Alvotech Expects Strongest Quarter in Its History, Holds 2026 Guidance Near Lower End
Key Facts
Alvotech Executive Chairman Robert Wessman said the company expects the fourth quarter of 2026 to be the strongest in its history, citing what he described as a strong order book as it approaches 2027. The company maintained its guidance for fiscal 2026, setting revenue at $650 million to $700 million and EBITDA at $180 million to $220 million. It now expects results to come in near the lower end of both ranges, according to its statement accompanying results for the nine months through September 30. The chief financial officer said on the earnings call that some timing-related effects are pushing expectations toward that end compared with what management saw earlier in the year. Wessman added: "We expect the fourth quarter to be the strongest in Alvotech's history, and we have a strong order book as we head into 2027."
The outlook came as the company reported total revenue of $323.4 million in the first nine months of 2026, compared with $420.0 million in the same period of 2025, a year-on-year decline of 23.0%. In the third quarter alone, revenue was $111.6 million, versus $113.9 million a year earlier, down 2.0%. Product and service revenue in the quarter rose to $58.2 million from $32.6 million, an increase of 78.3% year on year. Management attributed the weakness in total revenue for the nine months to slower production and the timing of licensing revenue, as well as the effect of the U.S. launch of the Stelara biosimilar in the first half of the previous year. The nine-month comparison therefore included a period when the product was launched in the U.S. market, alongside changes in production and the timing of licensed revenue.
Adjusted EBITDA improved to $78.3 million in the nine months through the end of September, compared with $68.0 million in the same period of 2025. Gross margin, meanwhile, was 54%, versus 59% a year earlier. Management said its manufacturing improvement program was completed in the first half of 2026 and that it is working to increase supply to meet strong underlying demand. It added that the priority is to convert this progress into the product deliveries planned for the fourth quarter. Management said on the earnings call that production volumes had begun to rise, pointing to supply progress as it meets demand and the orders the company has received.
On production capacity, Alvotech said the U.S. Food and Drug Administration approved a new manufacturing process for Simlandi that increases output per batch to more than double. The process allows the same quantity to be produced in fewer batches, according to the company's statement. The company also received approval to produce Simlandi drug substance in a second production suite at its facility in Reykjavik. It said the approval added flexibility and manufacturing capacity to its operations. The steps come as management reiterated that increasing supply and delivering the products planned for the fourth quarter are operational priorities.
Reported cash balance was $61.5 million on September 30, 2026, compared with $172.4 million on December 31, 2025. The chief financial officer said on the earnings call that the company expects its cash flow to turn positive in the fourth quarter of 2026. She also said management was confident of a significant improvement in EBITDA between 2026 and 2027, without providing detailed guidance for the next year. ALVO shares closed at $4.92 on November 11, after closing at $4.55 on November 5, $4.86 on November 6, $4.69 on November 9 and $4.88 on November 10. The company released its third-quarter results after the U.S. market close on November 11 and held its earnings call on November 12. It set March 10, 2027, for the release of fourth-quarter results after the U.S. market close and March 11 for its full-year results call.