BofA starts bullish Alvotech coverage on biosimilar launch cycle

Investing.com -- BofA Securities initiated coverage of Alvotech S.A. with a “buy” rating and a $7 price objective, versus the stock’s $4.43 price as of Monday, after the FDA’s closure of its inspection of the company’s Reykjavik manufacturing facility removed a key regulatory overhang and as the biosimilar developer enters what BofA called its most meaningful launch cycle since inception.

Shares of the company were up 2.7% in pre-open trade.

BofA’s price objective is based on a discounted cash flow analysis assuming a 10% discount rate and a 1% terminal growth rate.

The brokerage’s model projects 2026 earnings per share of $0.01, below the Bloomberg consensus range of $0 to $0.23 implied by differing estimates and Visible Alpha’s consensus of $0.12.

For 2027, BofA forecasts EPS of $0.24, above the Bloomberg consensus of $0.23 but below Visible Alpha’s $0.37. For 2028, BofA projects EPS of $0.66, above both the Bloomberg consensus of $0.46 and Visible Alpha’s $0.59.

BofA said Alvotech achieved its first full year of net profitability in 2025 and has assembled a pipeline of more than 10 programmes spanning several therapeutic categories, providing exposure to what the firm described as a roughly $200 billion biologic loss-of-exclusivity opportunity through 2033.

Near-term catalysts cited by BofA include U.S. launches of the biosimilars Simponi and Eylea SD, followed by Entyvio.

The analysts noted that the company has recorded cumulative operating losses exceeding $2 billion since inception while building its research, development and manufacturing platform.

BofA expects future launches to drive increasing scale, margin expansion and operating leverage, with commercialisation costs borne primarily by partners.

BofA flagged Eylea HD as a potentially differentiated opportunity, saying Alvotech is among the more advanced developers pursuing a high-dose Eylea biosimilar and could benefit from an early-entry position in a market where currently disclosed competition remains limited.

Upside risks to the price objective identified by BofA include better-than-expected commercial uptake or peak market share for biosimilar launches, faster-than-expected margin expansion from manufacturing leverage, and earlier or more favourable resolution of intellectual property disputes.

Downside risks include delays in regulatory approval of pipeline biosimilar programmes, IP litigation with originators that delays market entry, and slower-than-expected commercial uptake or more aggressive pricing pressure across biosimilar markets.

The stock’s 52-week range is $2.94 to $9.25. Alvotech’s market value stood at $1.498 billion, with 338.2 million shares outstanding and free float at 38.8%.

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