Alvotech (ALVO) is set to benefit from opportunities in the growing biosimilars market, Deutsche Bank analysts said in a note Tuesday.

Alvotech's stock performance year-to-date, down about 40%, has been driven by a combination of sector overhangs, lack of biosimilar launches to fuel growth, and a failure to set up a private label agreement for its ustekinumab biosimilar, the report said.

The Deutsche Bank analysts said there is a significant market opportunity in the biosimilars space, with 118 biologics expected to lose patent protection, representing a value of $232 billion.

Alvotech will benefit from the launch of denosumab, aflibercept, and golimumab biosimilars in 2026, analysts said.

The company is now free cash flow positive, and its business health should continue to improve as further biosimilars are launched and capital expenditure begins to decline, Deutsche Bank said.

Deutsche Bank raised Alvotech to buy from hold with a price target of $14.

Price: 8.81, Change: +0.80, Percent Change: +9.93