ALVO

Welcome to the Alvotech First Quarter 2026 earnings conference call. At this time I would now like to hand it over to our first speaker, Benedikt Stefansson, Vice President of Investor Relations. Please go ahead.

Thank you, and welcome to our listeners. Yesterday evening, the company issued a press release announcing our financial results for the first quarter of 2026. Material accompanying today's earnings call, including a supplemental earnings report, providing additional operational details and business updates, and the presentation we'll be referring to on today's call were also published on our investor portal, investors.alvotech.com in the earnings calendar section under the heading Q1 2026 earnings call. Our press release, earnings report, presentation, and statements that we make on the call today may include forward-looking statements. 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. Any risks and uncertainties could cause actual results to differ materially from forward-looking statements that are made.

Presenting on today's call are Róbert Wessman, Founder and Executive Chairman, Lisa Graver, Chief Executive Officer, and Linda Jónsdóttir, Chief Financial Officer. Róbert will begin today's presentation with a summary of our progress with the U.S. regulatory pathway and some key business highlights. Lisa will then present a commercial and pipeline update. Linda will conclude with a discussion of the financial results. Following the introductions, our team will be happy to take your questions. With that, I would like to turn the call over to Róbert Wessman.

Good morning, everyone, and thank you for joining us. The first quarter was focused on 3 priorities: progressing the FDA resubmission, maintaining a high level of inspection readiness, and continuing to expand our commercial business globally, including the launch of 3 biosimilars across Europe and rest of the world markets. Last week, the FDA began a routine GMP surveillance inspection at our Reykjavik facility, which is currently ongoing. Routine surveillance inspection are normal part of operating an FDA-regulated manufacturing facility, and our previous surveillance inspection took place in 2024. We continue to engage constructively with agency throughout the process and expect it to be concluded by the end of business day tomorrow. Since our most recent pre-license inspection, which took place in July 2025, we have implemented several important enhancements across our quality system and the operations.

The work to address the findings has been approached in a highly structured and disciplined manner and is well advanced. Importantly, we have deliberately taken additional time to substantially de-risk future operational and regulatory disruption and to ensure that when we resubmit, we do so with a package that fully address the Agency's requirements and support the long-term growth and value of the company. These actions have impacted manufacturing throughput, resulting in a slowdown at certain points during 2025 and the first quarter of 2026. I'm very pleased with the progress the organization has made and the resubmission of our Biologics License Applications for our biosimilars to Simponi, SIMPONI ARIA, EYLEA, Prolia, and XGEVA are now in the final stage of completion.

As we complete the current resubmission process, we believe there is significant near-term value within our pipeline, which we believe is one of the most valuable in the industry today. We are approaching a number of important milestones across several high-value programs that will drive the company's anticipated strong growth in 2027. This includes submissions in 2026 of biosimilar to ENTYVIO and the EYLEA high dose, and the resubmission for biosimilar to EYLEA, Simponi, Prolia, and XGEVA. These programs target large and growing biologics market and position us with the first wave of biosimilars entrants in their respective segments. Together with our leading pipeline of 30 biosimilar products, these submissions underscores the strengths and the momentum of our pipeline, which will support Alvotech's long-term growth.

More broadly, we have built out one of the strongest integrated biosimilar platform in the industry, combining research and development, manufacturing, regulatory capabilities, and global commercial partnerships. With the platform now built, our focus has increasingly shifted towards execution, launches, and converting our pipeline into commercial growth. Alvotech entered the U.S. market in mid-2024, marking the transition from an R&D-focused organization to a global commercial biosimilar company. Today, we have a commercial presence in over 90 countries and continue to expand patient access to biologics throughout the world. We believe the company is well-positioned for its next phase of growth. With that, I will hand the call over to Lisa.

Thank you, Róbert. Our primary focus during the quarter has been execution, both in relation to the regulatory process and in continuing to scale the commercial business globally. As Róbert noted, with the FDA now on site, we remain highly focused on a successful inspection outcome and on resubmitting the BLAs now pending approval. We believe the actions taken to date strengthen not only the specific resubmission packages, but the broader operational platform supporting future pipeline execution. We will provide the market with an update once the inspection has closed. As we continue to leverage our Reykjavik site for global supply, we have also been exploring additional manufacturing capacity, especially in the United States. Last night, we announced a manufacturing agreement with Fujifilm Biotechnologies, covering multiple products within our portfolio.

This agreement represents an important strategic step in further strengthening and diversifying our global manufacturing network, including expanded U.S.-based manufacturing capability. As our commercial portfolio and late-stage pipeline continue to scale, manufacturing resilience, supply reliability, and operational flexibility become increasingly important. This agreement enhances our ability to support future launches and long-term commercial growth while further strengthening supply continuity for our partners and patients. We believe the agreement complements the strengths of our existing vertically integrated platform. We're in the process of initiating technology transfer activities and expect to begin supplying products for the U.S. market in the second half of 2027 as the transfer and qualification process progresses. This additional capacity will become increasingly important as we move into the next phase of commercial launches and pipeline progression over the coming years.

With respect to the financial performance in the first quarter, we had sales of $106 million and EBITDA of $24 million. Both revenues and EBITDA were impacted by the timing of milestones and a slowdown in production related to facility improvements, which reduced product revenues in the quarter. We do expect improvement in product revenues as normal operations resume through the second quarter since underlying demand remains strong. Linda will provide more details later in the call. With respect to our marketed portfolio, we are seeing solid underlying demand trends and expanding adoption of biosimilars more broadly. For AVT02, our biosimilar to Humira, the U.S. market continues to evolve as expected, with ongoing transition toward a multi-biosimilar market. Based on available market data, AVT02 has now become the fastest-growing biosimilar to Humira in the United States and achieved a 10% market share within the segment.

In Europe and other international markets, AVT02 remains an important contributor to our commercial portfolio. We believe there is further opportunity for biosimilar adoption as the overall market continues to grow. For AVT04, our biosimilar to Stelara, Teva continues to expand Stelara's market through formulary and commercial execution. While in Europe, Uzruvo continues to hold a leading share of the biosimilar segment in launched markets. We expect further biosimilar adoption and commercial growth across the ustekinumab market during 2026. For our biosimilars to Simponi, Eylea, Prolia, and XGEVA, where we received approvals in Europe, U.K., and Japan at the end of last year, our partners continue to progress launch activities. We remain optimistic on the commercial prospects for these products, particularly for AVT05, the biosimilar to Simponi, which remains the only biosimilar for the predominant presentation in the market.

Taken together, these launches continue to diversify our commercial portfolio, strengthen our revenue base across multiple geographies, and support the long-term value of our integrated biosimilars platform. With respect to long-term value creation, there were a few highlights in the quarter regarding our pipeline. Our portfolio strategy remains highly selective and focused on molecules where we believe there is a compelling combination of market opportunity, durable mechanism of action, high scientific barriers to entry, manufacturing capability, and commercial attractiveness. Specifically, we are pleased to report that we have submitted a marketing authorization application to the European Medicines Agency for AVT16 and AVT80, our proposed biosimilars to Entyvio. Today, sales of Entyvio in Europe are close to $2 billion and growing.

Our biosimilar to Entyvio represents a significant market opportunity in Europe, supported by strong underlying demand trends in inflammatory bowel disease. We believe we are well-positioned to be within the first wave, if not the first biosimilar for this product. Turning to the biosimilar of high-dose EYLEA, AVT29, we are on track to submit a marketing authorization application with the EMA in 2026. In addition, we have enrolled the first patients in the pivotal efficacy and safety study for AVT29 in support of the submission in the U.S. in 2028. With this, we believe we could be the first to submit a biosimilar to high-dose EYLEA in Europe and the U.S. Today, the combined low dose and high dose market for EYLEA is approximately $8 billion, with $5 billion in the U.S. and $3 billion in Europe.

Together with our biosimilar to low-dose EYLEA, Alvotech is well-positioned to participate in the future evolution of the global EYLEA market as longer-acting dosing regimens become increasingly important. As we look ahead, our focus remains on disciplined execution across the commercial business, the regulatory process, and the pipeline. With that, I hand the call over to Linda to review the financial results in more detail.

Thank you, Lisa. I will now take you through the financial results for the first quarter of 2026. Unless otherwise stated, the figures I will go through are adjusted numbers. Reconciliations to the corresponding IFRS measures are included in our earnings materials, which have been published on our investor portal at investors.alvotech.com. Turning to the financial highlights for Q1 2026. Total revenues in the first quarter were $106 million, representing a 20% decline compared to the same quarter last year. As stated in our previous year's earnings call, we are still seeing impact on our financials from our facility improvements and the associated slowdown. We are expecting Q4 2026 to be the strongest quarter of the year. Gross margin for the first quarter was 57%, an improvement of 6 basis points compared to the same period last year.

This reflects the blend of product and licensing revenues in the quarter, which was equally split. Product margin in the quarter was 11%. Margins during the second half of 2025 and Q1 2026 have been impacted by reduced manufacturing throughput associated with facility improvements at our Reykjavik site. As manufacturing normalizes and volumes recover, Alvotech will be positioned to enter 2027 with a stronger margin profile. Adjusted EBITDA in the first quarter was $24 million, representing a margin of 23% versus EBITDA of $21 million, representing a margin of 15% in Q1 2025. We have recently seen changes in regulatory guidance from both the FDA and the EMA, including where comparable clinical studies can be waived. This places greater emphasis on analytical similarity for approval. That means we can demonstrate technical feasibility earlier in the process.

As a result, certain development programs now meet the criteria for capitalization under IFRS Standard IAS 38 at an earlier stage. This has increased the proportion of development costs that are capitalized, and the updated approach has been applied prospectively from the beginning of 2026. Further on revenues. About half of the revenues in the first quarter of 2026 come from product revenues, leveraging the continued commercial momentum. As we have discussed in the past, there is typically a timing lag between our partners' sales performance and the recognition of revenue in our results. As a result, strong partner performance typically flows through into our reported revenue over subsequent periods as the year progresses. Product revenues for the first quarter were $51 million. The key contributors were our biosimilar to HUMIRA, AVT02, and our biosimilar to STELARA, AVT04.

Our three newly approved products, AVT03, our biosimilar to Prolia and XGEVA, AVT05, our biosimilar to SIMPONI, and AVT06, our biosimilar to EYLEA, also began contributing incremental product revenues as launches expanded across Europe, the U.K., and Japan. Licensing revenues for the quarter were $55 million. As we have noted on previous calls, milestone revenue recognition is inherently lumpy, driven by the timing of development progress, regulatory submissions, and contractual milestones achieved with our commercial partners. Turning to cash flow. Cash at hand at the end of the quarter is $64 million, while operating cash flow is negative in the quarter by $25 million, driven mostly by working capital. As you can see from the cash flow bridge, other drivers impacting our cash flow in the quarter were net interest payments of $35 million per quarter following the transition from PIK to cash interest mid-2025.

CapEx at $7 million in the quarter and was low in line with plans. Investment in accountables is $39 million in the quarter, and we remain focused on achieving positive free cash flow in Q4 2026, which continues to be a key financial priority. Looking into our balance sheet. I will start with briefly summarizing key items on the asset side of our balance sheet. We have a strong asset base, which has been supported by strategic acquisitions in 2025 and pipeline investmentsFrom year-end 2025, non-current assets were up by $52 million, mainly driven by an increase in intangible assets and higher contract assets due to the timing of revenue recognition. Total current assets decreased by $118 million due to collections of trade receivables and reduction in cash to finance operating activities and debt service in the quarter.

Next, a few notes on the key movements across equity and liabilities. Derivative financial liabilities reduced by $32 million, mainly due to fair value changes on conversion futures and earn-out shares. Trade and other payables decreased by $28 million due to investments and timing of orders in Q4 2025. Contract liabilities decreased due to recognition of licensing revenues as development milestones have been achieved. Turning to our financial outlook for the full year. We target revenues in the range of $650 million-$700 million, representing continued double-digit growth compared to 2025. Adjusted EBITDA is expected to be in the range of $180 million-$220 million. As a reminder, the lower end of our revenue guidance range does not include revenues from the approvals and launches of AVT03, AVT05, or AVT06 in the U.S.

As we look ahead to 2027, we expect to deliver strong year-on-year growth driven by continued expansion of our commercialized product portfolio, contributions from our pipeline, and associated milestone revenues. We also expect to benefit from increasing manufacturing output following the completion of the facility improvements and operational enhancements implemented since mid-2025. With respect to our balance sheet, the anticipated growth in 2027 will allow us to be in a position to deliver healthy leverage in 2027, which will open up further opportunities for us to optimize our capital structure. With that, I will hand the call back to the operator for Q&A.

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for a name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question and one follow-up in the interest of time. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Christopher Uhde from SEB. Your line is open.

Hi there. Thanks very much for taking my questions. Two for me, please, to start. The first would be on the Fujifilm partnership and its implications. Is this just ensuring less scope for regulatory commercial disruption from politics and so on? You know, how critical was getting this partnership, and should we see it as having a tangible impact on your growth trajectory? Perhaps you can put that in the context then of the consolidation we've seen in the, you know, during the, I guess, quarter and after within the industry. My second question is, based on your comments, it seems like Simlandi is taking share in the U.S., looking at Q4 versus now, whereas Uzpruvo seems sort of flattish, possibly down somewhat in Europe.

What can you tell us about sort of market share position within markets? I mean, is it stable or more fluid than overall position? Are there any kind of sort of factors that we can think about that are driving those dynamics? Thank you.

Hi, Christopher. Thanks for the question. Maybe taking the Fujifilm question first. As we talked about on the last earnings call, we were in advanced discussions. It is very much a strategic move for us. Obviously happy that we were able to bring this across the finish line as quickly as we did. It really is what we said it was. It is an ability for us to diversify our capacity across markets. Certainly having a presence in the United States as well does give us the advantage being one of our large markets. I think from a perspective of timing, as we've said, that we do expect to introduce product for the U.S. market specifically in the second half of 2027.

All of this was really aimed at continuing to ensure that supply chain reliability, as we continue to see demand, and maybe heading into your next question, that demand is really being pulled through primarily in the U.S. with Simlandi. Teva's done a fantastic job continuing to grow that for us, as well as just the natural evolution towards biosimilars in the market. I think we're sitting at about an exit share of 60% of the market being biosimilar in the U.S. now. It's a combination of just commercial execution as well as just overall growth in the biosimilar segment. Clearly anything we can do that will continue to ensure that we meet that demand across our manufacturing platform is something that we're going to prioritize.

In terms of ustekinumab, particularly in Europe, we are seeing somewhat of a flattening in Q1. I will say we still have three quarters to go. I'm not going to say today that that's the trend we expect. We are still seeing the Stelara biosimilar market grow in Europe as well as in the U.S. It's sitting at about 56% at biosim now in Europe. I think there's still opportunity there. Certainly, we are seeing growth in Germany, not unexpected. Germany is one of the key markets for us across our biosimilar platform. Certainly we are still seeing that growth. I think from our perspective, growth will continue in the U.S.

In Europe, we are seeing some stability through Q1, but I think we clearly have the remainder of the year to go. Optimistic we'll still see some further top line growth there.

Thanks. Just a clarification on the first one. What sort of proportion of your U.S. sales should we think about as coming from Fujifilm in the future? I mean, is it a majority or is it a minority or any detail you can give there?

Yeah. I think it's too early to say from our perspective what I mean, we're going to leverage across our platform to ensure that, you know, we hit our markets. I think at this point in time, a little too soon to begin type of breakdown, but there's no question that the Reykjavik site will continue to be a predominant player across the markets. We will continue to look at ways to leverage both the Fujifilm site as well as our Reykjavik site.

Great. Thanks so much. I'll get back with you.

Thank you. Once again, that's star one one for questions. Our next question will come from the line of Ashwani Verma from UBS. Your line is open.

Hey, good morning. This is Dee calling on behalf of Ash. Just have to, sorry if I missed some of the conversation earlier. I just want to check, like, the FDA remediation. Just can you briefly outline the remaining steps to file the 3 pending products by end of 2Q, I guess? Like, do you expect, like, a FDA inspection? I think I heard Róbert a bit in the beginning, but I wasn't sure it's happening now or it's, like, what's the status on that? If there's a inspection required, like, are you guys still comfortable with the year-end approval timeline? The second question is just on the, I guess, like, the 1Q temporary production slowdown.

I think that's due to the FDA remediation plan. I just want to confirm, is that now fully resolved? Is there any risk to happen again? That's all. Thank you.

Thank you so much. Robert here. As we discussed in my part earlier, we basically have a catalyst coming up with the, of course, the resubmission and we discussed ENTYVIO submission and the high-dose EYLEA. For us, it's very important that we clear all regulatory risk going forward, if you will. We decided to prolong the slowdown, as I mentioned in my intro, and we see that as a short-term investment to then reap the growth of the launches which are coming, we believe, end of this year and of course, going into 2027. I think I mentioned that we expect to see a strong growth year on year, and that's why we want to eliminate any future risk. I'll leave the rest to Lisa to answer.

Yeah. Just on the FDA piece. We are in an inspection now, so FDA is on site. It is a routine surveillance inspection that we do expect to close out this week. As Róbert noted, we were well positioned and have been positioning ourselves to respond, and we are on track to respond to the call that was received last year. That will position us in the second quarter to resubmit the pending BLAs, and the target is still and does remain the fourth quarter. Again, to emphasize the work that we've been doing since last year through first quarter, really is setting us up for that success. We think we will be able to provide further update once the current inspection closes out.

I think we do anticipate resuming normal operations from a production standpoint this quarter. Again, the underlying fundamental was to remove any further overhang from the CRLs that we received last year, and we think we're gonna be in a great position to do that come this quarter.

Awesome. Thank you. Thanks for clarification.

Thank you. One moment for our next question. Our next question will come from the line of Arvid Nickander from DNB Carnegie. Your line is open.

Thank you and good afternoon, everyone. Just picking up on what was said previously with Cin husky, capturing meaningful market share in Q1, and prescription trends also look pretty supportive for Soliris as well, I suppose. Could you just provide a little bit more color here? What has changed commercially to drive this step up when it comes to Simlandi the uptake this far into the life cycle? If there's anything else that can be said on that. Then I guess secondly, you mentioned the sort of lag typically seen between partner performance and sales. Is this the main explanation why we didn't see a sharper increase in sales in Q1? Does it also reflect any other dynamics at play when it comes to pricing strategy or any other factors? I'll start there. Thanks.

to address the Simlandi uptake. This is really a factor of the continued erosion of the Humira product. We are seeing that exit share of biosims in Q1 being 60%. That continued growth in terms of the biosimilar market is just a larger addressable market that we are through our partner Teva able to take advantage of. I think we've also been, again, through our partner, very execution-oriented in growing that business in terms of taking advantage of both the branded and unbranded market position. I think it's a factor of both, and we're hopeful that we're gonna continue to see that growth certainly through 2026 and beyond.

In terms of your second question on the contribution from product revenue in Q1, I think we have said in the past, we do see lumpiness in terms of how orders are placed and how product is pulled through in the quarter. So we have some degree of control over that, but it is predominantly driven by customer order pattern and invoicing. So it is not, from our perspective, a dynamic of pricing at this point. It is really truly order patterning, order pattern, and we will and do expect to start to see that pick up as we go throughout the remainder of the year.

Great. Thank you so much. Just the last one, if I may, on the Fuji partnership. Can you comment anything on what sort of investment commitment this comes with from your side? Any guidance on the costs associated with this partnership?

I think this is something that, you know, we touched on as well on the last call. It has been a plan in terms of looking at diversifying our manufacturing capacity, whether it be, you know, through further investment internally or externally. It is something that was anticipated. I would also say that because of the nature of this being a tech transfer, we do expect that the batches at the end of the day will be sellable batches come 27. It's an investment balanced with the ability to recover that through these sellable batches when we hit 27.

Great. Thank you so much. I'll jump back in the queue.

Thank you. Our next question will come as a follow-up from the line of Christopher Uhde from SEB. Your line is open. Christopher, your line is open.

Sorry, I was on mute. I was wondering a couple things. Thanks for the follow-ups. Could you talk a little bit about the impact of reform in Germany and whether that could have a presumably positive impact on your business? How do you see that evolving as it's implemented? We also heard, I think, during the quarter and in the reports, discussions about the main immunotherapy products and DUPIXENT loss of exclusivities potentially being extended in comments by manufacturers, for instance. What is your thinking around the, you know, launch timing for those biosimilars? Thank you.

I think maybe just to address the questions around Dupixent. I think for us, I think it's a little too early for us to comment on, you know, precise launch timings. Certainly it is something that's in our portfolio and we're working towards. I think, you know, from a timing commitment, I think it's a little too early for us to, you know, to put out there our position.

Sure.

Maybe just to go back to the first part of your question on the German reforms. I think for us, you know, we do think there still could be opportunity, and we are certainly seeing today growth. We do think, you know, even if we see a tender market and once we see a tender market form, and that's been under discussion, obviously, for quite some time, in the German market, we do think it will allow for still multiple players. We do partner well in Germany. STADA obviously is one of our primary partners, who's a very strong player in the market. We think we still have a really good opportunity to position ourselves, even if and when that market starts to transform into a more tender-like market.

We do think it will be a multiplayer tender market, not a one and only market. I think that does position us well, given the strength of our partnerships there.

Thanks. That's very helpful.

Thank you. I'm not showing any further questions in the queue at this time. I would now like to turn it back over to Benedikt for any closing remarks.

On behalf of the team presenting today and all of us at Alvotech, I thank everyone who joined us for this webcast. We look forward to talking to you again and wish you a wonderful rest of the day. Bye-bye.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Good day, and thank you for standing by. Welcome to the Alvotech Q4 2025 and Full Year 2025 Earnings Conference Call. [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, Mikaela Vilchez. Please go ahead.

Thank you, and welcome to our listeners. Yesterday evening, the company issued a press release announcing our financial results for the full year and fourth quarter of 2025. Material accompanying today's earnings call was also published on our investor portal, investors.alvotech.com in the earnings calendar section. Our press release, presentation and statements that we make on the call today may include forward-looking statements. These statements do not ensure future performance and are subject to risks and uncertainties that are outlined in the company filings with the Securities and Exchange Commission. Any risks and uncertainties could cause actual results to differ materially from forward-looking statements that are made. Presenting on today's call are Robert Wessman, Founder and Executive Chairman; Lisa Graver, Chief Executive Officer Designate; Joseph McClellan, Chief Operating Officer; Linda Jonsdottir, Chief Financial Officer. Also with us on the call is Balaji Prasad, Chief Strategy Officer. Robert will begin today's presentation with a summary of business highlights. Lisa will then present a commercial update. Joseph will discuss the status of our pending biologics license applications with the FDA and our R&D pipeline. Linda will then conclude with a discussion of the financial results. Following the introductions, our team will be happy to take your questions. With that, I would like to turn the call over to Robert Wessman.

Hello, everyone, and thank you for joining us today. 2025 was an important year for Alvotech. We continue to strengthen our position as one of the leading global developers of biosimilars. We expanded our commercial footprint, advanced several pipeline programs and strengthened the financial position of the company through successful capital market transactions and our listing on NASDAQ Stockholm. At the same time, we have addressed the regulatory observation of the FDA inspection of our Reykjavik manufacturing facility, and we implemented a comprehensive quality improvement program. Based on the progress made so far, we expect to resubmit the affected applications to the FDA during the second quarter of 2026. We will, of course, update the market once those submissions have been accepted. We have addressed regulatory observation before in the industry, and we know how to solve them. Our focus has been on strengthening the operational platform so that we can continue to scale the business globally going forward. Alvotech has 30 biosimilars in development today. We are advancing plans to have a second source manufacturing site for some of our key products going forward. This includes manufacturing of drug substance and drug product at a strategic CMO partner based in the United States. This will give us greater operational flexibility and over time, reduce operational dependence on a single manufacturing site. Lisa will provide more details on the progress we are making with this initiative. Stepping back for a moment. The long-term drivers of the biosimilar market remains very strong. Across the pharmaceutical industry, we are seeing a continued shift towards biologic medicines. Today, around 40% of global pharmaceutical sales come from biologics. But if you look at the development pipeline, this shift is even more pronounced, around 60% of Phase II and Phase III pharmaceutical development today involves biologics. This tells us that the reliance on biologics will only increase over time as more targeted therapies are developed. At the same time, more than 100 biologics are expected to lose patent protection over the next decade. While healthcare systems around the world are under increasing pressure to reduce costs, this creates a very significant opportunity for biosimilars. Another important development for the industry was that FDA draft guidance related to biosimilar development. In practice, it means that large expensive efficacy trial will increasingly not be required. Some studies in the past have costed around $100 million per program and added 1 to 2 years to development times, reducing that requirement substantially lowered the development cost on time needed to bring biosimilars to market. At Alvotech, we anticipated those changes, and we adopted our development strategy already several years ago. The new FDA guidance, therefore, does not change our strategy, but rather validates the approach we have already taken. Importantly, we are now well positioned to benefit from those changes compared to many of the other companies that are still set up for the older model. Joseph will discuss this in more details and explain how these changes may benefit our pipeline. Turning to the next slide. Our ongoing investment into our platform mean that today, we can initiate development of a new biosimilar program roughly every 2 months. This has enabled us to build one of the most comprehensive biosimilar pipeline in the industry. We now have 30 biosimilars in development, representing more than $185 million in global sales. This pipeline is what will drive Alvotech's future growth, and we will continue to, of course, expand it. Before handing over, I would also briefly highlight our financial performance for the year. In 2025, total revenues increased by 20% to $591 million (sic) [21% to $593 million ] while adjusted EBITDA increased by 27% to $137 million. Linda will discuss the financial results in more details shortly. Finally, as we have announced earlier this year, Lisa Graver has joined Alvotech as the Chief Executive Officer. From the beginning, I saw my role as a CEO, to be a time-defined appointment focused on building the company's platform and global partnerships. Lisa and I have worked together over 20 years, and she has served as Alvotech Board member since 2022. Lisa brings a wealth of experience in commercial, R&D, manufacturing and quality compliance. With Lisa appointment as our CEO, Linda's appointment as CFO, and Joseph and Anthony stepping into expanded roles, the key management positions are now all based on-site in Iceland, and the senior leadership has been strengthened. With the platform of people now firmly in place, the company is entering into a new phase focused on operational execution and commercial scale. I will continue to serve as Executive Chairman and be actively engaged in the business, and I'm very much looking forward to work closely with Lisa and the leadership team. We, as a team, will of course, continue to build Alvotech into a leading global biosimilar company. And with that, I will hand the call over to Lisa.

Thank you, Robert, and hello, everyone. In addition to continuing my collaboration with Robert, I'm excited to help maximize the full potential of the robust pipeline Alvotech has built and is continuing to build. Before going into an overview of 2025 achievements, I want to address upfront a key priority of the team and myself. The team has been executing on an extensive improvement plan to address all outstanding issues related to the FDA inspection in July 2025 to ensure we receive FDA approval for all pending applications for AVT03, 05 and 06 this year. Despite continuing to commercialize our existing products in the U.S. and receiving approval for and commercializing AVT03, 05 and 06 in markets outside the U.S. We are committed to addressing all areas where improvement is required. To that end, I want to highlight an initiative that we have been advanced since last year that looks to dual source the manufacturing of some of our key products. As part of strengthening the long-term resilience and scalability of our platform, we are also evaluating opportunities to broaden our manufacturing footprint for selected products. Importantly, any future expansion would build on the strong manufacturing platform we've established in Iceland, which remains the cornerstone of our global production network and a critical source of our technical expertise and operational scale. As we evaluate options to broaden our manufacturing footprint, the United States is a natural area of focus given the importance of the U.S. market for biosimilars and the increasing emphasis on supply resilience within the U.S. healthcare system. Expanding our manufacturing base for selected products would support several important objectives. First, it would strengthen supply resilience by reducing reliance on a single manufacturing site. Second, it will support future launches and increasing commercial volumes across global markets. Third, a more diversified manufacturing platform strengthens our value proposition to commercial partners who prioritize supply reliability alongside product quality and economics. And finally, it provides greater strategic flexibility in a more complex external environment, including evolving healthcare policy environments as well as broader supply chain dynamics. Taken together, these steps will further strengthen the resilience and scalability of our manufacturing platform as we support future launches and increasing global demand. Turning to our 2025 achievements. Over the past year, we have continued to expand the commercial footprint of our biosimilars portfolio while strengthening the operational foundation that supports long-term growth. Our focus has been on 3 priorities. First, continuing the rollout of our approved biosimilars across global markets through our commercial partners. Second, ensuring reliable and scalable supply as volume increases. And third, positioning the company to capture the next phase of biosimilar market evolution, particularly in the United States. During 2025, we achieved several important milestones across the company. Our commercial partner, Teva launched Selarsdi in the United States, marking our second biosimilar launch in the U.S. market and demonstrating the strength of our global partnership model. We also received geographic expansion with approvals and first launches for golimumab, denosumab and aflibercept across Europe, the United Kingdom and Japan, targeting some of the largest biologic franchises in medicine. As we continue to build our pipeline, we form new commercial partnership agreements with Advanz pharma, which included our Cimzia program and with Dr. Reddy's for our Keytruda program. We further expanded our global commercial partnership network with the addition of Sandoz to broaden our reach across major pharmaceutical markets. As part of our efforts to further strengthen our technical and regulatory capabilities, we continue to expand our process development organization. Integrating Xbrane’s R&D team in Stockholm has added highly experienced scientists with deep expertise in biosimilar development and enhanced our ability to advance multiple programs in parallel. The acquisition of Ivers-Lee assembly and packaging business gave us greater flexibility and added capacity to meet increasing global demand for our biosimilars. It establishes a centralized assembly and packaging hub from which we can serve multiple global markets from a single location. From a corporate perspective, we further strengthened our financial position during the year, raising close to $300 million from the capital markets to support continued investment in our development programs and manufacturing platform. We also broadened our investor base through the listing of Alvotech shares on Nasdaq Stockholm, providing greater access to Nordic and European investors and further strengthening our presence in the region. These transactions are a testament to the strength of our platform, our strategy and our execution capabilities. Turning to our on-market portfolio, Humira remains one of the largest biologics markets globally, and biosimilars continue to gain share. At the beginning of 2025, the originator held roughly 70% of the U.S. market. By the end of the year, that share has declined to around 45% and continues to fall as patients switch to biosimilars. This continued shift toward biosimilars in the Humira market reflects strong payer support and growing physician confidence. In the United States, Simlandi saw continued volume growth between the third and fourth quarters, and we are expecting further growth in 2026. Simlandi now holds approximately 9% of the market in the U.S. making it the second largest and one of the fastest-growing biosimilars in the segment. In Europe, Hukyndra continues to demonstrate a consistent performance despite entering the crowded market. Elsewhere, our partners continue to extend access across Latin America and Middle East markets. In 2026, we anticipate further launches in rest of world markets. and that AVT02 will remain an important contributor to our commercial portfolio. Stelara represents another large and attractive biologics market with significant biosimilar opportunity, and we continue to see strong rollout of AVT04 across key regions. In the United States, where biosimilars now account for approximately 40% of the market, Teva continues to expand formulary coverage for Selarsdi, holding a strong and growing market position. In Europe, Uzpruvo has established a leading position with more than 20% share of the biosimilars segment. We expect continued biosimilar adoption across this market in 2026. Turning to AVT05, our biosimilar to Simponi, which currently faces very limited competition in markets where it has been improved. We expect to be first to launch in several key markets and potentially the only biosimilar option for a period of time. Being first to market in a highly attractive biologics segment with limited competition, represents a significant commercial opportunity for Alvotech, and we expect commercial momentum to build across launch markets through 2026. In Europe, AVT05 was the first biosimilar to Simponi to be approved by both the EMA and the MHRA. Marketed under the Gobivaz brand, our partner, Advanz Pharma, began launch activities following shipment of product in December had a successful National Health Service tender award in the U.K. In Japan, AVT05 is also the first and only approved biosimilar to Simponi. Our partner, Fuji Pharma, has announced a market entry date of May 2026, and we anticipate being the first to launch of Simponi biosimilar in this market and for there to be a limited competition for some considerable time. Elsewhere, we have filed for approval in several additional rest of world markets. In Canada, we are the only company to have filed to date based on available information and we expect a decision in the first half of 2026. Following approval of the AVT06 in Europe, the United Kingdom and Japan in the second half of '25, we announced a licensing and settlement agreement that resolves all remaining patent disputes related to aflibercept 2-milligram worldwide. The agreement provides clear pathways for market entry of AVT06 across key global markets and allows our partners to prepare for launches with confidence. In U.S., we have a licensed entry date in the fourth quarter of 2026 or earlier under certain circumstances, which positions Alvotech and our commercial partner, Teva, for a potential launch in the U.S. market this year, pending FDA approval. Following the shipment of product to Japan, our partner, Fuji Pharma, launched in February this year, with the first and only a aflibercept biosimilar in that market, and they are reporting strong early demand. Products has also been shipped to Europe. While we expect this market to be more competitive, our partners expect to gain a strong market share. Together with our commercial partners, we believe this positions Alvotech well to compete in the global aflibercept market, which is evolving toward longer-acting dosing regimens that reduce the burden on both patients and physicians. The high-dose version of aflibercept supports extended dosing intervals compared with the original formulation and is expected to represent an important part of the future market. In anticipation of this shift, we have been developing a biosimilar candidate for Eylea HD. We are targeting a first regulatory submission in 2026, which would potentially put us in the first wave of biosimilar launches for the high-dose product. Having both low dose and high dose aflibercept programs allows Alvotech to participate across the full evolution of the global aflibercept market, which remains one of the largest for ophthalmology globally. Following the approval of AVT03 in Europe in November 2025, first wave launch supplies were shipped to our commercial partners in December. Our partner, STADA and DRL have successfully launched in Germany and select European markets. As we anticipated, early pricing dynamics have been competitive, particularly in tender-driven segments. Despite the competitive environment, we believe that AVT03 represents an important addition to the denosumab biosimilar landscape, and we expect commercial momentum to build gradually through 2026 as launches expand and biosimilar adoption increases. In Japan, AVT03 remains the first and only biosimilar to have secured approval, with our partner, Fuji Pharma preparing for market entry in 2026. I want to emphasize the continued expansion of our commercial portfolio is closely linked to the strength of our development pipeline. The investments therein and the licensing revenue from that portfolio. The performance of our business going forward is also reliant upon our focus on cost optimization across all aspects of the company, which Linda will address later. I will now pass it to Joseph, who will provide an update on our R&D programs and our continued success in building that pipeline.

Thank you, Lisa. I will briefly cover 3 areas today. First, the status of our U.S. regulatory submissions. Second, progress across our development pipeline. And third, recent regulatory communications impacting biosimilar development. Last year, Alvotech had 4 active U.S. biologics license applications with the FDA for proposed biosimilars to Simponi, Simponi Aria, the dual products Prolia/Xgeva and Eylea. In the fourth quarter of 2025, we received complete response letters from the FDA for these applications. Further, after receiving the CRLs, we received a post application action letter or PAAL, detailing the remaining open items with the FDA after review of our 483 response. The CRLs were related to issues identified following the FDA's inspection of our Reykjavik facility in July of 2025. No issues were raised regarding the analytical, pharmacokinetics or clinical efficacy and safety data submitted in the applications. The dossiers themselves were considered complete. Following the inspection, we initiated a comprehensive remediation program addressing the FDA's observations. By the end of 2025, we had implemented most of the required corrective actions, our focus since then has been on demonstrating that these improvements are effective and sustainable over time, which is a normal part of the quality process to ensure that improvements are durable before resubmission. Based on current progress, we remain on track to resubmit the BLAs in the second quarter of this year, which would position us for FDA decisions before the end of the year. Importantly, our Reykjavik facility remains an FDA-approved manufacturing site, and we continue to manufacture our on-market products for both the U.S. and the rest of the world markets. Turning to the pipeline. Over the next decade, more than 100 biological medicines are expected to lose exclusivity. Against that backdrop, Alvotech continues to build one of the largest biosimilar pipelines in the industry with more than 30 candidates currently in development. When selecting new programs, we focus on biologics where we see a combination of multiple factors, including significant market opportunity, durable mechanism of action, high scientific barriers to entry where Alvotech can be successful and opportunities where Alvotech's integrated development and manufacturing platform can create meaningful differentiation. Consistent with our strategy, we are excited with the progress we are making with our biosimilar candidates to both the intravenous and high-concentration subcutaneous usage forms of Entyvio. Earlier this year, we announced positive top-line results from a pivotal pharmacokinetic study, which allows us to move forward with regulatory submissions in major markets with all dosage forms and strength currently approved for Entyvio. Entyvio is an important therapy for inflammatory bowel disease and represents a multibillion-dollar opportunity in the immunology market. Based on current plans, we expect to submit regulatory applications later in 2026. Importantly, we anticipate being among the first companies to launch a biosimilar to Entyvio including both the intravenous and subcutaneous use presentations. Another important program in development is our biosimilar candidate for Keytruda, one of the highest selling medicines in the world with annual sales exceeding $30 billion. Keytruda has transformed treatment across multiple oncology indications and continues to expand into new therapeutic areas. Through our collaboration with Dr. Reddy's Laboratories, we are combining development expertise with global commercial capabilities to pursue this opportunity, sharing development costs and marketing rights for Keytruda biosimilar targeting global markets. We are anticipating submitting a therapeutic pharmacokinetic study for our proposed biosimilar to Keytruda and are on track to submit a marketing application in 2028. This would position us for a launch upon Merck's loss of exclusivity. More broadly, we continue to expand the capabilities of our integrated biosimilars platform. Last year, we increased our R&D capacity through the acquisition of a new center of excellence in Stockholm. In manufacturing, we strengthened our downstream integration through the acquisition of Ivers-Lee, which adds capabilities into device assembly, packaging and logistics. In Iceland, we've added to our perfusion capacity which supports production of our Stelara and Simponi biosimilars, and we continue to implement improvements for both perfusion and fed-batch production. Also, we are adding new drug substance and new drug production suites in our existing Reykjavik facility expanding our manufacturing capacity. This additional capacity will enable us to support demand for approved products as well as our development pipeline. These investments further strengthen our end-to-end development and manufacturing platform. Before closing, I would like to briefly comment on the recent FDA draft guidance related to biosimilars development. Up until now, to support the approval of a biosimilar application in both the EU and the U.S., developers may have been expected to conduct a 3-way pharmacokinetic similarity study and a comparative clinical efficacy and safety study, in addition to a comprehensive analytical similarity assessment. The draft guidance reflects a move toward more efficient and science-based development pathway. In particular, it reduces the need for a large comparative efficacy and safety clinical study as well as providing flexibility in the use of reference products. In practical terms, this means that in most cases, companies will be able to support the demonstration of biosimilarity with a 2-arm pharmacokinetic study, either in a healthy subject population or a therapeutic setting. Further, it gives study sponsors flexibility in the selection of reference products for the study and foregoes the need of a 3-way pharmacokinetic bridging study. Importantly, Alvotech anticipated this regulatory evolution. Over the past years, we proactively aligned our development strategies with both the FDA and the EMA, engaging early and often across multiple programs to obtain scientific advice. Notably, the FDA provided early recommendations for our early-stage products even prior to issuing the draft guidance, encouraging streamlined development in clarifying when a 2-arm PK study without a U.S. sourced comparator is acceptable. This foresight by Alvotech, and proactive regulatory engagement uniquely positions us to capitalize immediately on the streamlined framework, reducing costs and strengthening our leadership in global biosimilar development. To summarize, Alvotech continues to make progress across its late-stage pipeline and its research, development and platform capabilities. With a broad pipeline and fully integrated development and manufacturing platform, we believe we are well positioned to address the growing global demand for lower-cost biologic medicines. With that, I will hand the call over to Linda, who will provide an overview of our financial results.

Thank you, Joe. Indeed, it has been an eventful year for Alvotech. Since joining in July last year, I've had the privilege of witnessing firsthand just how much this team can accomplish in a short period of time. Despite the challenging operating environment, the company delivered important operational, financial and commercial milestones, advancing major launches, expanding our global footprint and strengthening our financial position. What has stood out most for me since day 1 is a strong belief in delivering on our mission, not just at the leadership level, but across the organization. With that context, let me walk you through the fourth quarter and full year financial results. Unless otherwise stated, the figures discussed today are adjusted numbers. Reconciliations to the corresponding IFRS measures are included in our earnings materials. Starting with highlights from Q4 2025, performance landed within our guidance with a strong close to the year. Growth was primarily driven by licensing revenues on the back of continued development progress and successful achievement of several performance milestones related to our new launches outside the U.S. when product sales were softer. Total revenues in the quarter were up 13% compared to the same quarter last year, at $173 million with licensing revenues making up 75% of the total and being the key driver of the quarter. This mix lifted gross margin to 66% and adjusted EBITDA to $69 million or a 40% margin. On the product side, revenues was $43 million and product margin negative by 37%, reflecting timing of orders and planned facility upgrades to support upcoming launches. As noted last quarter, we did expect product margin to be impacted by facility improvements and lower throughput in the second half of 2025. Looking towards 2026, we are expecting operating performance back-end loaded in Q4, in line with trends in 2025 and previous years. Operating cash flow was negative at $28 million, mainly impacted by lower revenue collections from soft product revenues in the second half of '25 and inventory build-up related to upcoming launches. Our year-end cash balance was $172 million, supported by the financing transactions completed in Q4, the $108 million convertible bonds and the $100 million senior term loan. These transactions strengthen the balance sheet, provide more operational flexibility and support our launch program heading into 2026. So overall, we closed the year with strong gross margin driven by licensing revenues, while we continue to invest in product launches and market expansion. Turning now to the full year of 2025. This slide summarizes the highlights for a year that delivered solid top-line growth, strong licensing contributions and positive operational cash flow for the first time. Total revenues for the year were $593 million, up 21% year-on-year. The mix was split evenly between product revenues and licensing revenues demonstrating the continued strength of our licensing model and its important role in funding R&D activity and pipeline progression. Product revenues were driven by commercial momentum for our Humira biosimilar AVT02 and for our Stelara biosimilar AVT04, which launched in the U.S. in Q1 '25. In addition to the 3 new approved products, we delivered shipments for those products to our commercial partners in December, and these new products will continue to deepen our commercial footprint. Gross margin finished at 61%, showing the benefit of licensing revenues within the mix. As we convert our R&D pipeline into commercialized products, we expect product revenues to become a larger share of the mix over time, with licensing milestones revenues at similar levels as now. Adjusted EBITDA for the year was $137 million, up 27% over the year. That represents a margin of 23%, reflecting strong licensing income translating directly to EBITDA. Operating cash flow for the year was positive for the first time at $7 million, and reflects the company's commercial inflection point in 2024 to 2025. Turning to cash flow. The main impact on our cash flow is around our inventory build-up related to launch preparation, our acquisitions, alongside the impact of our financing actions in the fourth quarter. The full year bridge shows a movement from $51 million in opening cash to $172 million in cash balance at year-end. Looking at the 3 first bars together, we see positive operating cash flow before interest and tax of $7 million. Working capital outflows is largely tied to inventory build for multiple upcoming launches, CapEx and M&A investment, including the bolt-on acquisitions on Ivers-Lee and Xbrane resulted under CapEx and acquisitions. And you also see a significant step-up from new equity and net borrowings in 2025. In Q4, specifically, operating cash flow was negative by $28 million, mainly driven by timing of collections in the quarter, CapEx and intangibles totaling $16 million, reflecting ongoing investments in manufacturing capacity and pipeline investments. Net interest payments were $35 million, following the transition from PIK to cash interest on the existing term loans, and net borrowings were $207 million driven by the completion of the financing package in Q4 which strengthened liquidity and enhanced our financial flexibility heading into 2026. The next slide summarizes the financing activities completed in Q4 and how they enhance our liquidity and financial flexibility heading into 2026. The capital structure is now balanced between term debt, senior security facilities and the new convertible bond. While net debt increased with the Q4 financing inflows, our leverage ratio being bet debt to adjusted EBITDA, lowered to 9.3x and is attracted to improve meaningfully in line with our 2026 outlook, with double-digit revenue growth and expanding EBITDA. And on the prospect of revenue growth, the next slide summarizes how we continue building a diversified resilient revenue base supported by more products on the market, broader geographical reach and sustained progress across the R&D pipeline and future product launches. With an R&D pipeline of around 30 products, licensing milestone revenues are started to continue on an annual basis, consistent with prior years. Additionally, its incremental launch adds diversification and improves visibility into future revenues and strengthens quality of earnings. Turning to the 2026 financial outlook, we are reaffirming the outlook for 2026 with revenues in the range of $650 million to $700 million, which reflects continued double-digit sales growth as we expand our commercial portfolio and bring additional products to market across approved geographies. Adjusted EBITDA is expected to increase to $180 million to $220 million, supported by portfolio expansion and increased operating scale. The lower end of the range assumes no U.S. launches in 2026. Just to briefly summarize key items on the asset side of our balance sheet. Our asset base increased during the year, supported by strategic acquisitions and ongoing pipeline investments. Total noncurrent assets increased by 19%, driven primarily by the bolt-on acquisitions of Ivers-Lee and Xbrane, capacity expansions, capitalized pipeline investments and higher contract assets due to timing of revenue recognition and payments. Deferred tax asset adjusted downwards by $130 million, inventory increased by $92 million over the year as we built ahead of upcoming product launches across approved markets. Trade receivables decreased by $70 million, largely due to time of product shipments and improved collection cycles. Next, a few comments on the key moment across equity and liabilities. Our equity position improved by $128 million, mainly driven by profits for the period and capital contributions linked to our Swedish listing. The movement in derivative financial liabilities decreased by $156 million, mainly reflecting fair value changes on earn-out shares. Borrowings increased primarily due to the convertible bonds and $100 million senior term loan facility completed in Q4 2025. To summarize, this is the last slide I want to leave you with here today. Q4 landed in line with our outlook for the full year, a very strong finish driven primarily by licensing revenues, while product sales were softer, reflecting timing of workers and planned facility upgrades to support upcoming launches. Revenue diversification continues to strengthen as more of the portfolio is launched across Europe, Japan and other regions. This diversification reduces concentration risk and supports long-term sustainable growth. As stated before, there is high focus on reaching cash flow positivity by the year-end of 2026. Operating cash flow was positive in Q4 2025 for the first time at $7 million. The average is trending down, and we expect that to continue in line with our reaffirm 2026 outlook for double-digit revenue growth and margin expansion. And with that, I'd like to hand over to Lisa.

Thank you, Linda. Before we open the call for questions, I would like to briefly summarize where we are today. Alvotech has built a fully integrated biosimilars platform supported by a broad pipeline, global manufacturing capabilities and strong commercial partnerships. During 2025, we continue to expand that platform while also strengthening our operational foundation through significant investments in quality systems and compliance. Looking ahead, our priorities remain clear. We will continue advancing our biosimilar portfolio toward approval and commercialization in all markets, including the U.S. We will maintain strong focus on operational excellence, efficiency and regulatory compliance, which includes expanding our manufacturing footprint with key dual sourcing initiatives, and we will continue expanding our pipeline in the most cost-effective way and strengthening our global partnerships. The biosimilars opportunity remains large and durable, and we believe Alvotech is well positioned to capture that opportunity. With that, operator, we would be happy to take questions.

[Operator Instructions] We will take our first question, and the question comes from the line of Ash Verma from UBS.

Maybe just like on the U.S. approvals where your -- you said that you completed the remediation program. Can you give us a sense of what are the pending items between now and the filing? How confident are you this time that this would result in an approval, any chances of additional inspection from the FDA? And then second question, just I'm trying to understand like the guidance that you provided, the $650 million to $700 million compared to what you did for 2025 at $593 million. Like is there any assumption of these 3 new products for U.S. market at all at the low end of the guide? If you strip that out, like what would be the outlook for the full year.

This is Joseph McClellan. Thank you for the question. I'll take the first part, and then I'll hand it over to Linda for the second. So we, as I said, completed our remediation efforts. We are now gathering the information showing that our changes are effective. And so we're compiling that information and putting that forth. So that is why we're in the final stretches of being ready to submit. We're working really hard to do it by the end of the first quarter, but we're also prepared that it could be in the second, but definitely in the first half of this year. The approval process has been a 6-month clock based on the BsUFA guidelines. And then, yes, there is an opportunity for them to inspect the FDA again. However, we are working to have as comprehensive as a response as possible that would potentially could not require them to come and inspect again. Linda?

Yes. And on the guidance question, like, on the outlook for 2026, like in the lower end of the range, we are not including revenues from our U.S. launches. So yes, I think that's the answer to that one. I mean, I just think about the upper end as like -- I mean I would just think about the lower end as no revenues from the U.S. and then the upper end is what we're striving for.

The question comes from the line of Glen Santangelo from Barclays.

Just 2 quick ones for me. Linda, I did also want to follow up on the guidance. And I think I hear you loud and clear that you're not really building much in terms of the U.S. approvals into the guidance. But when I sort of walk that bridge from the $593 million you generated this year to the $650 million to $700 million for fiscal '26. Can you just give us a sense for what type of incremental commercial approvals outside of the U.S. may be required to sort of get into that range? Or are you not building in any incremental approvals into that guidance? And then secondly, Lisa, kind of curious to follow up on your comments about expanding the manufacturing platform. I just wonder if you can give us a better sense for timing, how you're thinking about that, the cost associated with that? And also to follow up on Joe's comments with respect to the FDA draft guidance changes, how that may impact your R&D costs and your operating expenses. I'm just trying to get a sense for how the cap structure may evolve here over the next sort of 12 to 18 months based upon your ambitions. Thanks so much.

Yes. On the guidance question, like what we're building in there is just the momentum on the launches we've already gotten approval on. So looking at Europe and rest of world. And then as I stated before, like what we are firmly targeting is then to get before year-end and getting to the upper end of the range. The approvals in the U.S.

Thank you for the question. It's Lisa. So regarding the dual sourcing and the capacity, so it's something that we've been evolving. It's certainly something that, as Joe has detailed in the past, as we look at our expanding portfolio and pipeline, that certainly is needed in order for us to capitalize and maximize on commercial potential. So from a timing point of view, I think we're -- this is a first half event in terms of being able to secure that. We're not in a position today to sort of name the party or parties we're talking about, but we will certainly, once we've secured that. I think from a cost and a CapEx perspective, I mean, this does somewhat dovetail with the changes that we had been anticipating in terms of R&D expenditure. For us, this allows us to do more for the same cost base that we've been anticipating over the last few years. So it allows us to do more in terms of actual programs, but it also allows us to be able to build into that the anticipation around capacity building. So I think what we'll see as we unfold the year is it's very much within scope of our expectations in terms of spend, both CapEx and I include in that R&D spend as well.

The question comes from the line of Christopher Uhde from SEB.

Christopher Uhde from SEB. I guess I'd like to start with some big picture things. And so maybe Lisa, congratulations on the new role. As you take the reins, how should we think about your aims and ambitions? Is this continuation, evolution or revolution. And I know you highlighted, of course, manufacturing investments, but what do you see as the most pressing short-term priorities and in particular, anything you think needs to be done differently or emphasize differently, both short term and long term?

So I think it's very much evolution, not revolution. I think the team has certainly built a solid platform, as I've said in my remarks. And as you've heard, from Joe and others. So I think it's really ensuring that we execute truly on the pipeline that we're building and continue to make sure that we launch those programs through our partners, of course, but that partnership model really is very heavily reliant on our performance, not only on R&D, but ultimately approval and being able to supply. So from a priority perspective, there is no question, and I think that was outlined as well in our remarks, that is sort of #1, 2 and 3 across the board. And I think working alongside on the compliance piece, I mean, the U.S. market obviously continues to be important to us. Europe and other markets continue to perform very well for us, as you saw through our '25 and we anticipate that continuing in '26. So we do need to make sure, and it's certainly my intent to work with the team that we continue to build upon the scaling that we've done so far from a commercial production perspective.

Okay. Great. If I could ask just a little bit more of a specific question. Could you talk a little bit about Iran war disruption risk to your supply chain and logistics? I mean, where is there more exposure, manufacturing like disposables, tissue culture, media, other items or shipping costs?

Yes. I think from our point of view right now, I mean, we do have markets that we're expanding to in the Middle East, but those are still early days in terms of expansion. Most of what we're anticipating from a contribution point of view continue to come from the key markets, U.S., EU, Japan. So right now, we are not seeing that as an immediate direct impact on procurement or supply.

Okay. Great. And if I could just ask one more bigger picture question before getting back into the queue. The big concern we hear back from investors is around the competitive landscape. So would you please just walk us through, let's say, an update on your thinking around how you can mitigate competitive exposure, whether that be development strategy or niches or some other kind of innovation at some level that could insulate you?

Yes. Yes, absolutely. So I think as we've said, I think we anticipated some of the changes on the regulatory front, particularly in the U.S. I think we started early, which allowed us to do a larger subset of programs, I think being first and forming in the first wave, but ultimately being first to market is our goal, that it comes from the speed of our development, which I think has been fantastic, and we have a good track record with I think it then comes to approval and our IP positioning, which, again, I think we're very strategic in terms of how we design our products, both from an IP perspective in U.S. as well as other markets. So very complementary from that perspective. And so for us, we try and choose programs where we can enable that first-mover advantage, and that comes from both the complexity of the program, our investment in it as well as our strategy, ultimately, commercially, both from an IP entry point of view as well as how we tackle contracting in the U.S. and the partnerships we have with very, players that have the ability to penetrate quickly like STADA and Advanz.

[Operator Instructions] We will take our next question, and the question comes from the line of Arvid Necander from DNB Carnegie.

So first off, a question, just trying to understand the underlying momentum of the established portfolio here. So product sales have been a bit on the software side over the past 2 quarters. Data that we can track is incomplete, but it seems like TRx growth for 02 seems to be moderating into 2026 and PBM dynamics are, of course, intensifying. So just wondering if the scripts and sales trends represent a true signal here or if it's just noise. And if you can say anything on the revenue growth trajectory that you're expecting for 02 and how it will evolve through the year? And then secondly, on R&D spend, which steps down quite significantly in Q4 while your guidance, I guess, implies an increase on a total spend basis for 2026. So how should we think about the sequencing of R&D through 2026? Is this more likely to be back-end loaded. Yes, I'll stop there.

Maybe I'll start just on some of the performance pieces on our commercialized programs. So when we look at '25, I think we're certainly exiting the year from a sales out into the market perspective in the U.S., we've seen growth in 02 and 04. We are continuing and expect to see that growth in '26. A lot of that growth is through certainly in the U.S., our partnership with Teva. In rest of world markets, we do have shot up for 02 and 04. I think 02 in Europe, a little more challenging from a growth perspective, but we're still anticipating it. We did form that market last but we have been able to secure leading positions in some of the European markets like Austria and Sweden. So we are still anticipating top line growth on 02, certainly on 04. There is, we believe, continue to be opportunity in '26, especially when we look at our exit position in '25. I think we were sitting at around a 5% share in the U.S., about a 9% share on 02 in the U.S. So we do think that there's continued momentum certainly in the very near term. And we're positioned well, I think, with our partners, even given some of the PBM pressures, our formulary business continues to contribute our unbranded business as well, is also contributing to that overall growth perspective. And maybe finally, just to say it, these markets are still evolving in terms of generic erosion of the branded base. So I think we're going to continue to see AbbVie get excluded in '26, which will help, obviously, our additional ability to secure new business, but just to maintain and grow just through volume the business we've secured today. Maybe I'll turn it to Linda on revenue piece.

So perhaps also just to comment a bit on the revenue piece, unlike with quarterly fluctuations, I think it's also good to keep in mind, like we are a B2B company. So you can always expect to see some fluctuations between quarters, depending on like timing of quarters. But if I move into the R&D spend, like I would say, it's fairly -- going to be fairly balanced throughout next year. We continue to invest in our R&D efforts, which have been paying off a lot looking at our pipeline. Perhaps also to mention that, as I mentioned in the call itself, we are expecting '26 to be back-end loaded towards the end of Q4, so just also keep that on in mind.

The question comes from the line of Christopher Uhde from SEB.

So I guess, maybe on the question that we just heard a follow-up around the dynamic with Simlandi. So what can you say about the overall market dynamics over the past year for the Humira biosimilar market? And what's the future of private label sales for you in the U.S. And I guess for both products, I mean, do you see -- in the past, I think we've heard management say that you could have probably 3 or 4 years of sales growth from a given product before erosion could start? Do you still see that as the case? Or obviously, we'd be looking for a return to growth at this point?

Yes. Yes. So I do think that what we've seen through the end of '25 has been that continued growth. I think that a lot of that is truly coming from the continued loss of business for the innovative product. So I think the exit was a biosimilar sitting at a roughly 55% share. So I think there's still that continued opportunity amongst the subset of players that are out there today, and we're sitting at a decent spot with that 9% share in terms of AVT02. So we do think there's more continued growth on that formulary business just as a factor of that erosion of the branded space. In terms of private label for 02, I do think we continue to seek opportunity there. I'll never say that there's no opportunity, but I think the formulary business will continue to be a focus for us, certainly in '26 and beyond. 04, as I mentioned, we are seeing decent growth. I mean that's a more recent launch. And certainly, we're still young in terms of the overall erosion. I think the exit was about 41% in '25 for biosimilar share. So there's still opportunity there. And Teva has been very a very good commercial partner in terms of how they're growing the market and partnering on the unbranded space as well as on the formulary piece. So we're optimistic still that we will continue to see growth over this -- over the next few years. For us, we're not ready to say this is plateaued by any stretch, just given the fact that we're still seeing that brand erosion continue to happen.

And if I could then ask about whether you could quantify the sum of sales for the 3 new launches that happened in 2025. So product sales that is?

We don't quantify it specifically, but it is like -- I mean, it is definitely a part of our contribution in Q4.

Okay. And -- then I guess, for the guidance high end, well taken on the revenue of new products of the U.S. launches not being part of the low end, but at the high end, would it be licensing revenues only or also product sales?

It will be both like on the high end.

The high-end, Robert here. The high end is mainly reflecting growth in supply revenues. It is both.

Okay. And then -- is it still fair to say that just with respect to the cadence that you discussed, is it still fair to say that your 6 months visibility remains extremely high, I mean, essentially that the orders have been placed.

Yes. We have good visibility into the next 6 months.

Okay. Great. And then I guess -- so then the last thing I wanted to ask about was just in terms of the product gross margin, and I might have missed this, I didn't quite catch it in your comments, obviously, negative for the past 2 quarters. When do you expect the portfolio to deliver leverage again there?

So I would say like -- I mean, we are definitely seeing impact from our facility improvements, both in Q3 and in Q4, and that's in line with what we also commented on in Q3, but it will flow into Q4. I mean, I think things are moving well on that front. So we should be seeing this trending up now in '26.

Maybe to add to that, Robert here. If you look at our gross margin because we need to look at the gross margin, which includes then, of course, both licensing and supply revenues, because there is always a trade-off, I mean, if you have a lower milestones, you would get a higher margin on vice versa. So we are basically seeing 62% gross margin in our business towards '25. And if you look at the comparable companies like Samsung and Celltrion, we are delivering today a gross margin, which is higher than those 2. But as mentioned by Linda, those revenues can be lumpy, both the license one and of course, how we ship. But just to underline that, we have, of course, been in a shutdown due to FDA remediation a few times this year. That is, of course, reflecting a bit how we ship also.

Thank you. This concludes today's question-and-answer session. I'll now hand back for closing remarks.

Thank you. On behalf of the team presenting today and all of us at Alvotech, I want to thank everyone who joined us for this webcast. We look forward to talking to you again and wish you a wonderful day.

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