Alvotech Plunges 34% on FDA Setback for Biosimilar Candidate AVT05—A Regulatory Storm Unfolds

Summary
• Alvotech’s stock (ALVO) slumps 34% to $5.04, hitting its 52-week low of $5.02
• FDA issues Complete Response Letter (CRL) for AVT05, delaying its potential as the first Simponi biosimilar
• Company slashes 2025 EBITDA outlook to $130–$150 million amid facility compliance hurdles

Alvotech’s dramatic intraday collapse reflects a perfect storm of regulatory setbacks and revised financial guidance. The FDA’s CRL for AVT05—a biosimilar targeting Simponi—has triggered a sharp selloff, with the stock trading near its 52-week low. The company’s revised revenue and EBITDA projections, coupled with facility compliance issues, have amplified investor concerns. With the biotech sector under pressure, ALVO’s move underscores the fragility of high-risk, high-reward biosimilar plays.

FDA CRL Sparks EBITDA Cut and Market Doubt
Alvotech’s 34% intraday plunge stems from the FDA’s CRL for AVT05, its biosimilar candidate to Simponi. The CRL mandates resolving deficiencies at its Reykjavik manufacturing facility, delaying AVT05’s launch and eroding its first-to-market advantage. The company’s revised 2025 EBITDA outlook of $130–$150 million—down from prior expectations—reflects the financial burden of facility remediation and production slowdowns. While the Reykjavik site remains FDA-approved for existing products, the AVT05 delay has cast a shadow over Alvotech’s growth narrative, triggering a liquidity-driven selloff.

Technical Deterioration and ETF Implications for Biotech Bears
• 200-day average: 9.64 (well below current price)
• RSI: 44.48 (neutral but bearish bias)
• MACD: -0.129 (negative momentum)
• Bollinger Bands: Price at lower band (5.02), signaling oversold conditions

Alvotech’s technicals paint a grim picture. The stock is trading near its 52-week low and below all major moving averages, with RSI and MACD confirming bearish momentum. Short-term traders should monitor the 5.02 support level and the 5.50 psychological threshold. Given the lack of options liquidity and the absence of leveraged ETFs, a cash-secured short position or a bearish ETF like XBI (Biotech Select Sector SPDR) could capitalize on sector-wide weakness. However, the stock’s proximity to its 52-week low suggests a potential rebound if the 5.02 level holds, though this remains speculative.

Backtest Alvotech Stock Performance
The back-test for “Buy ALVO after a ≥-34 % single-day plunge” has been completed for the period 2022-01-01 to 2025-11-03, using daily close prices. Key parameter choices (auto-filled for completeness): • Risk control – 20 % stop-loss, 120 % take-profit, 30-day max holding. (These provide basic downside protection, a generous upside cap, and ensure positions are not held indefinitely.) • Open signal – any trading day on which ALVO’s close-to-close return ≤ -34 %. • No explicit close signal apart from the risk-control exits above. You can review the detailed performance metrics and trade-by-trade breakdown in the interactive module below.Please open the module to explore the equity curve, trade list, and performance statistics.

Regulatory Hurdles and Biotech Volatility: What’s Next for ALVO?
Alvotech’s 34% drop underscores the high-stakes nature of biosimilar development, where regulatory delays can swiftly erase market optimism. The stock’s technical breakdown and revised EBITDA outlook signal near-term challenges, but the 5.02 support level could offer a buying opportunity for contrarians if the company resolves its facility issues. Investors should watch for a potential rebound above $5.50 or a breakdown below $5.02, which could trigger further declines. Meanwhile, sector leader Amgen (AMGN), down 1.8%, highlights broader biotech sector fragility. For now, ALVO’s path hinges on its ability to execute its CAPA plan and regain FDA confidence—a high bar in a risk-averse market.