Alvotech

Good day and thank you for standing by. Welcome to the Alviteg 4Q24 earnings 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. To ask a question during the session, you'll need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 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 Stefansson, VP of Investor Relations and Global Communications. Please go ahead.

Thank you. Welcome to Alvatech'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.alvatech.com, under News and Events. We will be referring to individual slides during 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 number two 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 Westman, Chairman and Chief Executive Officer of Alvatech, Anil Oke, Chief Commercial Officer, Joel Morales, Chief Financial Officer, and Joseph McClellan, Chief Scientific Officer. And with that, I would like to turn the call over to Robert Westman. Please turn to slide number six. 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 2024, 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 payers. The biosimilar industry is a young industry, and the opportunities launching new biosimilars are therefore still enormous. And according to the recent report by QVIA, 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 patent 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 heavily focused on biologics. Approximately 60% of the pipeline of those top 10 pharmaceutical companies globally have assets in phase 2 and phase 3, which are biologics. So turning to the next slide, over the past 12 years, Alvotek has invested around $2 billion into its business. Our strategic advantage in this space is the fact that Alvotek is a pure play by a similar company. with best-in-class end-to-end in-house manufacturing and the capacity to drive the company beyond 2030. Alvatech has end-to-end R&D 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. 10 products are in advanced development, and additionally, 18 molecules have passed cell line development. This pipeline, with a total addressable market of over $185 billion, will define the company's success in the years to come. With two products on the market, AlvoTech is, to some extent, still early in its journey. Yet, because of this global reach, we have already executed over 50 unique launches across our first two programs. With currently three pending submissions in major markets, we are planning several launches starting no later than fourth quarter of this year. For AlvoTech, 2024 was an exceptional year. We delivered on all fronts and met the commitments made to our partners, our investors, and most importantly, the patients that urgently need better access to affordable and quality biologics. Our team delivered 2 million units of finished products in 2024. We continued scaling manufacturing quarter by quarter and delivered over half of the total volume of 2024 in the fourth quarter. This scale-up supported multiple launches throughout the year. The most impactful were the AVTO2 launches in the U.S., branded as Simlandi with our partner Teva, and also the private label business with Qualent. Our launch of AVT04, our biosimilar to Stellara, was a very successful launch by our partner startups throughout Europe. From an R&D perspective, the team's hard work and dedication led to significant success in 2024, which resulted in two major U.S. approvals, as well as accepted filings for three additional projects in global markets that included the US, Europe, and Japan. The R&D unit also initiated the patient trial for AVT16 by a similar candidate to NTVU. Finally, the cell line development group completed the development of 18 cell lines positioning the company for accelerating portfolio development going forward. Alvotek is committed to best-in-class quality systems. During the year 2024, Alvotek passed multiple inspections from a number of different health authorities around the world, including EMA and the US FDA. The commercial team secured a private label contract for AVTO2 with a major U.S. payer. And our U.S. commercial partner, Teva, was able to secure excellent formulary position, which we believe will help drive further conversion in this market going forward. Our launch of Biosimilars Stellara in Canada, Japan, and Europe demonstrated the global approach that Alvatech takes to Biosimilars, with revenues from ex-U.S. market growing in both absolute and relative terms. The company also met significant capital market milestone in 2024, raising over $300 million in capital, including $150 million in new equity in the first half of the year, and refinancing all short-dated maturities in the second half, thereby removing all 2025 maturities and greatly simplifying our capital structure. Let us now turn to the next slide for a very quick overview of our financial performance 2024, which Joel will then elaborate on further on this call. Great execution by the team in 2024 allowed the company to meet our full-year financial guidance. The revenues grew over 400% to $492 million. Adjusted EBITDA was approximately $108 million, which represents an increase over $400 million compared to $300 million loss in 2023. For the first time in our history, product revenues exceeded milestone revenues and came in at just over $273 million, which represents an increase over 460% over the previous year. One very notable point regarding our product revenues can be seen on the following slide in this presentation. Product revenues increased every quarter in the year. in parallel with an increase in margins. Product gross margins were negative in the first quarter, but gradually increased to 45% in the most recent quarter. The driver for those increased margins, as we predicted early in the year, came from improved scale, process improvements, higher utilization, and improved product mix. Looking forward, Let me touch on how we see our top-line revenues and margin growing over time. In 2025, we project total revenues in the range of $570 million to $670 million, which represents a strong 25% growth year-on-year, as measured from the midpoints. Adjusted EBITDA is expected to be in the range of $180 million to $260 million, which is more than double our adjusted EBITDA in 2024, as measured from the midpoint. Joe will talk in more detail about the key drivers for this guidance in a moment. We also want to give you a view into our longer-term financial goals looking ahead to 2028. In 2025 to 26, we anticipate sustained growth in revenues from our product launches worldwide, from the proposed biosimilars for Prolia, Extiva, Symfony and Symfony Aria, and Aelia Lottos, while also drive markets here for our Humira and Stellara biosimilars. 2026 will be the first full year where all the three molecules are on the market. By 2028, we also expect to have launched AVT16. They're proposed by a similar to Antivio and high-dose ILEA. Both products where we expect to be first to market, and we will annualize revenues from these seven launched molecules. Based on this momentum, our goal is to reach $1.5 billion in revenues and a healthy 40% to 45% EBITDA margin in 2028. Before I conclude, let me touch briefly on our pipeline development and the significance of our acquisition of X-Brain R&D operation in Sweden announced late last week. As I noted earlier, Alvatech has been building an exceptional pipeline and our R&D capabilities are second to none in the biosimilar business. Meanwhile, there is a large and growing unmet need for new biosimilars. To meet this demand, we will leverage our R&D platform and expand our capabilities to accelerate the pace of the development. Three of our early stage program are moving into preclinical development this year. In addition, we will start preclinical development of two additional candidates and where the cell lines have already been developed. Going forward, we expect to have a similar cadence of four to six new development programs starting each year. This represents a significant step up from the earlier announced cadence of one new program starting every 12 to 18 months and reflects how the investment in our infrastructure and capabilities gives us a unique opportunity to ramp up. The acquisition of X-Brain R&D operation in Sweden is a part of implementing our accelerated pace of development. With this acquisition, we are acquiring a fully functional R&D unit and a team of professionals with experience in the development of biosimilars. Sweden is the home of second largest biotech sector in the world after the US. By establishing a base in Sweden, we gain increased flexibility to attract employees from the local talent pool. In addition, the Swedish stock market is, of course, a very important international hub for trading in technology stocks, including healthcare and biotech. We are now exploring the possibility of listing of Alvatex CS on the Stockholm Exchange. As a part of this transaction, we are also acquiring a new preclinical development program by a similar candidate to Simsea, that is in the same category of biologics as Humira and Stellara. Simsea has a global sales of 2.3 billion US dollars per year, and AlvoTech has the opportunity to be the first to launch a biosimilar of this product into global markets in the year 2028. Turning now to the next slide, I would like to summarize our key goals for this year as follows. We expect the approval for three biosimilars by end of the year, and we will be ready to launch each product upon approval. We have increased the pace of development, and five projects are entering the preclinical phase this year. We expect to deliver over 3 million units of finished products to the global markets. We have a truly exciting and transformative year ahead of us. And with that, I would like to turn the call over to Anil Oke, our Chief Commercial Officer. So over to you, Anil.