a proposed biosimilar to Xolair (omalizumab).

In March 2023, Alvotech provided an update on the company s Corporate Sustainability Framework that included new disclosures for 2022. The company has

updated its Sustainability Portal, which provides data on the company s key environmental, social and governance indicators as well as other information related to sustainability. More information can be found at

www.alvotech.com/corporate-sustainability.

Financial Results for First Three Months of 2023

Cash position and sources of liquidity

March 31, 2023, the Company had cash and cash equivalents of $115.8 million, excluding $25.2 million of restricted cash. In addition, the Company had borrowings of $793.7 million, including $23.0 million of current portion

of borrowings, as of March 31, 2023.

Revenue, including other income, was $15.9 million for the three months ended March 31, 2023, compared to $0.8 million for the same three months

of 2022. Revenue for the three months ended March 31, 2023, consisted of product revenue from sales of AVT02 in certain European countries and Canada.

Cost of product revenue

Cost of product revenue was

$39.1 million for the three months ended March 31, 2023. These costs were primarily a result of AVT02 product revenues in certain European countries and Canada. Cost of product revenue for the quarter 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 the 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 were $50.9 million for the three months ended March 31, 2023, compared to $47.1 million for the

same three months of 2022. The increase was driven by a one-time charge of $18.5 million relating to the termination of the co-development agreement with Biosana

for AVT23, and a $10.5 million increase in direct program expenses mainly from three biosimilar candidates, AVT03 and AVT06, that entered clinical development in 2022 and AVT05 that entered clinical development in 2023. These increases were

partially offset by a decrease in spending of $13.8 million primarily related to programs for which the clinical activities were winding down. In addition, there was a reclassification of pre-commercial

manufacturing activities of $12.4 million, that were previously recognized as R&D expense, which are now being recognized as cost of product revenue, in conjunction with the Company s commercial launch of AVT02.

General and administrative (G&A) expenses

expenses were $22.2 million for the three months ended March 31, 2023, compared to $24.2 million for the same three months of 2022. The decrease in G&A expense was primarily attributable to a decrease of approximately

$7.6 million in IP-related legal expenses and $2.0 million in transaction costs, which were incurred in 2022 in preparation for the business combination with Oaktree Acquisition Corp. II. This was

partially offset by an increase of $4.4 million in services related to Alvotech s public listing in both the U.S. and Iceland and expenses associated with the company s long-term incentive plan.

Finance income was $1.2 million for

the three months ended March 31, 2023, compared to $4 thousand for the same three months of 2022. This was primarily attributable to interests received on bank accounts resulting from higher cash balances and favorable interest rate

environment versus the same period in the prior year.

Finance costs were $207.6 million for the three months ended March 31, 2023, compared to $19.9 million for the same three months of 2022. The

increase was primarily attributable to a $179 million non-cash charge associated with the change in fair value of derivative instruments during the three months ended March 31, 2023.

Exchange rate differences

Exchange rate differences

resulted in a gain of $1.7 million for the three months ended March 31, 2023, compared to a gain of $2.2 million for the same three months of 2022. The decrease was primarily driven by the impact of the exchange rate to financial

assets and liabilities denominated in Icelandic Krona and Euros, along with the strengthening of the Icelandic Krona compared to the US Dollar over the current period.

Income tax benefit was

$29.4 million for the three months ended March 31, 2023, compared to $18.2 million for the same three months of 2022. The increase was primarily driven by higher net operating losses, which Alvotech expects to fully utilize against

future taxable profits, and a foreign currency benefit of $6.3 million due to strengthening of the Icelandic Krona against the U.S. dollar, which increased the U.S. dollar value of tax loss carry-forwards expected to be utilized against future

Net loss was 276.2 million, or ($1.24) per share on a basic and diluted basis, for the three months ended March 31, 2023, as compared to net loss of

$77.1 million, or ($0.43) per share on a basic and diluted basis, for the same three months of 2022.

Business Update Conference Call

Alvotech will conduct a business update conference call and live webcast on Friday, May 19, at 8:00 am ET (12:00 noon GMT).

A live webcast of the call will be available on Alvotech s website in the Investors Section of the Company s website under

https://investors.alvotech.com 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 participate in the conference call, please register in advance using the link on Alvotech s Investor Relations website under News and Events

Events and Presentations, to obtain a local or toll-free phone number and your personal pin.

About AVT02 (adalimumab)

AVT02 is a monoclonal antibody that is being evaluated for biosimilarity and interchangeability to

Humira (adalimumab), which inhibits tumor necrosis factor (TNF). AVT02 has been approved in the EU, Norway, Iceland, Lichtenstein, the UK and Switzerland (Hukyndra ); Canada and Saudi Arabia (Simlandi ); and Australia (Ciptunec and Aralicip ). AVT02 dossiers are under review in multiple countries, including in the United States.

AVT04 is a monoclonal antibody and a biosimilar candidate to Stelara

(ustekinumab). Ustekinumab binds to two cytokines, IL-12 and IL-23, that are involved in inflammatory and immune responses. AVT04 is an investigational product and has

not received regulatory approval in any country. Biosimilarity is not claimed.

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. AVT03 is an investigational product and has not received regulatory approval in any country. Biosimiliarity 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 (TNF alpha), a

cytokine protein in the body. Elevated TNF alpha levels have been implicated in several chronic inflammatory diseases such as rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis. AVT05 is an investigational product and has not

received regulatory approval in any country. Biosimilarity is not claimed.

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. AVT06 is an investigational product and has not received regulatory approval in any country.

Biosimilarity is not claimed.

a proposed biosimilar to to Xolair (omalizumab). Omalizumab is an antibody that targets free IgE and is used to treat patients with allergic asthma, chronic spontaneous urticaria (CSU) and

nasal polyps. AVT23 is an investigational product and has not received regulatory approval in any country. Biosimilarity is not claimed.

Humira is a registered trademark of AbbVie Inc., Stelara, Simponi and Simponi Aria are registered trademarks of Janssen Biotech Inc.,

Xolair is a registered trademark of Novartis AG, Prolia and Xgeva are registered trademarks of Amgen Inc. Eylea is a registered trademark of Regeneron Pharmaceuticals, Inc.

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