Alvotech Shares Plunge 22% After FDA CRL for AVT05 Biosimilar Application

Alvotech's shares have recently declined significantly, with an 8% drop over the past month and a 22% plunge in premarket trading following an FDA complete response letter (CRL) regarding its biologics license application for AVT05, a biosimilar to Simponi. The FDA identified deficiencies at Alvotech's Reykjavik manufacturing facility, which must be addressed before approval, though the facility remains approved for current products. In response, Alvotech has revised its 2025 financial outlook, projecting revenues between $570-$600 million and adjusted EBITDA of $130-$150 million, reflecting continued investments to resolve the issues and a temporary slowdown in production. Despite robust revenue growth and efficient production margins, financial indicators such as a negative debt-to-equity ratio and an Altman Z-Score in the distress zone suggest potential financial instability. Alvotech's share price is substantially below analyst price targets, which anticipate a fair value more than double the current price, highlighting a market debate over the company's future prospects amid regulatory and financial challenges. The company remains committed to resolving the FDA concerns and advancing its biosimilar pipeline to improve patient access to treatments globally.