Alvotech Plummets 34.5% on FDA Setback: A Biosimilar's Regulatory Woes Ignite Market Turmoil

Summary
• Alvotech (ALVO) crashes 34.5% intraday to $5.005, its lowest since May 2023
• FDA issues Complete Response Letter for AVT05 biosimilar, halting first-to-market bid
• 2025 EBITDA outlook slashed to $130–$150M amid facility compliance delays
• Technicals show bearish divergence with RSI at 44.48 and MACD histogram -0.094

Alvotech’s stock has imploded on news of a regulatory roadblock for its flagship biosimilar candidate AVT05. The FDA’s CRL for the BLA, coupled with a revised financial outlook, has triggered a 34.5% selloff. With the stock trading near its 52-week low of $4.90, investors are scrambling to assess the fallout from manufacturing facility deficiencies and production slowdowns.

FDA CRL Derails AVT05 Approval, Triggers EBITDA Cut
The FDA’s Complete Response Letter for AVT05, a biosimilar to Simponi, has shattered Alvotech’s first-to-market ambitions. The CRL cites unresolved deficiencies at the Reykjavik manufacturing facility inspected in July 2025, despite no clinical data issues. This forces a temporary production slowdown and a $130–$150M adjusted EBITDA outlook, down from $150–$170M. The facility remains FDA-approved for existing products, but the AVT05 delay—targeting a $300M U.S. market—has investors fearing lost revenue and competitive erosion.

Biotech Sector Mixed as Amgen Drags Down Peers
The biotech sector remains fragmented, with Amgen (AMGN) down 1.34% amid broader market jitters. While Alvotech’s 34.5% drop is extreme, peers like Biogen and Vertex Pharmaceuticals show resilience. The sector’s focus on regulatory outcomes and R&D progress contrasts with Alvotech’s facility-driven setback, highlighting the stock’s unique vulnerability to manufacturing compliance risks.

Bearish Technicals and No Options: Navigating the Short-Term Downtrend
• 200-day MA: 9.638 (well above current price)
• RSI: 44.48 (oversold territory)
• MACD: -0.129 (bearish divergence)
• Bollinger Bands: 9.06 (upper), 8.33 (middle), 7.61 (lower)—price near lower band

Alvotech’s technicals confirm a short-term bearish bias. The stock is trading near its 52-week low and below all major moving averages, with RSI indicating oversold conditions. The MACD histogram’s negative divergence and Bollinger Band compression suggest further downside. With no options liquidity provided, traders should focus on short-term bearish strategies. A 5% downside scenario to $4.75 would test critical support at $4.90, the 52-week low. Aggressive short-sellers could target this level, but caution is warranted given the stock’s volatility and potential for a rebound if the CAPA plan shows progress.

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Regulatory Hurdles Loom: Watch for Facility Compliance Updates
Alvotech’s collapse underscores the fragility of its biosimilar pipeline amid regulatory scrutiny. While the stock’s technicals point to further declines, the key catalyst remains the resolution of Reykjavik facility issues. Investors should monitor the company’s CAPA plan execution and FDA correspondence. Meanwhile, sector leader Amgen’s -1.34% decline signals broader biotech caution. For now, a bearish stance is justified, but a rebound could materialize if the company demonstrates swift compliance. Watch for $4.90 support and updates on AVT05’s regulatory path.