Alvotech, a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, successfully arranged a strategic refinancing transaction.

The financing, led by GoldenTree Asset Management, with participation from other institutional investors, will enable Alvotech to improve cost of capital, address upcoming debt maturities in 2025 and enhance its financial flexibility by adding incremental cash to the balance sheet.

With the transaction, Alvotech obtains financing from experienced healthcare investors who share the company’s confidence in its expected near-term product launches and pipeline progress.

Alvotech has entered into an agreement with the lenders for a senior secured first lien term loan facility of up to $965 million, in two tranches. The first tranche, a first lien $900 million term loan, bears an interest rate of SOFR plus 6.5% per annum. The lenders have also committed to an optional second tranche, a $65 million first lien, second out term loan drawable at Alvotech’s discretion, which bears an interest rate of SOFR plus 10.5% per annum.

The facility matures in June 2029 and is expected to fund in July 2024. The company intends to use the proceeds from the facility to refinance various outstanding debt obligations, including those maturing in 2025. The remaining proceeds from this transaction will be allocated towards supporting Alvotech’s working capital requirements for ongoing and expected launches in the near term.

“This facility aligns with our commitment to enhance financial flexibility and sustain Alvotech’s long-term growth,” Joel Morales, chief financial officer of Alvotech, said. “We expect significant revenue growth and diversification as we launch our biosimilars in multiple markets around the world and advance our pipeline of biosimilar candidates. Refinancing near-term maturing debt will help us execute our growth plans over the near and mid-term.”