View:
United States securities and exchange commission logo
February 25, 2022
Robert Wessman
Executive Chairman
Alvotech Lux Holdings S.A.S.
9, Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Re: Alvotech Lux
Holdings S.A.S.
Amendment No. 1 to
Registration Statement on Form F-4
Filed February 4,
2022
File No. 333-261773
Dear Mr. Wessman:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
January 18, 2022 letter.
Amendment No. 1 to Registration Statement on Form F-4
The Business Combination
The Background of the Business Combination, page 151
1. We note your response
to our prior comment 16 and reissue the comment in part. We note
that you have
substantially revised this section to include further detail on the
negotiations, including
reference to certain proposals and responses concerning material
terms of the
transaction. For example, on page 153 you state that "OACB returned
comments to the Term
Sheet to Alvotech, including with respect to certain binding
provisions, the amount
of contemplated PIPE financing, exclusivity terms, the Sponsor
earn-out terms,
transaction approvals and registration rights," however, you do not
Robert Wessman
FirstName LastNameRobert Wessman
Alvotech Lux Holdings S.A.S.
Comapany25,
February NameAlvotech
2022 Lux Holdings S.A.S.
February
Page 2 25, 2022 Page 2
FirstName LastName
describe the proposals concerning these terms. Please revise your
disclosure throughout
this section to describe each proposal (preliminary or otherwise) and
counterproposal
concerning a material transaction term and to identify the party
putting it forward. In this
regard, we continue to note that the Background section as written
discusses in general
terms the topical areas discussed by the parties during the eight
month negotiations and
some of the final terms they mutually agreed upon but does so with
little indication of
how those terms evolved during the course of the
discussions/negotiations.
2. We note your revised disclosure on page 158 where you discuss the
subsequent PIPE
financing arrangement and related subscription agreements that you
entered into on
January 18, 2022. Please expand your discussion in the background
section to provide
detail on the negotiation and marketing processes for this subsequent
PIPE transaction.
Comparable Public Companies, page 164
3. We acknowledge the additional information provided in your response to
prior comment
24 but continue to have difficulty in understanding the relevance of
the TAM--Current
Pipeline (market opportunity) for Alvotech. Please quantify the
estimate of peak WW
sales from 2021-2026 for each of your biosimilar products, as assumed
in your forecast on
page 168, and the estimate of peak WW sales from 2021-2026 for each of
the
corresponding reference products. Also, on page 169 you state that
global markets for
biologic and biosimilar medicines are forecasted to grow to
approximately $555 billion
and $80 billion by 2026, respectively. It is not clear how the
combined estimated peak
global sales of the product candidates in your pipeline could be $85.5
billion when the
global market for biosimilar medicines is forecasted to reach $80
billion by 2026.
Explain the relationship between these amounts. Revise your
presentation accordingly.
4. Please explain and quantify the expected impact of price erosion on
"originator" branded
biologic products as biosimilar products are introduced in these
markets in each year over
the next 3 years and your consideration of these market dynamics in
determining our
product candidates market opportunity as you quantified on page
223. Also, describe
and quantify the historical market examples for biosimilars that
you reference on page
169. Revise your presentation accordingly.
Certain Unaudited Alvotech Prospective Financial Information , page 166
5. We acknowledge the additional information provided in your response to
prior comment
25 but continue to believe that your presentation does not provide
investors with sufficient
information to evaluate the reasonableness of your financial
projections. Please provide
additional discussion that facilitates an understanding of the risk
that estimates underlying
your forecasted market share, revenue and adjusted EBITDA are
sensitive to changes in
underlying assumptions and quantify the impact on your forecast,
resulting from likely
variability in these assumptions. Also, provide additional discussion
that facilitates an
understanding of the progression in each year over the period 2022
through 2025 of
growth in market share, revenue and adjusted EBITDA, including
underlying changes in
Robert Wessman
FirstName LastNameRobert Wessman
Alvotech Lux Holdings S.A.S.
Comapany25,
February NameAlvotech
2022 Lux Holdings S.A.S.
February
Page 3 25, 2022 Page 3
FirstName LastName
percentages for cost of goods sold and operating costs. In addition,
provide us the
following information and revise your presentation accordingly.
Identify the principal target markets and quantify estimated
revenues for each market
by 2025.
Describe the expected timing for regulatory approval of your seven
pipeline products
and subsequent commercialization activities in each of the
principal target markets.
Provide a breakdown of forecasted 2025 revenues by product for
each market.
Discuss the key market dynamics underlying price erosion affecting
reference
products associated with your biosimilar products during the
period 2022 through
2025 and quantify the degree of price erosion by product and
principal market that is
expected by 2025.
Provide a breakdown of future milestone payments aggregating $916
million by type
and year.
Explain whether alternate financial projections were prepared,
acknowledging your
statement that no alternative financial projections were
considered by OACB s
Board.
6. We acknowledge the additional information provided in your response to
prior comment
28 but continue to have difficulty in understanding how you determined
probability of
technical success ( POS ). Please describe and quantify the
methods and key
assumptions underlying your POS estimates for each development phase.
In addition,
expand your presentation as follows:
Identify the over a dozen biosimilars developed by your
management team in the
past, describe the development time frame for each biosimilar
product and quantify
associated revenues generated upon its commercialization.
Describe your experience with development of biosimilar products
from each of your
"host cell lines (CHO and SP2/0) and processes (Fed batch and
perfusion)," identifying those products that did or did not
achieve regulatory approval
and commercialization.
Describe the expected timing for pre-clinical, clinical and
submission phase
development, as well as regulatory approval and commercialization
for each of your
five pipeline products to be launched in more than 50 markets by
2025.
Describe the significant risks associated with your planned
development and
regulatory approval processes, described on pages 215- 216, and
provide data
supporting your assertion that these processes for biosimilar
products are less
uncertain relative to originator biologics."
Describe the significant risks governing successful future
commercialization for your
five biosimilar products, given the level of apparent competition
described on pages
229-230, and explain how these risks were considered in
determining your forecasts
of Alvotech Revenue and Adjusted EBITDA on page 168.
Robert Wessman
FirstName LastNameRobert Wessman
Alvotech Lux Holdings S.A.S.
Comapany25,
February NameAlvotech
2022 Lux Holdings S.A.S.
February
Page 4 25, 2022 Page 4
FirstName LastName
Business of Alvotech
Third Party Suppliers and Manufacturers, page 217
7. We note your revised disclosure in response to our prior comment 31.
You state that "[t]he
availability of master cell banks is critical to [y]our ability to
manufacture products for the
commercial market" and that "[s]hould [y]our cell banks (despite any
redundancies) be
compromised, [you] would be unable to produce usable products for
patients in any
market." Please expand your disclosure to explain what "master cell
banks" are and to
describe why they are critical to your operations. Please also revise
your risk factor
disclosure to cover the particular risk posed to your business by your
dependence on
master cell banks.
Commercial Partnerships, page 219
8. We note your response to our prior comment 32 and reissue the comment
in part. For each
of your partnership agreements as described on pages 219-222 and
274-275, please
expand your disclosure to ensure that you are disclosing all material
terms, including the
following:
the nature and scope of any intellectual property transferred;
each parties' rights and obligations;
quantification of all up-front or execution payments received
or paid to date;
aggregate amounts paid or received to date under the agreement;
aggregate amounts of all potential development, regulatory and
commercial
milestone payments;
quantification of the royalty rate, or a range no greater than
10 percentage points per
tier;
disclosure of the duration of the agreement and when royalty
provisions expire; and
disclosure of termination provisions.
For example, we note your description of your agreement with Fuji
Pharma where you
state that "Fuji Pharma agreed to make certain payments to Alvotech
upon the
achievement of certain milestones [...]," and your description of your
partnership with
Biosana where you state that "[you] have agreed to make certain tiered
royalty payments
to Biosana," however, you do not quantify the aggregate amount of
these potential
milestone payments or royalty rates.
Our Pipeline, page 222
9. We note your response to our prior comment 34 and reissue the comment
in part. To the
extent that all 8 of your product candidates are material, please
revise your pipeline table
to identify all 8 candidates. Alternatively, revise your summary to
indicate you have
6 material product candidates in development and remove these two
undisclosed programs
from your pipeline table.
Robert Wessman
Alvotech Lux Holdings S.A.S.
February 25, 2022
Page 5
Our Programs, page 223
10. We note your response to our prior comment 35. For each serious
treatment-emergent
adverse event, clearly describe the event including whether it was
assessed as drug-
related.
AVT02, our high-concentration biosimilar to Humira, page 224
11. We note your response to our prior comment 36 and reissue the comment.
In particular,
please revise the text of the legend contained in the bottom left of the
graphic as it does
not currently appear to be legible.
Material Agreements, Partnerships and Suppliers, page 227
12. We note your response to our prior comment 37 and reissue the comment in
part. We also
note your disclosure with respect to your agreements with STADA and Teva
where you
state that you have received $32.8 million and $75 million,
respectively, in upfront and
milestone payments combined. Please revise your disclosure to
distinguish between
aggregate amounts received to date for upfront payments and for
milestone payments,
providing separate amounts for each.
Intellectual Property , page 230
13. We note your response to our prior comment 39 and reissue the comment in
part. With
respect to the two categories of patent applications that you have
pending related to you
AVT02 product, please also disclose the type of patent protection for
which you are
applying such as composition of matter, use or process.
You may contact Franklin Wyman at (202) 551-3660 or Vanessa Robertson
at (202) 551-
3649 if you have questions regarding comments on the financial statements and
related
matters. Please contact Jessica Ansart at (202) 551-4511 or Jeffrey Gabor at
(202) 551-2544
with any other questions.
Sincerely,
FirstName LastNameRobert Wessman
Division of
Corporation Finance
Comapany NameAlvotech Lux Holdings S.A.S.
Office of Life
Sciences
February 25, 2022 Page 5
cc: Nicolas Dumont
FirstName LastName