Alvotech's High-Concentration Adalimumab Biosimilar Approved in Europe

Alvotech (NASDAQ: ALVO)'s adalimumab biosimilar, Hukyndra (development code AVT02), has received marketing authorization from the European Medicines Agency (EMA), marking its entry into the European market. Hukyndra is a biosimilar targeting Humira (adalimumab), AbbVie's (NYSE: ABBV) original drug, and is a TNF-alpha inhibitor. It is developed as a high-concentration (100 mg/mL) and citrate-free formulation. This approval is based on the results of the Phase 3 clinical trial (AVT02-GL-301), which demonstrated therapeutic equivalence to the original drug. It is now available for sale in all 27 member states of the European Union (EU). This signifies that Alvotech has established the institutional framework for generating commercial revenue in the European market, and it represents a significant milestone as the first achievement in its biosimilar portfolio.

European Commercialization Commences Through Strategic Partnership with STADA

Instead of establishing its own global direct sales network, Alvotech has chosen to partner with STADA Arzneimittel AG, a global pharmaceutical company based in Germany, to secure its distribution network in Europe. The two companies signed an exclusive strategic partnership agreement in November 2019, under which Alvotech is responsible for development and production, and STADA is responsible for local marketing and distribution. The specific terms of the contract between the two companies, including the upfront payment and milestone payments, are confidential. However, they are collaborating under a structure that divides the sales margin through a joint sales strategy. By leveraging STADA's extensive local network of hospitals and clinics and its sales force, Alvotech has created a foundation to minimize initial marketing costs and accelerate its entry into the European market.

Differentiated Market Competitiveness with High-Concentration, Citrate-Free Formulation

The greatest strength of Hukyndra is that it is a high-concentration formulation while also eliminating citrate, which can cause pain at the injection site. After the expiration of Humira's European patent, numerous biosimilars have been launched, but most are low-concentration formulations, which has limited their ability to penetrate the market dominated by the high-concentration Humira. The high-concentration, citrate-free formulation, which significantly improves patient convenience, is a powerful weapon that can increase patient compliance and encourage physicians to prescribe it. Compared to other competing products, such as Hyrimoz from Sandoz and Yuflyma from Celltrion, Hukyndra has clearly secured a differentiated position in the market.

Reshaping the European Adalimumab Market and Reducing Financial Burden

Prior to the expiration of Humira's patent, the European adalimumab market was a battleground for biologics, with an annual size of approximately 3.9 billion euros. With the entry of Hukyndra, the monopoly of the original drug will be completely broken, and price competition will accelerate further. The availability of biosimilars will provide a groundbreaking opportunity for governments in European countries, which are facing deficits in their national health insurance funds, to reduce healthcare expenditures. With the availability of cheaper and equally effective treatments, access to drugs for patients with autoimmune diseases such as rheumatoid arthritis and Crohn's disease is also expected to be significantly improved.