Shares of Alvotech (ALVO), a biosimilars manufacturer based in Iceland, tumbled 5.90% in pre-market trading on Wednesday following news of potential tariffs on goods imported from Iceland to the United States. The company, which produces its biosimilars in Iceland, could face a minimum tariff of 10% on its products entering the U.S. market.

The impact of such a tariff could be significant for Alvotech, as the United States represents a key market for biosimilars. However, the company has stated that a 10% tariff on pharmaceuticals would raise the cost of its biosimilars imported to the U.S. for customers by less than 1% of Alvotech's expected total product revenues in 2025. Despite this relatively small impact on overall revenues, investors appear to be reacting negatively to the news.

This development comes at a time when the biopharmaceutical industry is increasingly focused on cost-effective alternatives to branded biologics. The potential tariff could impact Alvotech's competitive positioning in the U.S. market, where pricing is a critical factor. As the situation unfolds, investors will be closely watching for any updates on trade negotiations between Iceland and the United States, as well as Alvotech's strategies to mitigate the potential impact of these tariffs on its business operations and financial performance.