Alvotech Shares Fall After FDA Rejects Key Biosimilar Drug
The U.S. regulator cited manufacturing deficiencies for the company's AVT05 biosimilar, prompting a cut in Alvotech's 2025 financial forecast.
Shares of Alvotech (NASDAQ: ALVO) declined in trading after the Icelandic drugmaker announced that the U.S. Food and Drug Administration had rejected its application for a key immunology drug, citing issues at its manufacturing facility.
The FDA issued a Complete Response Letter (CRL) for the company's Biologics License Application (BLA) for AVT05, a proposed biosimilar to Johnson & Johnson’s blockbuster immunology drug, Simponi (golimumab). Alvotech's stock fell 2.4% to $7.65 following the news, trading near its 52-week low and reflecting investor concern over the regulatory setback.
In response to the FDA’s decision, Alvotech immediately slashed its financial outlook for 2025. The company revised its full-year revenue forecast to a range of $570 million to $600 million, a significant reduction from previous guidance. Adjusted EBITDA projections were also cut to between $130 million and $150 million. Alvotech attributed the downgrade to the anticipated investments required to resolve the manufacturing issues, as well as an expected temporary slowdown in production.
The CRL stems from deficiencies identified by the FDA during a pre-license inspection of Alvotech’s Reykjavik, Iceland, manufacturing facility in July 2025. The agency determined that these issues must be satisfactorily resolved before the application for AVT05 can be approved. The FDA did not raise any other concerns regarding the application itself.
This delay deals a blow to Alvotech’s strategy, as AVT05 was the first biosimilar candidate for Simponi to have its application accepted for review by the FDA. With no other Simponi biosimilars currently approved in the United States, a timely approval would have positioned Alvotech to capture a significant share of the market. According to IQVIA data cited by the company, U.S. sales of Simponi were less than $300 million in the first half of 2025.
Robert Wessman, Chairman and CEO of Alvotech, expressed disappointment with the outcome. In a statement, he noted that the company had already submitted a comprehensive Corrective and Preventive Action plan to the regulator following the July inspection. "We will continue to work with the FDA to bring our affordable biosimilar to patients in the U.S.," Wessman said.
The Reykjavik facility remains FDA-approved for the manufacturing and supply of Alvotech's other commercialized products, suggesting the deficiencies are specific to the processes or production lines intended for AVT05. However, the CRL introduces an indefinite delay, as the company must now implement its corrective actions and likely undergo a successful re-inspection before the FDA will reconsider the application.
For investors, the rejection highlights the persistent regulatory risks inherent in drug development and manufacturing. While the market opportunity for biosimilars remains substantial, the path to approval is contingent on meeting the FDA’s stringent manufacturing standards. Alvotech's ability to swiftly and effectively address the agency's concerns will be critical in regaining investor confidence and realizing the commercial potential of its pipeline.