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Alvotech Accepts Offer for the Sale of Shares for a value of approximately USD 166 million at a Purchase price of USD 16.41 (ISK 2,250) per Share

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Alvotech, a biotech company, accepted an offer from investors to sell 10,127,132 ordinary shares for USD 166 million. The transaction is at a purchase price of USD 16.41 per share, aiming to use the proceeds for corporate purposes, production capacity, and biosimilar launches.
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The sale of Alvotech's ordinary shares for USD 166 million is a significant liquidity event for the company, potentially providing them with the necessary capital to support their operations and expansion plans. The transaction price of USD 16.41 per share provides a benchmark for the company's valuation in the private investment market, which could influence its stock market performance. Investors will be interested in how this influx of capital will be allocated, particularly in enhancing production capacity and the launch of new biosimilars, which could lead to increased revenue streams in the competitive biosimilars market.

It is important to note that the sale was conducted as an overseas directed offering, which indicates a strategic move to target European investors, possibly due to more favorable conditions or a stronger investor interest in biosimilars within that market. The fact that the shares were sold from treasury shares implies no dilution for existing shareholders, which is typically viewed positively by the market. However, the exclusion of U.S. investors due to the lack of registration under the U.S. Securities Act may limit the pool of potential investors, possibly affecting the share price due to reduced demand.

Alvotech's focus on strengthening its production capacity and supporting biosimilar launches is indicative of the growing demand for cost-effective therapeutic alternatives in the pharmaceutical industry. Biosimilars, which are almost identical to original biologic drugs but sold at a lower price, are gaining traction as patents for many biologics expire. This strategic move by Alvotech could position them favorably in an expanding market, potentially increasing their market share and impacting future earnings positively.

However, the success of this strategy depends on the company's ability to navigate complex regulatory environments, scale production efficiently and compete with both originator biologics and other biosimilar manufacturers. The market response to the share sale and subsequent investments will depend on Alvotech's execution of its growth strategies and the market's perception of the company's potential to capitalize on biosimilar opportunities.

The adherence to the European Parliament and Council Directive 2014/65/EC, also known as MiFID II, in the share sale process is crucial for compliance with European financial regulations. This directive governs the sale of financial instruments within the EU and aims to increase transparency and investor protection. By conducting the offering in accordance with MiFID II, Alvotech demonstrates its commitment to regulatory compliance, which could enhance investor confidence in the company's governance practices.

Additionally, the decision not to register the shares under the U.S. Securities Act and to exclude U.S. investors from the offering might be due to the stringent regulatory requirements and associated costs of such a process. While this limits the offering to a European audience, it may expedite the transaction and reduce administrative burdens. It is essential for investors to understand the legal frameworks that govern such transactions to appreciate the complexities and potential risks associated with international securities offerings.

REYKJAVIK, Iceland, Feb. 26, 2024 (GLOBE NEWSWIRE) -- Alvotech (NASDAQ: ALVO), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, today announced that it has accepted an offer from investors (the “Investors”) for the sale of 10,127,132 of its ordinary shares, for an approximate value of USD 166 million, par value USD 0.01 per share (the “Shares”), at a purchase price of USD 16.41 per Share, or ISK 2,250 per share at foreign exchange rates on February 23, 2024 (the “Transaction”). The Shares are expected to be delivered to the Investors from previously issued treasury shares held by Alvotech’s subsidiary, Alvotech Manco ehf. The Transaction will be made on the Nasdaq Iceland Exchange.

A final binding offer for the Shares was made by the Investors and accepted by Alvotech this morning, on February 26, 2024. Alvotech intends to use the net proceeds from the Transaction for general corporate purposes and working capital, to strengthen its production capacity and to support expected biosimilars launches.

The offer or sale of the Shares was made in an overseas directed offering directed solely into Europe to professional clients or eligible counterparties in accordance with European Parliament and Council Directive 2014/65/EC, and in accordance with local laws and customary practices and documentation.

This communication is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States or elsewhere, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. The Shares have not been, and will not be, registered under the United States Securities Act, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About Alvotech
Alvotech is a biotech company, founded by Robert Wessman, focused solely on the development and manufacture of biosimilar medicines for patients worldwide. Alvotech seeks to be a global leader in the biosimilar space by delivering high quality, cost-effective products, and services, enabled by a fully integrated approach and broad in-house capabilities. Alvotech’s current pipeline contains eight biosimilar candidates aimed at treating autoimmune disorders, eye disorders, osteoporosis, respiratory disease, and cancer. Alvotech has formed a network of strategic commercial partnerships to provide global reach and leverage local expertise in markets that include the United States, Europe, Japan, China, and other Asian countries and large parts of South America, Africa and the Middle East. Alvotech’s commercial partners include Teva Pharmaceuticals, a US affiliate of Teva Pharmaceutical Industries Ltd. (US), STADA Arzneimittel AG (EU), Fuji Pharma Co., Ltd (Japan), Cipla/Cipla Gulf/Cipla Med Pro (Australia, New Zealand, South Africa/Africa), JAMP Pharma Corporation (Canada), Yangtze River Pharmaceutical (Group) Co., Ltd. (China), DKSH (Taiwan, Hong Kong, Cambodia, Malaysia, Singapore, Indonesia, India, Bangladesh and Pakistan), YAS Holding LLC (Middle East and North Africa), Abdi Ibrahim (Turkey), Kamada Ltd. (Israel), Mega Labs, Stein, Libbs, Tuteur and Saval (Latin America) and Lotus Pharmaceuticals Co., Ltd. (Thailand, Vietnam, Philippines, and South Korea). Each commercial partnership covers a unique set of product(s) and territories. Except as specifically set forth therein, Alvotech disclaims responsibility for the content of periodic filings, disclosures and other reports made available by its partners. For more information, please visit www.alvotech.com. None of the information on the Alvotech website shall be deemed part of this press release.

Forward-Looking Statements
Certain statements in this communication may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements generally relate to future events or the future financial operating performance of Alvotech and may include, for example, Alvotech’s expectations regarding its expected future business, financial performance, the use of proceeds from the private placement offering, and the settlement mechanics, including the origin of the Shares to be delivered upon closing, competitive advantages, business prospects and opportunities including pipeline product development, future plans and intentions, results, level of activities, performance, goals or achievements or other future events, regulatory submissions, review and interactions, the potential approval and commercial launch of its product candidates, the timing of regulatory approval, and market launches. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “aim” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Alvotech and its management, are inherently uncertain and are inherently subject to risks, variability, and contingencies, many of which are beyond Alvotech’s control. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the outcome of any legal proceedings that may be instituted against Alvotech or others following the business combination between Alvotech Holdings S.A., Oaktree Acquisition Corp. II and Alvotech; (2) the ability to raise substantial additional funding, which may not be available on acceptable terms or at all; (3) the ability to maintain stock exchange listing standards; (4) changes in applicable laws or regulations; (5) the possibility that Alvotech may be adversely affected by other economic, business, and/or competitive factors; (6) Alvotech’s estimates of expenses and profitability; (7) Alvotech’s ability to develop, manufacture and commercialize the products and product candidates in its pipeline; (8) actions of regulatory authorities, which may affect the initiation, timing and progress of clinical studies or future regulatory approvals or marketing authorizations; (9) the ability of Alvotech or its partners to respond to inspection findings and resolve deficiencies to the satisfaction of the regulators; (10) the ability of Alvotech or its partners to enroll and retain patients in clinical studies; (11) the ability of Alvotech or its partners to gain approval from regulators for planned clinical studies, study plans or sites; (12) the ability of Alvotech’s partners to conduct, supervise and monitor existing and potential future clinical studies, which may impact development timelines and plans; (13) Alvotech’s ability to obtain and maintain regulatory approval or authorizations of its products, including the timing or likelihood of expansion into additional markets or geographies; (14) the success of Alvotech’s current and future collaborations, joint ventures, partnerships or licensing arrangements; (15) Alvotech’s ability, and that of its commercial partners, to execute their commercialization strategy for approved products; (16) Alvotech’s ability to manufacture sufficient commercial supply of its approved products; (17) the outcome of ongoing and future litigation regarding Alvotech’s products and product candidates; (18) the impact of worsening macroeconomic conditions, including rising inflation, interest rates and general market conditions, uncertain financial markets and disruptions in banking systems, war in Ukraine and global geopolitical tension, the state of war between Hamas and Israel and the related risk of a larger conflict on the Company’s business, financial position, strategy and anticipated milestones; and (19) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in documents that Alvotech may from time to time file or furnish with the SEC. There may be additional risks that Alvotech does not presently know or that Alvotech currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Alvotech does not undertake any duty to update these forward-looking statements or to inform the recipient of any matters of which any of them becomes aware of which may affect any matter referred to in this communication. Alvotech disclaims any and all liability for any loss or damage (whether foreseeable or not) suffered or incurred by any person or entity as a result of anything contained or omitted from this communication and such liability is expressly disclaimed. The recipient agrees that it shall not seek to sue or otherwise hold Alvotech or any of its directors, officers, employees, affiliates, agents, advisors, or representatives liable in any respect for the provision of this communication, the information contained in this communication, or the omission of any information from this communication.

CONTACTS
Alvotech Investor Relations and Global Communications
Benedikt Stefansson, Senior Director
alvotech.ir@alvotech.com


FAQ

How many ordinary shares did Alvotech sell to investors?

Alvotech sold 10,127,132 ordinary shares to investors.

What is the approximate value of the shares sold by Alvotech?

The shares were sold for approximately USD 166 million.

What is the purchase price per share in the transaction?

The purchase price per share in the transaction is USD 16.41.

What will Alvotech use the net proceeds from the transaction for?

Alvotech intends to use the net proceeds for general corporate purposes, working capital, production capacity enhancement, and biosimilar launches.

Where will the transaction of shares take place?

The transaction will be made on the Nasdaq Iceland Exchange.

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