Alvotech's Nasdaq Stockholm Listing: A Strategic Move for European Biosimilars Leadership

Alvotech, a leading developer and manufacturer of biosimilar therapies, has published its prospectus in connection with an upcoming listing of Swedish Depository Receipts (SDRs) on Nasdaq Stockholm. The move aims to capitalize on growing demand for biosimilars in Nordic and European markets while diversifying its investor base. Here’s a deep dive into the opportunity, risks, and implications for investors.

Key Details of the Offering

Alvotech plans to issue 441,600 SDRs, each representing one ordinary share, with an estimated gross offering size of SEK 30 million. The final price per SDR will be the lower of two metrics:
1. A 10% discounted volume-weighted average price (VWAP) of Alvotech’s shares on Nasdaq Iceland during the May 9–16 application period.
2. A 10% discounted closing price of its shares on Nasdaq Iceland on May 16.

The SDRs will trade under the ticker “ALVO SDB” starting May 19, 2025. This listing is restricted to Swedish residents, with settlement expected by May 21. Existing shareholders can convert their shares to SDRs free of charge for one year post-listing, though custodial fees may apply.

Financial Strength and Growth Momentum

The prospectus highlights robust first-quarter 2025 performance, underscoring Alvotech’s transition to profitability.

• Revenue Surge: Total Q1 revenue reached $132.8 million, a 260% year-over-year increase, driven by U.S. launches of its Stelara® biosimilar SELARSDI™ and expanded sales of its Humira® and Stelara® biosimilars globally. Product revenue alone jumped 786% to $109.9 million.
• Profitability Gains: Adjusted EBITDA turned positive at $20.5 million, reversing a $38.4 million loss in Q1 2024.
• Cash Position: As of March 31, 2025, Alvotech held $39.5 million in cash, with borrowings at $1.096 billion. Management expects free cash flow positivity in 2025, signaling self-sufficiency without external equity raises.

Use of Proceeds: Fueling Expansion and Innovation

The offering’s proceeds are strategically allocated to accelerate Alvotech’s growth:
1. 60% to Production Capacity: Funds will expand facilities in Iceland and the U.S., including scaling up biopharmaceutical manufacturing to meet surging demand.
2. 20% to R&D: Investments will advance its pipeline of nine biosimilar candidates targeting autoimmune diseases, cancer, and eye disorders. Notably, the acquisition of Xbrane’s R&D operations adds a Cimzia® biosimilar, boosting expertise in monoclonal antibodies.
3. 10% to Commercial Infrastructure: Enhancing market penetration in the U.S., Europe, and emerging markets through partnerships with Teva, STADA, and Fuji Pharma.
4. 10% for General Corporate Purposes: Including working capital and potential acquisitions.

Strategic Implications and Risks

The Nasdaq Stockholm listing is a bold step to strengthen Alvotech’s Nordic presence and attract institutional investors. However, risks loom:
- Regulatory Hurdles: The Xbrane acquisition requires Foreign Direct Investment approval by May 2025. Delays could disrupt pipeline expansion.
- Market Constraints: The offering’s geographic restriction to Sweden limits immediate capital influx. SDRs are not registered in the U.S., curtailing access to its largest market.
- Operational Risks: Manufacturing bottlenecks or regulatory setbacks for key products like AVT05 (Simponi® biosimilar) or AVT06 (Eylea® biosimilar) could impact revenue.

Management’s Vision and Updated Guidance

CEO Robert Wessman emphasized Alvotech’s pivot to self-funded growth, with revised full-year 2025 guidance:
- Revenue: Raised to $600–$700 million (vs. prior estimates).
- Adjusted EBITDA: Increased to $200–$280 million, reflecting operational leverage.

The company is prioritizing four new biosimilar launches in 2025, including AVT06 (Eylea®), the first-of-its-kind biosimilar filing in major markets.

Conclusion: A High-Reward, High-Risk Play

Alvotech’s Nasdaq Stockholm listing marks a pivotal moment for its European ambitions. With 260% revenue growth in Q1 2025, a strengthened pipeline, and a clear path to free cash flow, the company is well-positioned to capitalize on the $82 billion global biosimilars market.

However, investors must weigh risks like regulatory approvals and geographic fundraising constraints. The SEK 30 million offering is modest compared to Alvotech’s $1.096 billion debt burden, suggesting this is a tactical move rather than a major capital raise.

For contrarian investors, the bet hinges on Alvotech’s execution: delivering on its pipeline, scaling production efficiently, and navigating regulatory hurdles. With $30 million in cash and a 786% product revenue surge, the fundamentals are compelling—if management can sustain momentum.

In short, Alvotech’s Stockholm listing is a vote of confidence in its biosimilars strategy. For those willing to accept risk, it could be a gateway to a high-growth sector poised to disrupt Big Pharma.

Final Take: Alvotech’s prospects are bright, but success depends on execution. The Stockholm listing is a strategic step—but investors must monitor regulatory approvals and cash flow closely.