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So, thank you for joining this session of the Morgan Stanley Global Healthcare Conference. I am Thibaut Woutran. I am part of the European Equity Research Team based in London. Before we start the session, I need to refer to important disclosures. Please see Morgan Stanley Research Disclosure website at www.morganstanley.com backslash research disclosure. And if you have any questions, please reach out to your Morgan Stanley sales representative. So for this session with Alvotec, I am delighted to have with me Robert Westman, Executive Chairman of Alvtec, and Balaji Prasad, Chief Strategy Officer for Alvetec. Thank you very much for joining us. Maybe before we start with the Q&A, if you want to start with some introductory comments on the situation at Alvutec, where we are today, and the outlook for the company. Yeah, thanks. It's great to be here. And I think it's fair to say that we have seen a lot of involvement, positive development with the company last month. And first of all, we resubmitted our four PLAs for three products, which we have pending with FDA. And we are very hopeful that that will be approved by FDA by the end of the year. We got filing or submission confirmation from FDA on biosimilar to NTVU, both vial and pre-filled syringe, and we strongly believe that we are the first and hopefully first to market with both presentation in Europe and U.S. going forward. We concluded FDA inspection end of July, general surveillance inspection, and that went well. We got a VA status, and we just concluded now EMA inspection last few days ago, and we are not seeing any major observation there. So, overall, with the inspection of the facility, we are getting very hopeful and very kind of certain on approval, hopefully, in coming months or beginning of December. But in addition to that, we have seen we made a good license contract with Lotus. that's a contract which allows us for the first time to go direct ourselves in US with Hemlibra and Infancy which is quite exciting and overall I mean a lot of other things happening within the firm but overall I think we are in a good position at a strong inflection point with all the coming launches. Okay amazing maybe we can start on what you just touched on which is The sort of evolution of your commercial model and Alvotech taking a more direct role in commercializing products in the U.S. I mean, historically, you've been a commercial partner. So maybe if you can sort of go through what's driving this evolution of the strategy, are there specific assets or therapeutic categories that are best suited for a direct commercial approach from Alvetech? Yeah, I think it's a good question. I mean overall, our model is business-to-business globally. and in this particular case, with those two products, we felt those two were strategically well geared to be marketed directly by AlvoTech. So even we, as I said, our model is business-to-business. If you take, for instance, Hemlibra, which is north of $6 billion product, It's a very limited patient pool, if you will, and you're more targeted to hemophilia patient treatment centers, if we will, so on that end it felt like in a wheelhouse of Valvo Tech being able to assemble a small group of team to market the product and so that was an exciting opportunity for us of course the concept is being able to capture more of the value chain if you will so quite exciting so it was more strategic approach with selecting two products which we felt could be easier to approach the market with the team has been in the market including myself last in the u.s market over 20 years so we know the channels we know they're players and so so overall it's not the overall change in how we think about our marketing, but we felt we were in part of our journey or we were in a time of our life where this was a natural next step for a straight strategic selected product. It might well be that we have a few more products like this coming in the US going forward. Okay, so rationale is clear for for Hemlibar, but Infinity is probably more sort of a challenging place to go in. I mean, you know, PD1 and PD1 are probably going to be quite competitive. So here as well, do you think sort of setting up a team is going to be what you're going to do, or is there a different approach for this one? No, I think, again, I mean it's still quite targeted, if you will. and the channels are of course a bit different from the big three pbms as you know and we have worked with some of those in the past clearly and we launched oncology products not through alvo tech but in through other portfolio companies in the past so we felt still being oncology that this could be a decent fit for alvo tech to market themselves also. Okay, amazing. That's very clear. And the other relatively recent development is the announce of manufacturing sourcing from Fujifilm and to add a US-based multi-product manufacturing capacity from next year. How much of this capacity is intended as redundancy capacity with what you have in Reykjavik and how much is sort of incremental growth from this capacity? Yeah, I think, I mean, overall, we are end-to-end by a similar company. We are selling what we basically develop on manufacturing. So everything we have in our portfolio is in-house developed. So AlvoTech, I believe, has one of the broadest own in- house developed portfolio pipeline in the industry so so overall we felt having a second source of some of the product would allow us to be more flexible we have of course invested dramatically into our manufacturing sites if you will i think our investment is north of half a billion dollars if you So we have pretty substantial capacity, but we also are seeing a lot of our approvals coming through, and there are not many companies with so many BLAs on file which are going to be approved in a short timeframe. So we felt that having the flexibility to meet the upside potential extra demands, being able to maintain a strong service level, it would be important or very important to have alternative sites. So we had a conversation with different potential partners. Fujifilm has a very strong track record in the U.S., and so it came kind of natural to us to sign up with them. So I think to answer the question, we will still allocate manufacturing optimize the regia week which is our main facility and utilize that facility we have invested in and having a strong capacity and partner in fuji to meet demand and potential upsides when they source themselves if you will okay amazing and when we think about the impact on the pnl in terms of gross margin do you expect that that this is going to be visible in the next few years Yeah, I mean, we will see that, as I mentioned, the company is at an inflection point. We have been growing quite a bit throughout when we launched the first product into market. I mean we are less than three years into commercial marketing, if you will, into U.S. market, the biggest one. So we are fairly young as a commercial organization, if you Will. So we will see multiple products coming to market, which means that we should be seeing a strong growth continue going forward. And secondly, I mean, if you look at the gross margin, it should be pretty neutral whether products are produced in-house or with a partner like Fujifilm. Okay, that's clear. You touched a little bit on the resubmission of the BLA, so ALEA, Prolia, Exgeva, and two presentations of Symfony in the U.S. So there was an FDA inspection. It closed with, as you mentioned, a voluntary action indication. Can you just sort of help us assess, is there any risk remaining on the approval, and how confident are you that this resubmission will go through and sort of what makes you confident? Yeah, so overall, so our PLAs were fully reviewed by FDA, which we resubmitted without any observation, if you will. So the PLAs have been kind of, have passed the test before, which are now resubmitted. The observation were partly facility-related. We think we have spent a lot of resources and energy to continue to evolve our quality system. I mean, again, the company being young commercially, but we still are seeing or continuing to invest into our quality systems and production process, if you will. The company today is approved by all major health authorities in the world. We just closed out EMA, the European Health Authorities, an inspection last week, and that inspection went extremely well. We closed out the July inspection with a VA status, and we continue to evolve the quality system, if you will. So we believe that whether FDA comes in for another inspection before they give us approval or not, we, as a company, organization, we are well prepared and ready for that. So we are very confident that we have a good shot at getting approval this time around. So just to confirm, you're not sure yet if the FDA will require another inspection? No, we have not fully, because FDA is at discretion of FDA. I mean they just finished the inspection as I said it was closed out in July so I think it's not absolutely certain that they will come okay but either or I mean it will be fine with us okay amazing and then you touch a little bit on this but what are structural changes have you made to the manufacturing process the quality process you know beyond just sort of resolving the specific observation? Yeah, I mean from the inspection where we got, so we have been producing for US, we have never had any product issues in the US that we didn't get approval for three products which we resubmitted so we continue to manufacture for the US market successfully. Overall, I mean, there were a couple of items which FDA pointed out when they gave us the CRL actually it was two issues which we believe we have addressed very well one was related to customer complaints the other one using pharma grade silicon in our filling machine which has been used last 20 years in the industry and we have simply removed that so I think when it comes to the pallet that we received and preparation from FTA. I mean, we always look holistically at what we are doing. We don't dive into one specific issue. We should be well-prepared, if you will. Okay, amazing. That's very clear. And so moving on to your portfolio and your pipeline, maybe starting with U.S. ALIA. So the market formation should be around the first quarter of this year, based on when the IP goes away. For Alvatech specifically, do you expect the approval to be gated by the IP or by your own approval, assuming that they give you clearance for US ALA? Yeah, we have a settlement with Regeneron, which is allowing us to basically launch upon approval in December. So we have seen Amgen, of course, been first to market, if you will, and over a year been able to convert, I believe, they are close to 40% from the brand sales. And I believe that Alvatec with two other players are coming in now. So we feel pretty excited about the opportunity. It's close to a $4 billion market, and so we are still seeing the market exciting, even though this time around we were not first in, but we are in the second wave now, meaning Amgeum was the first. So pretty good, strong opportunity in this one. Amazing. And as a follow-on to earlier, you were working on the high-dose formulation, the 8 milligram. Can you update us on the regulatory status? you are fighting in some regions in in 2026 well you know maybe maybe starting here you know which which sort of major regions can you file this year for for the high dose yeah high dose is a very interesting program for us I mean we started developing high dose before the brand launched eight milligrams so when When the brand launched, we had one of our formulation matching the brand. What we did is the formulation of two milligrams to eight milligrams is not fully identical. So we made sure that eight milligrams was a bit different because of the IP. So the European Health Authorities, they believe that no efficacy or safety study was required, so we are working hard on filing this year and basically in the US we are, based on requirement by FDA. We are running a safety and efficacy study, which will be basically running next year, if you will. So, submission most likely early 28th. Okay. And to confirm, on the high dose, because there was a slightly different molecule, this is going to be the approval that's going to condition the launch, and it's not a residual IP situation on the higher dose? No, I mean, we believe that we are in a very strong position with IP, and especially with the final tweak we did to the formulation, we are very confident that we're not infringing any of the patents. And all IP situations are partly complex, but they can also be fairly simple when you know the way you're going. And that's in this particular case, we know well where we are and we think we are in a good position. It doesn't mean that we will not have some litigation challenges or that we might be sued, but we are In a good Position to bring the product to market. And maybe to say that also, I mean, we are also with a safety device. As you know, the high dose in Europe is 80% with OcuClick and safety device, 20% is the vial. And I think we are the only one I know of, at least, which have developed the safety device which is important. Okay, that's clear. moving on to Symfony in the US so I think the only competitor here is Biothera they are gearing up for launch in the fourth quarter so if your CRL is resolved do you think you can launch around the same time is there a remaining IP challenge as I think Biotherai is dealing with a lawsuit from Johnson & Johnson on Symfoney yeah I think on IP again without going into that in specifics I mean, we are in a very strong legal position or IP position with the product. And basically, the patent is basically put forward by J&J on potential PI. We are absolutely certain we are not infringing that. So we think that launch should be at approval. We have, of course, launched the product into Europe, and we have been on the market since late last year. BiotheraWars got approval, which you mentioned, which is the only known other party with the product, and they have had their own GMP challenges, so they have not been on the market last, I believe, nine or ten months. So it remains to be seen whether we are in the same wave at launch in the U.S. as they are, or if we manage to get there first. Okay, amazing. And maybe another important pipeline asset you're working on is the interview biosimilar where you filed in Europe, in the US. and I guess here the question is on the timing of launch in both regions and what the IP situation is for NPVO so again we feel strongly about it and we think this is a near term opportunity we would not go into details on launch timing in different countries but again having a strong position and we think we will be already launched in quite a few markets towards 27 Amazing and then so we mentioned some of the sort of key and closest launch in your pipeline what other assets would you highlight within your pipeline in the next wave of development maybe Symsia or anything else you want to sort of point out as being very attractive in your pipeline? Yeah, I think, of course, Antivio and Hito's ILEA are two extremely exciting opportunities, AntivIO being $7 billion-plus, where there will be a very limited competition. We believe that we might be first to market globally with both the vial and pre-filled series, if you will. Other opportunities, I mean, we have seen, as you mentioned, Simsea, where we are seeing very few companies engaged in that product. and Ilaris, which we think we are in a very strong position. HALS, where we are now very strong in position. K2ta, even though there is a lot of players in that, it's a co-development with Dr. Redis. I think our company will be extremely competitive when it comes to cost of goods and being able to stay in the market. So these are all kind of fairly near-term or slightly mid-term opportunities we are seeing. Okay, amazing. So we went through pipeline. Maybe moving on to sort of commercial assets, you mentioned the launch of the Symfony Biosimilar in Europe. Around the same time you also launched Ailea and Denosumab. So overall, how is the uptake going in terms of these XUS opportunities that you launched at the end of last year? Yeah, I mean, we are extremely excited about especially Symfony being alone in the market. And we have seen launches in over 10 European countries, including being first in Japan. and very strong market share in many of the of the countries we are seeing a very strong uptake in Germany in Spain and we continue or our partner commercial partner continues to roll out the product so overall I mean strong conversion and very exciting opportunity same with highly I mean it has been rolled out in over 10 countries, and Advanced, which is our commercial partner, doing extremely well there. Okay, amazing. Maybe turning to the U.S. and UMIRA, can you give us some insight on the commercial performance of your UMIHA biosimilar in the U。S.? Maybe if you can make a distinction between, you know, private label channel on one side and sort of the rest of the commercial channel, and, you know from here as well well how far do you expect very similar penetration uh will go and and what kind of market share do you do you think you can ultimately achieve with with uh in the u.s yeah yeah i think i mean uh humira had a little slower start than uh some of the others i mean but still today we have seen 60 conversion from the brand to biosimilars which i think it's a strong and good position to be in Teva, our commercial partner is having the second largest market share in the US and we are seeing that they are growing this year on volume, quarter by quarter so we are extremely happy to be having Teva as our commercial partner if you will I, with With the private label, as you might know, private label is not really part of IQVIA. It was not really at the beginning, so it's a little bit more complicated to track how private label is doing, but my high-level estimate would be around 20%. So the biosimilar part is 80%, or biosimilars plus branded part, if you will. So we believe that the growth is happening on the biossimilar side more than the private label side, if You will. Okay, that's clear. And staying on you, Mira, but looking at XUS, here it's been partnered to your partner, Stada. And obviously, it's been a harder market to go into later and after competitive. Is there room to accelerate market share gain here? Or should we have moderate expectations for Humira outside of the U.S.? No, I mean, Humira, we came in with a high dose, but the market had already formed a few years before we came. We stopped developing low-dose when we saw that the brand switched to other high-doses. So we launched basically the high-dos right into a very formed by a similar low-dos market. So I think in that environment, Stara has done a good job. and with Stellara similar to Stellara we are seeing mostly second or third position in all the key markets in Europe and we are still going to see I think more volume coming our way from forward Ok, that's great, strong performance of Stellara Express and Stellara US similar question to you Mira penetration of biosimilars how much more room to go what is your market share here and to what extent is private label playing any role for Stellara compared to what we're seeing with Yumira yeah I think I mean Stellara with the private label is very small if anything Teva is in top 3 to 4 with Stellara I believe and is gaining share there also and the market has converted around 60% so the Stellara market converted two years faster I can say they are at the same place as Humira if you will so overall the market is still exciting we are seeing overall holistically for those two products for Alvo Tech that we have not peaked in sales so we are looking forward to continue with those products and we will see some growth going forward on those two molecules, if you will. Okay, that's great. If we move to your financials and your guidance, so for this year you're guiding for $650 to $700 million of revenues, between $180 and $220 million of adjusted EBITDA, and positive cash flow in Q4. So you told us the guidance is backhanded to Q4, Can you just touch a bit on sort of your level of confidence in achieving this? Are there any sort of key milestones that you need to reach on the business to basically be able to meet the guidance? Yeah, so overall we mentioned when we gave out the guidance that the higher end was geared towards successful launch in December for the pending products. But I think overall, I mean, the main, I would say, what we are working towards to hit the guidance as it is presented is basically our manufacturing as we speak. We, since June, we have gone to full capacity in our production. It's going very well to meet all the demands. The order book is strong. And so basically deliver, the question was basically, what are the challenges, opportunities to hit the guy that is basically mainly hitting the order book and deliver the products before year-end. And I think the company is in a good place to meet that goal or good portion. And then, of course, the milestones, revenues, which both will come with approval, and then we are always very busy, active, licensing out. But overall, I mean, we feel that the company is in a good place to find themselves lending in the Gaetan range, if you will. Okay, amazing. And if you can just touch a bit maybe on sort of funding capital need. So you recently raised $165 million in equity. You secured a $75 million terms facility. Can you come back on what this funding is going to be used for and from here do you expect to sort of need further funding on the line or do you feel like you are capitalized for the future? Yeah, I think, so overall, I mean, Alvotac, we are having one of the broadest portfolios mentioned. And then I mean when you look at companies which are doing the in-house development. we did the funding grant mostly because we wanted really to continue the pace we are on we feel the opportunities we are building today for future growth is extremely important and there is an amazing opportunity we are in front of being able to continue the pace in R&D we are in. So most of the funding was secured to make sure that both working capital for the launches and the R&T, we could keep that pace. Overall, I would never rule out opportunistic or strategic funding, if you will, but that just remains to be seen. That makes sense. and maybe thinking about the profitability in particular long-term. So if I look at our 26 guidance, it suggests an EBITDA margin of around 30% this year. And your previous long-time guidance was suggesting the business could achieve sort of 40%, 45% EBITTA margin. So should we see this as, you know, at the potential long-terms margins for the business? What could be your peak margin in the long- term once you've achieved more scale and you have a broader portfolio in the market? Yes, so the company, of course, is coming out of 12 months where we had to slow down to make sure that we had the proper response to FDA and we would be ready to do all the launches we wanted. We are out of that phase now, and with the slowdown, of coarse, the company did not have the same throughput through the facility as it should have if it would be producing at full capacity so i think with the new launches coming in december we should be in a very strong position to continue to grow and strengthen the ebitda margin going forward and i mean we are of course looking at some of the benchmark in the industry whether it is Samsung or Celtrion they are at the level which you are mentioning and go forward we have a similar pipeline as Samsung so we believe that we should not be very much different from the EBITDA margin those companies do have today ok that's very clear and maybe a final question on the CapEx and capital intensity you know the capex so far I mean over the last few years has been very light considering that you know you're primarily R&D and manufacturing business so how far can the current capacity you have sort of carry you for the future obviously there is a Fujifilm FujifILM capacity on top but should we expect Avertek to to enter another capex cycle at some point to build more capacity to address the biosimilar opportunities yeah it's a it's good question I mean we as I mentioned, we have invested a lot into the facility. As I mentioned so the facility is fairly new and so on the facility itself is not requiring a major investment going forward. We still can increase the capacity in Iceland. We still have both one suite for drug product and one suite for drug substance which we will be fitting out but most of the equipment and investment there at least the the big parts of it building out the facility has been done and then of course we have fuji as you mentioned so we believe that with this combination the company does not need to go into a massive investments in coming five years or so i believe okay i think we're at the end of the time so so robert balaji thank you very much for for joining us today at the conference yeah thank you so much thank you for watching thank you