Q3 2025 Alvotech SAS Earnings Call
<unk> presentation accompanying todays earnings call was also published under our Investor portal investors thought our tech dot com under news and events.
Our press release presentation and statements that we make on the call. Today may include forward looking statements.
Róbert Wessman: However, despite these fluctuations, we delivered strong double-digit growth in revenues, both in the quarter and in the first nine months, up 11% and 24%, respectively, with a trailing 12-month run rate of $571 million in revenues. Adjusted EBITDA margin for the first nine months 2025, however, was at 16% compared to 26% last year. This was driven by higher R&D investments to accelerate pipeline expansion, as well as higher DNA cost to scale operations and infrastructure to be able to drive operational efficiency across the organization. Finally, I would like to highlight that we continue to diversify geographically, with growing contributions from Europe, as market share in Europe and other markets outside of the US continues to grow. Moving to cash flow on the next slide.
We see our disclaimers on slide number two of the presentation.
These statements do not ensure future performance and are subject to risks and uncertainties that are outlined in the company filings with the Securities and Exchange Commission and the risks and uncertainties could cause actual results to differ materially from forward looking statements that are made.
Presenting on today's call are Robert Wiseman, Chairman and Chief Executive Officer of Alphatec.
Joseph Mcclelland Chief operating officer.
And Linda <unk>, Chief Financial Officer.
Also with US on the call is pelagic Prasad Chief strategy Officer brokers will begin today's presentation with a discussion of the status of our pending biologics license application with the FDA and.
Facility inspection and present some business highlights.
Joseph will discuss the status of our development pipeline Linda.
Linda will conclude with a discussion of our financial statements and full year guidance.
Róbert Wessman: As I touched on earlier, cash flow in the quarter was a function of lower revenue collection due to timing and planned inventory build-up in support of upcoming launches. We also continued strategic investments in CapEx and in fundables to expand capacity to support new launches and our growth plans. New working capital option of $100 million will be used to capture swings in working capital. Cash is impacted by the cost associated with acquisition of Ivers Lee and interest payments since from June 2025, we are paying cash interest on our loans. Next, I would like to quickly touch on the balance sheet on the next two slides. Our asset base remains strong, supported by recent bolt-on acquisitions and continued investment in R&D to drive future growth. Current assets are stable overall, with expected shifts in inventory and trade receivables during the period.
Following the introduction of our team will be happy to take your questions and with that I would like to turn the call over to Robert Westmont.
Thank you Benedict.
Thanks to everyone for joining us here today.
Please turn to the slide number four in your deck.
We are now approaching the end of very eventful year.
By increased pipeline development.
<unk> has four product approvals across multiple markets.
Licensing and product revenues.
All of our tact has come a long way in its 12 year history.
We have invested approximately $2 billion to build a global pure play Biosimilar company.
The integrated R&D and manufacturing under one roof.
Róbert Wessman: Looking into the equity and liability side, a couple of things to mention here: our equity position strengthened by $236 million, driven by profit for the period and the inflow of capital contributions from our most recent Swedish listing. Derivative financial liabilities decreased by $167 million, mainly due to fair value change on earn-out shares. Lastly, the overall contract liabilities decreased due to recognition of licensing revenues. If we then turn to the next slide featuring our revised full-year outlook. On 4 November, we revised our outlook following the CRL from the FDA. We updated our outlook for the full year to a range of $570 million to $600 million in revenues, and adjusted EBITDA range of $130 million to $150 million. This revision reflects action taken to respond to any issues identified by the FDA inspection impacting production efficiency in 2025.
We commercialized globally through our network of nearly 20 partners, reaching over 90 countries worldwide.
After launching our first biosimilars into 'twenty, two and second Biosimilar towards 24.
We entered the U S market last year.
The 2024 global launches drove 420% revenue growth and last year.
And we our guide think approximately 20% growth for 2025.
Its exclusivity expiring on Tau sense of originated biologics each year.
The regulators waving costly efficacy trials that biosimilar market is set for explosive growth.
With our resources and shrunk focus on developing a manufacturing biosimilars.
All of our tech is well positioned to lead the charge in fact be proactively responded to unanticipated changes in regulatory guidelines by expanding our research and development initiatives approximately two years ago.
Róbert Wessman: Some of the licensing agreements for pipeline assets that were expected at the end of Q4 are now shifting to 2026. Despite these short-term headwinds, we expect a strong finish to the year, especially with licensing revenues that translate directly to EBITDA. At the midpoint of the guidance, we are targeting to deliver 19% year-on-year revenue growth and 30% EBITDA growth. Fundamentals remain strong. We expect margin recovery, and accelerated revenue contribution will follow new launches and continued geographical diversification. More importantly, we continue to see growth in markets outside the US, which helps balance our revenue profile. Based on the committed orders we have for our new launches in markets outside the US, combined with the growth momentum we are seeing with our currently marketed product, we are well-positioned to deliver top-line and EBITDA growth in 2026.
More recently, we have further enhanced our R&D capabilities with the establishment of an operational pace in Sweden.
The reserve is already evident in our growing pipeline five approved Biosimilars file. Although these close development programs and already developed subtle lunch for additional 15 valuable markets and total targeting greater than $185 billion.
Originated markets.
Now, let me touch up on a few key points that I will discuss today. The described on the following slides.
This includes an update on the FDA process.
Róbert Wessman: Management will provide new future guidance no later than with the Q4 2025 results. Our strategic focus for the next 18 months is on focused execution to unlock long-term growth, advancing the pipeline, realizing multiple global launches to deliver solid sales growth, and diversification of revenues across geographies and products. At the same time, we will drive cost optimization and operational efficiencies to support margin expansion. Working capital management will also be our key focus to achieve positive free cash flow and support our growth trajectory. This brings me to my final slide. I think it's always good to look a bit backwards and see where we're coming from, where we are today, and where we are heading. Alvotech's journey from its 2013 foundation to today reflects a transformation into a leading biotech company with one of the industry's most valuable biosimilar pipelines.
Our pipeline.
Comment on the revised outlook for the year.
State on our marketed products, so, let's turn to the next slides.
As announced last week, we received a complete response letter or <unk> from the FDA for our BLA for the proposed Biosimilar to Symphony.
The sole reason noted in the C L.
Churns unresolved issues identified by F D. A during the inspection of how Reykjavik facility.
Which concluded in July of this year.
Let me make it clear this year did not change the status of Reykjavik manufacturing facility, which continues to be an F. D. A approved sites.
Produce some will continue to produce our current marketed products in U S.
Also this site is approved to Manav Hoctor for global markets continues to get approvals for our new product launches.
Róbert Wessman: From 2013 to 2023, the focus was on building a vertically integrated platform, investing in R&D and talent, and establishing global partnerships to enable successful launches of Humira and Stelara biosimilars. The 2024 to 2025 period marks a major inflection point: multiple global approvals, including those referencing Humira and Stelara in the US, accelerated pipeline development, and fivefold revenue growth from 2023 to 2024. We achieved positive EBITDA in 2024 and are targeting around 30% growth in 2025 on EBITDA level. Looking ahead to 2026, our priorities are diversification and scale, advancing our pipeline, executing multiple global launches, and critically adhering to regulatory standards and ensuring FDA compliance as a cornerstone of success. With a $20 billion addressable market for upcoming biosimilars, we are positioned to deliver sustainable growth and long-term shareholder value. I'll now turn the call back over to the operator for Q&A. Thank you.
The facility's reference there no regulatory application, including our HIV.
<unk>.
Our of course regularly inspected by several global regulatory agency as a routine part of the review process.
For example, both of the European Medicine Agency, the <unk> P. M. P. A inspect at our <unk> site earlier this year in support of our new product approvals in these markets. It will all core and third and fourth quarter.
Never a chink several successful inspection by many regulatory authorities, including recent inspection by F. D. A.
In the third quarter of tourists 24, which is that the only two minor form 43 observations.
We remain committed to continuous improvement of our manufacturing operations.
To support consistent and effective leadership at the sites, we have expanded the responsibility of a Joseph Mclellan current chief scientific officer by appointing him as Chief operating officer.
Róbert Wessman: As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. We will now take the first question from the line of Arsh Verma from UBS. Please go ahead. Hi, good morning. Thanks for taking our question. Yeah, I wanted to just get back to the focus on the CRL. Can you kind of explain this, what are the observations this time? They're different from the last time. I think you mentioned that you've effectively taken actions to resolve them. Just give us a status of where we are on that. This is Joe McClellan, Chief Operating Officer for Alvotech. We have been in a situation where we have done a significant number of improvements since the inspection has concluded. The observations were no repeat observations.
In his role Joseph will be responsible for technical operation as well as series for some development.
Supply chain and project management before joining Alphatec in 2019 Joseph.
Sessions of the increase the responsibility at Wyatt on high set in United States over a span of 17 years.
During his tenure at Allo attack. He has played a key role in advancing on strengthening our high performing research and development organization on this pipeline his commitment to a best in class quality standouts.
On the operational excellence will position <unk> to address any concerns raised by FDA at our facility.
Although we are disappointed by the approval delays, resulting from they see it all we remain committed to promptly resolve any outstanding bought there relating to the facility.
Róbert Wessman: Let me say that clearly. There were no repeat observations in the deficiencies identified in the Form 483 from the FDA at the conclusion of the inspection. It is a number of things that we have to improve about the facility associated with some of our aspects associated with manufacturing, control of our facility, documentation, investigations. We have committed to the FDA to complete more than 180 different changes to address all of their observations, plus more, so that we will not be in the situation again. In doing this, we have now completed 93% of these commitments, and we have communicated them to the FDA. We are in the process of completing additional actions that we will continue to keep the FDA updated on. All right. Thanks for that. Just as a follow-up, I know this Form 483, you have 10 observations.
Once the FTA provides clarity later this month on the specific issue identified during the inspection.
He will address those and timely manner.
One P respond to their Seattle, we anticipate the approval of our BLA may be granted as early as the first half of 2026 in our core tons with six months statutory Eddie view patios.
With this review time, Inc. We still anticipate being one of the first if not the only approved biosimilar to symphony in U S and all the global markets.
Off note, we have already received approval in <unk> put on the UK with the EMA approval are expected shortly for all Biosimilar to Symphony.
Róbert Wessman: Even for Humira back a while ago, I think you ultimately climbed up to 18. Just taking a step back on the manufacturing facility, if this has been a little bit of a challenge, has that made you think about the strategic value of keeping the manufacturing in Iceland? I'm just trying to understand, is this something that is driven by less of an availability of pharma talent or anything of that resort, and whether if you would not have it at that location or at some other place, then it might ultimately solve the problem in the long run? Yeah. Thank you for the question, Robert Wessman here, CEO. Overall, I mean, the concept, the vision, and the strategy around the business is to keep everything in-house, both R&D and manufacturing. We think creating a platform like we have is extremely important.
So please turn to the next slide.
Pressing out revenue growth later in the call Linda will discuss our third quarter financial results full year guidance in detail.
When we reported our full year guidance in March we signaled at the first half on second half of the year would be relatively balanced while the fourth quarter would be the strongest of the year due to anticipated product approvals and launches which were occurring later in the year.
They received of C. L from FDA, we revised our outlook for full year, two $570 million to 600 million top line revenues and adjusted EBITDA of $130 million to $150 million.
We believe the cost incurred on temporary loss in product revenue.
A necessary investment in our future growth and will make the company stronger as we continue to expand our portfolio of products and lumps into additional global markets.
Róbert Wessman: We can say that in the US, we are around 18 months into being a commercial company, if you will. We have gone through three FDA inspections over the 18 months. The first two, which was early 2024, was only one 483. Late last year, we had a general GMP inspection, which we only got two minor 483s. Overall, I would say it was very disappointing to get this CRL and unexpected. The company has continued to grow and strengthen further the quality systems. We have full intention to absolutely stay and be best in class when it comes to GMP and quality. I mean, that's reflected. We have gone through successfully five EMA inspections. We have gone through at least four inspections from different global health authorities and now two successful FDA inspections.
As you can see on this slide Oliver <unk> revenue growth has been extraordinary or 127% on average per year from 2021 tool yet in 2024.
With the latest guidance, we have given we are projecting a compounded average growth rate of 94% from 2021 tail end of this year.
US we are launching three more biosimilars. This year this contributes to both licensing and product revenues.
Our strong pipeline and increase the R&D.
Will allow license revenues to continue to be significant revenue contributor.
We are very pleased to say that we are seeing very strong global interest in our enhanced the product portfolio.
We continue to sign numerous contracts with our partners globally.
Which will continue to deliver strong milestone revenues on secured a strong market share globally going forward. So please turn to the next slide now I will turn to how the markets for the existing products have evolved.
Róbert Wessman: As Joe explained in detail, we took this very seriously. I think overall, we have done substantial improvements. Joseph himself has shown amazing success in R&D and brought all of our five currently approved or marketed products to a success, and the 12 products which are in late stage in R&D. He has extensive experience, as I mentioned in my part, from Pfizer, and he lives in Iceland. That is a big factor to have the core team living in Iceland to take charge. I have great expectations with those changes that all future deficiencies hopefully will be behind us. Saying that, of course, we are in pharmaceuticals. We are seeing that companies, whether it is big pharma, biotech, biosimilars, or small molecules, there are unfortunately FDA's 483s or even CRLs coming up on a very regular basis.
In the U S. B continue to hold the second largest market share in the Humira Biosimilar segment.
On power products remains the fastest growing humira biosimilar.
They're originated this year is at road think expected to fall below 50% of its original volume by year end.
With most volume continuing to shift to biosimilars much.
Much smaller portion transitioning to novel therapies.
In Europe, our partner stopped the continuous to grow volumes, what you Kendra.
We have seen average quarter on quarter growth of 12% the last four quarters.
Kindred now holds the top position in several of the 10 largest EU markets, including Austria and Sweden.
On the high streets, 10% share in France, competing against mine all the Biosimilars.
In Canada same lumpy market with gem pharma remains the fastest growing humira biosimilar.
With respect to our Biosimilar to start later in the U S. Our partner Teva continues to secure formulary coverage.
Róbert Wessman: It's a kind of moving target, and we will continue to move with it, if you will. Okay. I have just one more question. I guess just for the three products that you've tried to pursue now with the FDA approval, you've gotten two CRLs. I mean, I'm trying to understand what type of impact does that create when you're having the conversations with your customers effectively? Is that something that you faced when you were launching Humira? Now that you have seen this at the time of Stelara, how do you think that might impact the conversation when you're trying to contract it out? Yeah, I think it's a very appreciated question, if you will. I mean, we continue to see a very strong interest in our product.
We are among the top three biosimilars on the market for this product.
In Europe, we were first to launch that a lot of biosimilar on while the competition has increased.
Still holding a leading position in the European markets, where we have long style product.
With about 10% share of the total spend a lot of markets and 25% share of the Biosimilar segment.
We expect 50% of satellite us European market to transition to Biosimilars by year end with that I will hand, the call over to Joseph Mcclelland, who will discuss our portfolio, including the near term launches so over to you Joseph.
Robert as described on the next slide our products <unk>, a biosimilar to Eylea EBIT of five a biosimilar to symphony and even tier three biosimilar to the dual products of Prolia in ex Java are scheduled for launch in Europe This quarter.
Róbert Wessman: I mean, we definitely have the broadest portfolio of all biosimilar companies in the industry, and that is our strength. This of interest, of course, leave aside 11, 12 successful inspections from EMA to US FDA to other health authorities in the world. Our clients are doing also inspections or audits on ourselves. Our customers are very much aware of the status of the facility. Overall, we have not seen any reduction of interest in our products. We keep our key clients up to date on what we are doing to continue to evolve the quality system, if you will. We highly appreciate that for all of our portfolio products that are usually more than one or more than two, which are showing strong interest in those products at any given time. Great. Thank you. Thank you.
<unk> has received approval in Japan, the UK and the European economic area.
Last week, the UK High Court rejected Regeneron and Bayer's request to stop Alphatec is manufacturing.
Eylea biosimilar in the U K.
This really enables us to manufacture in anticipation of commercial launches after the Eylea supplementary protection certificates expire on November 23.
Of this year.
We are prepared to launch <unk>, prefilled syringes and vials across Europe post expiry of exclusivity and look forward to entering a market with strong partners.
<unk> five has already received approval in Japan, and the U K.
And we are expecting a favorable decision from the European Commission for the E. In the later part of November.
Following the Ema's cgmp recommendation early this summer.
Róbert Wessman: We will now take the next question from the line of Thibault Bouderin from Morgan Stanley. Please go ahead. Thank you very much. Just a couple of questions on the revenue impact of this year, having Q4. Our understanding is that the lower revenue is related to fixing the manufacturing process, basically a revenue loss. Should we think about this as a phasing of shipment into next year after the issues are resolved? Is it just a sort of phasing, or should we understand this as lost revenues? Does that mean that your commercial partner may face supply interruption impacting their revenues? I'll start there, and I have another one after. Okay. It's Linda Jonsdottir, the year's CFO. If I understood your question correctly, it's about the changes in guidance that we announced on 4 November. I would say it's twofold.
We intend to proceed with the launch properly after approval anticipate being the sole biosimilar to symphony available on the European market for several months.
Japan, we have secured the necessary rights and plan to initiate launch activities. During the first half of 2026, four <unk> three which has been approved in Japan.
European Commission approval for the EIA is anticipated in the second half of November.
Following EMA CHP recommendation this summer.
The intention is to ship launch supplies to our commercial partners in Europe. During this quarter. It is expected that <unk> will be among the first products available with established partners supporting its market introduction.
Speaker #5: This shows our strong commercial following the
Speaker #5: This shows our strong commercial following the momentum number call our and biosimilar to , successful Humira in the US and early traction for a biosimilar to Stelara in both Europe and the US Alvotech launch of .
Turning to our development pipeline on the next slide.
We are pleased to report ongoing growth and advancement across our programs.
In collaboration with partners Casino in advance we have submitted a biosimilar candidate to Xolair in the EEA and previously filed for approval in the U K, where the review process is ongoing.
Róbert Wessman: The revision is about actions taken to respond to any issues. That is slowing us down on the production side and impacting our revenues in 2025. We are also seeing some of the licensing agreements for pipeline assets that were expected at the end of Q4 are now shifting to 2026. That's just a timing impact. However, sizable EBITDA impact in Q4 since it's licensing revenues that flows directly into EBITDA. If I also comment a bit on 2026 and our compass levels there, if I look into the committed orders we have for new launches and markets outside of the US, and then a combination with the growth momentum noted in currently marketed products, we are in a very good position to deliver top-line and EBITDA growth in 2026. Thank you.
The development of ADT 29, our Biosimilar candidate to high dose Eylea as well as M. T $16 80, a biosimilar to Entyvio for both intravenous and subcutaneous administration is proceeding towards regulatory submissions targeted for 2026.
Progress continues on our candidate to Keytruda in partnership with Dr Reddy, including completion of manufacturing for clinical supplies.
Additionally, we have initiated clinical manufacturing for our candidate to Cimzia with positive developments underway.
Our investment in the early stage pipeline remains strong today.
Today, we are announcing two new molecules biosimilar candidates to hemlo bra and Lindsay.
Which are currently in process development.
Further we have over 15 cell lines completed for future development within our expanding portfolio.
Róbert Wessman: Can you just confirm that you are confident on how long the operations are going to be impacted in terms of having visibility on how long it's going to take to fix it, regardless of the answer you're expecting from the FDA, or could this change depending on what you get from the FDA? No, I think Robert's here again. I think we have pretty clear visibility on that. The drug product part of the facility is undergoing some minor adjustments as we speak. We will then close the drug substance for a particular period in December for both general maintenance and adjustments. I think, as Linda said, we have most of the orders which are in the order book to be delivered end of this year produced. They still need to be, some of them, assembled or packed, but mostly they have been produced.
At this point I invite Linda to deliver the financial overview. Thank.
Thank you Joe and good day to everyone questioned us on the call today.
Today I will take you through the financials for Q3 and the first nine months of 2025.
The earnings task is more detail Tony with shell and we hope you appreciate that this novel insights into the quarterly results provided in the next two slides.
As Robert mentioned Alphatec has delivered strong K Cup growth in the past four years since launching our first biosimilar and there is continued momentum and demand the appetite for our on market products of Biosimilars to Humira ancillary turning to the next slide which highlights our Q3 financial performance actually.
Communicate that that's part of our Q2 results, we were expecting Q3 to be a soft quarter, followed by a strong Q4.
It's primarily driven by lower product revenues and product margins, which were impacted by the timing of orders portfolio mix and temporary loss and product revenues related to facility improvements as Robert noted earlier.
Róbert Wessman: We have pretty good visibility how the year end, we believe, and comfort level how that will end. As you can imagine, based on the guidance we gave and based on year-to-date EBITDA, it's fairly easy to see how strong the fourth quarter will be. It's a good, as Linda said, good momentum with all the books. Based on what we are seeing, we are fairly confident on growth, both top-line and EBITDA for 2026, no matter what. Very clear. Thank you. Yeah. Thank you. As a reminder to ask a question, please press star one and one. Our next question comes from the line of Arvid Nekander from DNB Carnegie. Please go ahead. Good afternoon, and thanks for taking my questions. Going back briefly to the CRL and the slowdown in production, you anticipated after it came.
In Q3 licensing revenues were at the high level of 81 million supporting our strong gross margin of 69%. We also finalized the integration of <unk> into our financials that were acquired in July.
He is a Swiss based assembly and packaging service provider and will increase our capacity for finished product assembly and packaging.
Adjusted EBITDA was 14 million or 15% of revenues and was impacted during the quarter by costs associated with improvements in operations to support the lumpiness.
Operating cash flow has been a function of our revenue connections and the cluster down from a very strong quarter in the second quarter of 'twenty, five and outflow driven by inventory build and so forth for upcoming launches.
And looking at the year to date on the next slide I will talk delivered total revenues of $420 million for the first nine months with represents strong 24% growth year on year.
This shows our strong commercial momentum following the launch of a biosimilar to humira in the U S and the early traction for our Biosimilar to stay lira in both Europe and the U S.
Róbert Wessman: Could you be as concrete as possible? What amendments did you do to the ongoing production lines? You touched on this a little bit, but is it fair to say that you're more or less back to operating at full capacity for the approved products? Secondly, on the R&D spend, at the beginning of the year, I think you were expecting R&D spend of roughly $160 to 165 million for the full year. It seems to be trending higher than this. Do you anticipate a meaningful step down for Q4? I'll start there. Thanks. One moment, please. Your conference will resume shortly. Okay. If I continue, as I was saying, observations around putting in manufacturing controls, improving the way you do investigations, laboratory controls, documentation practices, those kinds of aspects.
Gross margin was 59% and underscores the strength of our licensing model, while product margin of 27% reflects quarter three softness.
Adjusted EBITDA in the first nine months was 68 million or 16% margin when compared to prior year. It is important to note that 2024 included very high licensing revenues tied to three biosimilars, the best chance and the U S launch of a biosimilar to Humira, along with a launch of a biosimilar to still around Europe.
Cash balance at the end of September was 43 million and reflects outflows connected to inventory Panther I had the proper Atlantis capex investments and M&A activity.
If we then double click on the revenue and EBITDA trends on the next slipped.
Our revenue model is a beat to be company naturally leads to quarterly fluctuations related to timing of orders from our partners.
Róbert Wessman: We committed to doing over 180 different actions to the FDA, things such as ensuring that we have the microbial controls by putting measures in to prevent actions that could be considered. It's clear that the FDA made observations, for example, around our manufacturing controls that may lead to lack of sterility, but not that actually it was observed, right? We did things to then strengthen that, putting practices in terms of how we do, say, for example, visual inspection, how we make sure that our airflow is correct, to make sure that our procedures associated with changing and gowning are all improved, right? We did all of those improvements over the last few months since 4 July 2023. Since then, we have begun manufacturing.
However, despite these fluctuations we delivered strong double digit growth in revenues, both in the quarter and through the first nine months up 11% and class B, 4%, respectively with a trailing 12 month run rate of 571 million in revenues.
Adjusted EBITDA margin for the first nine months 2025, however was up 16% compared to 26% last year.
This was driven by higher R&D investments to accelerate pipeline expansion as well as higher D&A cost to scale operations and infrastructure to be able to drive operational efficiency across the organization. Finally, I would like to highlight that we continue to diversify geographically with growing contributions from.
Europe as market share in Europe, and other markets outside of the U S continues to grow moving to cash flow on the next slide as I touched on earlier Castro and of course, there was a function of lower revenue collection due to timing and planned inventory buildup in support of upcoming analysis.
Róbert Wessman: The product that we are delivering in the fourth quarter is product that has been manufactured in both the third and the fourth quarter. There are actions progressing. We are manufacturing. As Robert says, there's always going to be the need for minor actions for maintenance. Those things are taken into account, and we make sure that we improve those. In general, we are manufacturing and delivering product for this quarter that we have recently manufactured since the slowdown we referenced in the press release. Linda? Yeah. To touch on your question, on the R&D side, we had elevated levels on R&D both in Q2 and in Q3. That's also related to timing of clinical and manufacturing activities, as well as launch preparation for upcoming launches. In Q3, we also had impact in R&D related to the improvements that Joe was covering.
We also continued strategic investments in Capex, and then comfortable to expand capacity to support new launches and our growth plans.
New working capital option of 100 million will be used to capture swings in working capital.
Cash is impacted by the cost associated with acquisition, obviously interest payments as from June 25, we are paying cash interest on our loans.
Next I would like to quickly touch on the policy on the next two slides.
Our asset base remains strong supported by recent bolt on acquisitions.
And continued investment in R&D to drive future growth.
Current assets are stable overall with expected shifts in inventory and trade receivables during the period.
Róbert Wessman: We are expecting that also to touch our R&D numbers in Q4. I can confirm that we're still expecting lower R&D in Q4 than both in Q2 and Q3. Great. Those were all my questions. Thank you. Thank you. Thank you. We will now take the next question from the line of Thibault Bouderin from Morgan Stanley. Please go ahead. Thank you. Just a question on the impact of the change of regulation you mentioned with the lower requirement for phase three trial. Can you talk a little bit about how that impacts your plan for your earlier stage biosimilars? In particular, thinking about K3DA and CIMS, where the timelines could move based on your decision to run an efficacy study or not. Thank you. Yeah, Robert's question here again. I will hand this over to Joseph, but I just want to say on the lines.
Looking into the equity and liability side, a couple of things I mentioned here, our equity position strengthened by $236 million driven by profit for the period and the inflow of capital contributions for most recent sweetest lifting.
They were ever to financing liabilities decreased by 167 million, mainly due to fair value tense on earn outs yes.
And lastly, the overall contract liabilities decreased due to recognition of licensing revenues.
We then turn to the next slide filtering, our revised full year outlook.
On November 4th we revised our outlook following the theater at all from the FDA, we updated our outlook for the full year two earnings of 570 million to 600 million in revenues and adjusted EBITDA rents off Hunter necessity millions to $150 million.
This revision reflects actions taken to respond to any issues that that's defined by the FDA inspection impacting production efficiency and plant to 75.
Gross margin was at 59% and underscores the strength of our licensing model, while product margin of 27% reflects quarter to 3 softness.
Some of the licensing agreements for pipeline assets that were expected at the end of Q4 are now shifting to 2026.
Róbert Wessman: We anticipated this change over two years ago. Based on that, we changed our approach to R&D, if you will. As we have already stated on this call and previous calls, we have, all in all, between marketed products, approved products, late-stage development, early-stage development, over 30 products in the pipeline. We think we have used the time very well and taken advantage of the changes which are coming now by kind of assuming and expecting this to come. We are already bearing the fruits of that vision we had back in time. For the detailed answers, maybe Joe, if you take that. Yeah, absolutely. This is Joseph. For sure, right? We are doubling down on our strategy. We have a proven development engine. We are leveraging that.
Despite these short term headwinds, we expect a strong finish to the year, especially with licensing revenues that translate directly to EBITDA.
At the midpoint of our guidance, we are targeting to deliver 19% year on year revenue growth and 30% EBIT growth.
Fundamentals remain strong we expect market recovery and accelerated revenue contribution with follow on new launches and continued geographical diversification Maureen.
Adjust the deeper and the first 9 months was 68 million or 16% margin when compared to Prior year. It is important to note that 2024 included very high licensing, revenues tied to 3 by a similar submissions and the US launch of our bio similar to hum along with the launch of our bio similar to stellar and Europe Casp balance. At the end of September was 43 million and reflects outflows connected to inventory. PA ahead of product launches capex Investments and AMA activity.
If we then double click on the revenue and EPA the Trends on the next slide.
More importantly, we continue to see growth in markets outside the U S, which helps balance our revenue profile.
Our Revenue model as a P2P company. Naturally leads to quarterly fluctuations related to timing of orders from our partners.
Based on the committed orders, we have for our new launches in markets outside the U S. Combined with the growth momentum we are seeing with our currently marketed product we are well positioned to deliver top line and EBITDA growth in 2026 minus.
However, despite these fluctuations, we delivered strong double-digit growth in revenues, both in the quarter and in the first 9 months of 11% and 24%, respectively, with a trailing 12-month run rate of $571 million in revenues.
Smith will provide new future guidance no later than with the Q4 'twenty five results our strategic focus for the next 18 months is on focused execution to unlock long term growth advancing the pipeline, where you got multiple global unsafe to deliver solid sales growth and diversification.
Róbert Wessman: As Robert said, we forecasted and anticipated that the need to do patient efficacy studies was going to go away from a regulatory perspective. It has. Because we made the bets over two years ago, we are now in a good position to take advantage of that. We are doing that for products as we're developing them, right? You can imagine that, yes, Cimzia would be one of those as well. Thank you. Thank you. There are no further questions at this time. I would like to hand back over to Benedikt Stefansson for closing remarks. Yes, thank you. On behalf of the Alvotech team, I would like to thank everyone who called in and listened to our call today. We look forward to speaking with you again, and wish you a good rest of the day. Thank you. Thank you.
at yesterday, but the margin for the first 9 months 2025, however, was at 16% compared to 26% last year.
Revenues across geographies and products at.
At the same time, we will drive cost optimization and operational efficiencies to support margin expansion.
Working capital management will also be a key focus to achieve positive free cash flow unsurpassed outgrow trajectory. This brings me to my final slide I think it's always good to look backwards and see where we're coming from where we are today and where we had thing.
This was driven by higher R&D investments to accelerate pipeline expansion, as well as higher DNA costs to scale operations and infrastructure to be able to drive operational efficiency across the organization. Finally, I would like to highlight that we continue to diversify geographically, with growing contributions from Europe, as markets here in Europe and other markets outside of the U.S. continue to grow.
Moving to cash flow on the next slide as I touched on earlier cash flow and quarter was a function of lower Revenue collection, due to timing and plant inventory built up in support of upcoming launches.
Next year in knee from its 21st thing Foundation today reflects the transformation into a leading biotech company with one of the industry's most valuable biosimilar pipelines.
We also continued strategic investments in CapEx in 2020 to expand capacity to support new launches and our growth plans.
From talking to your 15 to 2023, the focus was on painting, a vertically integrated platform investing in R&D talent and establishing global partnerships to enable successful launch of Humira and stellar at Biosimilars.
New working capital option of 100 million will be used to capture swings in working capital.
And 'twenty 'twenty four to 'twenty to 'twenty five period marks a major inflection points multiple global approvals, including those referencing humira and stellar in the U S.
Next, I would like to quickly touch on the balance sheet on the next 2 slides.
Our asset space remains strong supported by recent Bond, Acquisitions. And continued investment in R&D to drive future growth.
I celebrated pipeline development and fivefold revenue growth from 'twenty three 'twenty four.
Current assets are stable overall, with expected shifts in inventory and trade receivables during the period.
Teeth positive EBITDA in 'twenty, four and are targeting around 30% growth in 2025 on a better level.
Looking ahead to 2026, our priorities, our diversification and scale advancing our pipeline executing multiple coppola says and critically appearing correctly, Tristan and ensuring FTA compliance as a cornerstone of success.
Looking into the equity and liability side. A couple of things to mention here, our Equity position, strengthened, by 236 Million To Remember by profit for the period and the inflow of capital contributions for most recent sweetest listing
Derivative Financial liabilities decreased by 167 million. Mainly due, to fair value chains on earnout shares.
With a trustee billion addressable market for upcoming Biosimilars, we are positioned to deliver sustainable growth and long term shareholder value I'll now turn the call back over to the operator for Q&A.
And lastly, the overall contract, liabilities decreased due to recognition of Licensing revenues.
If we then turn to the next slide futuring, our revised full year outlook.
Thank you.
A reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
To withdraw your question. Please press star one on one again.
On November 4th, we revised our outlook for following the crl from the FDA. We opted, it our outlook for the full year to arrange of 570 million to 600 million in revenues and that your city with the rents of 130 million to 150 million.
We'll now take the first question.
From the line of <unk> Verma from UBS. Please go ahead.
this revision reflects action taken to respond to any issues identified by the FDA inspection, impacting production efficiency in 2025,
Oh, hi, good morning. Thanks, Thanks for taking our questions. So I wanted to just get back to the focus on the Seattle. So can you.
Some of the licensing agreements for pipeline assets that were expected at the end of Q4 are now shifting to 2026.
Goodness extend its like one of the observations this time different from the last time and I think you mentioned that you've effectively.
Despite these short-term headwinds, we expect a strong finish to the year, especially with licensing revenues that translate directly to EPA.
We've taken actions to resolve them just Doug if you can give us a status of value out of that.
Estimate point of the guidelines, we are targeting to deliver 19% year on year, Revenue growth and 30%. Ep the growth.
This is John Mclaughlin.
Chief operating officer, Rob with that we have been in a situation where we have done.
Fundamentals, remain strong. We expect Martin recovery and accelerated. Revenue contribution will follow a new launches and continue geographical diversification.
Difficult number of improvements.
Since the inspection has concluded.
More importantly, we continue to see growth in markets outside the U.S., which helps balance our revenue profile.
<unk>.
The observations.
Repeat observations.
There were no repeat observations in.
The deficiencies identified in the.
Form 483 from the FDA at the conclusion of the infection.
Based on the committed orders. We have for our new launches in markets outside. The US combined with the growth momentum. We are seeing with our currently marketed products. We are well positioned to deliver Top Line and deep with the growth in 2026.
And so it's a number of things that we have to improve on the facility.
Madison will provide new future guidance. No later than with the Q4 25 results.
Associated with some of our aspects associated with manufacturing.
Control of our facility documentation investigations, we have.
Committed to the FDA to complete more than 180 different changes to address all of their observations plus more so that we will not be in this situation again in doing this we have now completed 93% of these commitments and.
Our strategic Focus for the next 18 months is on focused execution to unlock long-term, growth advancing, the pipeline realizing multiple Global answers to deliver, solid sales growth and diversification of revenues across geographies and products.
At the same time, we will drive cost optimization and operational efficiencies to support Market expansion.
And we have communicated them to the FDA, we are in the process of completing additional.
Actions that we will continue to keep the FDA enernoc.
Alright, thanks for that and just as a follow up so I don't like this.
Working capital management will also be our key focus to achieve positive free cash flow and support our growth trajectory. This brings me to my final slide. I think it's always good to look a bit backwards and see where we're coming from, where we are today, and where we are heading.
This <unk> like yeah, and observations and like it even taller humira back back a while ago I think it ultimately turned up to 18.
Aloe text Journey from its 2013 Foundation to today, reflects the transformation into a leading biotech company with 1 of the industry's most valuable by a similar Pipelines.
Taking a step back on the manufacturing facility.
And this has been a little bit of a talent like has that made you think about like this could be an Jake.
From 2013 to 2023, the focus was on building a vertically integrated platform, investing in R&D and talent, and establishing global partnerships to enable successful launches of Humira and Stelara.
Value of keeping the manufacturing Iceland I was trying to understand like is this something that is driven by a less.
Less of an availability of.
Pharma talent or anything of that of that because art and other if you will not have it at.
in 2024 to 2025 period marks, a major inflection point, multiple Global approvals, including those referencing Humira and stellar and the US
That location or some other phase then it might.
Accelerated pipeline development and 5-fold revenue growth from $23 million to $24 million.
Hi, Duane this on the problem in the long run.
Yeah. Thank you for the question Robert West My here CEO.
We achieved positive, but then 24 and our targeting around 30% growth in 2025, only better level.
Overall, I mean, the concept on the division on the strategy around the business needs to keep everything in house.
The the monoprice.
Monetize it and we think creating a platform like we have.
Extremely important.
Looking ahead to 2026, our priorities are diversification and scale, advancing our pipeline, executing multiple global answers, and critically adhering to regulatory standards and ensuring FDA compliance as a cornerstone of success.
Yeah.
We can say that in U S. We are around 80 months into being a commercial company if you will.
With a 20 billion. Addressable market for upcoming biosimilars, we are positioned to deliver sustainable growth and long-term shareholder value.
We have gone through three FTE inspections over the 18 months.
I'll now turn the call back over to the operator for Q&A.
And the first tool, which will surely 24 was $101 43.
And then late last year, we had a general GMP inspection, which are the only bought two minor decrease.
Thank you as a reminder, to ask a question. Please press star, 1, 1 1 on your telephone, and wait, for your name to be announced.
To withdraw your question, please press star 1 and 1 again.
We will now take the first question.
So overall I would say it was but it is all pointing to get this CLO.
Please go ahead.
Unexpected.
And the but the company has continued to.
Grow the <unk>.
Drinks and photo.
Quality systems on.
We have full intention to absolutely stay and be best in class when it comes to to GMP and quality.
I mean, that's reflected we have gone through a successfully pipe Uma inspections, we have gone through.
Uh, hi. Uh, good morning. Thanks. Uh, thanks for taking your questions. So uh, yeah, I wanted to just like, get back to the, uh, focus on the, um, the crl. So can you, uh, kind of explain this like, what are the observations this time? Uh, the different from the last time. And, uh, I think you mentioned that you've effectively, uh, taken actions to uh, resolve them just uh just give us a status of where we are on that.
At least for inspection from different global health authorities.
This is Jon McLaren.
<unk> successful FDA inspections.
So as Joe explained in detail.
Chief Operating Officer for Altech. Uh, we have um, been in a situation where we have done a significant number of improvements uh since the inspection has concluded.
This very seriously.
I think overall, we have done.
Done a substantial improvement on the Joseph himself has shown amazing success in that Andy.
We um, the observations, how were not repeat observations. You said clearly, there were no repeat observations in uh, the deficiencies identified in the um, Form 483 from the FDA at the conclusion of the inspection.
Brought all of our <unk>.
Currently approved or marketed products to our success.
The 12 for products, which are in late stage in their R&D.
<unk> extensive experience as I mentioned in my part from I said on the latest in Iceland.
That is a big factor to have.
The core team living and is planned to take charts on the.
Um, and so, it's a number of things that we have to improve about the facility. Um, associated with, um, some of our aspects associated with manufacturing, uh, control of our facility, documentation investigations. We have, uh, committed to the FDA to complete more than 180 different, uh, changes to, uh, address all of their observations plus more. So that we will not be in the situation again, in doing this, we have now completed
I have.
Great expectations with those changes.
All our future.
<unk>.
Hopefully it will be behind this but let's say that of course, we are in pharmaceuticals, we are seeing that companies, whether it is big pharma or or biotech of biosimilars for or small molecules that are unfortunately, FTA for 83, four or even shire was coming.
93% of these uh, commitments. Uh, and we have communicated them to the FDA. We're in the process of completing uh additional, um, actions that we will continue to keep the FDA updated on.
Awesome very regular basis, so, it's a kind of moving target and we.
We will continue to move with it if you will.
Oh, Okay I have just one more question. So I think I'm just a pleasant team taught us that you've tried to pursue now and DFT the DFT a poorly correlate to Seattle.
To understand what type of impact does that create veneer, having the conversations the dealer.
The dealer customers effectively that al.
All right, thanks, uh, for that and just as a follow-up. So, um, I know like, um, uh, this form 483, uh, like you have 10 observations and like even for, uh, Humira back, uh, back a while ago, I think you like, ultimately climbed up to 18, uh, just like taking a step back, uh, on, uh, the manufacturing facility. Um, if uh, if if this has been a little bit of a channel like has that, uh, made you think about like the Strategic, um, uh, value of keeping the manufacturing in Iceland, uh, I was trying to understand like, is there something that is driven by, um, less of an availability of, uh, you know, farmer Talent or anything of that of that result? And whether if you would not have it, uh, at that location at some other place, then it might uh, ultimately solve the problem in the long run.
Is that something that you feel like when you were launching tomorrow and now that now that you have seen this.
Like at the Analyst Day, Laura then.
How do you think that might impact the conversation when youre trying to contracted out yeah I think it is.
Really appreciate that question. If you will I mean, we continue to see a very strong interest in our product I mean, we definitely have the broadest portfolio of all biosimilar companies in the industry about this our strength.
Yeah, thank you for the question, Robert Westman here CEO, uh, uh, overall. I mean the concept and the The Vision on the strategy around the business is to keep everything in house. Both AT&T, and the manufacturer. And we think creating a platform like we have is, uh, extremely important. Uh, we can say that in us, we
are around 18 months into being a commercial company, if you will
What is of interest of course.
Leave aside the 11 12 successful.
Uh, we have gone through 3 in Ft inspections, over the 18 months.
Action from EMA to U S FDA to overhaul.
Peace in the World.
Our clients are doing.
So inspections for all debt on ourselves.
So our customers are very much aware of.
The status of the facility.
Overall, we have not seen any Doug.
And the first 2, which was surely 24 was only 1 143 and, uh, and then late last year, uh, we had a general GMP inspection which we only bought 2 minor 43s. So overall I would say um it was pretty disappointing to get this uh crl and unexpected.
Auction of interest in our products and we keep all key clients up to date to you know what.
We are doing to continue to evolve the quality system. If you will.
We highly appreciate that.
For all of our portfolio of products that are usually more than one no more than two which are showing strong interest in those products, but any given time.
Oh, great. Thank you.
Thank you we'll now take the next question from the line of people Brasilein from Morgan Stanley. Please go ahead.
And uh, but the company is continued to uh, grow and uh, strengthen further the, the Quality Systems and we have full intention to absolutely stay and be Best in Class when it comes to to GMP and quality and and I mean that's reflected. We have gone through uh successfully 5 EMA. Inspections we have gone through uh at least 4 inspection from different Global Health authorities and how to successful ft inspections.
Thank you very much just a couple of question on the revenue even faster this year had in Q4.
Our understanding is that the lower whole thing here is related to fixing the manufacturing process of basically a venue.
Should we think about this as a phasing of shipments into next year. After the issue doesn't have.
So is it just a sort of a phasing.
Some of it has just the southern U S and does that mean that your commercial partner.
May face supply interruption impacting the revenues so I'll stop there and I haven't done all of that stuff.
Oh, okay.
They also began CFO.
If I understand your question correctly, it's about the change in guidance on November four.
I would say it's twofold.
It really is about like actions taken at least on plenty issue. So that is slowing us down on the production side and impacting our revenues in 2025.
But we are also seeing some of the licensing agreements or Python.
<unk> asked about the Q.
Q4 are now shifting to 2026, that's just like a timing impact.
I believe that the impact in Q4, it looks like the licensing revenues that flows directly into it than that.
In Iceland and that is a big factor to have, uh, you know, the core team living in Iceland to take charge. And, uh, I have, uh, a great expectations with those changes that, uh, all uh, future, uh, deficiencies, um, hopefully will be behind this. But but saying that, of course, we are in Pharmaceuticals we are seeing that companies, whether it is Big Pharma, or, or biotech or biosimilars, or or small molecules there are, unfortunately, fda's 433, or even crls coming up on a very regular basis. So, it's a, it's a kind of moving Target, and we will continue to move with it, if you will.
However, if I also come with a based on <unk>.
2026, and our comfort level there.
If I look into the committed orders we have for new launches in markets outside the U S. And then a combination with a quote from the master note that than currently marketed product.
We are in a very good position to deliver top line and EBITDA growth and different effects.
Thank you and can you just compound that youre confidant on you know how long the operations are going to be impacted.
As you know having visibility on how long, it's going to take to fix it.
Less house until you're expecting from the FDA or could this change depending on the what you get from the FDA No I think brokerage here again, I think we have a pretty clear visibility on box.
Okay, uh, if I have, uh, just 1 more question, so I, I guess like, um, uh, just, uh, for the 3 products that you've tried to pursue now in the FDA, uh, with the FDA approval, kind of like 2, CR L's. I mean, I'm trying to understand what type of impact does that create when you're having the conversations with your, um, with, with your customers effectively, is there a, uh, is that something that you face like when you were launching Humira? And now, that, uh, now that you have seen this with the like, at, at the time of Stelara then, uh, how do you think that might impact the conversation when you're trying to contract it out? Yeah. I think it's, uh, it's a very appreciated question.
If you will, I mean, we continue to see a very strong interest in our products. I mean, we definitely have the broadest portfolio of all by a similar companies in the industry and that is our strength.
<unk>.
On the drug product part of the.
The facility is.
Going to some minor adjustments are as we speak.
We will then.
Close the drug substance for a particular period in December.
But this of uh interest of course uh uh leave aside the 1112 successful uh inspection from uh imma to usfda to other health authorities in the world.
For both general maintenance on the adjustments. So I think the centers that we have for most of the or to switch.
Our clients are doing, uh, also uh inspections for audit uh on ourselves.
Erin gull, who booked to be delivered.
This year.
<unk> produced they still need to be some of them are sample pack, but mostly that has been produced.
And we have pretty good visibility how the year ends we believe on the comfort level whole vascular and unless you can imagine based on the guidance. We gave on based on year to date EBITDA.
So our customers are very much aware of, uh, the status of the facility and, uh, and overall we, we have not seen any, uh, reduction of interest in our products. And, uh, we keep our key clients up to date, uh, you know, what we are doing to continue to evolve the quality system if you will.
It's fairly easy to see how strong the fourth quarter will be.
And we highly appreciate that. For all of our portfolio products that are usually more than one or more than two, which are showing strong interest in those products at any given time.
And this is a good as Linda said good momentum with <unk>.
Um great, uh, thank you.
So so based on what we are seeing.
Here.
We are fairly confident on.
Thank you. We will now take the next question from the line of Tuple Berlin from Morgan Stanley. Please go ahead.
Our growth both top line on the EBITDA for 26.
No matter what.
Very clear thank you.
Thank you.
Linda to ask a question. Please press star one on one.
Our next question comes from the line as they come there from Dnb Carnegie. Please go ahead.
Good afternoon, and thanks for taking my questions.
So.
Back briefly to the CRM and the slowdown in production do you anticipate that after it came could it be as concrete as possible what the amendment city due to the ongoing production volumes.
Thank you very much. Uh just a couple of questions on the revenue impact of this year, in Q4, um, you know, our understanding is that the lower revenue is related to fixing the manufacturing process. So, basically, uh Revenue, uh, loss should we think about this as a phasing of shipment into next year after the issues as we have are, are resolved? So you just sort of uh phasing or should we understand this as as lost lost revenues and does that mean that your commercial partner? Um, May face, you know, super interaction, impacting the revenues. So I start there and I have another 1 after
And you touched on this a little bit but is it fair to say that you're more or less back to operating at full capacity for the approved products.
Okay, um it's I also see here CFO. Um if I wanted to talk to your question correctly, it's about the change in guidance.
And secondly on the R&D spend.
At the beginning of the year I think you were expecting R&D spend of roughly 100.
60 to 165 million for the full year.
It seems to be trending higher than this.
Anticipate a meaningful step down for for Q4 I'll start there. Thanks.
One moment, please your conference really fishing shortly.
Yeah.
So we announced on November 4th uh I would say it's 2:40 so that is slowing us down on the production side and impacting our revenues in 2025. Uh, but we are also seeing some of the licensing agreements for pipeline assets that were expected at the end of Q4 are now shifting to 2026.
Right.
Okay, if I continue.
You will.
So as I was saying observations around putting in manufacturing controls improving the way you do investigations laboratory controls documentation practices those kinds of aspects. So we took a we committed to doing over 100 different actions to the FDA.
That's just like a timing impact, but has I to believe that that impact uh in in Q4 since it's like licensing, revenues that flows directly into that.
Things such as ensuring that we.
Have the microbial controls are putting measures into preventive actions that could be considered because it's clear that the FDA observed made.
Observations for example around our manufacturing controls that may lead to lack of Australia, but not that actually it was observed right. So we did things then strengthen that I'm putting practices in terms of how we do say for example, visual inspection.
Um, however, like if I also comment a based on, uh, 2026 and our comfort levels there, uh, if I look into the committed orders, we have uh, for new launches and and markets outside of us, and then a combination with the growth of my master noted in currently marketed products. Uh, we are in a very good position to deliver Top Line and deep with the growth in 2026.
We make sure that our airflow is correct.
Make sure that our procedures associated with them.
Changing and counting are all improved right. So we did all of those improvements.
Over the last few months since the fourth of July and.
Expected, uh, in terms of, you know, having visibility on how long it's going to take to fix it, regardless of, of the answer you're expecting from the FDA or or could this, you know, change depending on on what you get from the FDA know. I think Robert here again, I think we have a pretty clear visibility on that and uh
Since then we have begun manufacturing with the product that we are delivering in the fourth quarter as product that has been manufactured in both the third and the fourth quarter. So there are actions are progressing we are manufacturing as Robert says theres always going to be the need for.
And the the drug product parts of the facility is undergoing some minor adjustments as we speak.
And uh we will then uh close the drug substance for a particular period in December.
Minor.
Actions for maintenance those things are taking taken into account and we make sure that we improve those.
But in general we are manufacturing and delivering product that for this quarter that we have recently manufactured.
The slowdown we referenced in the press release.
For both general maintenance and the adjustment. So, I think we, as Linda said, we have most of the orders which are involved to book to be delivered, uh, end of this year, uh, produced. They still need to be. Some of them are sampled to pack, but mostly they have been produced.
Yeah, two tests on your cost question.
On the R&D side, we had elevated levels in R&D both in Q1. Thank you.
Also related to the timing of clinical and manufacturing activities as well less loans preparation for upcoming.
In Q3, we also have inbox and RMB are related to the improvement.
What's the recovery and we are expecting that also too.
Our R&D numbers in Q4, but I can confirm looks like we're still.
And we have a good pretty good, visibility how the year and we believe are uncomfortable how that will end? And as you can imagine based on the guidance we gave and based on here today debit, uh, uh, is fairly easy to see how strong, uh, the work core will be. And, and, uh, and it's a good, uh, as Linda said, a good moment to with the with all the books. So, so, based on what we are seeing, uh, 3 year we have
Lower R&D in Q4 of them.
Fairly confident on growth post top line on EBITDA for 2026, no matter what.
Well, thank you <unk>.
Very clear, thank you. Yeah.
Two three.
Yeah.
Great those are all my questions.
Thank you as a reminder to ask a question. Please press star 1 and 1.
Thank you.
Thank you we will now take the next question.
Our next question comes from the line of Arvid. Neander from DMV Carnegie, please go ahead.
Because of the line of people delaying from Morgan Stanley. Please go ahead.
Thank you just a question on the impact of the change in regulation. You mentioned was the lower hookworm until phase three trial can you talk a little bit about how that impacts your plan for your earlier.
Stage by the human I don't think that's thinking about K today and Kim.
Diamond's couldn't move based on.
Based on the decision to <unk> guess, you said you're on that thank you.
Yes, Robert West point here again, I will hand, this over to Joe said.
Just from let's say.
The lines.
So we anticipated this change so two years ago.
Based on what we've changed our approach to R&D, if you will.
Good afternoon, and thanks for for taking my questions. Um, so going back, briefly to the the crl and and the slowdown in production. You anticipate that after it came could, could you be the biggest concrete as possible? What amendments did you do, uh, to the ongoing production lines and and uh you touched on this a little bit? But it is, is it fair to say that you're more or less back to uh, operating at full capacity for the approved products. Uh and secondly, on the R&D spend uh at the beginning of the year, I think you were expecting on these spend on roughly $160,265 million for the full year. Uh it seems to be trending higher than this uh during anticipated meaningful step down for for Q4. I'll start there. Thanks.
In the US we have already stated on this call on the previous calls.
We have all in all between marketed products approved products late stage development that understates development, though with 30 products through the pipeline.
So we think we have used the time well do well on that.
Taking advantage of the changes which are coming now.
1 moment please, your conference will resume shortly.
Oh,
<unk> kind of assuming kind of expected this to.
To come so we are already.
Bearing the fruits of that.
The issue we had back in time, but what are the pillars first maybe Joe if you if you take that yeah, absolutely. So this is Joseph for.
For sure we are doubling down on our strategy, we have a proven development engine, we are leveraging that.
We as Robert said, we forecasted and anticipated that the need to do patient efficacy studies was going to.
Go away from a regulatory perspective it has.
And because we've made that that's over two years ago. We are now in a good position to take.
<unk> taken advantage of that.
And we're doing that for products.
As we are developing that right. So you can imagine that yes, some of the year would be one of those as well.
Thank you.
Thank you there are no further questions at this time I would like to hand back over to Venetic Stefansson for closing remarks.
Okay, if I can continue, uh, we will. Um, so as I was saying, uh, observations around, putting a manufacturing controls improving the way you do, uh, investigations laboratory controls documentation practices, those kinds of aspects. So we took, uh, we committed to doing over a hundred 180, different actions to the FDA, uh, things such as ensuring that we, um, have the microbial controls, um, by putting measures in to prevent, uh, actions that could be considered because it's clear that the FDA observed made observations, for example, around our manufacturing controls, that may lead to lack of sterility, but not that actually, it was observed, right? So we did things to then strengthen that, uh, putting practices in terms of how we do say, for example, visual inspection. Um, how we make sure that our air flow is, is correct, uh, to make sure that, um, our procedures associated with, um, uh, changing and gowning, uh, Are all uh, improved, right? So we did all of those improvements.
Yes. Thank you.
So on behalf of the team I would like to thank everyone, who called in and listened to our call today and we look forward to speaking with you again and wish you a good rest of the day.
Um, over the last um few months since the 4th of July.
Thank you. Thank you.
Uh, since then, we have the gun manufacturing, uh, we the products that we are delivering in the fourth quarter, this product that has been manufactured in both the third and the fourth quarter. So there are, uh, actions. Uh, progressing, we are manufacturing as Robert says, you know, there's always going to be the need for, uh, minor, um, actions for, uh, maintenance. Those things are taking taken into account and we, uh, make sure that we improve those. Um, but in general, we are manufacturing, uh, and delivering product, uh, that we, uh, for this quarter that we have recently manufactured since the, uh, slowdown, we referenced in the press release.
Like um, on the R&D side, we had elevated levels on R&D, both in Q2 and in Q3 uh that's uh also related to timing of clinical and Manufacturing activities as well as launch preparation for our upcoming launches in Q3. We also had impact in R&D uh related to the improvements that Joe was covering. Um we are expecting that also to touch our uh RSD numbers and and Q4 but I can confirm that like we're still uh expecting lower R&D and and Q4 uh than it's possible to and Q3
Great. Those are all my questions. Okay? Thank you. Thank you.
Thank you.
We will not.
Question.
From the line of the Rain from Morgan Stanley. Please go ahead.
Thank you. Just a question on the impact of the change of Regulation. You mentioned with the lower requirement for phase 3 trial. Can you talk a little bit about how that impacts your plan for your earlier stage by a similar in particular thinking about K through 9 Sim here, where the timelines could move based on, uh, based on uh, you know, the decision to run an easy study on? Thank you.
Yeah, Proverbs West Point here, again, I will hand this over to Joseph but I just want to say on the on the line.
So, we anticipated this change over 2 years ago and based on that we changed our approach to R&D if you will. And uh, as we have already stated on this call and the previous calls, uh, we have all in all between marketed products approved products, late stage development, early stage development. So with 30 products in the pipeline,
So we think we have used the time very well and, uh, taken advantage of the changes which are coming now by kind of assuming an expected, uh, this to come. So we are already, you know, bearing the fruits of that vision we had back in time. But for the people answers, maybe Joe, if you if you take that. Yeah, absolutely. So this is Joseph, uh, for sure. Alright, we are doubling down on our strategy. Um, you know, we have a proven development engine. We are leveraging that. Um, we as Roberts that we forecasted and anticipated that the need to do patient advocacy studies was going to, uh, go away from a regulatory perspective. It has, uh, and because we made the bets, uh, over two years ago, we are now in a good position to, um, take advantage of that.
And we are doing that for products, you know, where it's as we're developing them, right? So you can imagine that. Yeah. As soon as the deal would be 1 of those as well.
Thank you.
Thank you. There are no further questions at this time. I would like to hand back over to Benedict Stevenson for closing remarks.
Yes. Um, thank you.
So I'm behalf of the other Tech Team. I would like to thank everyone who called in uh and listened to our call today. And we look forward to speaking with them, you again and wish you a good rest of the day.
Thank you. Thank you.
This concludes today's conference call, thank you for participating. You may now disconnect