Alvotech
_____________________
Annual report and Report of the
Réviseur d’entreprises agréé as of
31 December 2024 and 2023 and for the
years ended 31 December 2024 and 2023
____________________
Alvotech
9, rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
RCS Luxembourg B 258.884
Alvotech
_____________________
Annual report and Report of the
Réviseur d’entreprises agréé as of
31 December 2024 and 2023 and for the
years ended 31 December 2024 and 2023
_____________________
Table of Contents
Endorsement by the Board of Directors 2-8
Report of the Réviseur d’entreprises agréé 9-13
Consolidated Statements of Profit or Loss and Other Comprehensive Income or Loss 14
Consolidated Statements of Financial Position 15-16
Consolidated Statements of Cash Flows 17-18
Consolidated Statements of Changes in Equity 19
Notes to the Consolidated Financial Statements 20-69
Corporate Governance Report 70-76
Non-Financial Disclosure 77-125
Alvotech
Société Anonyme
(the “Company”)
Registered Office: 9, rue de Bitbourg, L-1273 Luxembourg
R.C.S. Luxembourg B 258.884
Management report to the General Meeting of Shareholders
Dear shareholders,
We hereby wish to submit to you the financial statements of the Company and the Alvotech Group
(“Alvotech” or the “Group”) for the financial year ending on 31 December 2024. The present report
relates to the consolidated accounts in accordance with article 1720-1 (3) of the law of 10 August 1915 on
commercial companies, as amended.
I. Business developments for the financial year ended 31 December 2024
In February 2024, the Company announced that the U.S. Food and Drug Administration (FDA) has
approved Simlandi (adalimumab) injection, the AVT02 interchangeable biosimilar to Humira. Teva
Pharmaceuticals International GmbH (“Teva”) is Alvotech’s strategic partner for the exclusive
commercialization of Simlandi in the United States. In April 2024, the Company signed an agreement
with Quallent Pharmaceuticals ("Quallent") allowing the interchangeable biosimilar to be distributed
under Quallent's private label in the U.S. Additionally, The Company extended its European commercial
partner, STADA Arzneimittel AG (“Stada”), commercial rights to AVT02 to Commonwealth of
Independent States (CIS) countries in Central Asia in June 2024.
On 26 February 2024, Alvotech announced it had received and accepted an offer from investors outside
the U.S. for the sale of 10,127,132 Ordinary Shares, for an approximate gross value of $166 million, at a
purchase price of $16.41 per share, or ISK 2,250, at the foreign exchange rate on 23 February 2024. The
shares were to be delivered to investors from previously issued treasury shares held by Alvotech´s
subsidiary Alvotech Manco. As of 31 December 2024, the settlement of the sale offers resulted in
9,213,333 Ordinary Shares delivered to investors upon the payment of $150.5 million, the net proceeds of
the transaction totaling $144 million.
The FDA approved AVT04, a biosimilar to Stelara (ustekinumab), for the U.S. in April 2024 enabling a
commercialization starting on or after 21 February 2025. Alvotech launched AVT04 in Canada with its
commercial partner JAMP Pharma ("Jamp"), on 1 March 2024 and started commercialization in Japan
with Fuji Pharma ("Fuji") in May 2024. In July 2024, the Company launched Uzpruvo, the first approved
AVT04 biosimilar to Stelara across select European countries, with its commercial partner Stada. The
Company extended Stada’s commercial rights to AVT04 to CIS countries in Central Asia in June 2024. In
October 2024, the FDA approved SELARSDI (ustekinumab) in a new presentation, 130 mg/26 ml
solution in a single-dose vial for intravenous infusion. This approval paves the way for SELARSDI to
2
further align its label with the indications of the reference product Stelara in the U.S. at launch, which is
expected in the first quarter of 2025.
In April 2024, the Company announced positive topline results from a confirmatory clinical study for
AVT05, a proposed biosimilar for Simponi and Simponi Aria (golimumab). In November 2024, the
European Medicines Agency (EMA) accepted a Marketing Authorization Application (MAA) for
AVT05. The approvals process is anticipated to be completed in the fourth quarter of 2025.
In May 2024, the Company announced its collaboration with Dr. Reddy's Laboratories SA, ("Dr.
Reddy"), for the commercialization of AVT03, a proposed biosimilar to Prolia (denosumab) and Xgeva
(denosumab), in the U.S., Europe and UK. Dr. Reddy’s commercialization rights are exclusive for the
U.S., and semi-exclusive for Europe and the UK. In June 2024, the Company extended its partnership
with Stada who will assume marketing license for AVT03 in Europe through semi-exclusive rights,
including Switzerland and the UK, as well as exclusive rights in selected markets in Central Asia and the
Middle East. In July 2024, the Company announced positive topline results from a confirmatory patient
study for AVT03. In October 2024, the EMA accepted a MAA for AVT03.
In June 2024, the Company entered into an exclusive partnership agreement with Mercury Pharma Group
Limited (“Advanz”) regarding the supply and commercialization of AVT06 (aflibercebt), its proposed
biosimilar to Eylea in Europe, except for Germany and France where the rights are semi-exclusive. In
August 2024, the European Medicines Agency (EMA) has accepted a Marketing Authorization
Application for AVT06.
The Company announced in June 2024 that all holders of the Tranche A and some holders of the Tranche
B of the 2022 Convertible Bonds exercised their right to conversion into ordinary shares at the fixed
conversion price of $10.00 per share on the last scheduled conversion date prior to maturity, which is 1
July 2024. Similarly, some holders of the Aztiq Convertible Bonds decided to exercise similar conversion
right into ordinary shares at the same conversion price. Based on the used exchange rate, a total of
approximately 22.1 million new shares were issued on 1 July 2024, corresponding to approximately
$220.7 million of aggregate value of these bonds with accrued interest. The holders of the 2022
Convertible Bonds and the Aztiq Convertible Bonds that did not exercise their right to conversion,
obtained repayment from the Group in July 2024, upon the closing of the senior secured first lien term
loan facility of $965.0 million, led by GoldenTree Asset Management (the "Secured Loan Facility").
On 11 July 2024, the Company announced the closing of its previously executed Secured Loan Facility.
The closing has allowed Alvotech to refinance outstanding debt obligations, reduce the cost of capital and
improve its overall debt maturity profile. The Secured Loan Facility, for $965.0 million in aggregate
principal amount, matures in July 2029. The first tranche is a first lien $900.0 million term loan which
bears an interest rate of Secured Overnight Funding Rate (SOFR) plus 6.5% per annum. The second
tranche is a $65.0 million first lien, second out term loan, which bears an interest rate of SOFR plus
10.5% per annum. This resulted in the concurrent settlement of its existing debt obligations.
In September 2024, the Company announced the initiation of a confirmatory patient study for AVT16, a
biosimilar candidate to Entyvio (vedolizumab).
The Consolidated Statement of Financial Position total assets amount to 1,221.4 million United States
dollars (USD).
The financial year ending on 31 December 2024 has produced a loss of 231.9 million USD.
3
In addition to its operating results, as calculated in accordance with IFRS, the Group uses Adjusted
EBITDA when monitoring and evaluating operational performance. Adjusted EBITDA is defined as
profit or loss for the relevant period, as adjusted for certain items that Alvotech management believes are
not indicative of ongoing operating performance. Alvotech believes that this non-IFRS measure assists
its shareholders because it enhances the comparability of results each period, helps to identify trends in
operating results and provides additional insight and transparency on how management evaluates the
business. Alvotech’s executive management team uses this non-IFRS measure to evaluate financial
measures to budget, update forecasts, make operating and strategic decisions, and evaluate performance.
This non-IFRS financial measure is not meant to be considered alone or as a substitute for IFRS financial
measures and should be read in conjunction with Alvotech’s consolidated financial statements prepared in
accordance with IFRS. Additionally, this non-IFRS measure may not be comparable to similarly titled
measures used by other companies. The most directly comparable IFRS measure to this non-IFRS
measure is loss for the year.
The following table reconciles loss for the year to Adjusted EBITDA for the years ended 31 December
2024 and 2023, respectively:
USD in thousands
2024 2023
Loss for the
year………………………………………………………………………..
(231.9) (551.7)
Income tax benefit 14.3 (99.3)
Total net finance 223.0 262.3
Loss on extinguishment of financial liabilities …..……………………... 69.4 -
Depreciation and amortization 31.3 24.2
Impairment and loss of sale of property, plant and equipment.. - 0.4
Impairment of intangible assets ……………………………………………. - 1.8
Charge related to contract termination ………….………………………… - 18.5
Incentive plan expense ……………………………………………………. 7.6 18.1
Share of net loss of joint venture ………………………………………..……. - 7.1
Impairment loss on investment in joint venture ……………………….. - 21.5
Loss on sale of interest in joint venture ………………..…………………. 3.0 -
Exchange rate differences …………………………………….. (8.1) 5.2
Recovery related to contract termination ..………………………………. (1.1) -
Transaction costs
0.8 0.9
Adjusted EBITDA…………………………………………………………. 108.3 (291.0)
We suggest the following allocation of the result:
USD (million)
Result brought forward from the previous year (2,205.8)
Result for the year (231.9)
Distribution of dividends 0
Result to be carried forward to the following financial year (2,437.7)
4
As of 31 December 2024, the Company had $51.4 million in cash and cash equivalents and the Company
had borrowings of $1,068.6 million, including $32.7 million of current portion of borrowings, as of 31
December 2024.
Product revenue: Product revenue was $273.5 million for the year ended 31 December 2024, compared
to $48.7 million for the year ended 31 December 2023. Revenue for the year ended 31 December 2024,
consisted of product revenue from sales of AVT02 in select European countries and Canada, launch of
AVT02 in the U.S., and the launches of AVT04 in Canada, Japan and select European markets.
License and other revenue: License and other revenue was $216.2 million for the year ended
31 December 2024, compared to $42.7 million for the year ended 31 December 2023. The license and
other revenue of $216.2 million was primarily attributable to the recognition of a $6.6 million research
and development milestone due to the approval of AVT04 in Europe, $6.8 million due to the MAA
submission with the EMA for AVT03, $12.1 million relative to the MAA submission with the EMA for
AVT05, $15.5 million due to the MAA submission with the EMA for AVT06, $16.8 million relative to
CTA submission for AVT16, $39.1 million due to the CES completion of AVT03, and $56.4 million due
to the CES completion of AVT05. This also included $5.4 million relative to the product launch of
AVT04 in Japan, $6.9 million relative to the achievement of sales target of AVT02 in Europe and
Canada, $10.0 million relative to the product launch of AVT04 in Europe, $18.8 million relative to the
product launch of AVT02 in the U.S., and a net milestone revenue of $20.4 million for the execution of
out-license contracts during the year ended 31 December 2024.
Cost of product revenue: Cost of product revenue was $185.3 million for the year ended 31 December
2024, compared to $160.9 million for the year ended 31 December 2023. This is the result of sales in the
period, including the launches of AVT02 in the U.S., AVT04 in Canada, Japan and select European
countries, tempered by lower production-related charges and lower costs associated with FDA inspection
readiness.
Research and development expenses: Research and development expenses were $171.3 million for the
year ended 31 December 2024, compared to $210.8 million for the year ended 31 December 2023. The
decrease was primarily driven by a one-time charge of $18.5 million relating to the termination of the co-
development agreement with Biosana for AVT23 recognized during the year 2023, a decrease of $6.3
million primarily related to programs which reached commercialization (i.e., AVT02 and AVT04
programs), a decrease of $25.0 million related to programs for which the clinical phase is substantially
completed (i.e. AVT03, AVT05, and AVT06), and overall lower headcount and other R&D expenses of
$8.2 million, partially offset by a $20.0 million increase in direct program expenses mainly due to AVT16
that is advancing through clinical phase.
General and administrative expenses: General and administrative expenses were $65.7 million for the
year ended 31 December 2024, compared to $76.6 million for the year ended 31 December 2023. The
decrease in G&A expenses was primarily attributable to $4.5 million in lower third-party services, lower
insurance premiums and headcount, coupled with a $6.0 million decrease in expenses for share-based
payments.
Net Loss: Net loss was $231.9 million, or $(0.87) per share on a basic and diluted basis, for the year
ended 31 December 2024 as compared to net loss of $551.7 million, or $(2.43) on a basic and diluted
basis, for the year ended 31 December 2023.
5
II. Future developments
On 27 January 2025, the Company announced filing acceptance of U.S. Biologics License Applications
(BLA) for AVT05, a proposed biosimilar to Simponi and Simponi Aria (golimumab). The FDA review
process for these applications is anticipated to be completed in the fourth quarter of 2025.
On 18 February 2025, the Company announced that the FDA has accepted for review a BLA for AVT06,
Alvotech’s proposed biosimilar to Eylea (aflibercept), a biologic used to treat eye disorders, including
diseases which can lead to vision loss or blindness. The process to obtain regulatory approval is
anticipated to be completed in the fourth quarter of 2025.
On 21 February 2025, the Company announced the availability of SELARSDI (ustekinumab) injection in
the U.S., a biosimilar to Stelara (ustekinumab), for the treatment of psoriatic arthritis, plaque psoriasis,
Crohn’s disease, ulcerative colitis, pediatric plaque psoriasis and pediatric psoriatic arthritis.
On 18 March 2025, the Company announced the FDA acceptance of BLA for AVT03, a proposed
biosimilar to Prolia and Xgeva (denosumab).
On 20 March 2025, the Company announced the acquisition of Xbrane Biopharma AB's ("Xbrane")
research and development operations and a biosimilar candidate, further expanding the Company's
development capabilities, and establishing a footprint in the Swedish life science sector. Xbrane retains
other pre-clinical development programs and will focus on the commercialization of this portfolio. The
purchase price for the acquisition amounts to approximately SEK 275 million (approximately
$27 million) and will be payable in cash at closing for SEK 102.2 million and by assumption of SEK
172.8 million in debt and accounts payable. The creditors have agreed to accept payment for SEK
152.8 million of the debt with Alvotech equity shares. Closing of the acquisition is expected to occur in
April 2025 and is contingent on approvals from the relevant authorities and Xbrane's shareholders. The
Company also announced that it intends to explore the possibility of a listing of Swedish Depository
Receipts (SDR), equity share equivalents, on Nasdaq Stockholm, in the future.
At this point, the Board of Directors is confident that the appropriate level of funding will be available
from these sources to meet the business needs in 2024 and beyond. See further information in note 1.4.
III. Business risks and their mitigation
This section contains a summary of the main risks that the Group may face during the normal course of its
business. Detailed information on the Group’s risks relating to financial instruments, risk management
objectives and policies can be found in note 27.
Please note however, that
• This section does not purport to contain an exhaustive list of the risks faced by the Group, as the
Group may be significantly affected by risks that it has not identified, or not considered as
material;
• Some risks faced by the Group, whether they are mentioned in this section or not, may arise from
external factors beyond the Group’s control;
• Where means of mitigation are mentioned in this section, such mention does not constitute a
guarantee that the means of mitigation will be effective (in whole or in part) to remove or reduce
the effect of the risk.
6
The Group’s business model is built around the development, manufacturing and commercialization of
biosimilar medicine. Development of biosimilar medicine is subjected to numerous risks, as the product
travels through different stages of development, scale-up, clinical, regulatory to name a few. On the
commercial side the Group is faced with an ever-changing competitive landscape, as well as pricing
pressure for its products.
IV. Additional disclosures
Alvotech is committed to strong and transparent corporate governance. Our corporate governance
framework, along with our internal controls and policies, is intended to support sustainable financial
performance and long-term value creation for all of our stakeholders including shareholders, patients,
employees and other stakeholders. Further information on corporate governance can be found in these
financial statements and on the Groups website at www.alvotech.com.
Information about sustainability and non-financial reporting is disclosed in these financial statements,
where information about operations, environment, social environment and governance can be found.
In our opinion, the Consolidated Financial Statements of Alvotech as of 31 December 2024 and for the
year then ended with the file name 222100DCZBOWV5DZ8372-2024-12-31-en.xhtml is prepared, in all
material respects, in compliance with the ESEF Regulation.
Pursuant to Article 68 of the law of 19 December 2002 regarding the trade and companies' register and
the accounting as well as annual accounts of companies, as amended, the board of directors hereby
declares:
1. To the best of our knowledge, we are not aware of any events which would have a
material bearing on the accounts since the end of the previous financial year. Information
on subsequent events can be found in note 29.
2. The Group's likely foreseeable future development is stable.
3. Research and development expenses consist primarily of costs incurred in connection
with Alvotech’s research, development and pre-commercial manufacturing activities
prior to the commercialization of its biosimilar products. Expenditures related to research
and development activities are generally recognized as an expense in the period in which
they are incurred. Due to significant regulatory uncertainties and other uncertainties
inherent in the development of pharmaceutical products, Alvotech did not capitalize any
research and development expenses as internally developed intangible assets during the
year. Research and development activities will continue to be central to Alvotech’s
business model and will vary significantly based upon the success of its programs.
Product candidates in later stages of clinical development generally have higher
development costs than those in earlier stages of development, primarily due to the
increased size and duration of later-stage clinical trials. The Group conducts research and
development activities at its subsidiaries in Iceland, Germany and Switzerland.
4. In March 2024 Alvotech issued 13,000,000 new shares which were transferred to a group
company, Alvotech Manco ehf. On 31 December 2024 Alvotech Manco ehf. owned
22,905,618 treasury shares in Alvotech.
5. The Group does not have established branches.
7
We kindly ask you to grant discharge to the directors for the exercise of their mandates during the
financial year ended on 31 December 2024.
Done in Luxembourg on 26 March 2025,
For the Board of Directors:
Robert Wessman
Title: CEO & Chairman
8
TotheShareholdersof
AlvotechS.A.
9,ruedeBitbourg
L-1273Luxembourg
REPORTOFTHEREVISEURD’ENTREPRISESAGREE
ReportontheAuditoftheConsolidatedFinancialStatements
Opinion
WehaveauditedtheconsolidatedfinancialstatementsofAlvotechS.A.anditssubsidiaries(the“Group”),whichcomprisethe
consolidatedstatementoffinancialpositionasatDecember31,2024,andtheconsolidatedstatementofprofitorlossandother
comprehensiveincomeorloss,consolidatedstatementofchangesinequityandconsolidatedstatementofcashflowsforthe
yearthenended,andnotestotheconsolidatedfinancialstatements,includingmaterialaccountingpolicyinformationandother
explanatoryinformation.
Inouropinion,theaccompanyingconsolidatedfinancialstatementsgiveatrueandfairviewoftheconsolidatedfinancial
positionoftheGroupasatDecember31,2024,andofitsconsolidatedfinancialperformanceanditsconsolidatedcashflowsfor
theyearthenendedinaccordancewithIFRSAccountingStandardsasadoptedbytheEuropeanUnion.
BasisforOpinion
WeconductedourauditinaccordancewiththeEURegulationN°537/2014,theLawofJuly23,2016ontheauditprofession
(Lawof23July2016)andwithInternationalStandardsonAuditing(ISAs)asadoptedforLuxembourgbytheCommissionde
SurveillanceduSecteurFinancier(CSSF).OurresponsibilitiesundertheEURegulationNo537/2014,theLawofJuly23,2016and
ISAsasadoptedforLuxembourgbytheCSSFarefurtherdescribedinthe“Responsibilitiesoftheréviseurd’entreprisesagrééfor
theAuditoftheConsolidatedFinancialStatements”sectionofourreport.WearealsoindependentoftheGroupinaccordance
withtheInternationalCodeofEthicsforProfessionalAccountants,includingInternationalIndependenceStandards,issuedby
theInternationalEthicsStandardsBoardforAccountants(IESBACode)asadoptedforLuxembourgbytheCSSFtogetherwith
theethicalrequirementsthatarerelevanttoourauditoftheconsolidatedfinancialstatements,andhavefulfilledourother
ethicalresponsibilitiesunderthoseethicalrequirements.Webelievethattheauditevidencewehaveobtainedissufficientand
appropriatetoprovideabasisforouropinion.
Deloitte Audit
Société à responsabilité limitée 20
Boulevard de Kockelscheuer L-1821
Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
9
KeyAuditMatters
Keyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthe
consolidatedfinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextoftheauditofthe
consolidatedfinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopinionon
thesematters.
KeyAuditMatter HowtheKeyAuditMatterWasAddressedintheAudit
IncomeTaxes—DeferredTaxAssets—RefertoNotes2.14
and10totheConsolidatedFinancialStatements
TheGrouprecognizesdeferredtaxassetsfordeductible
temporarydifferencesarisingfromunusedtaxlosses,
amortization,depreciation,reservesandemployeebenefitsin
accordancewithIAS12,IncomeTaxes.
TheGroup’sdeferredtaxassetsbalanceasofDecember31,
2024was$298million.Thedeferredtaxassetsbalanceis
reviewedattheendofeachreportingperiodandrecognizedto
theextentthatitisprobablethatsufficienttaxableprofitswill
beavailabletoallowallorpartoftheassettoberecovered.The
majorityofthedeferredtaxassetrecognizedrelatestotax
lossesthathaveariseninIceland,wherebyitisprobablethat
futureforecastedtaxableprofitsassociatedwithproductand
out-licensingrevenue,drivenbymanagement’sassumptionsfor
unitpriceandmarketshare,willbeavailabletooffsetthe
cumulativetaxlossesasof31December2024.
Giventhedeterminationthatitisprobablethattherewillbe
sufficienttaxableprofitsgeneratedinthefutureagainstwhich
thedeferredtaxassetscanbeutilizedrequiresmanagementto
makesignificantjudgementsandestimatesrelatedtotaxable
profits,performingauditprocedurestoevaluatethe
reasonablenessofmanagement’sestimatesandassumptions
relatedtotaxableprofitsrequiredahighdegreeofauditor
judgmentandanincreasedextentofeffort,particularlyrelated
tounitpriceandmarketshareassumptions.
Ourauditproceduresrelatedtothedeterminationofwhether
sufficient taxable profits will be generated in the future
against which the deferred tax assets can be utilized,
particularly as it pertains to estimates for unit price and
marketshare,includedthefollowing,amongothers:
• We evaluated the unit price and market share
assumptions to determine if such assumptions are
consistentwithinternalandexternaldataaswellas
relevant existing market information, industry and
otherexternalfactorssuchas:
o Internalbudgets.
o Historicaltaxableprofits.
o Analyst and industry reports for the Company
anditspeercompanies.
• We evaluated management’s ability to accurately
estimatetaxableprofits by comparingactualresults
tomanagement’shistoricalestimates.
• Weassessedunitpriceandmarketshareassumptions
utilized within the future forecasts for potential
manipulation or bias by considering contradictory
evidence.
Otherinformation
TheBoardofDirectorsisresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationstatedinthe
consolidatedmanagementreportandtheCorporateGovernanceStatementbutdoesnotincludetheconsolidatedfinancial
statementsandourreportoftheréviseurd’entreprisesagrééthereon.
Ouropinionontheconsolidatedfinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformof
assuranceconclusionthereon.
Deloitte Audit
Société à responsabilité limitée 20
Boulevard de Kockelscheuer L-1821
Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
10
Inconnectionwithourauditoftheconsolidatedfinancialstatements,ourresponsibilityistoreadtheotherinformationand,in
doingso,considerwhethertheotherinformationismateriallyinconsistentwiththeconsolidatedfinancialstatementsorour
knowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,we
concludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthisfact.Wehavenothingto
reportinthisregard.
ResponsibilitiesoftheBoardofDirectorsandThoseChargedwithGovernancefortheConsolidatedFinancialStatements
TheBoardofDirectorsisresponsibleforthepreparationandfairpresentationoftheseconsolidatedfinancialstatementsin
accordancewithIFRSAccountingStandardsasadoptedbytheEuropeanUnion,andforsuchinternalcontrolastheBoardof
Directorsdeterminesisnecessarytoenablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterial
misstatement,whetherduetofraudorerror.
InpreparingtheconsolidatedfinancialstatementstheBoardofDirectorsisresponsibleforassessingtheGroup’sabilityto
continueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisof
accountingunlesstheBoardofDirectorseitherintendstoliquidatetheGrouportoceaseoperations,orhasnorealistic
alternativebuttodoso.
TheBoardofDirectorsisresponsibleforpresentingandmarkinguptheconsolidatedfinancialstatementsincompliancewith
therequirementssetoutintheDelegatedRegulation2019/815onEuropeanSingleElectronicFormatasamended(“theESEF
Regulation”).
ThosechargedwithgovernanceareresponsibleforoverseeingtheGroup’sfinancialreportingprocess.
Responsibilitiesoftheréviseurd’entreprisesagrééfortheAuditoftheConsolidatedFinancialStatements
TheobjectivesofourauditaretoobtainreasonableassuranceaboutwhethertheConsolidatedFinancialStatementsasawhole
arefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueareportoftheréviseurd’entreprisesagréé
thatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedin
accordancewiththeEURegulationN°537/2014,theLawofJuly23,2016andwithISAsasadoptedforLuxembourgbytheCSSF
willalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsidered
materialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofusers
takenonthebasisoftheseconsolidatedfinancialstatements.
AspartofanauditinaccordancewiththeEURegulationN°537/2014,theLawofJuly23,2016andwithISAsasadoptedfor
LuxembourgbytheCSSF,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.We
also:
• Identifyandassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudor
error,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientand
appropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudis
Deloitte Audit
Société à responsabilité limitée 20
Boulevard de Kockelscheuer L-1821
Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
11
higherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,
misrepresentations,ortheoverrideofinternalcontrol.
• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriate
inthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sinternal
control.
• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelated
disclosuresmadebytheBoardofDirectors.
• ConcludeontheappropriatenessofBoardofDirectorsuseofthegoingconcernbasisofaccountingand,basedonthe
auditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificant
doubtontheGroup’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,weare
requiredtodrawattentioninourreportoftheréviseurd’entreprisesagréétotherelateddisclosuresintheconsolidated
financialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheaudit
evidenceobtaineduptothedateofourreportoftheréviseurd’entreprisesagréé.However,futureeventsorconditions
maycausetheGrouptoceasetocontinueasagoingconcern.
• Evaluatetheoverallpresentation,structureandcontentoftheconsolidatedfinancialstatements,includingthe
disclosures,andwhethertheconsolidatedfinancialstatementsrepresenttheunderlyingtransactionsandeventsina
mannerthatachievesfairpresentation.
• Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesandbusinessactivities
withintheGrouptoexpressanopinionontheconsolidatedfinancialstatements.Weareresponsibleforthedirection,
supervisionandperformanceoftheGroupaudit.Weremainsolelyresponsibleforourauditopinion.
Ourresponsibilityisalsotoassesswhethertheconsolidatedfinancialstatementshavebeenpreparedinallmaterialrespects,in
compliancewiththerequirementslaiddownintheESEFRegulation.
Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingofthe
auditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirements
regardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughtto
bearonourindependence,andwhereapplicable,actionstakentoeliminatethreatsorsafeguardsapplied.
Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmost
significanceintheauditoftheconsolidatedfinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.
Wedescribethesemattersinourreportunlesslaworregulationprecludespublicdisclosureaboutthematter.
ReportonOtherLegalandRegulatoryRequirements
Wehavebeenappointedasréviseurd’entreprisesagréébytheBoardofDirectorsonJune7,2024andthedurationofour
uninterruptedengagement,includingpreviousrenewalsandreappointments,is3years.
Deloitte Audit
Société à responsabilité limitée 20
Boulevard de Kockelscheuer L-1821
Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
12
Theconsolidatedmanagementreportisconsistentwiththeconsolidatedfinancialstatementsandhasbeenpreparedin
accordancewithapplicablelegalrequirements.
TheaccompanyingCorporateGovernanceStatementispresentedonpages70to76.TheinformationrequiredbyArticle68ter
paragraph(1)lettersc)andd)ofthelawofDecember19,2002onthecommercialandcompaniesregisterandonthe
accountingrecordsandannualaccountsofundertakings,asamended,isconsistentwiththeconsolidatedfinancialstatements
andhasbeenpreparedinaccordancewithapplicablelegalrequirements.
WehavecheckedthecomplianceoftheconsolidatedfinancialstatementsoftheGroupasatDecember31,2024withthe
relevantstatutoryrequirementssetoutintheESEFRegulationthatareapplicabletofinancialstatements
FortheGroupitrelatesto:
- FinancialstatementspreparedinavalidxHTMLformat;
- TheXBRLmarkupoftheconsolidatedfinancialstatementsusingthecoretaxonomyandthecommonruleson
markupsspecifiedintheESEFRegulation.
Inouropinion,theconsolidatedfinancialstatementsoftheGroupasatDecember31,2024,havebeenprepared,inallmaterial
respects,incompliancewiththerequirementslaiddownintheESEFRegulation.
Weconfirmthattheauditopinionisconsistentwiththeadditionalreporttotheauditcommittee.
Weconfirmthattheprohibitednon-auditservicesreferredtointheEURegulationN537/2014werenotprovidedandthatwe
remainedindependentoftheGroupinconductingtheaudit.
ForDeloitteAudit,Cabinetderévisionagréé
LudovicMosca,Réviseurd’entreprisesagréé
Partner
March26,2025
Deloitte Audit
Société à responsabilité limitée 20
Boulevard de Kockelscheuer L-1821
Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
13
Consolidated Statements of Profit or Loss and Other Comprehensive Income or Loss for the years ended 31 December
2024 and 2023
USD in thousands, except for per share amounts Notes 2024 2023
Product revenue 5 273,472 48,699
License and other revenue 5 216,210 42,735
Other income 2,296 1,948
Cost of product revenue (185,309 ) (160,856 )
Research and development expenses (171,312 ) (210,827 )
General and administrative expenses (65,713 ) (76,559 )
Operating profit / (loss) 69,644 (354,860 )
Share of net loss of joint venture 26 — (7,153 )
Impairment loss on investment in joint venture
Loss on sale of interest in joint venture 26 (2,970 ) —
Finance income 7 80,145 4,823
Finance costs 7 (303,165 ) (267,157 )
Exchange rate differences 8,161 (5,183 )
Loss on extinguishment of financial liabilities 21 (69,378 ) —
Non-operating loss (287,207 ) (296,189 )
Loss before taxes (217,563 ) (651,049 )
Income tax (expense) / benefit 10 (14,301 ) 99,318
Loss for the year (231,864 ) (551,731 )
Other comprehensive loss
Item that will be reclassified to profit or loss in subsequent periods:
Exchange rate differences on translation of foreign operations (690 ) (86 )
Total comprehensive loss (232,554 ) (551,817 )
Loss per share
Basic and diluted loss for the year per share 11 (0.87 2.43
The accompanying notes are an integral part of these Consolidated Financial Statements.
14
Consolidated Statements of Financial Position as of 31 December 2024 and 2023
USD in thousands
Non-current assets
Notes
31 December
2024
31 December
2023
Property, plant and equipment 12 284,546 236,779
Right-of-use assets 13 125,198 119,802
Goodwill 14 11,330 12,058
Other intangible assets 15 20,621 19,076
Contract assets 5 22,710 10,856
Interest in joint venture 26 — 18,494
Other long-term assets 3,615 2,244
Restricted cash 16 — 26,132
Deferred tax assets 10 298,360 309,807
Total non-current assets 766,380 755,248
Current assets
Inventories 17 127,889 74,433
Trade receivables 160,217 41,292
Contract assets 5 67,304 35,193
Other current assets 18 48,064 31,871
Receivables from related parties 24 118 896
Cash and cash equivalents 16 51,428 11,157
Total current assets 455,020 194,842
Total assets 1,221,400 950,090
The accompanying notes are an integral part of these Consolidated Financial Statements.
15
Consolidated Statements of Financial Position as of 31 December 2024 and 2023
USD in thousands
Equity
Notes
31 December
2024
31 December
2023
Share capital 19 2,826 2,279
Share premium 19 2,007,058 1,229,690
Other reserves 20 17,272 42,911
Translation reserve (2,218 ) (1,528 )
Accumulated deficit (2,437,709 ) (2,205,845 )
Total equity (412,771 ) (932,493 )
Non-current liabilities
Borrowings 21 1,035,882 922,134
Derivative financial liabilities 27 210,224 520,553
Lease liabilities 13 112,137 105,632
Contract liabilities 5 80,721 73,261
Deferred tax liability 10 1,811 53
Total non-current liabilities 1,440,775 1,621,633
Current liabilities
Trade and other payables 67,126 80,563
Lease liabilities 13 9,515 9,683
Current maturities of borrowings 21 32,702 38,025
Liabilities to related parties 24 8,465 9,851
Contract liabilities 5 15,980 59,183
Taxes payable 204 925
Other current liabilities 25 59,404 62,720
Total current liabilities 193,396 260,950
Total liabilities 1,634,171 1,882,583
Total equity and liabilities 1,221,400 950,090
The accompanying notes are an integral part of these Consolidated Financial Statements.
16
Consolidated Statements of Cash Flows for the years 31 December 2024 and 2023
USD in thousands
Cash flows from operating activities
Notes 2024 2023
Loss for the period (231,864 ) (551,731 )
Adjustments for non-cash items:
Long-term incentive plan expense — 78
Depreciation and amortization 12 31,301 24,210
Impairment of other intangible assets 15 — 1,779
Impairment loss on investment in joint venture 26 — 21,519
Change in allowance for receivables (946 ) 18,500
Change in inventory reserves 17 (3,483 ) 8,341
Share-based payments 22 7,626 18,033
Loss on disposal of property, plant and equipment — 365
Loss on sale of interest in joint venture 26 2,970 —
Share of net loss of joint venture 26 — 7,153
Finance income 7 (80,145 ) (4,823 )
Finance costs 7 303,165 267,157
Exchange rate difference (8,161 ) 5,183
Loss on extinguishment of financial liabilities 22 69,378 —
Income tax benefit 10 14,301 (99,318 )
Operating cash flow before movement in working capital 104,142 (283,554 )
Increase in inventories 17 (49,973 ) (11,304 )
(Increase) in trade receivables (119,063 ) (8,320 )
Decrease / (increase) in receivables with related parties 24 20 881
(Increase) in contract assets 5 (45,192 ) (17,393 )
(Increase) in other assets (7,125 ) (802 )
(Decrease) increase in trade and other payables (13,695 ) 31,772
(Decrease) / increase in contract liabilities 5 (31,446 ) 35,396
(Decrease) / increase in liabilities with related parties (7,871 ) 1,280
(Decrease) in other liabilities (14,299 ) (5,182 )
Cash used in operations (184,502 ) (257,226 )
Interest received 4,617 3,649
Interest paid (54,921 ) (57,254 )
Income tax paid (2,037 ) (1,354 )
Net cash used in operating activities (236,843 ) (312,185 )
17
Cash flows from investing activities
Acquisition of property, plant and equipment 12 (53,661 ) (33,234 )
Disposal of property, plant and equipment — 133
Acquisition of intangible assets 15 (3,339 ) (13,239 )
Restricted cash in connection with debt extinguishment 16 26,132 —
Proceeds from the sale in joint venture 26 12,000 —
Net cash generated from (used in) investing activities (18,868 ) (46,340 )
Cash flows from financing activities
Repayments of borrowings 21 (749,082 ) (99,367 )
Repayments of principal portion of lease liabilities 13 (10,197 ) (8,269 )
Proceeds from new borrowings 21 896,263 278,831
Transaction cost from new borrowings (4,236 ) (9,004 )
Gross proceeds from equity offering 19 150,451 136,879
Fees from equity offering (5,812 ) (4,141 )
Proceeds from warrants 27 4,843 6,390
Stock options exercised 76 —
Proceeds from loans from related parties 24,500 —
Repayment of loans from related parties (9,500 ) —
Net cash generated from financing activities 297,306 301,319
Increase / (decrease) in cash and cash equivalents 41,595 (57,206 )
Cash and cash equivalents at the beginning of the year 16 11,157 66,427
Effect of movements in exchange rates on cash held (1,324 ) 1,936
Cash and cash equivalents at the end of the period 16 51,428 11,157
Supplemental cash flow disclosures (Note 28)
The accompanying notes are an integral part of these Consolidated Financial Statements.
18
Consolidated Statements of Changes in Equity for the years ended 31 December 2024 and 2023
USD in thousands
Share
capital
Share
premium
Other
reserves
Translation
reserve
Accumulated
deficit Total equity
At 1 January 2023 2,126 1,058,432 30,582 (1,442 ) (1,654,114 ) (564,416 )
Loss for the period — — — — (551,731 ) (551,731 )
Foreign currency translation differences — — — (86 ) — (86 )
Total comprehensive loss — — — (86 ) (551,731 ) (551,817 )
Capital contribution 118 132,618 — — — 132,736
Vested earn-out shares 6 8,300 — — — 8,306
Penny warrants exercised 25 27,159 — — — 27,184
Public warrants exercised 6 7,612 — — — 7,618
Recognition of share-based payments — — 16,985 — — 16,985
Settlement of RSUs with shares 8 5,095 (5,781 ) — — (678 )
Settlement of SARs with shares (10 ) (9,526 ) (4,231 ) — — (13,767 )
Recognition of equity component of
convertible bonds — — 5,356 — — 5,356
At 31 December 2023 2,279 1,229,690 42,911 (1,528 ) (2,205,845 ) (932,493 )
Loss for the period — — — — (231,864 ) (231,864 )
Foreign currency translation differences — — — (690 ) — (690 )
Total comprehensive loss — — — (690 ) (231,864 ) (232,554 )
Capital contribution 92 144,547 — — — 144,639
Vested earn-out shares 198 310,703 — — — 310,901
Penny warrants exercised 17 24,293 — — — 24,310
Public warrants exercised 4 6,691 — — — 6,695
Recognition of share-based payments — — 6,486 — — 6,486
Stock options recognised — — 276 — — 276
Settlement of RSUs with shares 15 5,890 (10,981 ) — — (5,076 )
Settlement of options with shares 0 105 (29 ) — — 76
Conversion of convertible bonds 221 285,139 (21,391 ) — — 263,969
At 31 December 2024 2,826 2,007,058 17,272 (2,218 ) (2,437,709 ) (412,771 )
The accompanying notes are an integral part of these Consolidated Financial Statements.
19
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
23
Notes to the Consolidated Financial Statements
24
Notes to the Consolidated Financial Statements
25
Notes to the Consolidated Financial Statements
26
Notes to the Consolidated Financial Statements
27
Notes to the Consolidated Financial Statements
28
Notes to the Consolidated Financial Statements
29
Notes to the Consolidated Financial Statements
30
Notes to the Consolidated Financial Statements
31
Notes to the Consolidated Financial Statements
32
Notes to the Consolidated Financial Statements
33
Notes to the Consolidated Financial Statements
34
Notes to the Consolidated Financial Statements
35
Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
40
Notes to the Consolidated Financial Statements
41
Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
45
Notes to the Consolidated Financial Statements
46
Notes to the Consolidated Financial Statements
47
Notes to the Consolidated Financial Statements
48
Notes to the Consolidated Financial Statements
49
Notes to the Consolidated Financial Statements
50
Notes to the Consolidated Financial Statements
51
Notes to the Consolidated Financial Statements
52
Notes to the Consolidated Financial Statements
53
Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
60
Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
63
Notes to the Consolidated Financial Statements
64
Notes to the Consolidated Financial Statements
65
Notes to the Consolidated Financial Statements
66
Notes to the Consolidated Financial Statements
67
Notes to the Consolidated Financial Statements
68
Notes to the Consolidated Financial Statements
69
Corporate Governance Report for 2024
This corporate governance report (the “Report”) covers the period from 1 January 2024 through 31 December 2024
of Alvotech, a société anonyme, incorporated and existing under the laws of the Grand Duchy of Luxembourg,
registered with the Luxembourg Trade and Companies' Register under number B258884, having its registered office
at 9, rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg (“Alvotech” or the “Company”).
Alvotech was incorporated on August 23, 2021 for the sole purpose of completing a business combination between
Alvotech Holdings S.A., Oaktree Acquisition Corp. II and Alvotech. The business combination closed on 15 June
2022 and, concurrently with the closing, the current Directors of Alvotech S.A. were appointed.
The ordinary shares and warrants of Alvotech are listed on The Nasdaq Stock Market LLC (“Nasdaq US”) under
the symbol “ALVO” and “ALVOW”, respectively, since 16 June 2022. Alvotech’s ordinary shares are also listed on
the Nasdaq Iceland Main Market under the ticker symbol “ALVO” since 8 December 2022 and, prior to that, on the
Nasdaq First North Growth Market since 23 June 2022 until their admission to trading to the Nasdaq Iceland Main
Market. This Report will be a part of the financial statements for the year ended 31 December 2024 and has been
approved by the board of directors of the Company (the “Board of Directors” or “Board”) and reviewed by its
Audit Committee.
As regards general meetings of shareholders, at an ordinary general meeting, there is no quorum requirement, and
resolutions are adopted by a simple majority cast vote. Abstentions are not considered “votes”.
Resolutions at an extraordinary general meeting are required for any of the following matters, among others (i) an
increase or decrease of the authorized or issued capital, (ii) a limitation or exclusion of preferential subscription
rights, (iii) approval of a statutory merger or de-merger (scission), (iv) Alvotech’s dissolution and liquidation, (v)
any and all amendments to Alvotech´s articles of association and (vi) change of nationality. Pursuant to Alvotech´s
articles of associations, for any resolution to be considered at an extraordinary general meeting of shareholders, the
quorum shall be at least one half of Alvotech´s issued share capital unless otherwise mandatorily required by law. If
the said quorum is not present, a second meeting may be convened, for which Luxembourg Company Law does not
prescribe a quorum. Any extraordinary resolution shall be adopted at a quorate general meeting, except otherwise
provided by law, by at least a two-thirds majority of the votes validly cast on such resolution by shareholders.
Abstentions are not considered “votes”.
An annual general meeting of shareholders (“AGM”) shall be held in the Grand Duchy of Luxembourg within 6
months of the end of the preceding financial year.
Each Ordinary Share entitles the holder thereof to one vote. Neither Luxembourg law nor Alvotech´s articles of
association contain any restrictions as to the voting of Ordinary Shares by non-Luxembourg residents. The
Luxembourg Company Law distinguishes ordinary general meeting of shareholders and extraordinary general
meetings of shareholders with respect to the required quorums and majorities.
Alvotech is committed to recognizing general principles aimed to ensure good corporate governance. Our approach
to corporate governance is further described in this report.
Alvotech’s corporate governance consists of a framework of principles and rules, including its Articles of
Association, the 6
th
edition from February 2021 of the Guidelines on Corporate Governance issued by the Iceland
Chamber of Commerce, Nasdaq Iceland and the Confederation of Icelandic Employers (the “Guidelines”). The
Guidelines are accessible on the website www.leidbeiningar.is.
The Board of Directors also adopted a Code of Business Conduct and Ethics (the “Code”) applicable to the
directors, officers, employees and other team members that complies with the rules and regulations of Nasdaq US,
Nasdaq Iceland Main Market, and the SEC. Alvotech’s relevant policies, rules and procedures can be found on
Alvotech’s website.
70
Alvotech’s regulatory framework for corporate governance practices consists of the law applicable to listed
companies in Luxembourg as well as other applicable law and regulations, including those imposed by Nasdaq
Iceland Main Market and Nasdaq US available at their respective websites.
The Board of Directors is committed to excellence in corporate governance by complying with the applicable
regulatory standards and international best practices in the field of corporate governance.
All directors of the Company must act honestly, with due skill and care in the best interests of the Company and the
group. All directors must adhere to the highest standards of honest and ethical conduct, including taking proper and
due actions to avoid any conflicts of interest in his or her dealings with the Company or the group, or dealings with
other parties that may relate to or affect the group of Alvotech, its interest and assets.
Internal Control & Risk Management
The Board has the role to ensure that Alvotech maintains sound and effective internal controls to safeguard the
shareholders investment and the Company’s assets, and conducts an annual review of the effectiveness of Alvotech’s
internal control systems. The Audit and Risk Committee is responsible, among other things, for establishing
procedures for the confidential anonymous submission of complaints (a whistleblowing mechanism).
The Board of Directors is responsible for overseeing Alvotech’s risk management process. The Board of Directors
focuses on Alvotech’s general risk management strategy, the most significant risks, and oversees the implementation
of risk mitigation strategies by management. The audit and risk committee is also responsible for discussing
Alvotech’s policies with respect to risk assessment and risk management. The Board of Directors believes its risk
oversight function has not negatively affected the Board’s leadership structure. As part of the steady expansion of
Alvotech´s risk management processes, the Company has launched several initiatives. Each initiative is contributing
to achieving the company´s objectives regarding efficacy and efficiency of operations, reliability of financial
reporting and compliance with applicable laws and regulations. The Company has identified certain key risks that
are given special attention and monitored.
Audit, accounting and risk
The Board of Directors adopted the Audit and Risk Committee Charter. The Chief Executive Officer of the
Company ensures that the directors are provided with accurate information on Alvotech´s finances, development,
operations and risk assessments on a regular basis and the Audit and Risk Committee assists the Board in fulfilling
its oversight responsibilities in the financial reporting process and the system of internal controls. The Board of
Directors ensures that internal procedures for risk management are revised at least annually.
The financial statements are published on an annual, semi-annual and quarterly basis as applicable, subject to and in
accordance with applicable publication requirements under Icelandic and/or Luxembourg and/or U.S laws.
The AGM appoints the independent auditor (réviseur d´entreprises agréé) and shall determine their office, in
accordance with Alvotech´s Articles of Association. The Board´s proposal to the AGM is based on the Audit and
Risk Committee´s recommendation on the selection of an audit firm and the statutory auditors and shall determine
their office, which may not exceed six years, in accordance with Alvotech´s Articles of Association. The Board´s
proposal to the AGM is based on the Audit and Risk Committee´s recommendation on the selection of an audit firm.
Deloitte Audit (20, Boulevard de Kockelscheuer L-1821, Luxembourg, Grand Duchy of Luxembourg) is appointed
as the independent auditor (réviseur d´entreprises agréé) of Alvotech and in recent years conducted external audits
in accordance with the Luxembourg law of 23 July 2016 on the audit profession (the “Audit Law”). In accordance
with article 51 of the Audit Law and by way of derogation from Article 17 (1) of Regulation (EU) No 537/2014, the
maximum duration of a statutory audit of a public-interest entity may be of 20 years, where a public tendering
process for the statutory audit is conducted in accordance with paragraphs 2 to 5 of Article 16 of the above-
mentioned regulation.
71
Compliance
Alvotech has a Compliance function. The General Counsel of the company is the Compliance Officer and is
responsible for the Code, the training of employees and business ethics. Under the Icelandic law no. 60/2021 on
actions against market abuse a Securities Compliance Officer has been appointed to oversee the compliance in
accordance with the abovementioned law and in compliance with the Company´s Insider Trading policy. The
Securities Compliance Officer is responsible for assessing and monitoring if Alvotech, its directors, officers and
employees are in compliance with the laws and regulations that apply to a company listed on the Nasdaq Iceland
Main Market. The Compliance Officer monitors if the company is in compliance with other applicable law and the
Company´s Business Code of Conduct.
Code of Business Conduct and Ethics
The Board of Directors adopted a Code of Business Conduct and Ethics for Alvotech´s directors, officers and
employees. The Code sets out Alvotech´s code of business conduct and ethics, consisting of the principal business,
ethical, moral and legal standards which Alvotech´s directors, officers and employees are required to observe. The
aim of the Code is a further testament to Alvotech´s commitment to sustainability, to having oversight and managing
relevant environment, social and government risks and opportunities in Alvotech´s operations and value chain.
Sustainability
Alvotech has adopted a Sustainability Policy that is focused on making its operations exemplary in the
pharmaceutical environment based on established international environmental, social and governance (“ESG”)
criteria.
Diversity
Alvotech’s Equality Policy, first issued in January 2021, sets out clear principles to ensure equal conditions and
opportunities for all employees, regardless of gender, age, religion, nationality, or other personal characteristics. An
annual Equality Report is published, which among other metrics, details the gender distribution across all levels of
management. Alvotech has made meaningful progress toward greater gender balance and continues to implement
initiatives that promote diversity, equity and inclusion.
Board Committees
Alvotech has five committees of the Board of Directors (an audit and risk committee, a compensation committee, a
nominating and corporate governance committee, a strategy committee and a corporate sustainability committee).
All the committees are constituted of members of the Board based on their expertise, skills and experience, relevant
to that Committee and in accordance with the rules set for each committee by the Board. The charters outlining the
rules of procedure for each of the Board Committees are accessible on Alvotech’s website.
Audit and Risk Committee
The members of Alvotech’s audit and risk committee are Dr. Linda McGoldrick (Chair), Ann Merchant, Hjörleifur
Pálsson and Richard Davies. Each member of Alvotech’s audit and risk committee qualifies as independent directors
according to the rules and regulations of the SEC and Nasdaq with respect to audit and risk committee membership.
In addition, all audit and risk committee members meet the requirements for financial literacy under applicable SEC
and Nasdaq rules and at least one of the audit and risk committee members qualifies as an “audit and risk committee
financial expert,” as such term is defined in Item 407(d) of Regulation S-K under the United States Securities Act of
1933, as amended. The committee held 7 formal meetings in 2024. The audit and risk committee is responsible for,
among other things:
72
• appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered
public accounting firm;
• discussing with our independent registered public accounting firm their independence from management;
• reviewing, with our independent registered public accounting firm, the scope and results of their audit;
• approving all audit and permissible non-audit services to be performed by our independent registered
public accounting firm;
• overseeing the financial reporting process and discussing with management and our independent registered
public accounting firm the annual financial statements that we file with the SEC;
• overseeing our financial and accounting controls and compliance with legal and regulatory requirements;
• reviewing our policies on risk assessment and risk management;
reviewing related party transactions; and
• establishing procedures for the confidential anonymous submission of concerns regarding questionable
accounting, internal controls or auditing matters.
Compensation Committee
The committee members are Richard Davies (Chair), Árni Harðarson and Tomas Ekman. Mr. Davies qualifies as an
independent director according to the rules and regulations of the SEC and Nasdaq with respect to compensation
committee membership, including the heightened independence standards for members of a compensation
committee. The committee held 4 formal meetings in 2024. The compensation committee is responsible for, among
other things:
• reviewing and approving the corporate goals and objectives, evaluating the performance of and reviewing
and approving, (either alone or, if directed by the board of directors, in conjunction with a majority of the
independent members of the board of directors) the compensation of our chief executive officer;
• overseeing an evaluation of the performance of and reviewing and setting or making recommendations to our
board of directors regarding the compensation of our other executive officers;
• reviewing and approving or making recommendations to our board of directors regarding our incentive
compensation and equity-based plans, policies and programs;
• reviewing and approving all employment agreement and severance arrangements for our executive officers;
• making recommendations to our shareholders regarding the compensation of our directors; and
• retaining and overseeing any compensation consultants.
Corporate Sustainability Committee
The members of Alvotech’s ESG committee are Ann Merchant (Chair), Árni Hardarson and Dr. Linda McGoldrick.
The committee held 6 formal meetings in 2024. The ESG committee is responsible for, among other things:
• reviewing, monitoring and setting strategy in the area of corporate responsibility;
• overseeing Alvotech’s activities in the area of corporate responsibility that may have an impact on the
Company’s reputation and operations;
73
• periodically assess the Alvotech’s compliance obligations;
• monitor and review matters of health and safety and report findings to the broader board; and
• review and evaluate environmental, social and political issues and trends and their relevance to Alvotech’s
business and make recommendations to the board regarding those trends and issues.
Nomination and Corporate Governance Committee
The members of Alvotech’s nominating and corporate governance committee are Richard Davies (Chair), Dr. Linda
McGoldrick and Ann Merchant. The nominating committee is responsible for, among other things:
• identifying individuals qualified to become members of our board of directors, consistent with
criteria approved by our board of directors;
• overseeing succession planning for our Chief Executive Officer and other executive officers;
• periodically reviewing our board of directors’ leadership structure and recommending any proposed
changes to our board of directors;
• overseeing an annual evaluation of the effectiveness of our board of directors and its committees;
and
• developing and recommending to our board of directors a set of corporate governance guidelines.
Strategy Committee
The Strategy committee is responsible for, among other things, reviewing, monitoring and setting strategy for the
business of Alvotech. The members of Alvotech’s Strategy committee are Faysal Kalmoua (Chair), Lisa Graver and
Róbert Wessman.
The structure and composition of the Board of Directors
Alvotech’s Board of Directors is currently composed of nine members. In accordance with Alvotech’s Articles of
Association, the Board is not divided into classes of directors. Eight of the directors were appointed at the closing of
the business combination on 15 June, 2022, to serve as director until the end of the general meeting of shareholders
called to approve Alvotech’s annual accounts for the 2024 financial year. Hjörleifur Pálsson was appointed at the
AGM on 6 June, 2024, to serve until the end of the AGM called to approve Alvotech’s annual accounts for the 2025
financial year. There are no limitations on the duration of the board membership. The composition of the board shall
at any time be diverse, regarding educational and professional background, gender and age.
The board undertakes Alvotech´s affairs in between shareholders´ meetings unless otherwise provided by law or
Alvotech´s Articles of Association. The board is responsible for setting Alvotech´s general strategy. The board has a
supervisory role in overseeing that Alvotech´s organization and activities are at all times in accordance with the
relevant law, regulation and good business practices. The board met 12 times last year. The Board conducts a regular
evaluation of its own performance, as well as reviewing the contribution required from a director to perform his or her
duties to the Company, and whether he or she is spending sufficient time performing them. The rules of procedure for
the Board, outlined in Alvotech’s Corporate Governance Rules, can be found on Alvotech’s website. Details
regarding the Directors’ ownership of Company shares are available in the Company’s Form 20-F filed with the SEC.
Members of the Board of Directors
Robert Wessman, Chairman and CEO, is the founder of Alvotech and has served as Executive Chairman and member
of the board of directors of Alvotech since January 2019. He served as a Director on the board of Fuji Pharma from
2018 to 2023. He serves as chairman of the board of directors of Lotus Pharmaceuticals since 2018 and since May
2009, he has served as a member of the board of directors of Aztiq and as a member of the board of directors of Aztiq
GP, the general partner of Aztiq Fund I SCSp, a Luxembourg alternative investment fund, and the parent company of
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Aztiq. Mr. Wessman is also the founder and main partner of the Aztiq group. Mr. Wessman founded Alvogen in July
2009, and served as its Executive Chairman and Chief Executive Officer until June 2022. He continues to serve as
Alvogen’s chairman since July 2022. Between 1999 and 2008, Mr. Wessman served as the Chief Executive Officer of
Actavis. He has a Bachelor of Science degree in Business Administration from the University of Iceland. Mr.
Wessman is not considered independent of Alvotech or its day-to-day managers, nor of the Company’s major
shareholders.
Richard Davies, Director and Deputy Chairman, has served as Deputy Chairman of Alvotech’s board from June
2022. He was previously the Chairman of Alvotech’s board, and as one of Alvotech’s directors since January 2019.
Since November 2018, he has served as Chief Executive Officer of Auregen Bio Therapeutics SA. Prior to joining
Auregen Bio Therapeutics, Mr. Davies served as Chief Executive Officer of Bonesupport AB between 2016 and
2018, as Senior Vice President and Chief Commercial Officer of Hospira Inc. between 2012 and 2015, and in various
leadership roles at Amgen Inc between 2003 and 2012. Mr. Davies holds an MBA from the University of Warwick
and Bachelor of Science in applied chemistry from the University of Portsmouth. Mr. Davies is considered
independent of Alvotech, its day-to-day managers and its major shareholders.
Tomas Ekman, Director, has served as one of Alvotech’s directors since January 2019. Since November 2014 he has
served as a partner at CVC Capital Partners where he is a member of the CVC Nordics team and is based in
Stockholm. Prior to joining CVC in 2014, Mr. Ekman was a partner and Managing Director at 3i, responsible for its
Nordic business. Mr. Ekman holds MSc degrees from the University of Strathclyde and Chalmers University of
Technology, and an MBA from IMD, Switzerland. Mr. Ekman is considered independent of Alvotech and its day-to-
day managers but is not considered independent of the Company’s major shareholders.
Faysal Kalmoua, Director, has served as one of Alvotech’s directors since June 2020. Mr. Kalmoua has also served
as a partner of the Aztiq group since June 2022. Between April 2020 and June 2022, Mr. Kalmoua served as
Executive Vice President of Portfolio, Business Development and Research and Development for Alvogen. Between
November 2015 and March 2020, Mr. Kalmoua served as Executive Vice President of Portfolio for Alvogen, Inc.
Prior to joining Alvogen, Mr. Kalmoua served in various management positions for Synthon for nearly 16 years. Mr.
Kalmoua holds a master’s degree in chemistry from the Radboud University Nijmegen and an executive MBA from
Instead. Mr. Kalmoua is not considered independent of Alvotech or its day-to-day managers, nor of the Company’s
major shareholders.
Ann Merchant, Director, has served as one of Alvotech’s directors since June 2022. Since January 2024, Ann has
served as one of Biodexa Pharmaceuticals PLC directors. Since 2018, she has served as Vice President for
MorphoSys, and as Head of Global Supply Chain since January 2019 and Head of External Operations since April
2022. Prior to joining MorphoSys, from September 2011 to August 2018, Ms. Merchant served as the President for
Schreiner Medipharm. Between 1994 and 2011, Ms. Merchant held various roles at Amgen, including Vice President,
Head of International Supply Chain and Site Head between 2007 and 2011. Ms. Merchant holds an MBA from the
Henley Business School and a Bachelor of Science in Languages from Georgetown University. Ms. Merchant is
considered independent of Alvotech, its day-to-day managers and its major shareholders.
Arni Hardarson, Director, has served as one of Alvotech’s directors since June 2022. Mr. Hardarson is a co- founder
and partner of the Aztiq group. Between 2009 and June 2022, he served as Deputy to the Chief Executive Officer and
General Counsel of Alvogen. Prior to joining Alvogen, Mr. Hardarson was Vice President of Tax and Structure at
Actavis, and as partner, member of the executive management committee, and served as a head of tax and legal at
Deloitte. Mr. Hardarson holds a Master’s degree in law from the University of Iceland. Mr. Hardarson is considered
independent of Alvotech and its day-to-day managers but not considered independent of the Company’s major
shareholders. Lisa Graver, Director, has served as one of Alvotech’s directors since June 2022. Ms. Graver has
served in various leadership positions for Alvogen since June 2010, including as President of Alvogen Inc, a
subsidiary of Alvogen, since August 2015, as Executive Vice President and Deputy to the Chief Executive Officer of
Alvogen Inc. since February 2013, and as Vice president Intellectual Property of Alvogen since June 2010. Prior to
joining Alvogen, Ms. Graver was Vice President Intellectual Property and Senior Director Intellectual Property at
Actavis Inc. between 2006 and 2008. Ms. Graver holds a BSc in Biology from Lakehead University and a law degree
from the Case Western Reserve University School of Law. Ms. Graver is considered independent of Alvotech and its
day-to-day managers but is not considered independent of the Company’s major shareholders.
Dr. Linda McGoldrick, Director, has served as one of Alvotech’s directors since June 2022 and as the Chairman of
the Audit Committee. In 1985, Dr. McGoldrick founded, and currently serves as Chairman and Chief Executive
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Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and
life sciences. Since January 2020, she has served as the Chief Executive Officer for 2Enable Health LLC. Prior to
joining 2Enable Health LLC, Dr. McGoldrick served as interim CEO at Zillion between June 2019 and December
2019. Over her professional career, Dr. McGoldrick has served in a number of leadership roles, including Senior Vice
President and National Development Director for the Healthcare and Life Sciences Industry Practices at Marsh-MMC
Companies, International Operations and Marketing Director of Veos plc, and Managing Director Europe for Kaiser
Permanente International. In 2018, Dr. McGoldrick was appointed by the Governor of Massachusetts to serve on the
state’s Health Information Technology Commission. Dr. McGoldrick has served as a director of numerous publicly
traded and private held companies and non-profit organizations in the U.S., UK and Europe, including as director for
Compass Pathways since September 2020. In 2012, Dr. McGoldrick was named as one of the Top 100 Corporate
Directors of Fortune 100 Companies by the Financial Times. Dr. McGoldrick holds a Master’s Degree in Healthcare
from the University of Pennsylvania, an MBA from Wharton, and a PhD in Philosophy from Worcester Polytechnic
Institute. Dr. McGoldrick is considered independent of Alvotech, its day-to-day managers and its major shareholders.
Hjörleifur Pálsson, Director, has served on the board of directors and on the audit and risk committee at Alvotech SA
since June 7th, 2024. From 2015 Mr. Pálsson has served as a member of the board of directors at Brunnur
vaxtarsjóður slhf., from 2016 as a member of the board at Ankra ehf. (Feel Iceland), from 2022 as a member of the
board of directors and as the chairman of the remuneration committee at Festi hf., and from 2023 as a member of the
board at Brandr Global ehf. From 2019 Mr. Pálsson has been a member of the audit committee at Landsbankinn and
from 2021 he has been the chairman of the Audit committee at Harpa tónlistar- og ráðstefnuhús ohf. From 2014 to
2022 he was the chairman of the board of directors and the board of trustees at Reykjavik University. He served as a
member of the board of directors at Sýn hf. (Vodafone Iceland) from 2013 to 2022, thereof as a chairman for four
years. From 2015 to 2024 he served on the board of Directors and as a chairman of the audit committee and a member
of the remuneration committee at Lotus Pharmaceutical & Co., Ltd., a global pharmaceutical company listed at the
Taiwan stock exchange. Mr. Pálsson graduated with a cand oecon. degree from the University of Iceland in 1988. He
was granted a license as a State Authorized Public Accountant in Iceland in 1989 and practiced as such until 2001.
From 2001 to 2013 he was the VP of Finance and CFO at Össur hf., a global Medical Device company listed at
NASDAQ Iceland and NASDAQ Copenhagen. Mr. Pálsson is considered independent of Alvotech, its day-to-day
managers and its major shareholders.
Business ethics and Code of Conduct
Alvotech sets high standards for all employees and directors. We also adhere to ethical commitments in every aspect
of our business, with respect to our employees as well as outside stakeholders, including contractors, suppliers,
commercial partners, government authorities and the public. These commitments are spelled out in our Code of
Corporate Conduct and Ethics, which applies to all our employees, including our senior executive officers and
directors. We apply our Code of Conduct both in internal and external relations and give preference in our business
dealings to those who adhere to comparable ethical standards.
It is the duty of the Board of Directors to serve as fiduciary for shareholders and to oversee the management of the
company. To fulfill its responsibilities and to discharge its duties prudently, the Board of Directors follows the
procedures and standards that are set forth in guidelines and charters. These documents are subject to modification
from time to time as the Board of Directors deems appropriate in the best interests of Alvotech or as required by
applicable laws and regulations.
The Code of Conduct and other charters are accessible on Alvotech’s website at https://investors.alvotech.com/
corporate-governance/documents-charters
Information on Infringements of Laws and Regulations
No remarks were received concerning major violations of laws or regulations in 2024.
Approved by the board on: 26 March 2025
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Non-Financial Disclosure
Introduction
Advancing sustainability through transparency and action
At Alvotech, we recognize the increasing importance of sustainability in the global healthcare industry.
Sustainability, a balance of environmental, social, and economic considerations, remains important for our long-term
success and for the stakeholders that we serve. One of the key decisions to locate Alvotech’s development and
manufacturing operation in Iceland, was the abundance renewable energy and availability of clean water, robust
system of government, and a general commitment to advance gender equality and fairness, values which are
considered a bedrock of society. As we continue our rapid growth, we are taking important steps to integrate
sustainability considerations into our business strategy and decision-making processes.
This sustainability report marks our first year moving towards adapting to the Corporate Sustainability Reporting
Directive (CSRD), a European regulation designed to enhance corporate transparency, comparability, and
accountability in sustainability disclosures. While the CSRD has not taken effect in Iceland (which is a member of
the European Economic Area, but not of the European Union) or in Luxembourg, we have paid close attention to the
directive and the discussions taking place at the European Union level. Alvotech is preparing to adhere to the CSRD
framework, strengthening its sustainability reporting to align with evolving expectations and market standards.
In 2024, we took significant steps towards constructing a more structured approach to sustainability. Key milestones
included conducting a Double Materiality Assessment (DMA) and further assessment of our greenhouse gas
emissions. These efforts have laid the foundation for a more robust sustainability strategy and will help to inform
our continuous improvements.
Regulatory uncertainty around the CSRD
In 2024, Alvotech dedicated significant efforts to preparing for compliance with the CSRD, aligning its
sustainability reporting with evolving European regulatory requirements. As a publicly listed company on stock
markets in Iceland and the United States, that is incorporated under Luxembourg law with all major operations based
in Iceland, Alvotech operates in fairly a complex regulatory landscape.
While the CSRD has been transposed into national law in some EU countries, including Sweden, the Netherlands,
and Denmark, it has yet to be adopted in other markets, such as Germany, Spain, and Luxembourg, where Alvotech
is incorporated. The fragmented implementation of the CSRD has created legal asymmetry within the European
market, where companies are subject to differing compliance obligations depending on their jurisdiction.
Alvotech remains committed to aligning with the evolving sustainability market practice and enhancing its
sustainability disclosures despite these regulatory uncertainties. Looking ahead to 2025, Alvotech will continue to
monitor these regulatory developments while refining and streamlining its sustainability infrastructure to ensure
compliance with the evolving CSRD framework.
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A year of progress, a future of commitment
Some of Alvotech’s sustainability efforts are still at an early stage, which simply reflects the rapid growth of
Alvotech from being focused on R&D to having multiple biosimilars launched in multiple major markets. In fact,
2024 was a pivotal year in our scale-up as well as in advancing our understanding of key sustainability impact areas.
While Alvotech has historically disclosed metrics for sustainability performance, we acknowledge the need to
conduct a more comprehensive Scope emissions assessment including our supply chain, to give us a more
comprehensive view of our indirect environmental impact. We now have a clearer picture of the emissions footprint
of our value chain. While we are still refining our data, this baseline will enable more informed decision-making in
the years ahead.
Similarly, our DMA has helped us identify and prioritize the ESG topics most relevant to our business. Key focus
areas include climate change, resource use and circular economy, own workforce, consumers and end-users, and
business conduct. These topics will guide our sustainability efforts as we work toward measurable progress.
Looking ahead to 2025, one of our key priorities is setting measurable and credible targets across these material
topics. Alvotech is strategically evaluates climate targets to ensure they align with our operational realities and
business growth trajectory. Our focus in the coming year will be to refine our sustainability data, enhance reporting
accuracy, and lay the groundwork for setting ambitious but achievable targets.
We are committed to continuous improvement and embedding sustainability more effectively into our operations
over time. By aligning with the CSRD framework, at least on a preliminary basis while the regulation is being
revised at the EU level, Alvotech is taking an important step toward greater accountability, structured sustainability
management, and long-term value creation for all stakeholders.
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1. General Information ESRS 2 - General Disclosures
1.1. Basis for preparation
General basis for preparation (ESRS 2 BP-1)
The format and content of this sustainability reporting has been adapted to prepare for the CSRD and the European
Sustainability Reporting Standards (ESRS) under the requirements of the CSRD. Mandatory disclosures based on
the CSRD are included in this report, while best efforts have been made to adhere to other relevant standards and
frameworks applicable to our operations, such as the GHG Protocol. The following information outlines the general
basis for preparation:
1. Scope of preparation: The sustainability statement covers the period from 1 January 2024 to 31 December
2024 and has been prepared and consolidated, encompassing all entities included in Alvotech’s financial
statements. The scope of consolidation is aligned with that of the financial reporting under Directive
2013/34/EU.
2. Subsidiary exemptions: No subsidiaries have been exempted from individual or consolidated
sustainability reporting under Articles 19a(9) or 29a(8) of Directive 2013/34/EU. Therefore, all subsidiaries
are included in the scope of this sustainability statement.
3. Coverage of the value chain: The report includes upstream and downstream value chain impacts to the
extent data is currently available:
a. Upstream: Focused on suppliers and production partners, covering areas such as greenhouse gas
emissions and resource use.
b. Downstream: Includes impacts related to distribution, patient accessibility, and end-user safety
for biosimilar medicines.
While efforts were made to gather comprehensive value chain data, certain data points remain incomplete
due to limitations in supplier engagement. These areas will be expanded upon in subsequent reporting
cycles as part of Alvotech’s phased implementation plan.
4. Use of omission options:
a. Intellectual property: No specific information corresponding to intellectual property, know-how,
or innovation results relevant to meeting the objective of an applicable disclosure requirement has
been omitted from this report.
b. Negotiations and impending developments: Alvotech has not used the option to omit
information on impending developments or matters in negotiation under Articles 19a(3) or 29a(3)
of Directive 2013/34/EU.
Disclosures concerning specific circumstances (ESRS 2 BP-2)
1. Time horizons: Alvotech has adopted the standard definitions for short- (the reporting period in the
financial statements), medium- (up to 5 years), and long-term (more than 5 years) horizons outlined in
ESRS 1 Section 6.4. No deviations from these definitions were applied in this report.
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2. Value chain estimations: Alvotech has had to rely on estimations and modeling of the value chain impact,
due to the limited availability of primary data for the metrics that include upstream and downstream value
chain data. The following disclosures provide additional details:
a. Identified metrics: Greenhouse Gas emissions: Data was estimated mainly using emission factors
from publicly available databases or other references from standard literature, as a limited amount
of supplier-specific ESG reports were available.
b. Basis for preparation: The value chain analysis followed a structured methodology to integrate
upstream and downstream data. The basis for the calculation is the total dollar spend on goods or
services multiplied by an emission factor, primarily sourced from databases such as Eco Invent or
Carbon Minds, as well as information published by the IEA, IPCC, U.S. Environmental Protection
Agency (EPA) and UK Department for Environment, Food & Rural Affairs.
c. Accuracy and limitations:
i. Level of accuracy: The estimates are considered moderately accurate, as data relied
heavily on sector averages (from the above-mentioned data sources) and proxy
assumptions for some suppliers and downstream partners.
ii. Limitations: Challenges included limited access to primary data from smaller suppliers
and commercialization partners outside mandatory reporting obligations. These gaps are
targeted for improvement in future cycles.
d. Planned actions for improvement: Alvotech is planning to design a roadmap to improve value
chain data quality through:
i. Expanding supplier engagement to encourage ESG reporting alignment with CSRD
standards.
ii. Leveraging digital tools to streamline data collection and enhance traceability.
iii. Transitioning from reliance on proxies to collecting granular, supplier-specific data by
2028. 1.2. Governance
The role of the governance bodies (ESRS GOV-1)
Alvotech’s governance structure includes two key bodies: the Board of Directors, which serves as the supervisory
body, and the Corporate Leadership Team (CLT), which acts as the management body. The Board of Directors
provides strategic oversight and ensures accountability, while the CLT is responsible for executing day-to-day
operations and implementing Alvotech’s strategy.
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Image 1: Alvotech’s governance structure.
Board of Directors Composition and diversity
Indicator 2024
Percentage of women on the Board of Directors 33%
Percentage of independent board members 78%
Corporate Leadership Team (CLT) Composition and diversity
Indicator 2024
Percentage of women in the Corporate Leadership Team 33%
Governance of impacts, risks and opportunities
Alvotech’s governance framework for managing IROs integrates the roles of its two primary governance bodies, the
Board of Directors and the CLT. The Board of Directors oversees the identification, management, and monitoring of
material sustainability IROs. It provides strategic guidance and ensures accountability for progress toward
sustainability objectives. The CLT is responsible for managing IROs daily, implementing the Board-approved
sustainability strategy, and reporting on progress.
Delegation of sustainability management responsibilities
Alvotech’s Board of Directors has appointed a Corporate Sustainability Committee, which serves as a dedicated
subcommittee of the Board. It oversees the integration of sustainability into business operations, sets sustainability
priorities and targets, and monitors progress against material topics.
In 2024 Alvotech also intends to form a Corporate Sustainability Steering Group at the CLT and management level.
The working group will monitor future compliance with sustainability regulations and standards. The committee will
comprise members from seven key functions: HR, Finance, Commercial, Operations, R&D, Strategy, and Legal.
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Starting in 2025, the working group will meet monthly to coordinate sustainability reporting efforts, monitor
regulatory developments, and address cross-functional challenges.
Setting targets and monitoring progress
Establishing a structured process for target-setting is a priority for Alvotech and is being actively developed as part
of its sustainability governance enhancements. The process for defining and monitoring sustainability targets will
follow these principles:
● The Board of Directors shall approve long-term sustainability targets, such as emissions reductions,
resource efficiency goals, and diversity metrics.
● The Corporate Sustainability Committee and the Board of Directors shall receive quarterly reports on
sustainability performance, including progress on targets.
● The CLT shall track operational performance against these targets and identify corrective actions when
needed.
Expertise and skills in sustainability
Alvotech has established mechanisms to build and access expertise to ensure effective oversight of sustainability
matters.
The Board of Directors and the CLT include members with direct experience in the pharmaceutical industry, global
markets, and sustainability, ensuring relevant experience for overseeing IROs.
Sustainability governance (ESRS GOV-2)
During the reporting period, the following processes were implemented to ensure that Alvotech’s Board of Directors
and CLT were informed about sustainability matters.
● With the CLT's endorsement, an external consultant carried out a double materiality assessment in Q3 of
2024, and the results were presented to the Corporate Leadership Team at the quarterly meeting.
● The Corporate Sustainability Committee receives formal sustainability updates periodically, as necessary
for critical issues or decisions.
● Interim sustainability oversight has been managed directly by the Investor Relations function but is in the
process of being transitioned into the Finance Department, with a dedicated resource.
Integration of sustainability-related performance in incentive schemes (ESRS GOV-3)
Alvotech does not have an established mechanism for integrating sustainability-related performance into incentive
schemes. This is primarily due to the absence of formalized sustainability targets, which are currently under
development as part of Alvotech’s ongoing enhancements to its governance and sustainability framework.
Statement on due diligence (ESRS GOV-4)
Alvotech is committed to implementing a robust due diligence process to identify, assess, prevent, mitigate, and
address sustainability-related impacts, risks, and opportunities. While fully formalizing this process is underway,
Alvotech has taken initial steps to align its practices with the principles outlined in ESRS 1 Chapter 4. These efforts
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include the development of internal policies and frameworks to integrate due diligence into core business operations
and decision-making.
The due diligence process at Alvotech is reflected across various sections of this sustainability statement. The
following mapping highlights where the main aspects and steps of the process are disclosed:
Due Diligence Aspect Description Reference
Embedding due diligence in
governance, strategy and
business model
Explanation of how governance bodies integrate
sustainability-related due diligence into strategic
oversight, decision-making, and risk management
processes.
1.2. Governance
1.3. Strategy and
Business Model
Engaging with affected
stakeholders
Summary of stakeholder engagement efforts, including
surveys, focus groups, and ongoing dialogues with
employees, suppliers, and key stakeholders.
1.4. Stakeholder
engagement
Identifying and assessing
negative impacts on people
and the environment
Overview of the DMA process and methodology for
identifying material impacts, risks, and opportunities.
1.5. Materiality
assessment
1.6. Material impacts,
risks and opportunities
Taking action to address
negative impacts on people
and the environment
Description of initiatives to mitigate material impacts,
including emissions reduction, resource efficiency
programs, and diversity and inclusion strategies.
2. Environmental
Information
3. Social Information
4. Governance
Information
Tracking the effectiveness
of the efforts
Explanation of monitoring mechanisms and plans for
improvement in tracking effectiveness.
2. Environmental
Information
3. Social Information
4. Governance
Information
Risk management and internal controls over sustainability reporting (ESRS GOV-5)
Alvotech has established foundational processes to ensure the accuracy, reliability, and transparency of its
sustainability reporting. While these systems are still evolving to meet the requirements of the ESRS, the following
key elements describe the current approach to managing risks and ensuring effective internal controls over
sustainability reporting.
● Risk management. Key risks related to sustainability reporting are identified, including data quality issues,
incomplete value chain data, and compliance with ESRS requirements. Identified risks are assessed based
on their potential impact on reporting accuracy, reliability, and regulatory compliance. Measures to address
identified risks include strengthening data collection processes, engaging external consultants for reporting
guidance, and conducting regular audits of sustainability data.
● Internal controls. The Corporate Sustainability Working Group includes representatives from seven key
functions and is assigned sustainability reporting responsibilities. The Corporate Sustainability Committee
oversees the reporting process and ensures alignment with ESRS requirements.
1.3. Strategy and business model (ESRS SBM-1)
The following key elements outline Alvotech’s general strategy related to sustainability matters:
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1. Products and services. Alvotech focuses on developing and manufacturing biosimilar medicines, which
provide affordable alternatives to branded biologics.
○ Developing and manufacturing biosimilars requires expertise and specialized technology.
Development times for biosimilars and costs are elevated compared to generic medicines, but
biosimilars are typically offered at a discount to existing biologic medicine.
○ Alvotech expands global access to biosimilars, reducing costs and minimizing costs, strives to
minimize environmental footprint and promote health equity.
○ Alvotech currently markets two biosimilars in over 25 markets globally, aiming for three
biosimilar candidates to be approved in 2025.
2. Markets and customers. Alvotech expands access to biosimilars, reducing healthcare costs and improving
patient outcomes, especially in underserved markets. With 19 global partners, the Company covers major
markets and has secured approvals in over 50 countries.
3. Employees. Alvotech is committed to fostering a diverse and inclusive workplace as part of its broader
sustainability objectives.
Image 2: Business model, upstream and downstream.
Business model and value chain
● Business model inputs. To ensure quality and flexibility, the manufacturing process relies on single-use
plastics, as cleaning reusable equipment requires more chemicals and water, increasing the carbon
footprint. Alvotech continually evaluates these processes with a sustainability focus, prioritizing
partnerships with responsible suppliers.
● Business model outputs. Alvotech delivers biosimilar medicines designed to increase patient access while
reducing healthcare costs. Benefits include improved affordability and accessibility of treatments and
strengthened stakeholder trust through sustainable growth.
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● Value chain. Alvotech’s value chain spans upstream suppliers to downstream distributors and end-users.
○ Upstream: Global suppliers provide raw materials and components, with sustainability
considerations embedded in the selection process.
○ Downstream: Alvotech collaborates with pharmaceutical distributors and healthcare providers to
ensure biosimilars reach patients effectively.
1.4. Stakeholder engagement (ESRS SBM-2)
Stakeholder engagement is a cornerstone of Alvotech’s strategy, enabling it to align with stakeholder expectations,
drive informed decision-making, and build trust across diverse groups. Feedback from stakeholder engagement is
consistently presented to the CLT to ensure it informs strategic and operational decisions.
The following table provides an overview of the engagement process for each key stakeholder group identified by
Alvotech.
Stakeholder Group Engagement Organization Purpose
Incorporation of
outcome
Management Engaged regularly - Quarterly
management
meetings
- Direct consultation
for strategic matters
To align strategic
objectives and
operational goals
- Feedback loops to
document and
analyze input
- Action plans for
strategic alignment
- Transparent
reporting
Employees Engaged regularly - Employee surveys
- open forum
- Direct
communication
To ensure job
satisfaction,
performance
improvement, and
wellbeing
- Iterative
improvements in
policies
- Monitoring
engagement metrics
- Implementing
wellbeing programs
Investors Engaged regularly - Investor relations
meetings and events
- Advisory panels
- Financial reporting
To provide
transparency on
financial and non-
financial
performance
- Tracking and
addressing investor
feedback
- Incorporating
insights into
strategy
Board of Directors Engaged regularly - Regular board
meetings
- Strategic
workshops
To ensure
governance practices
align with strategic
and regulatory
requirements
- Implementation of
board directives and
resolutions
- Regular review of
governance
effectiveness
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Suppliers Engaged regularly - Supplier portals
and surveys
- Direct
communication
To foster
partnerships, ensure
compliance, and
improve supply
chain resilience
- Developing
supplier action plans
- Monitoring
compliance and
performance
indicators
Customers Engaged regularly - Customer
feedback systems
- Focused surveys
- Direct
consultations
To enhance product
offerings, customer
satisfaction, and
loyalty
- Utilizing feedback
for product
improvement
- Tracking customer
satisfaction metrics
Alvotech conducted a comprehensive DMA in 2024, engaging key stakeholder groups. The process included the
distribution of uniform surveys to stakeholders, which were designed to:
1. Gather quantitative data: Stakeholders were asked to priorities and rank pre-defined material impacts, risks,
and opportunities.
2. Encourage open feedback: Stakeholders were allowed to provide suggestions in addition to ranking
provided topics.
3. Ensure anonymity: Responses were collected anonymously to encourage honesty and transparency.
The surveys were quantitative data input, with results weighed by stakeholder groups to reflect their relevance and
impact on Alvotech’s strategy and business model. This approach ensured stakeholders' views and interests were
systematically analyzed and incorporated into Alvotech’s decision-making processes.
Based on the stakeholder engagement, no amendments to Alvotech’s strategy or business model were identified as
necessary.
1.5. Double Materiality Assessment process (DMA) (ESRS IRO-1)
Identifying and assessing material impacts, risks, and opportunities
In 2024, Alvotech conducted its first DMA under ESRS 1 to determine the company's most material ESG topics.
This assessment aligns with the CSRD requirements and reflects best practices in sustainability reporting.
The assessment evaluated two dimensions of materiality:
● Impact materiality considers how Alvotech’s operations affect society and the environment—both
positively and negatively.
● Financial materiality assesses how sustainability-related topics create risks and opportunities that could
influence a company’s business, financial performance, and long-term resilience.
The process was guided by the implementation insights of the European Financial Reporting Advisory Group
(EFRAG). It included quantitative and qualitative thresholds to ensure a structured and objective evaluation of
material topics. It is also built on previous assessments, internal expertise, and engagement with key stakeholders.
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Interaction with Alvotech’s strategy and business model
The DMA findings link Alvotech’s sustainability priorities to its long-term business strategy. As a
biopharmaceutical company specializing in biosimilars, Alvotech is vital in increasing access to affordable, high-
quality medicines. This strategy contributes to positive social impacts, particularly in healthcare affordability, patient
safety, and equitable treatment access.
However, the assessment identified key environmental and social challenges in Alvotech’s operations, including the
carbon footprint of manufacturing, reliance on single-use plastics, and the energy demands of the production
process. Acknowledging these impacts, Alvotech remains committed to reducing its environmental footprint while
upholding its high safety and quality standards.
From a financial materiality perspective, the assessment underscored regulatory risks, including evolving
compliance obligations under the CSRD and opportunities in supply chain sustainability, energy efficiency, and
product innovation. Additionally, workforce-related topics such as employee engagement, diversity, and
professional development were identified as material to Alvotech’s ability to attract and retain top talent in a
competitive industry.
The insights gained from the DMA now serve as a foundation for Alvotech’s sustainability strategy and roadmap.
These insights help policy development, target-setting, and investment decisions as the Company continues to
integrate sustainability considerations into its broader business operations. The assessment also helps Alvotech align
with global sustainability frameworks and investor expectations, ensuring the Company remains agile and well-
prepared for future regulatory and market changes.
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Image 3: Outcomes of the double materiality assessment.
Methodologies and assumptions
The DMA was structured as a stepwise process:
a. Stakeholder engagement: Key stakeholders, including employees, management, suppliers, and
commercialization partners, were engaged via surveys and meetings to gather insights into Alvotech’s
impacts and dependencies.
b. Internal data assessment: Company-specific data, policies, and strategic documents were analyzed to
assess internal perspectives on risks, opportunities, and impacts.
c. Industry benchmarks: External datasets, including ENCORE, S&P Global, and Sustainability Accounting
Standards Board (SASB) frameworks and peer analysis, validated findings and provided context.
d. Aggregation and validation: The results were aggregated using a weighted scoring system (60% internal
data, 20% stakeholder feedback, 20% industry benchmarks) and validated in workshops with senior
leadership.
Process to identify, assess, prioritize, and monitor impacts
The DMA process considered both impact materiality and financial materiality.
● Scope and focus areas: Impacts were assessed across Alvotech’s operations, tier-1 suppliers and
commercialization partners. Topics were prioritized based on heightened risks related to activities, business
relationships, and geographies.
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● Impact assessment criteria: Impacts were ranked based on severity (scale, scope, irremediability) and
likelihood. Negative impacts, such as single-use plastic consumption, were prioritized for mitigation and
positive impacts, such as equitable access to medicines, were assessed for their relative scale and
importance.
● Stakeholder consultation: Surveys tailored to stakeholder groups gathered input on 37 sub-topics and 14
statements aligned with ESRS. Stakeholder inputs informed the prioritization of material sustainability
matters.
● Materiality thresholds: Thresholds for materiality were 3.5/5 for impact and financial materiality. Topics
scoring above this threshold were deemed material for reporting purposes.
Process to identify and manage risks and opportunities
The DMA process also identified key sustainability-related risks and opportunities:
● Connections between impacts and dependencies: The analysis mapped how Alvotech’s operations
influence sustainability topics, affecting financial and reputational risks. Examples include risks related to
supply chain dependencies and opportunities to expand access to affordable healthcare.
● Risk and opportunity evaluation: Risks were assessed for their likelihood and magnitude of financial or
reputational impact. Opportunities were evaluated based on their alignment with strategic priorities and
maturity of execution plans.
Decision-making, internal control procedures and input parameters
The DMA process included structured decision-making and internal controls:
● Workshops: Conducted with the leadership representatives at key stages to align hypotheses, review
findings, and validate results.
● Control procedures: Internal governance ensured the accuracy and reliability of the assessment process,
with input from multidisciplinary teams.
The assessment relied on:
i) data from internal reports, policies, and ESG analyses
ii) inputs from stakeholder engagement and external benchmarks and
iii) assumptions tailored to Alvotech’s business model and sustainability context.
Process changes and future revisions
The DMA will serve as a baseline for subsequent reporting periods.
The DMA results will be reviewed annually to reflect evolving sustainability challenges, regulatory developments,
and stakeholder expectations.
1.6. Material impacts, risks, and opportunities (ESRS SBM-3)
The 2024 DMA identified Alvotech’s key material topics, highlighting critical environmental, social, and
governance issues that align with Alvotech’s sustainability and business priorities. These topics reflect areas where
Alvotech has the most significant impacts and dependencies, guiding its strategy to address risks and leverage
opportunities effectively. Below is an overview of the identified material topic.
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Material topic IRO
Up
stream Own ops
Down
stream
Short
-term
Medium-
term
Long
-term
E1 Climate change
Climate change mitigation
Negative
impact Yes Yes No Yes Yes Yes
Energy Positive impact No Yes No Yes Yes Yes
E5 - Circular economy
Resource inflows
Negative
impact No Yes No Yes Yes Yes
S1 - Own workforce
Working conditions
Positive and
negative
impact No Yes No Yes Yes Yes
Equal treatment and
opportunities for all Positive impact No Yes No Yes Yes Yes
S4 - Consumers and end-users
Personal safety Opportunity No Yes Yes Yes Yes Yes
Social inclusion Opportunity No No Yes Yes Yes Yes
G1 - Business conduct
Corporate culture
Positive and
negative
impact No Yes No Yes Yes Yes
Supplier relationships Risk No Yes No Yes Yes Yes
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2. Environment
E1 Climate Change
2.1.1. Material impacts, risks and opportunities (ESRS 2 IRO-2, SBM-3, E1.IRO-1)
Alvotech evaluated climate-related factors most significant to its operations and stakeholders as part of its
materiality assessment. Climate change mitigation and energy emerged as critical material topics, reflecting the
Company’s commitment to addressing the challenges and opportunities posed by a rapidly changing climate.
The identification of these topics is closely linked to Alvotech’s operational context. Based in Iceland, Alvotech
benefits from a unique advantage- access to a renewable energy infrastructure powered predominantly by
geothermal and hydroelectric sources. This minimizes its direct emissions (Scope 1 and 2), allowing the Company to
focus its climate efforts on reducing indirect emissions (Scope 3) across its value chain.
Alvotech aims to strengthen its environmental performance by prioritizing these material topics, preparing for
evolving regulatory and stakeholder expectations, and contributing to global sustainability goals. The Company is
committed to advancing initiatives in these areas and developing formal policies to support its long-term climate
strategy.
Material topics related to climate change mitigation and energy
Material topic IRO
Up
stream
Own
ops
Down
stream
Short
-term
Medium
-term
Long
-term
E1 Climate change
Climate change mitigation
Negative
impact Yes Yes No Yes Yes Yes
Energy
Positive
impact No Yes No Yes Yes Yes
Climate risk analysis (ESRS 2 IRO-1)
A key strategic advantage of Alvotech’s operations in Iceland is the country´s fully closed electrical grid, which
relies heavily on renewable geothermal energy. This significantly reduces the Company’s dependence on non-
renewable energy for the operation and makes it possible for Alvotech to aim for and have a relatively low carbon
footprint. However, as part of the global pharmaceutical value chain, Alvotech also faces indirect climate-related
risks and opportunities, primarily linked to its Scope 3 emissions.
Key climate risks
Value chain dependencies (Scope 3 emissions):
● Upstream risks: The pharmaceutical industry relies on raw materials and manufacturing processes that may
be affected by climate regulations, disruptions in supply chains due to extreme weather events, or increased
costs of transportation and logistics associated with carbon pricing.
● Downstream risks: Alvotech’s products may face climate-related pressures from customers and regulators
demanding greater transparency and lower emissions across the value chain.
Regulatory and market risks: Global and regional climate policies, such as carbon pricing, emissions reduction
targets, and supply chain sustainability requirements, could impact Alvotech’s operations and cost structure,
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particularly if suppliers or partners operate in high-emission regions. Investors and stakeholders increasingly
prioritize sustainability, which could influence market access and investment opportunities if climate-related
disclosures are inadequate.
Physical risks: While Iceland’s climate is relatively stable, global supply chain disruptions caused by extreme
weather events such as flooding, hurricanes, or droughts could affect the availability and cost of raw materials,
manufacturing inputs, or logistics services. The worst impacts from climate-related weather hazards will likely
materialize in the medium- and long-term and are currently not considered financially material to Alvotech.
Key climate opportunities
Renewable energy advantage: Alvotech benefits from a renewable energy infrastructure in Iceland, primarily
geothermal and hydroelectric power. This positions the company favorably compared to peers in regions with higher
reliance on fossil fuels. A low-carbon energy source can provide a competitive advantage in meeting emissions
reduction expectations, particularly for Scope 1 and 2 emissions.
Sustainable product innovation: Climate-conscious stakeholders and customers drive demand for sustainable
pharmaceuticals. By integrating sustainability into product design, packaging, and distribution, Alvotech may
enhance its market positioning.
Efficiency gains: Climate adaptation measures, such as optimizing energy use, transitioning to low-emission
transport, and leveraging circular economy principles (e.g., recycling materials or reducing waste), may drive cost
savings and environmental benefits for the Company.
Strengthening supplier engagement, adopting sustainable practices throughout the value chain, and aligning with
emerging climate regulations will be critical for mitigating risks and leveraging opportunities. Proactive climate-
related disclosures and sustainability initiatives will further enhance Alvotech’s reputation and resilience in a
climate-conscious global market.
Strategy and business model resilience (ESRS 2 SBM-3)
Alvotech’s resilience analysis evaluates its ability to address identified climate-related risks, such as supply chain
disruptions, regulatory compliance, and market demands for sustainable practices. The scope includes direct
operations and key upstream and downstream value chain elements.
● Methodology and analysis. Alvotech is in the early stages of integrating climate scenario analysis into its
strategic planning. The Company recognizes the importance of this approach and is committed to
integrating scenario analysis into future strategic planning processes. Climate-related risks are assessed
qualitatively, ensuring alignment with the Company’s strategic priorities and operational capabilities.
● Preliminary results. Transition risks, particularly regulatory compliance and stakeholder expectations for
Scope 3 emissions management were identified as highly important and increasing in significance. Physical
risks, such as extreme weather events, were considered moderate but manageable. This assessment
considers Alvotech’s reliance on Iceland’s renewable energy infrastructure, which is highly stable and less
vulnerable to weather-related disruptions than conventional energy sources. Alvotech has also implemented
robust operational planning measures, including contingency strategies for supply chain resilience, to
mitigate the potential impacts of such events on its operations.
● Strategic adjustments. Alvotech prioritizes enhanced engagement with suppliers and stakeholders to
manage Scope 3 emissions better. The company is committed to improving its climate risk resilience by
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investing in long-term sustainability initiatives and exploring the integration of formal climate scenario
analysis in the near future.
2.1.2. Climate Mitigation (ESRS 2 IRO, E1-1, E1-3, E1-4, E1-6)
2.1.2.1. Management approach (ESRS 2 MDR-P, E1-2)
Alvotech acknowledges the importance of addressing climate change mitigation as part of its commitment to
sustainability. Alvotech remains committed to aligning its future climate-related initiatives with international
standards and best practices. The Company will continue to leverage Iceland’s renewable energy infrastructure to
minimize its direct climate impacts and engage suppliers and partners to minimize its indirect climate impacts.
Alvotech recognizes climate change as a critical global challenge requiring immediate and collective action. Guided
by the principles of the Paris Agreement, Alvotech envisions a low-carbon future and is committed to minimizing
the environmental impact of the operations while advancing sustainable healthcare solutions, considering the growth
trajectory. Alvotech commitments:
● Continuous monitoring and improvement: The aim is to reduce emissions intensity per production unit
while supporting the growth trajectory. This will be achieved through baseline assessments, enhanced
models, and integrating best practices into the operations.
● Reducing greenhouse gas emissions: Baseline assessment is underway but key actions include engaging
suppliers, optimizing transportation, and adopting renewable energy solutions.
● Science-based targets: The aim is to establish credible and impactful reduction targets supported by
validated frameworks and robust data.
● Collaboration and innovation: The Company will work with suppliers and partners to integrate
sustainability into procurement practices and adopt low-carbon solutions.
● Governance and transparency: These principles are central to Alvotech’s sustainability commitments.
The Board of Directors oversees the climate change policy, supported by the Corporate Sustainability
Committee.
2.1.2.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, E1-3, E1-5)
Alvotech does not operate in, nor is it associated with, activities or sectors identified as having a high climate
impact. As a pharmaceutical company, Alvotech’s operations primarily involve research, development, and
production activities with a relatively low direct environmental footprint.
GHG emission 2024 (tCO2e)
Scope 1 emission
39.8
Scope 1 emissions from fuel use
14.3
Scope 1 emissions from refrigerants
25.5
Scope 2 emissions
231
Scope 2 emissions from electricity use
205
Scope 2 emissions from thermal energy use
26
Scope 3 emissions
574
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Scope 3 emissions from business travel
386
Scope 3 emissions from waste
170
Scope 3 emissions from fuel and energy use
4
Future plans and targets (ESRS 2 MDR-T, E1-1, E1-4)
Alvotech recognizes the critical importance of addressing climate change and is committed to advancing
sustainability by managing and reducing its climate impact. As part of the alignment with CSRD, the Company has
comprehensively assessed its greenhouse gas emissions profile and identified material sustainability topics through a
DMA. This foundational work has been instrumental in shaping the sustainability strategy and prioritizing areas for
action.
At this stage, Alvotech has opted not to commit to specific climate targets for the following reasons:
1. Operational context and scale-up phase. Alvotech is in a significant growth phase, marked by increased
manufacturing activities, product development, and global expansion. This context introduces complexities
and uncertainties that require careful consideration to ensure future commitments are aligned with
operational realities and support the Company’s long-term business goals.
2. Need for validation and credibility. Alvotech has completed foundational steps, including comprehensive
GHG emissions analysis and stakeholder engagement. The Company is now enhancing data quality and
planning third-party validation to align with internationally recognized frameworks. Prematurely
announcing targets without completing this process could undermine the robustness and credibility of
Alvotech's commitments.
3. Strategic flexibility. Alvotech prioritizes directional goals that provide strategic adaptability as it refines its
approach. This allows the Company to develop actionable, measurable and impactful commitments while
fostering innovation and operational resilience to support the evolving sustainability strategy.
While specific targets are not being disclosed now, Alvotech is taking deliberate steps to establish the necessary
foundations for setting meaningful and credible climate goals. These include:
● Developing a comprehensive emissions baseline. Alvotech has completed a comprehensive GHG
emissions baseline and is enhancing its understanding of emissions across the value chain. This involves
refining data accuracy, identifying key emission hotspots, and ensuring robust methodologies to support
meaningful reduction strategies.
● Evaluating decarbonization levers. Identifying actionable strategies, such as supplier engagement,
production insourcing, and transportation optimization, to reduce emissions per output unit.
● Strengthening governance and oversight. Sustainability is embedded within Alvotech’s governance
framework, led by the Corporate Sustainability Committee, which includes senior management and cross-
functional teams. The committee ensures alignment with regulatory requirements, tracks progress and
effectively supports decision-making processes to advance Alvotech’s goals.
Alvotech is committed to transparency and continuous improvement. The Company will update progress in future
reporting cycles, including developing specific emissions reduction targets. These targets will reflect the insights
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gained through ongoing work and align with Alvotech’s broader sustainability strategy and evolving CSRD
requirements.
This approach allows the Company to remain flexible and thoughtful in its sustainability journey, ensuring that the
commitments are credible and aligned with the dynamic nature of Alvotech's business and regulatory landscape.
2.1.3. Energy (ESRS 2 IRO, E1-5)
2.1.3.1. Management approach (ESRS 2 MDR-P)
Alvotech recognizes the importance of sustainable energy practices as part of its mission to deliver environmentally
responsible healthcare solutions. Leveraging Iceland’s 100% renewable energy infrastructure
1
alongside energy
sources in other regions, the Company aims to expand renewable energy adoption across all operations.
Alvotech commitments:
● Energy efficiency and innovation: The aim is to continue to optimize energy use and improve
performance across operations. This will be achieved by adopting advanced technologies, preventive
maintenance, upgrading systems, and incorporating innovative designs.
● Renewable energy adoption: The Company prioritizes using renewable energy, leveraging Iceland’s
infrastructure and exploring opportunities in its global value chain.
● Employee engagement: Alvotech will foster a culture of energy awareness by educating and empowering
employees to adopt energy-saving practices.
● Collaboration with partners: The Company will collaborate with suppliers and stakeholders to embed
energy-efficient practices across the value chain and drive sustainability initiatives.
● Governance and transparency: These principles are central to Alvotech’s sustainability commitments.
The Board of Directors oversees the Energy policy, supported by the Corporate Sustainability Committee.
2.1.3.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, E1-5)
Iceland's energy grid is primarily powered by geothermal and hydroelectric energy, allowing Alvotech to maintain a
minimal carbon footprint from its energy usage. The company leverages this renewable energy source to support its
manufacturing and operational activities, aligning with its broader sustainability strategy.
Energy consumption metrics 2024
Total energy usage (MWh) 17170
Total energy consumption from nuclear sources 0%
Total energy consumption from renewable sources, disaggregated by: 97%
Total energy consumption from fossil fuel sources
3%
Consumption of purchased electricity, heat, steam and cooling from
renewable sources
38%
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1
According to official data, the Icelandic energy grid is combined of energy that is 99.9% from renewable energy sources, as a tiny
amount of fossil fuel is used to run backup generation in remote areas.
Future plans and targets (ESRS 2 MDR-T)
As Alvotech continues its growth journey, energy efficiency and sustainable energy use remain key focus areas.
While specific energy-related targets are not yet established, the Company is actively working to optimize energy
consumption across its operations and explore opportunities to set measurable targets in the future.
Accounting policies—emissions
Alvotech follows the ESRS E1 and the GHG Protocol, ensuring compliance with the CSRD. Alcotech's accounting
policy statement outlines how emissions are measured, reported, and assured.
Scope 1 is reported. Emissions come from fuel combustion (cars) and fugitive refrigerants
Scope 2 emissions are reported using location- and market-based methods, incorporating national grid averages
(IEA, national authorities) and supplier-specific data where available. Residual mix factors are applied when
supplier-specific data is missing. Alvotech is exploring renewable energy procurement, with Icelandic grid mix
factors used as necessary.
Scope 3 emissions data documentation is being developed. For 2024, out of the nine categories applicable to
Alvotech, data is available for category 3, fuel and energy related activities. In 2024, a mapping effort was
conducted to estimate the largest Scope 3 categories for Alvotech, which are: purchased goods and services (81% of
total Scope 3 emissions), capital goods, transport (upstream and downstream), energy-related activities, waste,
business travel, employee commuting, and end-of-life product treatment.
Energy consumption is reported in megawatt-hours (MWh), distinguishing between fossil and renewable sources.
Alvotech is enhancing its reporting processes in preparation for third-party limited assurance by strengthening
methodologies, ensuring consistency, and benchmarking against external consultant reports, the International Energy
Agency (IEA), and EXIOBASE. The assurance process will focus on improving emission factors, refining
methodologies, and maintaining consistency across reporting periods.
E5 Resource Use and Circular Economy
2.2.1. Material impacts, risks and opportunities (ESRS 2 IRO-1)
Alvotech employs a preliminary approach to identifying and assessing material impacts, risks, and opportunities
related to resource use and circular economy. This process focuses on resource inflows, resource outflows, and
waste management within its operations and value chain.
Screening methodology: Alvotech has conducted an internal assessment to screen its operations and activities for
potential impacts, risks, and opportunities associated with resource use. Key aspects of the screening process
include:
● Focus on resource efficiency: Evaluating material inputs, particularly in manufacturing processes, to
identify areas for improved efficiency and reduced waste.
● Value chain assessment: Review upstream and downstream activities to pinpoint areas with significant
resource dependency or potential waste reduction opportunities.
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● Informal benchmarking: Leveraging available industry benchmarks and best practices to guide the
assessment while planning to formalize this process.
Engagement with affected communities: As part of its focus on resource use and circular economy, Alvotech has
not identified any affected communities within the scope of its activities. The Company remains open to expanding
its stakeholder engagement efforts as it develops resource-use strategies and policies.
As a result of this assessment, resource inflows were identified as the area with the most material impact for
Alvotech. This includes the sourcing and utilization of raw materials required to produce biosimilar pharmaceuticals.
Material impacts related to resource inflows and circular economy
Material topic IRO
Up
stream
Own
ops
Down
stream
Short
-term
Medium
-term
Long
-term
E5 - Resource use and circular economy
Resource inflows
Negative
impact No Yes No Yes Yes Yes
2.2.2. Resource inflow (ESRS 2 IRO, E5-1, E5-2, E5-3)
2.2.2.1. Management approach (ESRS 2 MDRP)
Alvotech recognizes the need to integrate circular economy principles and responsible resource management
throughout its operations and value chain. Alvotech strives to reduce material use, optimize resource efficiency, and
minimize waste generation while delivering high-quality healthcare solutions.
Alvotech commitments:
● Circular economy integration: The aim is to embed circular economy principles into the operations,
focusing on minimizing waste, maximizing material reuse, and regenerating natural systems.
● Resource optimization: The Company prioritizes renewable, recycled, and reused materials to reduce
reliance on non-renewable resources and enhance resource efficiency.
● Eco-design and innovation: Alvotech integrates sustainability into product and process design to improve
lifecycle performance and minimize environmental impacts.
● Collaboration and partnerships: Ongoing work with suppliers and stakeholders to drive innovation and
adopt sustainable resource management practices.
● Governance and transparency: These principles are central to Alvotech’s sustainability commitments.
The Board of Directors oversees the resource use and circular economy policy, which is supported by the
Corporate Sustainability Committee.
2.2.2.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T)
Resource inflows are a material topic for Alvotech, representing a critical operational dependency and an
opportunity for sustainability leadership. Alvotech aims to minimize its environmental footprint while maintaining
the high standards of quality required in biosimilar production.
Biosimilar production relies on biologic and non-biologic materials to ensure the final products' safety, efficacy, and
quality. These materials, from raw inputs to packaging components, play a pivotal role in manufacturing and
represent key areas for optimizing sustainability.
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1. Biologic materials: Alvotech uses advanced biotechnological processes involving host cells such as
Chinese Hamster Ovary (CHO) cells to produce biosimilar proteins. Further, nutrient-rich media support
the growth and productivity of these cells, requiring careful management to optimize yields.
2. Non-biologic materials: Stabilizers, surfactants, and buffering agents are integral to the formulation and
stability of biosimilars. In addition, packaging materials such as specialized glass vials, pre-filled syringes,
and medical-grade plastics ensure drug safety and delivery efficiency.
3. Purification materials: Chromatography resins and filters are critical for removing impurities during
manufacturing but are predominantly single-use and resource-intensive.
Addressing resource inflows presents Alvotech with challenges and opportunities to enhance its sustainability
performance. Alvotech aims to balance operational needs with environmental responsibility by focusing on resource
efficiency and sustainable sourcing, ensuring long-term resilience and reduced ecological impact.
1. Resource efficiency:
● Challenges: Biosimilar production's resource-intensive nature, particularly in upstream processes,
presents challenges for minimizing waste and optimizing input utilization.
● Opportunities: Alvotech is exploring strategies to enhance the efficiency of fermentation media
use and reduce reliance on single-use purification materials.
2. Sustainable sourcing:
● Raw materials: Partnering with suppliers that adhere to sustainable practices can reduce the
environmental footprint of inputs like excipients and packaging. Packaging: Investigating
alternatives such as lightweight materials, biodegradable plastics, and modular designs can lower
the impact of secondary and tertiary packaging.
3. Energy and water:
● Leveraging Iceland’s renewable energy resources already minimizes production's energy impact.
However, further water recycling and energy efficiency innovations can strengthen Alvotech’s
environmental performance.
Future plans and targets (ESRS 2 MDR-T)
As Alvotech continues to expand and strengthen operations during its active growth phase, it focuses on optimizing
resource inflows to align with its sustainability objectives. The Company is committed to continuous improvement
in resource management practices. Establishing specific targets will be further evaluated to enhance transparency
and performance, with more details provided in future reporting cycles.
2.2.3. Waste management (ESRS 2 IRO-1)
2.2.3.1. Management approach (ESRS 2 MDR-P)
Alvotech recognizes the importance of reducing its environmental footprint through sustainable waste management
practices. Possible performance opportunities are in waste generation and recycling optimization, especially to
ensure the responsible disposal of all waste. Embedding sustainable waste practices into its operations is a step to
contribute to a circular economy and advance its mission of delivering high-quality healthcare solutions.
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While many components of Alvotech devices can be recycled individually, there is no established recycling
infrastructure for pharmaceutical waste in many of their markets. Hence, the Company conservatively assumes zero
recyclable content in many products.
Alvotech commitments:
● Waste minimization and prevention: The aim is to reduce waste at its source by optimizing processes and
adopting eco-efficient designs.
● Reuse and recycling: To priorities the reuse of materials and maximize recycling efforts to reduce reliance
on non-renewable resources.
● Sustainable disposal: The Company shall ensure responsible waste management and safely handle
hazardous materials while limiting landfill use to non-recyclable, inert materials.
● Circular economy principles: Integrating circular economy strategies into waste management practices
and supporting sustainable solutions.
● Governance and transparency: These principles are central to Alvotech’s sustainability commitments.
The Board of Directors oversees the waste management policy, supported by the Corporate Sustainability
Committee.
2.2.3.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T)
Alvotech takes a proactive approach to waste management by categorizing, monitoring, and managing all waste
generated from its operations in compliance with applicable laws and regulations. The Company has identified 17
categories of hazardous, general, and plastic waste as the largest contributors. Hazardous waste is collected and
safely disposed of by a certified third-party provider.
To ensure the proper handling and disposal of all waste, Alvotech has implemented several targeted initiatives
across its operations. Additionally, employees receive comprehensive training upon onboarding to promote
consistent and correct waste management practices throughout the facilities.
Waste metrics (tonnes) 2024
Total amount of non-hazardous waste, 330.2
Total amount of hazardous waste, 111.2
Waste to landfill
6
Recycled waste
131364
Composted waste
22377
Waste to Incineration
259222
Future plans and targets (ESRS 2 MDR-T)
Targets are in place to minimize waste and ensure that wastewater complies with regulatory limits of biomass
residue. Recently, Alvotech re-evaluated its definition of “hazardous waste” and analyzed its production flow to
identify opportunities to recycle more single-use plastic that had not been contaminated. This resulted in a
considerable amount of single-use plastic being recycled instead of incinerated.
Accounting policies—waste management and circular economy
Alvotech follows ESRS E5 (Resource Use and Circular Economy) under the CSRD to ensure responsible waste
management, resource efficiency, and circular economy principles.
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Total waste generated is measured based on weight receipts from certified waste management providers. Under the
EU Waste Framework Directive, it includes both hazardous and non-hazardous waste. Waste from non-Icelandic
sites is estimated using operational data and waste intensity benchmarks.
Waste treatment and diversion methods include recycling, reuse, and energy recovery, with incineration used for
materials that cannot be repurposed. Non-hazardous waste is processed locally, though some materials are exported
for disposal due to regulatory constraints.
The percentage of non-recycled waste represents the proportion of total waste directed to landfills or incineration
with energy recovery. Alvotech seeks to reduce landfill dependency through enhanced waste segregation, material
redesign, and supplier engagement.
Recyclable content in products and packaging is assessed using life cycle analysis (LCA) tools, ensuring compliance
with circular economy guidelines. Packaging material recyclability is evaluated against industry benchmarks and EU
packaging regulations.
Resource efficiency initiatives focus on minimizing single-use plastics, increasing secondary material use, and
exploring material innovation to improve circularity. Due to regulatory constraints in pharmaceuticals, reducing
virgin plastic use in production remains challenging, though efforts are ongoing to optimize material efficiency.
Radioactive waste is safely handled, stored, and transferred to licensed waste management facilities in compliance
with regulatory requirements.
Alvotech's waste reduction strategy to enhance circular economy performance includes increased recycling capacity,
improved supplier collaboration, and sustainable product design. It actively integrates waste minimization principles
into procurement and manufacturing operations.
Compliance and assurance processes ensure accurate waste tracking, external verification, and regulatory alignment.
Waste accounting methodologies follow third-party standards and are benchmarked against industry best practices.
EU Taxonomy
The EU Taxonomy Regulation (2020/852/EU) entered into force at the EU level on July 12, 2020, and applies to
Alvotech starting with the fiscal year 2023. The regulation establishes an EU framework for classifying
environmentally sustainable economic activities, requiring firms to disclose information on how and to what extent
their business is associated with these activities. Based on that framework, companies can assess and communicate
whether their activities have the potential to be considered sustainable (taxonomy eligible) and which of these
activities can be classified as sustainable (taxonomy eligible & aligned). Companies must disclose the percentage of
economic activity that can be considered eligible and aligned regarding the share of turnover, capital expenditures
(CapEx) and operating expenses (OpEx).
Alvotech has identified economic activities which may be considered under the framework based on the six official
environmental objectives, which are climate change mitigation, climate change adaptation, sustainable use and
protection of water and marine resources, transition to a circular economy, pollution prevention and control and
protection and restoration of biodiversity and ecosystems. To be classified as sustainable, an activity must contribute
to at least one of these objectives and not cause significant harm to any other five. Furthermore, the activity must
meet minimum human rights safeguards and have no negative social impact. Additionally, the EU has instituted
specific technical screening criteria for each of the six environmental objectives.
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For 2024, Alvotech assessed which economic activities were eligible and aligned. The assessment results showed
that one economic activity was eligible to report for the fiscal year 2024: ‘1.2 manufacture of medicinal products’ by
contribution to the environmental objective of ‘pollution prevention and control’. Furthermore, the Company
evaluated whether they could classify turnover, CapEx and OpEx for this economic activity as ‘taxonomy aligned’.
The Company has not made sufficient progress in assessing alignment with the technical screening criteria and,
therefore, does not report these activities as eligible or aligned. Still, Alvotech aspires to report at least some of these
activities aligned for fiscal year 2025.
Accounting policies for this disclosure
Turnover consists of total revenues from product sales and milestone payments from long-term out-license
commercial contracts under IFRS 15. The turnover KPI is calculated as the share of taxonomy-eligible turnover
divided by total turnover.
Total CapEx includes additions to fixed and intangible assets, excluding goodwill, finance leases, and business
combination-related expenditures, under IAS 38 and the EU Taxonomy Delegated Regulation 2023/2486/EU. The
CapEx KPI is calculated as taxonomy-eligible CapEx divided by total CapEx.
Total OpEx consists of direct R&D costs related to process improvements and manufacturing innovation, following
the EU Taxonomy’s narrower OpEx definition, which excludes general administrative expenses, amortisation, and
impairments. The OpEx KPI is calculated as Taxonomy-eligible OpEx divided by total OpEx.
About the KPIs
All turnover is considered part of ‘1.2 manufacture of medicinal products’ under the pollution prevention and
control environmental objective. However, only certain CapEx activities qualify, primarily expenditures related to
expanding production capacity (e.g., facility equipment and cleanroom infrastructure). CapEx for furniture, fixtures,
leasehold improvements, and IT infrastructure is excluded, as they do not contribute to sustainability objectives
under the EU Taxonomy.
For OpEx, the EU Taxonomy defines eligibility more narrowly than standard financial reporting, requiring direct
links to manufacturing processes. Due to this restriction, no OpEx is considered eligible or aligned in 2024.
Alvotech follows the Taxonomy KPI calculation guidelines outlined in Annex V to the Commission Delegated
Regulation 2023/2486/EU to ensure accuracy and regulatory alignment. No double counting occurs, and no further
disaggregation is required.
Alignment with EU Technical Screening Criteria
For the year 2024, Alvotech assessed eligibility but did not fully align with the technical screening criteria. While
one eligible activity was identified, further evaluation is required to confirm alignment with specific performance
thresholds, Do No Significant Harm (DNSH) requirements, and minimum social safeguards.
The economic activity was eligible to report on for the fiscal year 2024: ‘1.2 Manufacture of Medicinal Products’ by
contribution to the environmental objective of ‘Pollution prevention and control’.
Alvotech does not classify any activities as enabling or transitional under the EU Taxonomy framework. However,
alignment assessments will continue in 2025 to report aligned activities that meet technical criteria. None of the
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activities disclosed here is classified as enabling or transitional, as the economic activities do not substantially
contribute to ‘Climate Change Adaptation’, ‘Water’, ‘Circular Economy’, or ‘Biodiversity’.
2023
For detailed EU Taxonomy disclosure, please see Appendix.
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3. Social
S1 Own Workforce
3.1.1. Material impacts, risks, and opportunities (ESRS 2 IRO-1, IRO-2, SBM-2)
Alvotech recognizes its workforce as a key group of affected stakeholders and strongly emphasizes respecting their
interests, views, and rights. While the Company’s operations primarily focus on developing and manufacturing
biosimilars, its business strategy is directly informed by workforce considerations to foster a safe, equitable, and
supportive working environment.
Alvotech is committed to managing its workforce's material impacts, risks, and opportunities by implementing
targeted action plans, allocating appropriate resources, and continuously improving its practices to foster a safe,
inclusive, and supportive workplace. Alvotech dedicates significant resources to manage workforce-related material
impacts, risks, and opportunities:
● Human resources function: Led by the Vice president (VP) of People and Culture, the HR team oversees
policy implementation, engagement processes, and monitoring of workforce-related risks and opportunities.
● Training and development: To enhance workforce resilience and satisfaction, investments in professional
development, safety training, and well-being programs are prioritized.
● Monitoring and reporting systems: Resources are allocated to grievance handling, tracking workforce
metrics (e.g. turnover rates, safety incident reports), and reporting progress to senior leadership for
continuous improvement.
Connection between workplace impacts and Alvotech’s strategy and business model (ESRS 2 SBM-3)
The material impacts, risks, and opportunities identified with Alvotech’s workforce are closely connected to its
strategy and business model. Alvotech employs a highly skilled research, manufacturing, and corporate operations
workforce. The Company’s operational standards, which emphasize health and safety, professional development,
and fair working conditions, impact employees and non-employees. Employees are individuals who either have
permanent or temporary employment agreements with Alvotech. In contrast, non-employees are individuals hired to
perform certain work within a predefined timeframe. They are not considered to have a form of employment with
Alvotech, e.g. consultants and third-party contractors.
1. Positive impacts:
● Reskilling and upskilling: The Company invests in professional training programs, equipping
employees with skills to adapt to evolving industry demands.
● Wellbeing programs: Wellbeing initiatives promote a supportive work environment, improving
job satisfaction and productivity.
● Positive regional impact: Alvotech’s operations create opportunities for skilled employment in its
locations.
2. Risks and opportunities:
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● Workforce restructuring: While no significant restructuring has occurred, Alvotech is
committed to minimizing disruption through proactive workforce planning, reskilling, and
upskilling programs.
● Retention of skilled talent: The Company’s reliance on specialized workforce skills presents a
risk in competitive labor markets. To mitigate this, Alvotech prioritizes career development
opportunities and competitive compensation packages.
Alvotech recognizes that certain groups within its workforce, such as third-party contractors or temporary workers,
may face greater risks of harm due to less direct oversight from Alvotech. In such cases, Alvotech relies on the
employers of these contractors to uphold appropriate standards of care, compliance, and workplace safety.
Engagement with own workforce (ESRS S1-2)
Alvotech values workforce engagement as a key factor in decision-making and impact management. By actively
involving employees, the Company ensures that their perspectives, concerns, and expectations are integrated into its
policies and practices.
1. Alvotech engages directly with its workforce through multiple channels, including:
● Employee surveys: Conducted twice a year to gather feedback on workplace satisfaction, well-
being, and professional growth opportunities.
● Open forum meetings: Participants can directly ask leadership questions about the discussion
topic.
● Performance and development discussions: One-on-one dialogues between employees and their
managers ensure continuous communication regarding individual goals, development needs, and
challenges.
Alvotech actively engages with the Labour Unions in Iceland, representing most of its workforce, to negotiate wages
and other employment terms in collective wage agreements, ensuring alignment on key workplace matters. This
interaction reflects Alvotech’s commitment to fostering open communication and collaboration with workers’
representatives as part of its broader focus on employee well-being and inclusion. Alvotech respects its employees’
right to associate freely and to join or refrain from joining labor unions and workers’ councils without fear of
discrimination or retaliation.
2. Engagement occurs across key stages of workforce management and decision-making, including:
● Policy development and updates: Employee feedback gathered through surveys informs updates
to workforce-related policies, such as equality, compensation, and professional development.
● Annual performance reviews: Structured, recurring conversations ensure continuous two-way
dialogue on workforce needs and growth opportunities.
● Workplace initiatives: Engagement occurs while implementing well-being, safety, and diversity
initiatives to address employee needs effectively.
The type and frequency of engagement include structured annual processes (e.g., surveys, performance reviews),
open forum discussions, and ongoing feedback mechanisms.
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3. The human resource's function, led by the VP of People and Culture, ensures effective workforce
engagement. The VP oversees workforce feedback collection, analysis, and integration into decision-
making processes to enhance policies, workplace initiatives, and organizational strategy.
4. Alvotech assesses the effectiveness of workforce engagement through the following mechanisms:
● Engagement survey results: Survey data is analyzed to identify trends, gaps, and areas for
improvement. Follow-up actions are implemented to address concerns raised by employees.
● Participation and feedback metrics: Employee participation rates in surveys and open forum
discussions are monitored as indicators of engagement levels.
● Outcome monitoring: Alvotech evaluates the outcomes of its workforce initiatives, such as
improved satisfaction scores, reductions in turnover rates, and enhanced employee well-being, to
ensure engagement feedback translates into tangible results.
In 2024, Alvotech's engagement score from the employee survey was 3.87 on a scale of 1-5, and the participation
rate was 86%.
3.1.2. Working conditions (ESRS 2 IRO-2, S1-1, S1-2, S1-3, S1-4, S1-6, S1-7, S1-8)
3.1.2.1. Management approach (ESRS 2 MDR-P)
Alvotech is committed to maintaining a supportive and transparent work environment where all employees feel
empowered to raise concerns and have them addressed effectively. The Company has established processes and
channels to ensure that material negative impacts on its workforce are identified, remedied, and monitored to foster
trust and accountability.
1. Alvotech has a structured approach to remedy situations where it has caused or contributed to material
negative impacts on its workforce. The Company’s processes ensure:
● Prompt investigation and resolution: All reported concerns are investigated independently and
promptly to determine the root cause and identify appropriate corrective measures.
● Effectiveness of remedies: The effectiveness of remedies is assessed through follow-up with
affected individuals to ensure their concerns have been resolved. Outcomes are also reviewed to
prevent the recurrence of similar issues.
2. Alvotech provides multiple channels through which employees can raise their concerns, ensuring
accessibility, confidentiality, and trust:
● Direct communication: Employees are encouraged to speak up and raise concerns through their
direct supervisors, union representatives or the HR team.
● Anonymous hotline: Alvotech has implemented a dedicated anonymous hotline, enabling
employees to report concerns confidentially. To ensure objectivity, this hotline is available 24/7
and managed by SpeakUp®, a reporting tool provided by an external service provider on
Alvotech's behalf.
● Reporting portal for harassment and bullying: Alvotech has set up a reporting portal for
harassment and bullying complaints via a platform managed confidentially by the HR team. While
employees are encouraged to report under their name, anonymous reports are also possible.
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● Grievance and complaints mechanism: A formal grievance-handling process is in place to
address workforce-related concerns promptly and fairly. Employees can submit complaints
directly to the HR team through the anonymous hotline or other established reporting mechanisms.
3. To ensure employees are aware of and can utilize these channels effectively:
● Workplace communication: Employees are regularly informed about reporting channels through
onboarding programs, periodic communications, and dedicated training sessions.
● Leadership advocacy: Supervisors and managers are trained to encourage open communication
and support employees using the appropriate channels without fear of retaliation.
4. Alvotech tracks and monitors workforce concerns to ensure issues are addressed effectively, and processes
remain trusted:
● Issue tracking and resolution: The HR team or relevant compliance personnel log, track, and
monitor all reported concerns. They also review each case's status to ensure timely resolution.
● Assessing trust and awareness: Regular feedback is gathered through employee surveys and
engagement initiatives to assess awareness of the reporting channels and levels of trust in their
effectiveness. Participation rates and employee sentiment serve as indicators of trust and
reliability.
● Retaliation prevention: Alvotech has clear policies to protect individuals, employees, and
workers’ representatives who raise concerns. The Bullying & Harassment Policy, Whistleblowing
Policy, and Code of Conduct explicitly prohibit retaliation, ensuring employees can use these
mechanisms without fear of adverse consequences.
3.1.2.2. Performance and targets (ESRS 2 MDRA, MDRM, MDRT, S1-5)
Alvotech reports its workforce data under the ESRS S1-6 disclosure requirements, providing insights into employee
composition and turnover. Unless otherwise noted, the data is compiled based on headcount at the end of the
reporting period. Full-time equivalent (FTE) is defined as the equivalent of one full-time employee working a
standard workweek, adjusted for part-time schedules where applicable.
Workforce composition for 2024
2
Category Total Male Female Other
Total headcount 1068 51% 49% 0
Permanent employees 969 515 496 0
Temporary employees 39 18 21 0
Working Students 18 11 7 0
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2
FTEs of permanent, temporary and working students as of 31 December 2024.
Turnover metrics for 2024
Employees who left during the reporting period 126 employees resigned
Employee turnover rate (%) during the reporting period 12.40%
Alvotech engaged 35 non-employees as part of its workforce during the reporting period. Most non-employees are
contractors with specialized expertise.
Learning and development (ESRS S1-13)
Alvotech provides employees with access to training and career development opportunities to enhance their skills,
align with industry demands, and support personal and professional advancement.
During the reporting period, 79% of Alvotech employees participated in regular performance and career
development reviews.
Employee participation in performance and career development reviews in 2024
Gender Percentage
Male 74%
Female 83%
Other NA
During the reporting period, employees received an average of 3 hours of training. A breakdown by gender was not
available at the time of reporting. However, when on-the-job training is included, which covers job-specific skills,
regulations, and standards, the average training hours per employee increase to 67 hours. This figure does not
account for additional training to enhance broader competencies, such as leadership skills.
Work-life balance (ESRS S1-15)
Alvotech supports work-life balance by ensuring equitable access to family-related leave for all employees. Through
national social policies or collective bargaining agreements, 100% of Alvotech’s employees are entitled to family-
related leave. Alvotech promotes gender equity in family-related leave by fostering a culture where all employees
feel supported in balancing family and work responsibilities.
During the reporting period, 100% of employees entitled to family-related leave used it, and this is further broken
down by gender.
Utilization of family-related leave by gender for 2024
Gender Percentage
Female 81.9%
Male 18.1%
Other NA
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Plans and targets (ESRS 2 MDR-T, S1-5)
Alvotech aims to continue strengthening its commitment to the Alvotech ‘Five Rules of Engagement’, which
embodies the Company’s core principles while fostering and building upon our one-team culture. A key focus will
be on implementing actionable steps informed by insights from employee engagement surveys, ensuring initiatives
align with workforce needs and expectations.
3.1.3. Equal treatment and opportunities for all (ESRS 2 IRO-2, S1-1, S1-9, S1-10, S1-12, S1-13)
3.1.3.1. Management approach (ESRS 2 MDR-P)
Alvotech actively promotes equality, diversity, and inclusion through several key policies:
● Equality policy & Equal pay policy: These policies ensure equal opportunities for all employees,
regardless of gender, race, age, or other characteristics. Alvotech prohibits any form of discrimination in
recruitment, compensation, career progression, and professional development.
● Bullying & harassment policy and response procedure: This policy provides a framework for
preventing, mitigating, and addressing incidents of harassment or discrimination in the workplace. It
includes procedures for reporting, investigating, and remediating concerns to ensure swift action and
accountability.
While Alvotech has not identified specific groups within its workforce at particular risk of vulnerability, the
Company remains committed to fostering an inclusive work environment where all individuals are treated with
respect and provided equal opportunities.
3.1.3.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, S1-5)
Diversity (ESRS S1-9)
Alvotech values diversity and inclusion as fundamental principles guiding its workforce management. The Company
is committed to fostering an equitable workplace where individuals from diverse backgrounds can thrive.
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Gender distribution at top management for 2024
Gender Number Percentage
Male 8 33%
Female 4 67%
Other NA NA
Age distribution of employees for 2024
Age group Percentage
Under 30 years old 18%
30-50 years old 72%
Over 50 years old 10%
Alvotech aims to foster an inclusive workplace where individuals of all abilities can thrive. The Company actively
supports the inclusion of people with disabilities across its workforce. As of the reporting period, 0% of Alvotech’s
employees identified as people with disabilities. This percentage is disclosed in compliance with applicable legal
requirements and respects privacy and data protection standards.
Adequate wages (ESRS S1-10)
Alvotech is committed to providing fair and equitable compensation to all employees. The ompany strives to align
wages with applicable benchmarks in each country of operation, supporting the financial well-being of its
workforce.
Remuneration and pay gap (ESRS S1-16)
Alvotech actively monitors and reports on its gender pay gap and remuneration ratios to ensure alignment with its
Equality and Equal Pay policies and promote equitable treatment of all employees.
● Gender pay gap:
3
During the reporting period, the average pay levels of female and male employees
resulted in a gender pay gap of 0.6% (audited externally), calculated as the difference between the average
pay of female employees and the average pay of male employees, expressed as a percentage of the average
pay of male employees.
● Annual total remuneration ratio:
4
The total remuneration ratio of the highest-paid individual to the
median annual total remuneration for all employees (excluding the highest-paid individual) was 20.4. This
ratio reflects Alvotech’s efforts to balance executive remuneration with fair compensation for the wider
workforce.
Future plans and targets (ESRS 2 MDRT, S1-5)
Alvotech is committed to fostering an inclusive and equitable workplace where equal treatment and opportunities
are prioritized. The Company focuses on continuous improvement through regular assessment and enhancement of
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3
The gender pay gap is calculated using gross annual pay, excluding bonuses and other non-salary benefits, to provide a
consistent comparison.
4
The remuneration ratio is based on total annual remuneration, including salary, bonuses, and other financial benefits.
policies, processes, and practices to promote diversity, equity, and inclusion. Alvotech remains dedicated to creating
an environment where all individuals feel valued, respected, and supported in achieving their full potential.
3.1.4. Health and safety (ESRS 2 IRO, S1-1, S1-9, S1-10, S1-12, S1-13)
3.1.4.1. Management approach (ESRS 2 MDR-P)
Alvotech is committed to ensuring a safe work environment for its employees. It has a comprehensive
environmental, health and safety (EHS) policy and management system in place that safeguards its employees’
health and well-being:
● Environmental health and safety policy promotes safety, well-being and sustainability across Alvotech’s
operations. It ensures compliance with applicable laws, aims for zero harm, manages risks, reduces
environmental impact, and fosters a culture of accountability. The policy emphasizes continuous
performance monitoring to protect people and the environment through leadership-driven improvements.
3.1.4.2. Performance and targets (ESRS 2 MDRA, MDRM, MDRT, S1-5)
Alvotech has several key initiatives and training to ensure the health and safety of its employees:
● Safety training programs are mandatory for all employees at the start of employment and are monitored
by a supervisory body. The training programs vary according to each employee’s role within the
organization. Additional training material developed independently and in cooperation with an external
occupational health service on specific topics is available and accessible to employees via Alvotech’s
intranet. A designated safety week is held once a year where working conditions are re-assessed, awareness
is enhanced, open lectures are provided, and refresher training programs on, e.g. fire safety and first
response, are conducted.
● An incident reporting system: A system is in place for incident reporting, and an EHS portal is available
and accessible to employees. The portal is widely available and advertised via QR codes throughout
Alvotech’s facilities. Employees can use the portal to report accidents and near misses, submit ideas, and
raise related topics. The reports are overseen by the EHS manager, who ensures that all matters are
investigated and addressed appropriately.
● A safety committee. A special committee is in place, with representatives across the organization meeting
regularly to discuss EHS matters and ensure continuous improvement.
Further, managers regularly inspect all organizational areas, departments, and facilities. A supervisory body ensures
that these inspections are conducted monthly.
Health and safety metrics for 2024
Metric 2024
Percentage of employees covered by Alvotech’s health and safety management
system
100%
Number of fatalities as a result of work-related injuries or work-related ill health 0
Number of recordable work-related accidents 5
Total rate of recordable work-related accidents (%) 6.8
Number of cases of recordable work-related ill health 0 (From EHS perspective)
Number of days lost to work-related injuries and fatalities from work-related
accidents, work-related ill health and fatalities from ill health
6 days
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Risk assessments are conducted for all job roles within the Company, assessing potential risks of sound, manual
handling of heavy loads, and chemical use. A risk assessment is carried out for all pregnant employees, and roles are
adjusted to mitigate potential risks.
Future plans and targets (ESRS 2 MDRT, S1-5)
Alvotech is in the early stages of its sustainability journey and is actively developing measurable targets across
material topics. The Company aims to finalize key targets in the next reporting cycle and will provide updates in
future CSRD reports to ensure transparency and accountability.
3.1.5. Work-related rights (ESRS 2 IRO-2, S1-1, S1-11)
3.1.5.1. Management approach (ESRS 2 MDR-P)
Alvotech has implemented policies and procedures to protect the human rights and labor rights of its workforce,
including explicit measures to prevent forced labor, compulsory labor, and child labor:
1. Human Rights Policy: Alvotech has established a human rights policy that reflects its commitment to
upholding the rights of its workforce through principles of non-discrimination, fair treatment, and equal
opportunities. While the Company’s policy incorporates key elements aligned with internationally
recognized human rights frameworks, such as the UN Guiding Principles on Business and Human Rights,
Alvotech is currently evaluating the extent of this alignment to identify areas for enhancement.
2. Child and Forced Labor Policy: Alvotech maintains a dedicated policy prohibiting all forced,
compulsory, and child labor across its operations and value chain. Regular internal reviews and supply
chain due diligence ensure adherence to this policy.
3. Code of Conduct: The code of conduct outlines expectations for ethical conduct, including respect for
human rights, fair treatment, and non-discrimination. Compliance with the code of conduct is monitored
through audits and reporting mechanisms.
3.1.5.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, S1-5)
Policy implementation and risk management (ESRS 2 SBM-3)
Alvotech has identified no operations at significant risk of incidents of forced labor or child labor across its facilities
or geographic areas of operation.
● Forced Labor Risk Assessment: Internal reviews and supply chain due diligence confirm that Alvotech’s
manufacturing operations do not present forced or compulsory labor risks.
● Child Labor Risk Assessment: Alvotech’s policies prohibit child labor across its operations and value
chain, and no such risks have been identified.
Alvotech has established mechanisms to promptly and effectively address human rights impacts. Employees can
report concerns related to human rights, labor rights, and discrimination through confidential reporting channels,
ensuring independent investigations and the implementation of corrective actions. Additionally, the annual employee
survey serves as a valuable tool for identifying instances of harassment, discrimination, and human rights issues.
A key finding from the 2024 employee satisfaction survey led to efforts to update the Company's bullying,
harassment, and violence policy, as well as its response procedures. Furthermore, Alvotech’s policies explicitly
prohibit retaliation against individuals who raise concerns, fostering a culture of trust and transparency within the
workforce.
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Collective bargaining agreements and social dialogue (ESRS S1-8)
Most of Alvotech’s employees are based in Iceland and are covered by a collective bargaining agreement through
membership with their respective Labor Unions. This represents approximately 79% of the ompany’s total
workforce. The unions negotiate collective agreements for their members, which apply to employees in specific
sectors or professions.
In the EEA, Alvotech has collective bargaining agreements in Iceland. As Iceland represents a significant portion of
Alvotech’s workforce, these agreements play a key role in defining working conditions and terms of employment.
Alvotech does not have operations outside the EEA that include collective bargaining agreements. Alvotech
determines their working conditions and terms of employment in alignment with the Company’s Equality Policy for
employees not covered by collective bargaining agreements, Compensation Policy, and other labor-related policies.
These employees benefit indirectly from the standards and principles established by collective agreements applicable
to their counterparts in Iceland, ensuring consistency and fairness across the workforce.
Collective bargaining agreements do not influence the working conditions and terms of employment for non-
employees, such as contractors. These are determined through individual contracts that comply with Alvotech’s
ethical and labor standards.
Alvotech does not currently have an agreement with its employees for representation by a European Works Council
(EWC), a Societas Europaea (SE) Works Council, or a Societas Cooperativa Europaea (SCE) Works Council.
Social protection (ESRS S1-11)
Alvotech is committed to ensuring that social protection programs adequately cover all employees. The Company
provides benefits through public programs and employer-sponsored initiatives to protect employees against income
loss during major life events, including sickness, unemployment, employment injury, acquired disability, parental
leave, and retirement.
Future plans and targets (ESRS 2 MDR-T, S1-5)
Alvotech remains committed to upholding worker-related rights, including preventing child labor, forced labor, and
other unethical practices. Alvotech will maintain and enforce its existing policies and practices to ensure compliance
with these standards.
Accounting policies—own workforce
Alvotech follows ESRS S1 (Own Workforce) under the CSRD to ensure transparent reporting on workforce
composition, turnover, diversity, health and safety, and employee well-being.
The workforce composition is based on headcount at the end of the reporting period, segmented by employment type
(permanent, temporary, non-guaranteed hours) and gender. FFTE is calculated based on contracted work hours and
adjusted for part-time schedules.
Turnover is reported as the number of employees who left during the period, with the turnover rate calculated as
leavers divided by the average headcount. Only voluntary resignations are counted in employee-initiated turnover.
Performance reviews track the percentage of employees receiving structured performance evaluations, disaggregated
by gender.
Family-related leave is the percentage of eligible employees who accessed leave benefits, categorized by gender.
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Diversity metrics include gender representation across leadership levels and age distribution across workforce
categories.
Health and safety reporting covers employees under Alvotech’s health and safety system, work-related injuries, lost
workdays, and total incident rates. Data is based on workplace incident records, ensuring compliance with EU
Occupational Health and Safety (OHS) standards.
Discrimination, harassment, and human rights incidents are tracked by total reported cases, with separate data for
grievances and penalties where applicable.
Remuneration metrics include the gender pay gap, calculated as the percentage difference between male and female
average salaries, and the total remuneration ratio, comparing the highest-paid salary to the median employee salary.
S4 Consumers and end-users
3.2.1. Material impacts, risks and opportunities (ESRS 2 IRO-1, S4-4)
Alvotech’s business model as a developer and manufacturer of biosimilar drugs inherently positions it to generate
positive impacts for end-users while addressing key risks. These impacts, risks, and opportunities are shaped by
biosimilars' critical role in increasing accessibility to affordable healthcare solutions globally.
Alvotech’s contribution to healthcare is primarily through its development of biosimilars, which by definition create
competition in markets previously dominated by one supplier, and thus greatly increase the availability of
affordable, high-quality alternatives to originator biologics. This supports greater healthcare access for patients and
caretakers globally. Biosimilars also reduce financial burdens on healthcare systems and payers, fostering equity in
healthcare delivery.
However, risks such as non-compliance with regulatory standards or quality assurance failures could potentially
negatively impact end-users. Alvotech mitigates these risks through extremely stringent internal quality controls and
strong external regulatory oversight.
Opportunities for Alvotech lie in continuously building upon the existing trust and stellar reputation it already has
with healthcare providers, regulators, and end-users by consistently delivering high-quality, competitively priced
products. Alvotech also aims to address the needs of underserved populations. For example, the upcoming launch of
a biosimilar for women with osteoporosis, a historically underserved demographic, reflects Alvotech’s commitment
to fostering inclusivity and broadening access.
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Alvotech has identified two material topics for consumers and end-users, outlined below.
Material topic IRO
Up
stream
Own
ops
Down
stream
Short
-term
Medium
-term
Long
-term
S4 - Consumers and end-users
Personal safety Opportunity No Yes Yes Yes Yes Yes
Social inclusion Opportunity No No Yes Yes Yes Yes
Interaction of material topics with strategy and business model (ESRS 2 SBM-2, SBM-3)
Consumers and end-users are central to Alvotech’s mission of improving global healthcare accessibility through
biosimilars. Alvotech integrates the interests, views, and rights of these key stakeholders into its strategy and
business model in the following ways:
● Alvotech is committed to respecting the rights of its consumers and end-users, as outlined in internationally
recognized frameworks such as the UN Guiding Principles on Business and Human Rights. This
commitment underpins Alvotech’s policies, operations, and product development strategies, ensuring that
the safety, well-being, and privacy of end-users are protected at all stages of the product lifecycle.
● Alvotech actively seeks input from regulators, commercial partners and healthcare providers to inform its
product design, quality standards, and post-market monitoring practices. This engagement ensures that
Alvotech addresses its end-users’ needs and concerns, including access to affordable medications and
safety expectations.
● Alvotech’s business model is designed to address the growing demand for affordable biologic treatments.
By focusing on developing biosimilars, Alvotech aligns its operations with the interests of end-users who
require cost-effective, high-quality alternatives to expensive conventional drugs.
Alvotech's operations and value chain impact diverse groups of consumers and end-users, including those with
specific vulnerabilities and dependencies. These impacts are assessed through a materiality process to ensure
Alvotech’s strategy and business practices align with stakeholder needs and minimize risks.
Alvotech’s biosimilars are developed as highly regulated, safe alternatives to conventional drugs. Alvotech ensures
that its products meet stringent regulatory standards and do not inherently harm consumers or increase risks of
chronic diseases. Instead, biosimilars often improve healthcare accessibility, reducing costs for patients managing
chronic conditions.
Alvotech's consumers rely heavily on accurate product labelling, usage instructions, and educational materials to
ensure the safe and effective use of biosimilars. Alvotech adheres to international guidelines for product
transparency, ensuring all information, including potential risks and benefits, is communicated to healthcare
professionals and end-users.
Alvotech’s focus on affordability and accessibility benefits vulnerable groups, such as financially disadvantaged
individuals who face barriers to accessing expensive treatments.
Engagement with consumers and end-users (ESRS S4-2)
Alvotech does not engage directly with consumers or end-users of its biosimilar products. Instead, it relies on its
commercial partners, who manage the distribution and marketing of its products, to gather insights and feedback
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from end-users. These partners act as intermediaries, providing valuable input that informs Alvotech’s approach to
managing actual and potential impacts on consumers and end-users.
3.2.2. Safety of end-users (ESRS 2 IRO-2, S4-4, S4-1)
3.2.2.1. Management approach (ESRS 2 MDR-P, S4-2, S4-3)
Alvotech ensures end-users' safety by embedding quality assurance at every stage of the product lifecycle.
Alvotech employs stringent quality control procedures before biosimilars reach the market.
● Analytical characterization: A comprehensive analysis of the reference biologic to identify its molecular
and functional attributes. This guides the development of biosimilars that meet strict similarity standards.
● Custom manufacturing process development: A proprietary process replicates the reference biologic's
attributes while ensuring product integrity.
● Iterative testing: Continuous testing ensures the biosimilar matches the reference biologic’s quality,
safety, and efficacy.
● Regulatory compliance: Biosimilars undergo rigorous evaluation by regulatory authorities, including the
FDA and EMA, ensuring adherence to global safety and efficacy standards.
After market entry, comprehensive pharmacovigilance systems monitor drug safety in the U.S., where Alvotech is
the market authorization holder, directly overseeing these systems. Partners manage the systems in other regions,
with Alvotech overseeing and reviewing data. End-users can report adverse effects through hotline numbers and
other contact details provided in product packaging.
● Data protection and privacy: Alvotech adheres to robust data protection standards, safeguarding patient
privacy. Employees receive mandatory training on data privacy and pharmacovigilance relevance,
reinforcing compliance and trust.
3.2.2.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, S4-2, S4-5)
Alvotech manages end-user safety by combining pre-market quality assurance with post-market pharmacovigilance.
The Company tracks the number of adverse events reported and resolved, as well as the outcomes of regulatory
inspections and audits related to product safety.
Alvotech currently has two approved products on the market:
1. AVT02 (adalimumab): A high-concentration, low-volume biosimilar to Humira® for autoimmune diseases
and
2. AVT04 (ustekinumab): A biosimilar to Stelara® for inflammatory conditions.
Both are used to treat various autoimmune conditions in adults and children.
Nine more molecules are in the pipeline, and Alvotech aims to get approval for three biosimilar candidates in 2025:
1. AVT03 (denosumab): Biosimilar candidate to Prolia®/Xgeva®, treatments for bone diseases,
2. AVT05 (golimumab): Biosimilar candidate to Simponi®/Simponi Aria® in immunology, and
115
3. AVT06 (aflibercept): Biosimilar candidate to Eylea® in ophthalmology.
Following that, Alvotech aims to gain further approval for at least one product every 12-18 months, including
AVT23 (omalizumab), a biosimilar candidate to Xolair® for respiratory conditions; AVT29 (aflibercept) a high dose
biosimilar candidate for Eylea HD; AVT16 (vedolizumab), a Biosimilar candidate to Entyvio® for immunology;
and AVT33 (pembrolizumab), a biosimilar candidate to Keytruda® for oncology.
Alvotech also has three undisclosed biosimilar candidates (AVT19, AVT28, and AVT41) in earlier development
stages.
Human rights commitments
Alvotech is committed to upholding the human rights of its consumers and end-users by embedding ethical practices
and consumer protection principles throughout its operations. Alvotech incorporates elements of human rights policy
frameworks, such as the UN Guiding Principles on Business and Human Rights, the ILO Declaration on
Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises, into its practices
to ensure safety, equity, and respect for consumer rights.
Alvotech provides mechanisms to address potential human rights impacts, including:
● Grievance channels: Established mechanisms such as pharmacovigilance systems enable consumers and
end-users to report concerns.
● Remediation processes: Alvotech ensures that reported issues are investigated and resolved promptly in
compliance with regulatory and ethical standards.
● Whistleblower protection: Policies safeguard individuals reporting concerns from retaliation, fostering
trust and transparency.
Future plans and targets
Alvotech is in the early stages of its sustainability journey and is actively developing measurable targets across
material topics. The Company aims to finalize key targets in the next reporting cycle and will provide updates in
future CSRD reports to ensure transparency and accountability.
3.2.3. Social inclusion of end-users (ESRS 2 IRO-2, S4-4)
3.2.3.1. Management approach (ESRS 2 MDR-P, S4-2, S4-3)
Alvotech is committed to promoting social inclusion by addressing healthcare disparities and expanding access to
biosimilars for underserved populations. The Company’s upcoming launch of a biosimilar for women with
osteoporosis exemplifies this commitment, providing treatment options for a historically underserved demographic.
Through these efforts, Alvotech aligns its operations with the UN Sustainable Development Goals and supports
equitable healthcare access.
Collaboration with partners and healthcare systems is central to Alvotech’s strategy. These partnerships help foster
inclusivity and support the equitable distribution of healthcare solutions globally, ensuring that its biosimilars reach
underserved regions and populations.
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3.2.3.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T, S4-5)
Alvotech continues to expand its biosimilar portfolio to address unmet medical needs, focusing on vulnerable
populations and underserved markets. Through strategic partnerships, the Company ensures its products are
accessible to marginalized groups, promoting social inclusion.
Alvotech monitors the timely introduction of new biosimilars to track progress and evaluates their geographic reach
in underserved markets. Looking ahead, the Company plans to formalize policies that address the needs of
vulnerable groups and strengthen collaborations to extend the availability of biosimilars worldwide.
Future plans and targets
Alvotech is in the early stages of its sustainability journey and is actively developing measurable targets across
material topics. The Company aims to finalize key targets in the next reporting cycle and will provide updates in
future CSRD reports to ensure transparency and accountability.
Accounting policies—consumers and end-users
Alvotech follows ESRS S4 (Consumers and End-Users) under CSRD, reporting on material consumer-related
topics. Personal safety ensures safe and effective medicinal products relevant to operations and downstream
activities across all timeframes. Social inclusion focuses on accessible healthcare solutions, primarily in downstream
activities, with long-term impact.
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4. Governance
G1 Business Conduct
4.1. Material impacts, risks, and opportunities (ESRS 2 IRO-1)
Alvotech employs a structured and comprehensive approach to identify and assess material impacts, risks, and
opportunities related to business conduct. This process is integrated into Alvotech’s broader governance framework
to ensure that all potential business conduct issues are proactively addressed.
Key criteria and methodology
The identification and assessment process are underpinned by the following criteria, which are systematically
applied across Alvotech:
1. Location: Business conduct assessments are tailored to reflect the regulatory and cultural nuances of the
regions where Alvotech operates. This ensures that location-specific risks, such as differing legal
frameworks and societal expectations, are thoroughly evaluated.
2. Activity: The analysis includes a detailed review of all operational activities, focusing on areas with
heightened dependencies, such as procurement, supplier relationships, and interactions with
commercialization partners. Activities involving significant financial transactions or third-party
engagements receive additional scrutiny.
3. Sector: Operating within the biopharmaceutical sector, Alvotech considers specific risks, such as
compliance with healthcare regulations, ethical marketing practices, and data protection in its business
conduct assessments. The sector’s stringent standards inform the design of robust internal policies and
controls.
4. Transaction structure: Alvotech evaluates transaction structures to identify potential ethical and
compliance risks. This includes due diligence in counterparties, monitoring of financial transactions for
transparency, and ensuring that agreements align with the Company’s ethical principles.
As a result of this process, Alvotech has identified two material topics related to business conduct, outlined below.
Material topics in business conduct: impacts, risks, and opportunities
Material topic IRO
Up
stream
Own
ops
Down
stream
Short
-term
Medium-
term
Long
-term
G1 - Business Conduct
Corporate culture
Positive and
negative
impact No Yes No Yes Yes Yes
Supplier relationships Risk No Yes No Yes Yes Yes
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4.2. Business conduct governance (ESRS G1.GOV-1)
Role of the management and supervisory Bodies
At Alvotech, the CLT, the management body, and the Board of Directors, the supervisory body, share
complementary roles in governing business conduct.
The CLT implements business conduct policies operationally, ensuring alignment with the Company’s strategic
goals and regulatory requirements. They set ethical standards, oversee compliance initiatives, and foster a culture of
integrity across all operations. By monitoring adherence to these principles, the CLT ensures that business conduct
policies are effectively integrated into day-to-day activities and decision-making processes.
The Board of Directors, in its supervisory capacity, provides strategic oversight and guidance on business conduct. It
ensures that the policies established by the CLT are robust and aligned with global best practices. It also evaluates
the effectiveness of these policies, ensuring they adequately address the evolving regulatory and ethical landscape.
Expertise in business conduct
Alvotech’s leadership expertise is instrumental in maintaining high standards of business conduct. Members of the
CLT bring extensive operational experience in compliance, risk management, and corporate governance, equipping
them to handle complex ethical challenges. The Board of Directors complements this with its strategic perspective,
leveraging expertise in oversight, stakeholder engagement, and governance frameworks.
Alvotech is committed to implementing professionalism and excellence by enforcing high recruiting standards. In
2024, the Company also created targeted training programs for employees to enhance expertise and strengthen in-
house leadership capabilities continuously.
4.3. Corporate culture (ESRS G1-1)
4.3.1. Management approach (ESRS 2 MDR-P)
Alvotech is committed to fostering a culture of integrity and ethical business practices through a framework of
policies and governance.
● Code of Conduct: Alvotech establishes ethical principles and behavioral expectations for all employees
and external stakeholders. It outlines the Company’s commitment to legal compliance, anti-corruption and
bribery, whistleblowing, and fostering a culture of ethical decision-making. The code also mandates
transparency and promotes accountability in all operations.
● Whistleblower Protection Policy: The dedicated policy ensures whistleblowers can report concerns safely
and anonymously, with robust protection against retaliation.
Alvotech has established rules and measures to address anti-corruption and anti-bribery practices. The Company is
working to further align these with the United Nations Convention against Corruption principles, demonstrating its
ongoing commitment to ethical business practices.
119
4.3.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T)
Mechanisms for identifying, reporting, and investigating concerns
Alvotech is committed to upholding its Code of Conduct, which sets ethical standards for all employees and
partners. The Company has established clear mechanisms for identifying, reporting, and investigating concerns
about unlawful behavior or breaches of the Code of Conduct. These mechanisms include:
● Reporting Channels: Concerns about suspected or actual impropriety can be reported through designated
confidential channels, ensuring the protection of the reporting party. These channels are accessible to both
internal and external stakeholders.
● Investigation Procedures: Each reported concern is investigated promptly and independently, ensuring
fairness and objectivity in addressing the matter.
Protection of whistleblowers
Alvotech provides a safe environment for whistleblowers to report concerns without fear of retaliation. Key
measures include:
● Internal whistleblower reporting channels: Employees and stakeholders can access confidential and
secure reporting mechanisms.
● Protection against retaliation: Policies in compliance with Directive (EU) 2019/1937 protect
whistleblowers from retaliation.
Procedures for investigating business conduct incidents
Alvotech has established procedures for investigating incidents of misconduct, including corruption and bribery. A
dedicated compliance team conducts investigations promptly, independently, and objectively, ensuring unbiased
outcomes.
No specific functions within Alvotech have been identified as having a high risk for corruption or bribery. Regular
reviews ensure that any emerging risks are promptly addressed.
In 2024, Alvotech received no business conduct incidents or complaints and didn’t start any investigation.
Animal welfare
As a biosimilars-focused Company, Alvotech does not conduct animal testing during standard development unless
specifically requested by law or Competent Authorities. During 2024, no animal testing was conducted. Generally, if
such animal testing were to be conducted, Alvotech fully embraces the 3Rs principles of animal research while
developing its products, adhering to strict ethical standards and industry best practices. The 3Rs principle is a
recognized standard for the ethical use of animals in product development and research (Russell and Burch, 1959).
Training on business conduct
Alvotech’s business conduct training programs are mandatory for all employees at the start of employment and are
monitored by the HR team. They provide education on the Company’s ethical standards and policies. In 2024,
Alvotech introduced new training sessions to its employees.
120
During the reporting period, employees received an average of 3 hours of training. However, when on-the-job
training covers job-specific skills, regulations, and standard is included, the average training hours per employee
increases to 67 hours. This figure does not account for additional training to enhance broader competencies, such as
leadership skills.
Future plans and targets
Alvotech is in the early stages of its sustainability journey and is actively developing measurable targets across
material topics. The Company aims to finalize key targets in the next reporting cycle and will provide updates in
future CSRD reports to ensure transparency and accountability.
4.4. Supplier relationships and payment practices (ESRS G1-2)
4.4.1. Management approach (ESRS 2 MDR-P)
Alvotech recognizes the critical role of its supply chain in achieving sustainable operations and is actively
developing policies and practices to manage supplier relationships responsibly. While work is ongoing, several
foundational elements are in place to address supplier-related risks and promote sustainability:
● General due diligence: Alvotech updates its supplier due diligence procedures, including social and
environmental considerations.
● Quarterly business reviews: In 2024, Alvotech started incorporating sustainability considerations into its
agenda in its regular supplier meetings. It aims to have quarterly business reviews with its top 10 suppliers,
during which they will ask for information about ESG factors.
● Supplier code of conduct: Alvotech aims to implement a code of conduct for its suppliers in 2025.
● Country and company screening: Alvotech currently focuses on sourcing suppliers operating in countries
with robust regulatory frameworks and established industry standards while avoiding suppliers from
jurisdictions with heightened risks related to governance, corruption, or environmental practices.
● Payment practices: Emphasis is placed on ensuring timely payments, particularly for smaller vendors who
may be more vulnerable to late payments. A complaints channel is available for suppliers to raise concerns
about payment delays.
4.4.2. Performance and targets (ESRS 2 MDR-A, MDR-M, MDR-T)
Approach to supplier relationships
Alvotech adopts a strategic approach to managing supplier relationships, balancing operational needs with
sustainability considerations. Key elements of this approach include:
● Alvotech recognizes that its supply chain may pose risks related to operational disruptions, compliance
challenges, and sustainability impacts. To mitigate these risks:
● A preliminary supplier screening process is conducted to identify potential risks tied to geographic regions,
governance practices, or supplier capacity.
● Proactive measures are taken to exclude partnerships with suppliers operating in jurisdictions with
heightened risks, such as weak governance frameworks or low environmental compliance standards.
121
● Alvotech seeks to build collaborative relationships with its suppliers by fostering open communication,
aligning on shared goals, and emphasizing long-term partnerships that promote mutual success.
● Social and environmental criteria in supplier selection
Alvotech integrates social and environmental criteria into its supplier selection process to ensure alignment with its
commitment to sustainable practices.
● Sustainability disclosure requirements: Suppliers are increasingly engaged in disclosing their social and
environmental indicators. This ensures greater transparency and alignment with Alvotech’s sustainability
objectives.
● Focus on ethical practices: Alvotech prioritizes suppliers who strongly adhere to labor rights, ethical
sourcing, and environmental stewardship.
● Continuous improvement: Alvotech actively encourages suppliers to adopt improved sustainability
practices through engagement, feedback, and capacity-building efforts.
Future plans and targets
Alvotech is in the early stages of its sustainability journey and is actively developing measurable targets across
material topics. The Company aims to finalize key targets in the next reporting cycle and will provide updates in
future CSRD reports to ensure transparency and accountability.
Accounting policies—business conduct
Alvotech follows ESRS G1 (Business Conduct) under CSRD, ensuring transparent reporting on governance, ethics,
compliance, and supplier relationships. This policy defines how business conduct-related metrics are measured and
reported.
Corporate culture is monitored through policy adherence, employee training, and business conduct incident tracking.
Supplier relationships are assessed through due diligence, compliance screening, and engagement initiatives, with
data on the percentage of suppliers screened and engaged.
Whistleblowing and compliance monitoring ensure confidential reporting mechanisms with substantiated cases
leading to corrective actions.
Anti-corruption and bribery compliance is tracked through mandatory employee training and incident reporting, with
internal audits ensuring regulatory adherence.
Payment practices are measured by average days to pay invoices and alignment with standard payment terms to
ensure fair supplier treatment.
122
Financial year 2024 Substantial contribution criteria DNSH criteria (Does not significantly harm)
Economic Activities (1)
Codes (2)
Turnover (3)
Proportion of
turnover (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy
(9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adoptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy Aligned
(A.1) or eligible
(A.2)
turnover,year N-1
(18)
Category enabling
activity (19)
Category
transitional
activity (20)
USD
million
%
Y; N;
N/
EL
Y; N;
N/
EL
Y; N;
N/
EL
Y; N;
N/
EL
Y; N;
N/
EL
Y; N;
N/
EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Turnover of environmentally
sustainable activities
(Taxonomy-aligned)
0 0% 0% 0% T
Of which enabling
0
0%
0%
0%
0%
0%
0%
0%
0%
E
Of which transitional
0
0%
0%
0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/
EL
EL; N/
EL
EL;
N/EL
EL; N/
EL
EL;
N/EL
EL;
N/EL
1.2. Manufacture of medicinal
products
PPC
1.2 491.978 100% N/EL N/EL N/EL N/EL N/EL N/EL 100%
Turnover of Taxonomy-eligible
but not environmentally
sustainable activities (not
Taxonomy-aligned activities)
(A.2.)
491.978 100% 0% 0% 0% 100% 0% 0% 100%
Turnover of Taxonomy-eligible
activities (A.1. + A.2.)
491.978 100% 0% 0% 0% 100% 0% 0% 100%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomynon-
eligible activitiy
0 0%
TOTAL
491,978 100%
123
Financial year 2024 Substantial contribution criteria DNSH criteria (Does not significantly harm)
Economic Activities (1)
Codes (2)
CapEx (3)
Proportion of
turnover (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy
(9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adoptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy Aligned
(A.1) or eligible
(A.2) turnover,year
N-1 (18)
Category enabling
activity (19)
Category
transitional
activity (20)
USD
million
%
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N
% E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally
sustainable activities
(Taxonomy-aligned)
0 0% 0% 0% 0% 0% 0% 0%
%
Of which enabling
0
0%
0%
0%
0%
0%
0%
0%
0%
E
T
Of which transitional
0
0%
0%
0%
T
A.2 Taxonomy eligible but not aligned environmentally sustainable activities (not Taxonomy-aligned activities) (g)
Manufacture of medicinal
products
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
%
%
CapEx of Taxonomy eligible but
not environmentally
sustainable activities (not
Taxonomy-aligned activities)
(A.2)
0%
CapEx of Taxonomy-eligible activities (A.1. + A.2.)
A. CapEX of Taxonomy-eligible
activities (A.1+A.2)
61,633 94% 0% 0% 0% 94% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomynon-eligible
activitiy
3615 6%
TOTAL
65.248
100%
124
Financial year 2024 Substantial contribution criteria DNSH criteria (Does not significantly harm)
Economic Activities (1)
Codes (2)
OpEx (3)
Proportion of
turnover (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy
(9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adoptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy Aligned
(A.1) or eligible
(A.2) turnover,year
N-1 (18)
Category enabling
activity (19)
Category
transitional activity
(20)
USD
million
%
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y; N;
N/ EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-Eligible Activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally
sustainable activities
(Taxonomy-aligned)
0 0% 0% 0%
Of which enabling
0 0% 0% % % % % % 0%
E
T
Of which transitional
0 0% 0% 5 0%
T
A.2. Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities
EL N/
EL
EL N/
EL
EL N/
EL
EL N/
EL
EL N/
EL
EL N/
EL
Manufacture of medicinal
products
P 1.2 0 0% N/EL N/EL N/EL N/EL N/EL N/EL 0%
OpEx of Taxonomy-eligible but
not environmentally
sustainable activities (not
Taxonomy-aligned activities)
(A.2.)
0 0% 0% 0% 0% 0% 0% 0% 0%
OpEx of Taxonomy-eligible
activities (A.1. + A.2.)
0 0% 0% 0% 0% 0% 0% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy non-eligible
activitiy
171,312
100%
TOTAL 171,312
100%
125
