Good day and thank you for standing by. Welcome to the Alvotech Q4 2024 earnings call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during this session, you will need to press star-one-one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star-one-one again. Please be advised today’s conference is being recorded. I’d now like to hand the conference over to your first speaker today, Benedikt Stefannson, VP of Investor Relations and Global Communications. Please go ahead.

Thank you. Welcome to Alvotech’s full year results call for 2024. Yesterday evening, the company issued a press release with the full year results and an accompanying presentation that can be found on our Investor portal, investors.alvotech.com, under News and Events. We will be referring to individual slides through the presentation today. Our results announcement, presentation materials and some of our statements that we make today may include forward-looking statements. Please see our disclaimers on Slide No. 2 of the presentation. These statements do not ensure future performance and are subject to risks and uncertainties that are outlined in company filings with the Securities and Exchange Commission. These risks and uncertainties could cause actual results to differ materially from forward-looking statements that are made. With me on today’s call are Robert Wessman, Chairman and Chief Executive Officer of Alvotech; Anil Okay, Chief Commercial Officer; Joel Morales, Chief Financial Officer; and Joseph McClellan, Chief Scientific Officer. With that, I would like to turn the call over to Robert Wessman. Please turn to Slide No. 6. Robert?

Thank you Benedikt, and thanks to everyone joining our call today. Last year was a pivotal and successful year for Alvotech, but before we talk about our performance in ’24, I would like to take a moment to recognize what we have built over the last 12 years. Biologics have become best-in-class medication for patients with cancer and chronic disease. Because of the growing importance of those medications, access to low cost, high quality biologics is vital for patients and payors. The biosimilar industry is a young industry and the opportunities launching new biosimilars are therefore still enormous, and according to a recent report by IQVIA, 14 out of 62 biologics with main patents already expired have no biosimilar competition. Over the next decade, an additional 118 biologic medicines are expected to lose patient protection, and according to IQVIA, only 10% of biologics with near term patent expiry have a known biosimilar in development. Also importantly, pharma development pipelines are happily focused on biologics. Approximately 60% of the pipeline of those top 10 pharmaceutical companies globally have assets in Phase II and Phase III which are biologics. Turning to the next slide, over the past 12 years, Alvotech has invested around $2 billion into its business. Our strategic advantage in this space is the fact that Alvotech is a pure play biosimilar company with best-in-class end-to-end in-house manufacturing and the capacity to drive the company beyond 2030. Alvotech has end-to-end [indiscernible] capabilities in house and a global commercial reach to over 90 countries around the world. We have the strongest in-house developed product pipeline in the biosimilar industry based on official available data. Ten products are in advanced development and additionally 18 molecules have passed cell line development. This pipeline with a total addressable market of over US $185 billion…

Thank you Robert. Let me turn to the next slide. We will start with a commercial update on our biosimilars to Stelara and Humira. As we noted in our Q3 2024 earnings call, we had 1.3 million units in committed purchase orders from our partners in the U.S. for our biosimilar to Humira, which we delivered by end of last year with 60% of those volumes being delivered in the fourth quarter. These 1.3 million units were delivered both to our partner, Teva, and to the private label channel. As you recall, in April 2024 we announced our first private label deal for the U.S. market with Quallent, part of a subsidiary of Cigna Health. The continuing growth in 2024 and the large volumes delivered in the last quarter of the year demonstrate the capabilities and the flexibility of our manufacturing platform, resulting in a rapid scale-up of capacity and level of execution which is of enormous value to our commercial partners. The volume shipped of our biosimilar to Humira represents about 12% of total U.S. demand for Humira and Humira biosimilars. After a very slow uptake in 2023, by the end of 2024 Humira biosimilars had, according to IQVIA data, reached about 21% share of the U.S. Humira market. It should be noted that this understates the real market share of Humira biosimilars as some of the private label sales are not represented in IQVIA data, including sales of Alvotech’s private label product. We also see 2025 as being another transformational year in the market. All the major pharmaceutical benefit managers of all PBMs have now announced that they will exclude Humira from formulary. AbbVie, the manufacturer of Humira, has in fact stated publicly that the firms expect coverage for its brand to drop by 50% in 2025. We…

Thank you Anil. I would like to begin by talking about Alvotech’s capacity and capabilities. In the past, we at Alvotech have used the terms fully integrated, broad in-house capabilities, and end-to-end platform to describe our biosimilar development and manufacturing capabilities. We have emphasized these capabilities as they have been a catalyst for us to build a leading biosimilars company with global reach. Further, having built this large infrastructure as a pure play biosimilars company, it differentiates us within the biosimilars industry and thus the biotech industry at large. It has taken tremendous courage and dedication from our founders, early supporters and shareholders with over 12 years and nearly $2 billion in investment, coupled with a relentless drive by our broad team to create our successful end-to-end biosimilars development and manufacturing platform. This dedication has resulted in an astounding and truly best-in-class organization with highly capable and proven development and commercialization capabilities, a state-of-the-art manufacturing site for drug substance, drug product, and finished product, a superb quality mindset and, importantly, all under one organizational umbrella. We are not done evolving within our facility in Iceland. We are amid expanding our profusion capacity for our biosimilars to Stelara and Simponi and growing our drug product operations, device assembly and packaging capabilities. It is quite a privilege to deploy these capabilities every day, working with the best team in the business to increase patient access to vital biologics and lower the cost of healthcare around the world. Our manufacturing facility in Iceland now has the infrastructure and expanded capacity to support development and manufacture of our entire disclosed pipeline for global markets through 2030 and beyond. As we move to the portfolio, today we are excited to announce that we intend to leverage these unique capabilities to increase the number of new…

Thanks Joe. I’ll now provide a summary of our operating performance for the year ending December 31, 2024. On the following slide, you will find a summary of our adjusted operating results, where we show key non-IFRS P&L line items and metrics for the full year. For reference, IFRS reported financials and reconciliations to our adjusted results are included in our press release and the slides in the appendix of this presentation. We achieved $273 million in product revenues as we closed the year with another strong quarter of product shipments to our customers. As you heard earlier from Anil, we delivered on our U.S. purchase orders for our biosimilar to Humira and we also shipped initial prelaunch orders of our biosimilar to Stelara to our U.S. commercial partner. We are also pleased with the performance of the launch of our biosimilar to Stelara across the Europe region. Our commercial partner for Europe has been successful in securing share across multiple markets and re-orders have increased, driving higher shipments as we exited the year. Specifically in the fourth quarter of 2024, we successfully shipped over 1 million units across two distinct products to multiple markets worldwide, which is a demonstration of the skill of our manufacturing capabilities and our ability to execute at this level. We recognized product revenues of $146 million in the fourth quarter, making it our third consecutive quarter-over-quarter increase in product revenue this year. Adjusted product margins in the fourth quarter were 45%, which represents a sequential quarter increase from Q3 where we reported adjusted product margins of 37%. This was driven by increased volumes in manufacturing efficiencies, an increase in product shipments to our U.S. commercial partners, and the shipments of reorders for our biosimilar to Stelara to our European commercial partners, which is a…

Thank you. [Operator instructions] Thank you. We’ll now take our first question, it is from the line of Ash Verma from UBS. Please go ahead.

Hey, thanks for taking our questions, and congrats on all the progress. [Indiscernible] the business today. Maybe just one on Stelara - wanted to get your thoughts on where pricing is coming out to be and how you think about that, and then what gives you confidence about a potential private label deal here? We saw the innovative alternative player from getting into such a deal. Then separately, a second question just on the milestone revenues, here it would be helpful if you can help us understand the cadence of how this will shake out. It’s a pretty sizeable contribution in 2025 guide - what’s driving that, and I thought you had initially indicated that it would be a step down versus 2024? Then as you progress for 2026 and 2027, what’s the level of milestone revenue that you expect? Thanks.

Okay, thank you Ash. Anil is speaking, thanks for the questions. Let me take them from my perspective, from the commercial perspective. Starting from the milestone revenue, 2025 we have a significant portion of these milestones that have been already signed, so we have good confidence on achieving those numbers because of--based on signed contracts. As Joe and Robert mentioned, we also managed to advance further programs in our portfolio that are candidates for further business development deals, and we have very attractive and active dialogues going on, so we feel fairly confident in achieving those milestones in 2025. Going back to your Stelara pricing question, first of all, let me divide the question into two pieces, the U.S. and Europe. In the U.S., as you can appreciate, we just launched the product a month ago. Our initial experience is very positive with the uptake. We are seeing a relatively faster trend than Humira phase out, so we remain optimistic in our market position of Stelara in the U.S. I think it’s too early to really communicate the U.S. pricing yet because it’s just a very recent launch, as you can appreciate. In Europe, the good thing is that we were--day one in the market, we were the first company launching Stelara in the market. We have significant market share, we are one of the number one and number two players, depending on the market. There, we have more established pricing and we have made our 2025 AOP based on this established trend, and of course as the competition increases, we also assume certain price pressure on the portfolio for that specific product, both in the U.S. and in Europe. The last piece of your question was on the private label. We have various active discussions ongoing, and also we have a contract which is very advanced to be signed that will give us a position in one of the private label businesses in the U.S. market. Overall, we feel very confident about Stelara revenues in 2025 and beyond.

Thanks Ash, and to answer the second part of your question on milestone revenues, I think ultimately the size of milestone revenue contribution is a function of the progress that we’re making in our R&D lab in our facility, and you heard some comments from Robert and Joe in particular about how we’ve been prioritizing that and advancing the pipeline. I think with respect to the higher contribution this year than maybe we had previously communicated, I would attribute that just to the good progress that our organization has been making in prioritizing our R&D programs. With respect to phasing, as I mentioned in the prepared remarks, we are expecting a higher weighting in the second half of the year, about 75% of our milestones we’re expecting to recognize in the second half of the year, in particular in the fourth quarter. That’s really driven just by the timing of the number of milestones that we’re achieving in the fourth quarter, including we receive milestones once we get approvals from our partner, upon launches by our partner, as well as just some other, I would say development milestones that we’re also planning to achieve in that second half of the year. As I look more broadly through 2028, we mentioned--or I should say at least in the management presentation, you’ll see we’re expecting cumulatively to recognize about a billion dollars in milestone revenues between ’25 and ’28, and I think that would more or less approximate about $250 million per year between now and 2028, just given the programs that we have in place in our pipeline at this time.

Great, thank you guys.

Thank you. As a reminder, if you would like to ask a question, please press star-one-one on your keypad. To withdraw your question, you can press star-one-one again. Once again, that’s star-one-one if there are any further questions. There are no further questions coming through at this time, so I will now hand the conference back to the speakers for any closing remarks.

Okay, thank you Sara - this is Benedikt. I want to give a special thanks to all the participants on the call today as we experienced a little bit of a delay at the beginning because our vendor had to resolve some technical issues that caused this delay; but on behalf of the Alvotech team, I just want to thank you all and wish you a very good rest of the day.

Thank you. This concludes today’s conference call. Thank you for participating, and you may now disconnect.