Alvotech Plummets 33.6% on FDA Setback for Key Biosimilar, EBITDA Outlook Cut

Summary
• Alvotech (ALVO) slumps 33.6% to $5.08, its lowest since May 2025
• FDA issues Complete Response Letter for AVT05 biosimilar, citing Reykjavik facility deficiencies
• 2025 EBITDA outlook slashed to $130–$150M, down 30% from prior guidance

Alvotech’s shares imploded on Monday after the FDA rejected its AVT05 biosimilar application, triggering a 33.6% intraday drop. The stock’s collapse reflects a perfect storm of regulatory delays, revised financial guidance, and a bearish technical setup. With the company now navigating a $570M–$600M revenue outlook and a 52-week low of $5.01 in sight, investors face a critical inflection point.

FDA CRL Sparks Sharp Selloff in Alvotech Shares
The FDA’s Complete Response Letter for AVT05, a biosimilar to Simponi, triggered a liquidity crisis in Alvotech’s stock. The CRL cited unresolved deficiencies at the Reykjavik manufacturing facility, which remains FDA-approved for existing products but now faces delays for AVT05. This regulatory hurdle forced the company to cut its 2025 EBITDA forecast by 30% and delay a potential first-to-market biosimilar launch. The market’s reaction—a 33.6% drop to $5.08—underscores the fragility of Alvotech’s growth narrative and the high stakes of facility compliance in the biosimilar sector.

Biotech Sector Bears Mixed Pressures as Alvotech Dives
While Alvotech’s collapse is idiosyncratic, the broader biotech sector faces headwinds. Amgen (AMGN), the sector’s leader, fell 1.79% on Monday, reflecting investor caution ahead of earnings. However, other biotechs like Vertex Pharmaceuticals (VRTX) held firm, highlighting divergent market sentiment. Alvotech’s facility-related selloff contrasts with peers focused on clinical milestones, underscoring the sector’s fragmented dynamics.

Bearish Technicals and EBITDA Woes: ETF and Options Playbook
• 200-day MA: $9.64 (well above current price)
• RSI: 44.48 (neutral but bearish bias)
• MACD: -0.129 (bearish crossover)
• Bollinger Bands: $5.01–$9.06 (current price near lower band)

Alvotech’s technicals confirm a breakdown. The stock is trading below its 200-day MA and RSI is trending lower, suggesting further weakness. Key support levels at $5.01 (52-week low) and $4.50 (psychological floor) are critical. With no options liquidity provided, traders should focus on ETFs like XLV (healthcare) or short-term cash-secured puts for aggressive downside exposure. The bearish case hinges on a breakdown below $5.01, which could trigger a 20%+ extension.

Backtest Alvotech Stock Performance
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Alvotech’s Facility Woes: A Sell-Off with No Quick Fix
Alvotech’s 33.6% drop reflects a regulatory and financial perfect storm. With AVT05 delayed and EBITDA slashed, the stock’s near-term outlook is bleak. Investors should monitor the $5.01 support level and the company’s CAPA plan progress. Meanwhile, Amgen’s 1.79% decline signals broader sector caution. For Alvotech, a rebound will require resolving facility issues and proving AVT05’s market viability—neither of which are assured. Watch for a breakdown below $5.01 or a regulatory update by Q1 2026.