Good day, and thank you for standing by. Welcome to the Alvotech Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only-mode. After the speaker's presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Benedikt Stefansson, Director of Investor Relations and Global Communications. Please go ahead.

Thank you. And good morning or afternoon to everyone joining this call today. Yesterday evening, the company issued a press release that can be found on our website, investors.alvotech.com, the release reports financial results for the first 9 months of 2022 and provides our business update. Additionally, presentation slides that cover our call today will be posted on our website at investors.alvotech.com. Our presentation materials and some of our statements that we make today may include forward-looking statements, including about development activities, business strategy, financial matters and the timing and impact of future events. Actual results could differ materially from those projected by those statements, which are based on management's views as of today and subject to risks and uncertainties, including those noted in our most recent Form 20-F as such discussions may be modified or updated from time to time by subsequent filings made with the Securities and Exchange Commission, and in the earnings press release we issued last night. You are cautioned not to place undue reliance on these statements and Alvotech disclaims any obligation to update them. With me on today's call are Robert Wessman, Executive Chairman and Founder of Alvotech, Anil Okay, Chief Commercial Officer; Mark Levick, Chief Executive Officer; and Joel Morales, Chief Financial Officer. With that, I would like to turn the call over to Robert Wessman.

Thank you, Benedikt, and welcome, everyone, to Alvotech call today and our second earnings update as a public company. Before I pass the presentation over to the team, I wanted to touch on the key highlights for Alvotech. Over the last decade, we have invested over $1 billion in our strategy that has focused exclusively on biosimilars. This investment has taken place during a time where the biosimilar environment has rapidly matured. We believe we are well positioned to reap the benefit of our investment and strategy in the coming years, as the health care system, both public and private grapple with a high cost of health care. I'm very pleased that our biosimilar development platform is working. We are advancing a portfolio on pipeline of eight biosimilars and biosimilar candidates. Since we established the company, we have taken one biosimilar to commercial launch in multiple markets, filed application for second biosimilar and two more biosimilar have entered in patient studies in the recent months. Our approach is global, multiproduct and requires an operational platform that can support concurrent development programs. We have all of the capabilities necessary to develop and produce biosimilars and have a dedicated team of over 900 people that are focused on our mission. Additionally, we are transforming from an R&D company into a commercial stage company. We have already launched our first biosimilar with our strategic commercial partners in a number of European markets and in Canada. We will be providing a brief update on those launches during today's presentation. As a reminder, Alvotech has business-to-business model, which allows us to focus on R&D and manufacturing and rely on the expertise, infrastructure and relationship of our partners. Our commercial partners are some of the best-known names in the industry, and all of them have demonstrated…

Thanks, Robert. We are a B2B company, as Robert noticed. And through our partners, we have recently launched our biosimilar to HUMIRA in Canada and markets across the European continent. Our first launch was earlier this year in April, for the Canadian market through our partner, JAMP Pharma Group. JAMP is a well-recognized name in the Canadian market. And together, we were one of the two companies that have launched a high concentration presentation of adalimumab for adult patients in Canada. Even the originator company at the time of our launch had not launched the high concentration form, which is broadly available in Europe and the U.S. One of the advantages of having the high concentration form is the ability to offer the ATMG [ph] strength, which can help reduce the number of loading dose injections for certain gastric indications. And today, in Canada, we are the only company whose product is offered at this trend in the local market. For the latest data we were adding roughly 200 patients per month on our HUMIRA biosimilar under brand name Simlandi in Canada. We continue to expect further market capture as the launch progresses. Besides from the natural progression of the retail launch, we expect that provinces will move forward towards pharmacy substitution, which is now the case for a majority of the provinces with notable exception of Ontario. Ontario, which has the largest population within Canada, is expected to finalize their decision on interchangeability in the very near term, and we look forward to that event. Some final words regarding JAMP Pharma Group. JAMP has made significant investments today at biosimilar commitment. We have recently expanded our partnership by adding two more biosimilar candidates through our platform, which brings the total collaboration under our agreement to seven. This is one…

Thank you, Anil. As Robert mentioned earlier, we believe we can be in a position to resolve the approval status for our proposed biosimilar to HUMIRA in time to support a successful commercial launch on July 1, 2023. We are in a somewhat unique situation in the U.S. as we have two biologics license applications for the same proposed biosimilar. The first BLA supports biosimilarity only and has received a CRL sizing the requirement for a satisfactory completion of the site inspection for our Reykjavik manufacturing facility. The application is otherwise approvable and had been deferred as a result of COVID-19 travel restrictions, which led to a delay in the on-site inspection. The second BLA has a BSUFA [ph] date at the end of December of this year and covers both biosimilarity and interchangeability. We have had positive interactions with the FDA during the mid-cycle review and tap on meetings with the FDA and of no other approvability issues at this stage outside of resolving the ongoing inspection of our manufacturing site. We have been working collaboratively with the FDA, which has now communicated a need for re-inspection to find a time that can be supportive of verifying our responses and commitments that we have submitted. The requirement for satisfactory resolution to the pre-approval inspection held in March of this year, would apply for the second BLA, which includes both interchangeability and biosimilarity. We continue to engage with the FDA to find an expedient procedural part considering the dual track applications to allow for launch of AVT02 in the U.S. We are aiming to host an inspection early in the first quarter of 2023, and hope to resolve all inspection-related issues around the end of Q1. We are awaiting confirmation from the FDA regarding inspection timing. For our next topic,…

Thanks, Mark. I'll now provide some brief highlights for the period ending September 30, 2022. As we mentioned last quarter, higher redemptions resulted in less cash contributed from the trust when we closed our transaction with OACB last June. Accordingly, we've been exploring financing options to further strengthen our liquidity position. On our last call, we mentioned that we were finalizing a second lien loan facility with existing investors. The ultimate outcome of these negotiations is the facility that we announced earlier this week, where we executed financing agreements with existing lenders and shareholders to secure $136 million of gross proceeds. We achieved this largely through the restructuring and upsizing of our existing first lien and shareholder loan facilities. Additionally, we made the strategic decision to purchase our Reykjavik manufacturing facility from our leading shareholder as peak [ph] with the issuance of a convertible note. This transaction provides us with direct ownership over the facility and eliminates future rental payments in exchange for the mortgage on the property. In connection with this acquisition, we refinanced the property, and we were able to draw cash against the equity, which is included in the gross proceeds I mentioned earlier. Giving effect to the financing now in place, our pro forma cash balance as of September 30 is $142 million. Additionally, as part of the commitments we've made to our lenders, we intend to raise up to $150 million of additional capital in the near to midterm. We are currently evaluating a variety of different capital instruments, including convertible debt, common equity and preferred equity. In terms of our operating performance, the company remains on track to meet prior financial guidance for 2022, as presented during our Analyst Day last March. We continue to expand our launch of AVT02 into more European markets…

Yeah. Thank you very much for taking my questions. I have a few. To start off on AVT02 biosimilar HUMIRA in the U.S. How is the uncertainty over the 1st of July 2023 time line impacted or otherwise contracting dynamics for HUMIRA in '23 and 2024? And can you sort of talk to us in terms of what you're doing in terms of building inventory for the U.S. launch at risk ahead of that approval point in July next year? That's the first question. The second question on AVT04, clearly a very exciting opportunity. Could you remind us of the competitive landscape and any outstanding IP with respect to launch time lines? And thirdly, AVT06, thoughts on developing a high-dose 8-milligram formulation and freedom to operate as such will be helpful to get your comments there. And then lastly, obviously, your early-stage pipeline, you haven't made disclosures, but Evaluate Pharma has you down [ph] is developing a biosimilar version of pertuzumab. So I just wondered if you could comment on whether this is an attractive target given the outside China, I'm not aware of any biosimilars in clinical development currently? Thank you.

Hi, Mark. Anil, speaking. Good to hear your voice again. So let me start addressing also contracting. Before I address the contracting, I think it's clear that our launch target dates remain unchanged as 1st of July 2023. I believe the entire market is having ongoing conversations with PBMs, which includes biosimilars and HUMIRA themselves. As I mentioned, our partner, Teva, supported by us is having continued conversations with PBMs, which provides us with confidence that we can be on the formulary provided we resolve our in-station status issue. You have to remember that a unique market formation due to the size of the overall opportunity, the different product profile that exists among biosimilar competitors, the likelihood that the PBMs will hold multiple sources including the brand. And that market really forms on July 1st, 2023. Our understanding is that based on settlement agreements contracting will occur on the launch date itself. For all of those reasons, we believe that there is sufficient time to resolve our outstanding inspection issue to have a successful launch on July 1st, 2023. Going back to 04, we are very excited with this opportunity. While we have not published when we expect to launch 04. J&J has noted in their recent public comments that they anticipate LOE in the U.S. in the second half of 2023. Presumably, this is tied to expiry of the main patent, which expires in September '23. In Europe, we expect this to be an 2024 event. As a reminder, the competitive landscape on this product is noticeably more limited than prior biosimilars. We were only the second company to announce positive top line results in a patient study. Since then, Celltrion and Formicon [ph] have noted positive results in a similar study. However, Formicon has noted that they are…

Thank you, Anil.

Thank you. [Operator Instructions] And your next question comes from the line of Andrew Baum from Citi. Please go ahead.

Thank you. A couple of questions. I think when the initial manufacturing issues occurred, you described as opening the door to acquiring an inspection with a hoping it was virtual, you know, with now evolved to physical inspection being required. Given the significant backlog that existed post-COVID, particularly in relation to international inspections, could you just share with us some of your sense of confidence and why you think you're going to have an inspection within the time lines that you gave? Has the FDA committed to the above date or it's still in the works, and this is an informed hope rather than a confirmed time line? And then second, in relation to a Praxis [ph] pricing, which gives the pharmacist within specialty pharmacy and incentive for stocking the brand. When would you be able to apply Praxis pricing? And would you - and do you think that's important within 340B pharmacies in order to provide an incentive for the pharmacist stock you can rather than the brand products? Thank you.

Thanks, Andrew, for your question. Yes. So we've been working very collaboratively with the FDA on both applications. As we mentioned in the earlier comments, we will be very re-inspected [ph] Of course, the inspection timing can have an impact, but we do feel confirmed that we can host an inspection in the early part of 2023. And we should be able to get the outstanding inspection issue to a satisfactory resolution.

On the follow-up question, Andrew, of course, Teva is our commercial partner, and they drive the commercial strategy. What I can say publicly is that Teva has a 340B strategy.

Thank you.

Thank you. We will now go to our next question. One moment, please. And your next question comes from the line of Carl Byrnes from Northland Capital Markets. Please go ahead.

Thanks for the question. I think most of my questions have been answered in the prepared comments and the follow-up questions. But looking at the guidance that you provided before, which I believe was $85 million to $155 million with product sales expected to be between 25 and 75 and the milestones between 60 and 80, given where you are right now, it looks like it might be towards the lower end of the range, unless you're expecting a bit of lumpiness in the December quarter with respect to product sales or milestone payments. Can you comment a little bit on that? Thank you.

Sure. This is Joel, and thank you for that question. That's right. I mean we provided a broad range at the beginning of the year, in particular, just because of the lumpiness that we were expecting. And as we mentioned last quarter and reiterated here, we are expecting to see an uptick both in milestone revenues, as well as product revenues in particular. We launched in Europe and in Canada, as you heard from Anil earlier on this call. So the broad range is there really to address some of the lumpiness, the inherent lumpiness that comes with just the timing of our launches in particular, this year, and as we transition into the following year. And so I believe what we've mentioned right now is that we remain on track to target that range for 2022.

Got it. Thanks so much.

Thank you. [Operator Instructions] And your next question comes from the line of Ash Verma from UBS. Please go ahead.

Hi. Thanks for taking our questions. I had two on biosimilar HUMIRA in the U.S. So the first one, just to understand the stock [ph] ratio raised in the Form 483 a little bit more clearly, do you have multiple vendors for stoppers and would you need to swap out your prior vendor? And the inventory that you have built with the previous stopper, is that something that you can still use or do you plan to write that down? That's question number one. And then second, so on the inspection time line in the best case value that you [indiscernible] the FDA does visit for an inspection in 1Q 2023, how long would it take for the FDA to turn around and give you a potential approval for that? Thanks.

Thanks, Ash, for your question. As to the stock ratio, this is an issue that we are on top of. We understand what the issues are. And we think we're very well placed to have continued to supply around this. And we've addressed all the issues that the FDA has raised with us. For the second question, we believe that with - obviously we're in close discussion with the FDA. For the second BLA, we've had those positive instructions. We do believe that with an inspection in the early part of 2023 we'll be in a position to resolve all the outstanding topics and be in a position to launch on July the 1st.

Got it. Thanks, guys.

Thank you. There are currently no further questions. I will hand the call back to Benedikt Stefansson.

Thank you, Sharon. So on behalf of the Alvotech team, I would like to thank all the participants and get to our webcast today, and we wish you a good rest of the day and look forward to speaking to you all again. Thanks.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.