Good day and thank you for standing by. Welcome to the Arvitech Q2 2026 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Benedikt Stefansson, VP of Investor Relations and Global Communication. Please go ahead.

Thank you and welcome to our listeners. Yesterday evening, the company issued a press release announcing our financial results for the first half of 2026. Material accompanying today's earnings call, including a supplemental earnings report providing additional operational details and a business update, and the presentation you will be referring to on today's call, were also published on our website, alvotech.com, under financials in the Q2 section. Our press release, earnest report, presentation and statements that we make on the call today may include forward-looking statements. These statements do not ensure future performance and are subject to risks and uncertainties that are outlined in company filings with the Securities and Exchange Commission. Any risks and uncertainties could cause actual results to differ materially from forward-looking statements that are made. Presenting on today's call, are Robert Wessman, founder and executive chairman, Lisa Graver, chief executive officer, Joseph McClellan, chief operating officer, and Linda Jonsdottir, chief financial officer. Robert will begin today's presentation with a summary of our regulatory, funding, and commercial highlights. Lisa will then present a commercial and operations update. Joseph will provide a pipeline and regulatory update. and Linda will conclude with a discussion of the financial results. Following the presentation, our team will be happy to take your questions. And with that, I would like to turn the call over to Robert Wessman.

Hello, everyone, and thank you for joining us here today. The first half has been an important period for AlgoTech as we made significant investments in our manufacturing facility and quality systems. These investments allowed us to resubmit our US BLAs in June, and in July, the FDA formally closed the May surveillance inspection of our agri-facility with a VAI classification. Our second quarter performance reflects the associated production slowdown and the preparation for our BLA resubmissions. Manufacturing returned to planned operating levels at the end of the second quarter. Our order book is strong, which will support a strong fourth quarter as we seek to gradually rebuild sufficient safety stock for our customers. During the period, we also continue to expand our commercial portfolio, make significant progress in our R&D programs, We are optimistic about our first mover position with our Entivio Biosimilar program. We were the first to submit a PLA in the US and we have also submitted a marketing application in Europe addressing a global market of $7 billion. We believe These moves position us to be among the first wave of biosimilars to this important product. Alvotech now has five biosimilars contributing to product revenue, with our biosimilars to Symfony, ILEA, and Prolea Xgeva beginning to add to our Humira and Stellara biosimilar sales. We have built one of the largest biosimilar pipelines in the industry. and we are now entering an important execution phase. Our focus is on preparing for multiple anticipated launches, advancing the next wave of biosimilar candidates and continuing to build the capabilities we need to develop, manufacture and supply those products globally. Building a company at this scale requires a long-term thinking and sustained investment. Capital is the fuel. that enable us to execute. The equity financing completed in June generated approximately $165 million in gross proceeds. We were very pleased with the strong demand for the offering and more importantly, with the composition of the demand. Alongside continued support from our existing shareholders, we welcomed 20 new specialists in healthcare from across the US, Europe and the Nordics. The diversification of the shareholder base is important because it brings investors with a deep understanding of the sector and our opportunity. Linda will take you through the financing in a little bit more details. We continued also to evolve our commercial model. Our primary route to enter global market is through our network of commercial partners in a business-to-business model. At the same time, as we look ahead, we see opportunities for Alvotech to participate more directly in the U.S. markets, including by commercializing selected pipeline products ourselves. I have always believed that strategy itself is only part Thank you, Robert.

I want to start by putting our first half performance in context. As we have previously discussed, during the first half we made significant improvements to our manufacturing facility and quality systems in Reykjavik. These activities formed the foundation of our response to FDA's inspectional observations following the July 2025 pre-license inspection and enabled us to resubmit our applications for ABT05 and ABT06. The resubmissions are a clear inflection point for the company as they paved the way for FDA approvals in the fourth quarter of 2026. In particular, it positions us to be the first or amongst the first biosimilars to be approved for Symfony and Symfony ARIA in the U.S. Joe will provide further updates on the improvement program at our Reykjavik site and the favorable outcome of the recent GMP surveillance inspection by FDA. While the Improvement Program was critical to ensuring a robust response to FTA, those activities affected manufacturing output and therefore product availability during the period. Manufacturing returned to planned operating levels at the end of second quarter and our focus is now on building supply in accordance with commercial requirements as we move through the second half. At the same time, the underlying commercial demand for our portfolio has remained strong. That distinction between market demand and our reported product revenue is particularly important this quarter. As a B2B company, we manufacture and supply product to our commercial partners. Our reported product revenue therefore reflects not only underlying demand, but the timing of partner orders, inventory movements, and our own product availability. As we've explained previously, that can create variability between reporting periods. and it was particularly evident during the first half of 2026 and the second half of last year due to the slowdown in manufacturing necessitated by the facility improvement activities. Turning to our financial highlights, total revenue for the first half was $212 million compared with $306 million in the first half of 2025. Adjusted EBITDA was $46 million compared with $54 million last year and Gross Margin was 54%, broadly consistent with 55% in the prior year period. Both revenues and EBITDA are in line with our expectations. We ended June with $143 million of cash following the successful equity financing completed during the quarter. Based on our current expectations for product supply as well as anticipated contributions from milestone revenue in the second quarter, We are reaffirming our 2026 guidance of $650 to $700 million in total revenue and $180 to $220 million in adjusted EBITDA. Linda will take you through the financial performance and the key drivers in more detail later in the presentation. As Robert outlined, the first half saw significant operational progress across the business. Rather than repeat those milestones, I want to focus on what they mean for the next phase of execution, particularly the performance of our commercial portfolio and our preparations for the next wave of launches. Let me start with the commercial portfolio and AVT02. The U.S. adalimumab market continues to demonstrate strong biosimilar conversion. Biosimilars now account for more than 60% of the market. compared with approximately 55% when we last reported. Synlandi continues to hold the number two biosimilar position in the US. That is important because while our first half supply constraints affected the volume we could deliver to our partner, the underlying demand picture remains strong. Europe also provides an interesting indication of the longevity of these franchises. Ukindra was first launched four years ago. Yet we continue to see sustained demand across key European markets. Recent partner performance reinforces our view that successful biosimilars for chronic conditions do not necessarily reach a short-term peak and then decline. They can remain valuable commercial assets for many years. That is one of the reasons we think it is important to look beyond individual quarterly supply and focus on the development of these franchises over time. We are seeing a similar market transition with ABT04. Biosimilar penetration of the U.S. Ustekinumab market has developed considerably faster than we saw with Adalimumab and is now around 60%. Solaris-D continues to participate in an expanding market. Our strategy here remains disciplined. We are focused on building sustainable business and attractive economics rather than merely pursuing volume. In Europe, biosimilars have also taken share rapidly from the originator and whose provost remains well positioned in an increasingly established biosimilar market. Again, the important point is that the underlying market is developing as we anticipated. The next part of the commercial story is the expansion beyond ABT02 and ABT04. ABT05 and ABT06 are now launched across more than 10 European markets. including the major markets of Germany, France, the UK, Spain, and Italy. For ABT05, we have seen encouraging early momentum, particularly in Germany and Spain. The product was also launched in Japan in July, where it is currently the only approved Gololumab biosimilar. In the US, we are expecting regulatory approval in the fourth quarter of this year, and we anticipate being one of only two biosimilars on the market in the near term. AVT06 has similarly established a broad European footprint. It was launched in Japan earlier this year and has seen strong early uptake. We also have a clear pathway to U.S. market entry under the Settlement and Licensing Agreement announced in January, subject of course to regulatory approval. That agreement provides for U.S. market entry from the fourth quarter of 2026. Taken together, these products broaden our commercial base. We entered 2026 with product revenue principally driven by AVT02 and AVT04. We now have five biosimilars contributing to product revenue, with three of those franchises still at an early stage of their commercial development. That gives us a much more diversified platform for future growth. So we now enter the second half with manufacturing back at planned operating levels, supply levels improving, and a broader commercial portfolio. I will now hand over to Joe to discuss our regulatory progress and pipeline.

Thank you, Lisa. I will briefly cover the following topics today. The status of our ongoing facility and quality improvements, U.S. regulatory updates, including on our complete response resubmissions and updates on our biosimilar development pipeline. As we have discussed on previous calls, Following the US FDA's observations in mid 2025, we initiated a comprehensive improvement program across our Reykjavik facility. By the end of 2025, we had implemented the majority of our committed and necessary corrective actions. Since then, Our focus has been on demonstrating that those improvements are effective and sustainable, implementing continuous improvement opportunities, and embedding them in our routine manufacturing and quality operations. These extensive efforts form the basis of our response to the FDA's post-action application letters, and enabled the resubmission to our four biologics license applications for the proposed biosimilars to Symphony, Symphony Aria, ILEA, and the dual-products Prolia XGiva in June of this year. In their acknowledgment letters for each of the resubmissions, as complete responses to the previous action letters, the FDA confirmed review completion goal dates in alignment with the standard six-month process. Separately, the FDA completed a routine GMP surveillance inspection of our Reykjavik facility in May 2026. In July, the agency formally closed that inspection with a voluntary action-indicated classification. Our Reykjavik facility remains an FDA-approved manufacturing site, and we continue to manufacture our on-market products both for the U.S. and rest of world markets. We are confident that the actions we have taken to address observations from our recent FDA inspections have effectively addressed all observations. With the resubmissions now completed, we continue to work with the FDA as those applications progress through review to enable our important medicines to be available in the U.S. Turning to the development pipeline, Alvatech continues to build one of the largest internally developed biosimilar pipelines in the industry with more than 30 candidates currently in development. When selecting new programs, we prioritize biologics with significant market opportunity, durable mechanisms of action, high scientific barriers where Alvatech can succeed, and opportunities for differentiation for our integrated development and manufacturing platform. These attractive molecules make up our early phase and preclinical pipeline, supported by ongoing process, product, and analytical development, manufacturing, clinical, regulatory, and intellectual property workstreams to enable future approvals and commercialization. This portfolio breadth is important because biosimilar development is inherently a portfolio business. Individual programs have different technical, regulatory, competitive, and IP profiles. Our broader pipeline gives us multiple opportunities to create value over time. Beyond the ongoing launches, as previously discussed, our next wave of products is expected to receive approvals over the 2027 to 2029 time horizon. These include our proposed biosimilar to Katrina, which is co-developed with Dr. Reddy's, and where we have commenced a randomized, Also, in this near-term horizon of approvals are our proposed biosimilars to Intivio and ILEA high dose. Our development of a proposed biosimilar to Intivio, including both the intravenous presentation, which we denote as ABT16, and the high concentration subcutaneous presentation, which we denote as ABT80, is a good example of the capabilities we have built. Intivio is an important therapy for inflammatory bowel disease, and it represents a multi-billion dollar opportunity in the immunology market. We are pleased the European marketing authorization application for both AVT16 and AVT80 has been validated and progressing through review. The FDA has accepted a biologics license application for AVT16 as we have previously announced. We are looking forward to communicating positive news on a US biologics license application for AVT80 soon. We expect decisions on these applications in 2027. The significance of the development of our proposed biosimilar to Intivio goes beyond one molecule. It demonstrates Alvatech's ability to develop multiple presentations around a major biological franchise and to advance them across different regulatory pathways with speed. Now, turning to ABT29, as we have discussed previously, the high-dose version of ILEA supports extended dosing intervals compared with the original presentation, and we are seeing it become the leading ILEA presentation and an increasingly important part of the global ophthalmology market. We anticipated this shift when we selected ABT29 for development. Together with ABT06, our biosimilar to ILEA low-dose, We have the opportunity to participate across both the established and high-dose segments of what remains one of the largest markets in ophthalmology. We remain on track for our first regulatory submission this year. Further, our ALVO-I-HD clinical study, which is a randomized clinical study to evaluate the efficacy and safety of AVT29 compared with ILIA-HD, and participants with diabetic macular edema was the first to be initiated globally and is progressing in alignment with expectations to enable a U.S. regulatory submission in 2028. Based on these timelines, we believe ABZ29 has the potential to be among the first wave of ILEA-HD biosimilars in major markets. With that, I hand over to Linda for the financial review.

I will now take you briefly through some highlights of our financials for the second quarter and the first half of 2026. Unless otherwise stated the figures I will go through are adjusted numbers. Reconciliations to the corresponding IFRS measures are included in our earnings material which have been published under financials in the investor section of our website allotech.com. During the first half of the year, facility improvements led to manufacturing slowdown and temporarily constrained supply. But as mentioned before, those slowdowns also enabled a successful close of the FDA GMP inspection during this period and the resubmission of BLAs to the FDA. These improvements provide a good foundation for growing performance heading into the second half of the year and as we have noted earlier we expect the fourth quarter in particular to be the strongest quarter of the year. I'll begin with the second quarter highlights before covering the first six months as a whole. The second quarter was in line with expectations and we finalized a successful equity issue delivering strong cash position at the end of June. Total revenues were down 39% compared to the same period last year but at level with the first quarter of the year at 106 million. Gross margin in Q2 was 51%, reflecting lower product and milestone revenues compared to previous periods. Our product margin in Q2 was down 17 basis points compared to the same quarter last year at 6%, impacted by the product mix and facility improvements which were concluded at the end of the quarter. Adjusted EBITDA was 23 million in the quarter, down 32% year-on-year, due to lower product and milestone revenues compared to the same quarter last year, which saw the launch of our buyer similar to Stellara in the US. Turning to the financial highlights for the first half of 2026, total revenues were 212 million, representing a 31% decline compared to the same period last year, Gross margin was 54%, broadly in line with the same period last year, with licensing revenues contributing half of total revenues in the current period Product margin was 8%, margins continued to be impacted until end of Q2 by reduced manufacturing throughput associated with facility improvements at the Reykjavik site We expect that Alvotech will be positioned to enter 2027 with a stronger margin profile. Adjusted EBITDA was 47 million, representing a margin of 22%. Adjusted EBITDA in the same period last year was higher at 54 million, with a four basis point lower margin of 18%. As noted in our last earnings call, we are expecting Q4 to be the strongest quarter of the year We will start to see Q3 regaining momentum on the product revenue side with a strong step-up expected in Q4 both for product revenues and milestones. Further on the revenues in the first half of the year. Half of the revenues come from product revenues which were at 106 million. We now have five in-market products contributing to product revenues. In the first half of the year, launches of these three new products expanded across Europe, the UK and Japan. As we have noted previously, as a B2B company, our reported product revenue reflects not only underlying market demand, but also the timing of partner orders, inventory movements and our own product availability. During the first half, manufacturing output was affected by the improvement activities at the Reykjavik site, which constrained our product supply. Manufacturing returned to planned operating levels at the end of the second quarter. Our focus is now on rebuilding sufficient supply for our clients and meeting commercial requirements as we move through the year. Importantly, underlying market demand for our products remains strong. As supply normalizes, we expect the demand to be reflected in product revenue in subsequent periods. Licensing revenues in the first half were 106 million. As we have also noted earlier, milestone revenue recognition will be inherently lumpy, as it is driven by progress in R&D, timing of marketing authorization applications, and other contractual milestones achieved. Turning to cash flow. Cash on hand at the end of the period was 143 million, reflecting in part our equity raise completed in June. Cash from operations was 17 million during the quarter, reflecting operations and changes in working capital, but as you can see from the cash flow bridge, all the key drivers impacting cash flow in the quarter were net interest payments of 37 million per quarter following the transition from PIC to cash interest in mid-25, CAPEX at 28 million in the quarter primarily consisting of the cost of facility improvements which have now been concluded, investment in insumptibles of 17 million reflecting continued investment in the advancement offered by a similar pipeline. Turning to the financing completed during the quarter. The equity offering, completed in June, generated approximately $165 million in gross proceeds. The transaction was initially launched at $125 million, increased to $152 million at pricing, and the full exercise of the overall allotment option increased the total to approximately $165 million. In addition, we secured an additional term loan facility of up to $75 million with our existing lenders, which we've drawn on in Q3 and is therefore not included in our Q2 cash position. Together, this represents approximately 240 million of new equity and debt financing, enhancing our financial flexibility. This capital supports continued investment in our pipeline, preparation for additional product launches, global commercialization and our manufacturing and supply requirements. These investments are focused on supporting the execution of our strategic priorities and the next phase of Alvotech's growth. Looking at the balance sheet, I will start with briefly summarizing key items on the asset side. From end, 25 non-current assets were up by 129 million, mainly driven by an increase in intangible assets and higher contract assets due to the timing of revenue recognition. Total current assets decreased by 29 million, reflecting collections of trade receivables, partly offset by increase in inventories and other current assets. Next, a few notes on key movements across equity and liabilities. Total equity improved by 93 million and was strengthened by the June 26 equity financing. Non-current liabilities decreased by 20 million, mainly driven by a 15 million reduction in derivative financial liabilities due to fair value chances and current liabilities increased by 27 million including the recognition of a commercial provision while contract liabilities declined as previously deferred revenue was recognized. Turning to the financial outlook for the year. We target revenues in the range of 650 to 700 million, representing continued double-digit annual growth from last year. At yesterday, beta is targeted to be in the range of 180 to 220 million. As we look ahead to the second half of the year and into 2027, we expect to see the benefit of increased manufacturing output after the completion of facility improvements. and major enhancements that have been implemented since the middle of last year. We therefore expect to be able to deliver strong year-on-year growth in 26 with an expanded product portfolio and development milestones from our expanding pipeline. As we have noted earlier, we expect to deliver healthy deleveraging of our balance sheet in 27 presenting further opportunities to optimize our capital structure. With that, I will hand the call back to Lisa.

Thank you, Linda. In summary, we believe the first half of 2026 demonstrates the progress Alvatech is making across each of the areas that are critical for the next phase of growth. Our commercial portfolio is expanding, with five products now contributing to revenue and a growing presence across markets. We have important regulatory catalysts ahead and are preparing for the next wave of product launches. We continue to strengthen and scale our manufacturing platform while investing selectively in a pipeline we believe can create significant future value. With that, we'll open the call for questions.

Thank you. We will now begin the question and answer session. If you wish to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1, One again. We will take our first question. Your first question comes from the line of Christopher Ude from SEB. Please go ahead. Your line is open.

Hi there. Thanks for taking my questions. Christopher Ude from SEB here. My first question is on the Biofera news. You guys haven't mentioned it. I have no doubt you saw it. What can you say about How you're viewing the impact on your symphony biosimilar and how you expect it to evolve going forward. And are there any tenders perhaps that might have been one that reopen or need to be re-evaluated that could be a positive for you in the short term and obviously then the more medium and long term picture? Thank you is the first one. The second one was, obviously, it's exciting to hear about your U.S. commercialization plans. Which disclosed assets are you not yet partnered for the U.S.? And should we update our models for those yet, or should we wait and see? Thank you very much.

Hi, Christopher. Thanks for the question. So, on Biofera, certainly, we are and our partner in Europe, Advance, is doing everything it can to take advantage of the fact that we are truly first in the market. From a supply perspective, we have been building in anticipation, clearly, for the launch that happened late last year. We are well positioned with supply through the rest of this year and certainly are looking to be so as we look to 27 and even beyond. I think our partner has done well, certainly expanding market share. I think sitting slightly north of 15% at this point and growing. So what I would say is we are fully capable on both our end as well as our partner's end to take advantage and make sure that we access the market in the fullest possible way. I think from a future-looking perspective, Certainly, we don't know sitting here today the long-range opportunity, but we're preparing for it. So I think we're optimistic that this will continue to drive our European growth story in addition to the other molecules we have in the space today. But we're quite excited about what we're seeing with ABT05 and galilumab. On your second question, there are a few assets that remain, especially as we look at our pipeline, which is quite robust, as you know. Several are in various phases of early and mid-stage development that we are still in active licensing discussions around. What I would say, Christopher, is as we look and secure those future arrangements, we will certainly update the market. I think we'll have some news as we go throughout Q3 and Q4 on that front. But the good news for us is, given the breadth of our pipeline, we do expect to continue to see contribution from milestone revenues, both for the remainder of 26 and as we look into 27.

Okay, thanks. That's very helpful. If I could possibly ask a quick follow-up on the BioThera What's your expectation or what could potential knock-on effects be beyond the EU? Thank you, and that's all for me.

Yeah, so I think from a U.S. perspective, certainly, you know, we can't comment on, you know, third parties, but what I would say is this. We certainly have been positioning ourselves to, once we receive the approval, which we're optimistic to see in the fourth quarter, We're actively pursuing clearing any IP litigation as we speak, and we do feel very comfortable that we will be, if not the first, within that first wave in the very near term. So we'll be positioned well, Christopher, as I said, both from an EU and US perspective, from a supply and preparedness point of view, to take advantage as we look to the remainder of this year and certainly into 2027.

Thank you very much.

Thank you. We will take our next question. Your next question comes from Ash Verma from UBS. Please go ahead. Your line is open.

Hey, team. Congratulations to all the progress. I wanted to ask about first just on this DEA that you received from the FDA for these U.S. submissions. I just wanted to get the latest if there have been any additional communications from the FDA recently and is there a formal acceptance of the resubmitted application or any other additional information requests that you received from the FDA that are outstanding at this point. And then secondly, on Symphony, can you talk about your confidence on the launch timeline for 4Q of this year? I see this J&J lawsuit around the Thank you, this is Joe McClellan. I will answer the first aspect regarding the resubmissions and then I'll hand it over to answer the second part.

So regarding the resubmissions, as we communicated in early June, all of our BLAs were submitted in the complete response. We did get an acknowledgement letter for all of the submitted BLAs from the FDA that the application was submitted. It was viewed as a complete response to the action letters we received in the fourth quarter of 25. and we were informed of goal dates in alignment with the six month clock upon resubmission.

And on your second question related to timing of launch, so as we stated in the past, we commercialize through partners and we do not comment ahead of our partners in terms of precise launch timing. But what I will say is we do expect to see a decision in the ongoing litigation in the fourth quarter with respect to ourselves. We have also stated that we feel very strongly in our position that we will be able to be successful in that litigation and certainly that does pave the way to launch. So approval, again as we noted, expected in the fourth quarter. We also expect to see a decision as part of the litigation that we're in in that fourth quarter. And again, we do feel very strongly in our IP position and that we will be successful ultimately in that litigation.

Great. Thank you.

Thank you. We will take our next question. And the question comes from Arvid Nekanda from DNB Carnegie. Please go ahead. Your line is open.

Good afternoon and thanks for taking my questions. So the first one on ABT05, or sorry, ABT16. So with the DLA accepted, how do you think about the US launch window here? Teva appears to view this as a 2028 or beyond opportunity and market expectation seems to be quite limited by similar impact until the early 2030s. So where do you realistically see the launch window today? And then my second one would be on expense versus capitalized development. So first off, do you still stand by the roughly 250 million in total R&D spent for 2026? And second, the consensus assumes a quite steep step up in expense R&D from Q3. Does that make sense to you? Is there any sort of bolus or catch-up effect from the new capitalization policy? that made the first half expense run rates unusually low. It would be great to get your comment on that. Thanks.

So maybe I'll start with ABT16. So again, being careful in terms of precise launch timing. I do think with the submission, we are expecting an approval decision in early 2027. We do feel quite comfortable in our IP position on ABT16. We certainly will be working with our partner to take advantage of every opportunity to bring this into a near-term launch. We think there is opportunity here, just given our positioning and how quickly we were able to file this in advance of the rest of the field. So we will pursue this. And I think we will pursue this to the point where we can get a positive, of course, approval, but also a positive outcome in any patent litigation, which at this point we are not involved in. But to the extent that we do become, we do feel comfortable that we will be successful as well and hope for a near-term contribution from ABT16.

On the R&D part, looking at where we are today with just over 100 million in total R&D spent and roughly 50% of that capitalized, I'm expecting that trend to continue. So looking at the total year around 200 with 50% capitalized. In terms of Q3, Q4 R&D expense, I would say like... assuming pretty even split between the two quarters.

Great, thank you.

Thank you. Once again, if you wish to ask a question, please press star one, one on your telephone. We will take our next question, and the question comes from Glenn Santangelo from Barclays. Please go ahead, your line is open.

Yeah, good morning and thanks for taking my question. Hey, I just wanted to ask a quick question about the guidance and then I have a couple follow-ups. With respect to the guidance, I was hopeful that you could maybe unpack, you know, what the expectation is in terms of, you know, development milestones in the back half of the year, just sort of given all the resubmissions and regulatory actions we're expecting. I'm kind of trying to parse that out because I fully appreciate the constraints that Thank you for your time today. I'm curious if you can sort of give us a timeline on that as well. Thanks.

I mean, just like thinking about the year holistically and the timing of the upcoming approvals, that will lay the foundation for a strong full year long in 27. and given the late timing of the potential approvals this year like we do not expect any great contribution to the 26 numbers from that so I would rather think about the year like we are targeting strong Q4 we are coming out of a period which has been impacted by slowdown which is concluding at the end of Q2 so we basically just started to operate close to full scale now at the end of Q2 so therefore we can say like on the product level we are confident in having a strong Q4 because like what we produce in Q2 will be a commercial product in Q4 so therefore we are like guiding the year with a strong Q4 on that basis and also taking into account like the insights we have on the licensing side and the timing there which can always be lucky and so I would say reaching the guidance like with a strong Q4 but like Q3 will still be impacted from the rest of what's happening now.

Yeah I mean I kind of get all that right but I'm just trying to really understand how much licensing revenue is incorporated in the second half of the year guidance to sort of so I can segregate you know how much strength we're going to see on the product side.

Yeah, I mean, maybe Glenn to just add to that. So I think it's going to be a contribution clearly from both. I mean, we don't break down quarterly license versus product. But what I would say in addition to what Linda already telegraphed, there are certain earned milestones that we're projecting, but there's also milestones likely coming from, as I mentioned, actively engaged in New Deal licensing efforts as we speak. And we do expect contribution from those activities through Q3, but most likely heavily weighted into Q4. So it is a mix. It's a healthy mix, Glenn, between both product revenue contribution and milestone with products increasingly contributing as we see Q4 come out.

Yeah, and like, I mean, the only flavor we have given historically on the milestone side, like in terms of numbers is around, we've been saying it's somewhere around the 250 a year. However, like, it can easily fluctuate up and down based on the exact timing of it. So it can be lucky, but that's the only like, number of flavor we've given to it, the holisticity.

Okay, that's helpful. Then my follow-up was the timing on AVT 80 and AVT 29, the timeline for submissions.

Yep, absolutely. So I'll take ILEA high dose first. So for ILEA high dose in Europe, we have committed and stated that it is a 2026 event. So we will be submitting that in Europe this year. regarding a U.S. submission for ABT29, a proposed file similar to ILEA-HD. That does require a clinical study for submission in the U.S. That study has been initiated. We were the first to start a study on this, and that is anticipated to be a 2028 event. Regarding AVT-80, as we've communicated, we have submitted both AVT-16 and AVT-80 to Europe. We have communicated our 16 submission already to the U.S., and we anticipate communicating very soon that we have submission of AVT-80 in the U.S.

Okay, thank you.

Thank you. We will take our next question. Your question comes from the line of Christopher Uda from SEB. Please go ahead. Your line is open. Christopher Uda, your line is open. Please ask your question.

Sorry, I was on. Yeah, sorry about that. I was on mute. So my first question was, and thank you for taking my follow-ups, was on if there's anything you can give us about the status of the Fujifilm collaboration. And then secondly, what can you share about the provision that you took in the quarter? Was it related to the CRLs? Thank you.

Hi, Christopher.

On Fuji, so we are progressing well. Activities are well underway. I think we have said previously we expect to start to see product coming out of Fuji in the second half of 27, more towards the back half of 27. We are on track for that. I would say the collaboration is going well, and we're continuing to look at other ways We can work with Fuji. So on track, I think, is the message at this point.

And on the provisioning, Linda, here. So, like, I mean, it is about, like, commercial and contractual matters. And, like, of course, given the nature and the size of our business and, like, the multiple partners we are working with, I think it's usual that provisions may be required from time to time, like, when issues arise. So we need to evaluate these topics carefully. However, the underlying details of it remains confidential because it is commercially very sensitive. So unfortunately, I can't really elaborate further on that now in this call.

OK, understood. Thank you very much.

Thank you. This concludes today's question and answer session. I will now hand back for closing remarks.

Yes, thank you. And on behalf of all of us here at Aldo Tech, I want to thank everybody who participated in today's call and wish you a very good rest of the day. Goodbye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.