Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alvotech (ALVO, Financial) reported record total revenues of $235.6 million for the first half of 2024, a tenfold increase compared to the same period in 2023.
- The company achieved positive EBITDA for both the second quarter ($102 million) and the first half of the year ($63.5 million).
- Alvotech (ALVO) has a substantial order book for its biosimilar to Humira in the US market, reaching approximately 1.3 million units for 2024.
- The company successfully launched its biosimilar to Stelara in Canada, Japan, and Europe, with replenishment orders already received from partners.
- Alvotech (ALVO) has a strong pipeline with multiple biosimilar applications expected to be submitted by the end of 2024, and anticipated revenues from new markets starting as early as the end of 2025.
Negative Points
- The company's revenue guidance for 2024 remains at $400 million to $500 million, indicating potential volatility in achieving higher revenue targets.
- Alvotech (ALVO) expects milestone revenue contributions to decrease in the second half of 2024, which may impact overall revenue growth.
- The company faces competition in the biosimilar market, particularly from other brands and biosimilars, which could affect market share and pricing.
- Alvotech (ALVO) has significant debt, with $1.35 billion in gross borrowings as of June 30, 2024, which could impact financial flexibility.
- The company's operating results are expected to be lumpy from one quarter to the next, indicating potential fluctuations in financial performance.
Q & A Highlights
Q: What is the outstanding potential milestone revenue that Alvotech could achieve from existing partnerships?
A: Joel Morales, Chief Financial Officer: We currently have over $1 billion of milestones yet to be collected as a result of the agreements that we have in place.
Q: What sort of progression should we look for in gross profit margin on product sales?
A: Joel Morales, Chief Financial Officer: Our Q2 product margins were almost 17%, driven by initial shipments into the US of AVT02 and resupply of ex-US partners. We expect our product margins to continue to increase quarter-over-quarter, driven by the increase in volumes and product mix, particularly in the fourth quarter.
Q: Could you elaborate on the main factors behind the success of the commercial launch of SIMLANDI in the US?
A: Anil Okay, Board Member: We are the only interchangeable high concentration, citrate-free Humira biosimilar in the US market with exclusivity until May 2025. We have a sizable firm order book and major coverage, driven by product profile, dedicated capacity, and a quality commercial partner. We expect to be one of the leaders in this market.
Q: What is the timing for the US launch of the Eylea biosimilar?
A: Anil Okay, Board Member: The timing for the US launch is to be determined, but we feel strongly that we will be there on day one. For other markets, including Europe, we expect the launch to be sometime next year.
Q: What are the expectations for product revenues and milestone revenues for the rest of 2024?
A: Joel Morales, Chief Financial Officer: We expect product revenues to overtake milestone revenues towards the end of 2024. While Q3 is expected to be another positive EBITDA quarter, most of our second half EBITDA will be achieved in the fourth quarter, mirroring our supply schedule.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
