Full Press Release Details
| Alvotech | ||
| Unaudited Condensed Consolidated Interim Financial Statements as of 30 June 2023 and for the six months ended 30 June 2023 and 30 June 2022 |
| Table of Contents | ||||
| Endorsement by the Board of Directors | 2-6 | |||
| Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income or Loss | 7 | |||
| Unaudited Condensed Consolidated Interim Statements of Financial Position | 8-9 | |||
| Unaudited Condensed Consolidated Interim Statements of Cash Flows | 10-11 | |||
| Unaudited Condensed Consolidated Interim Statements of Changes in Equity | 12 | |||
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements | 13-33 |
Endorsement by the Board of Directors
Unless otherwise indicated or the context otherwise requires, all
references to "Alvotech," the "Company," the "Group," "we," "our,"
"us" or similar terms refer to Alvotech and its consolidated subsidiaries.
Alvotech is a highly integrated biotech company
focused solely on the development and manufacture of biosimilar medicines for patients worldwide. Our purpose is to improve the
health and quality of life of patients around the world by improving access to proven treatments for various diseases. Since our
inception, we have built our company with key characteristics we believe will help us capture the substantial global market opportunity
in biosimilars: a leadership team that has brought numerous successful biologics and biosimilars to market around the world; a
purpose-built biosimilars research and development and manufacturing platform; top commercial partnerships in global markets; and a diverse, expanding
pipeline addressing many of the biggest disease areas and health challenges globally. Alvotech is a company committed to constant
innovation: we focus our platform, people, and partnerships on finding new ways to drive access to more affordable biologic medicines.
Alvotech, which was founded in 2013, is led by specialists in biopharmaceutical product creation from around the world that bring
extensive combined knowledge and expertise to its mission.
Alvotech currently has eleven product candidates in its pipeline
for serious diseases with unmet patients and market need. Product candidates in our pipeline address reference products treating
autoimmune, eye, and bone disorders, as well as cancer.
The Unaudited Condensed Consolidated Interim Financial Statements for the
six-month period ended 30 June 2023 comprise the financial statements of Alvotech and its subsidiaries (together "the Group"
The Unaudited Condensed Consolidated Interim
Financial Statements are prepared in accordance with IAS 34 Interim financial reporting' and should be read in conjunction with
the Group's Consolidated Financial Statements as at and for the year ended 31 December 2022.
Financial results for the six months ended
As of 30 June 2023, the Company had $60.5 million in cash and cash
equivalents, excluding restricted cash. In addition, the Company had borrowings of $808.6 million, including $22.5 million of current
portion of borrowings, as of 30 June 2023.
Product revenue: The Company successfully launched
the AVT02 product in Canada and select European countries during the second quarter of 2022 and increased sales volume in these
countries resulted in $3.9 million and $22.7 million of product revenue recognized during the six months ended 30 June 2022 and
License and other revenue: License and other
revenue decreased by $38.6 million, from $36.2 million for the six months ended 30 June 2022, to $(2.5) million for the six months
ended 30 June 2023. The decrease in license and other revenue was primarily driven by the recognition of $34.7 million research
and development milestone during the same period in the prior year, due to the completion of the AVT04 main clinical program. The remainder of the decrease is mainly due to the net impact of
the changes in licensing arrangements during the six months
Cost of product revenue: The Company
successfully launched AVT02 in select European countries and Canada during the six months ended 30 June 2022. As a result,
the Company recognized cost of product revenue in the amount of $17.8 million and $67.9 million during the six months ended
30 June 2022 and 2023, respectively. Cost of product revenue includes both variable and fixed manufacturing costs associated
with commercial manufacturing. 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 research and development expenses.
Endorsement by the Board of Directors
Research and development expenses: Research
and development expenses increased by $12.7 million, or 14.6%, from $86.9 million for the six months ended 30 June 2022, to $99.6
million for the six months ended 30 June 2023. The increase 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, and a $24.6 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 $21.0 million primarily related to programs which have completed clinical phase (i.e., AVT02
and AVT04 programs). In addition, upon the launch of AVT02 during the second quarter of 2022, the Company commenced recognizing
pre-commercial manufacturing activities as cost of product revenue. As a result, research and development expenses during the six
months ended 30 June 2022 included $12.3 million of costs relating to AVT02 which have since been recognized as cost of product revenue.
General and administrative expenses:
General and administrative expenses decreased by $97.2 million, or 69.9%, from $139.1 million for the six months ended 30
June 2022, to $41.9 million for the six months ended 30 June 2023. The decrease in general and administrative expenses was
primarily attributable to a $83.4 million non-cash share listing expense and $21.0 million of transaction costs recorded as
a result of the Business Combination recognized as of 30 June 2022. The Company also incurred $10.6 million of IP-related
legal expenses during the six months ended 30 June 2022,
compared to $1.3 million during the six months ended 30 June 2023. This decrease was partially offset by a $7.7 million net
increase in other general administrative expenses due to incremental costs from operating as a public company in both the
U.S. and Iceland. Lastly, the Company recognized $7.5 million of general and administrative expenses for share-based
payments, resulting from the granting of RSUs during the six months ended 30 June 2023, against $0.1 million during the six
months ended 30 June 2022.
Net Loss: Net loss was $86.9 million, or $(0.39) per share on a basic and diluted basis, for the six months ended 30
June 2023 as compared to net loss of $184.5 million, or $(1.02) on a basic and diluted basis, for the same six months of 2022.
In April 2023, Alvotech received from the FDA
a complete response letter (CRL) for the Company's BLA. 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.
On 28 June 2023, the FDA issued a CRL for
Alvotech's 2nd BLA, which contained data to support approval as a high- concentration biosimilar and additional information
to support the interchangeability designation. The CRL noted that certain deficiencies, which were conveyed following the FDA's
reinspection of the Company's Reykjavik facility that concluded in March 2023, must be satisfactorily resolved before the
application can be approved.
Alvotech's next three most advanced
product candidates, AVT06, AVT03, and AVT05, are proposed biosimilars to Eylea (aflibercept), Prolia / Xgeva
(denosumab) and Simponi / Simponi Aria (golimumab), respectively. Alvotech announced that the AVT04 filing was
accepted in the U.S. in January 2023, and in Europe in February 2023.
In March 2023, Alvotech provided Biosana 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).
On 19 May 2023, Alvotech entered into termination
agreements with STADA to terminate the license and supply agreements between Alvotech and
STADA pertaining to Alvotech's product candidates AVT03, a biosimilar candidate to Prolia / Xgeva (denosumab),
AVT05, a biosimilar candidate to Simponi and Simponi Aria (golimumab) and AVT16, a proposed biosimilar to Entyvio
(vedolizumab). Pursuant to the terms of the termination agreements, Alvotech repaid the aggregate amount of $18.9 million in July 2023 that
Alvotech had previously received from STADA under the terminated agreements.
On 22 May 2023, Alvotech entered into a master
license and supply agreement with Mercury Pharma Group Limited (trading as Advanz Pharma Holdings) ("Advanz") with
respect to the supply and commercialization in Europe of AVT05, a biosimilar candidate to Simponi and Simponi Aria (golimumab),
AVT16, a proposed biosimilar to Entyvio (vedolizumab), and three additional early-stage, undisclosed biosimilar candidates (each, a "Product Schedule").
Under the terms of the agreements with Advanz, Alvotech will develop the product candidates and provide the dossier of data, information
and know-how relating to the relevant product candidate to Advanz. Alvotech retains full ownership of all intellectual property
rights in the product candidates and the dossiers. Advanz has an exclusive right to use the dossiers to apply for, and, subject
to grant, maintain regulatory approvals for the products and to commercialize them in the European Economic Area, the United Kingdom
and Switzerland. Advanz made upfront
Endorsement by the Board of Directors