Gubra A/S (PI3.F) Earnings Call Transcript & Summary

Thank you for standing by. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Gubra Quarter 3 2025 Earnings Release. [Operator Instructions] I will now turn the call over to Markus Rohrwild, CEO. Please go ahead.

Good morning, everybody. Also welcome from my side. My name is Markus Rohrwild, I'm the CEO of Gubra. I'm joined here by Louise, our CFO; and our CFO, Kristian. So we will start with our presentation. I will give a general overview, followed by Louise and then the financial results by Kristian before I wrap up. As you know, at the core of our strategy, we have a dual business model. We have our discovery and partnerships, our key value driver and our sales services, which are strong enabler for our internal pipeline as well as our partnering. Our CO business has had the market growth over the long run. We had 30% growth year-on-year, and we delivered great data and service to 16 out of top 20 customers who [indiscernible] area. Our primary focus in [indiscernible] demonstrated environment our business model. Now let's look at the first 9 months, and I think this tough fix for itself office so the or also on the revenue side of [indiscernible] margin side, [indiscernible] fund of sales extraordinary sale, which has a significant utility. In terms of highlights of 2025, of course, our [indiscernible] has demonstrated a fantastic [indiscernible] in the results, and we look forward for instance, asset to begin in the first half of 2026. This program is developed [indiscernible] high-quality vehicle and we will hear more about this from [ BBC ]. I mentioned the [indiscernible] us, and we have also had an extra [indiscernible] dividend of [ DKK 1 billion ] retail. [indiscernible] has shown great results in [indiscernible] 5 now. And stage 1 will stay very good. We also have a good [indiscernible], which is -- so we strongly believe in the [ EBITDA ]. Our CO business has seen a slight decline driven by macroeconomic uncertainties because led to some delays in decision making on our customers [indiscernible] like at the end of the [indiscernible]. And of course, also now from our [indiscernible] company in September this year, and we like to see in the company full potential. I'm handing over to Louise.

Yes. So thank you. So let's take a look at internal discovery pipeline. At Gubra, [indiscernible] with a partner. For our work is [indiscernible] in-house developed drug discovery platform streamline. Using this platform, we could develop a set target into a [indiscernible] as successive development candidates. The platform takes advances of AI [indiscernible] combined with the good relet screening as notable peptide lasers, thousands of data. He use multiparameter optimization, which this time and enables the identification of the monies part. So what you see here is an overview of the Gubra [indiscernible] pipeline. This growing pipeline is at the best [indiscernible] of the power and efficiency of a streamline discovery platform and an extensive [indiscernible]. We represent the internal equipment [indiscernible] partner. Unless the launch is using to equipment to high [indiscernible]. We are advancing the diversified portfolio, up early stepped concern a strong growth for future opportunities. [indiscernible] reflecting successful collaborations with leading in discrete players. Key highlights is the top line of our Phase I and footprint is the biggest out licensing fee [indiscernible] for so far. This underscores both design to explain and [indiscernible] pipeline. [indiscernible]. We have been dedicated to understanding conceding the [indiscernible] misconception of the company. So [indiscernible] expertise in this field for early discovery to several to clinical cases. And today, [indiscernible] 2 of the most advanced [indiscernible] to current standard of care. But let's go line into the data. Let's take a moment and look on the quarter [indiscernible] and what's the next generation [indiscernible] will likely focus on. So it's no secret that [indiscernible] continues to be a growing [indiscernible] opportunity. And [indiscernible] is has substantial below, we need more stores in the [indiscernible] if we want to take our patients [indiscernible]. In addition, this will acknowledge the [indiscernible] accounts its 20% to 40% of the [indiscernible]. There will be a plan shift in the next generation of seed with a focus on quality, [indiscernible]. In other words, we still aim to maximize that mess while serving our [indiscernible]. But this is the next generation of obesity assets to a different to improved solubility profile and [indiscernible] related to mobility. Gubra's pipeline. [indiscernible] is persistent to make this [indiscernible] we have announced active family analog ABBV-295, now outlicensed to [indiscernible]. [indiscernible] is the development for wealth management indication -- how could be persistent book has an alternative or add to interties business. [indiscernible] the results from. So a [indiscernible], it's well [ celebrated ] [indiscernible] of almost 8% in the 2-milligram compared with a 2% we gain in the placebo. After just 6 weeks of treatment. So these signs supports analyst successes to deliver 2 meaningful weight loss to have improved probability profile. So next in line is the internal obesity program focused on high quality [indiscernible]. This program goes in a new mechanism. [indiscernible] in designed to deliver a set and more sustainable [ Fotios ] program. We have designed a selected new [ CMT ] analog with a target profile of [indiscernible]. You as content the emerging model for this patient, [indiscernible] be competition, increasing much on less, reducing flatness but also operating key obesity related to mobilities such as cardiovascular and kidney diseases. Today, pursuing on the [indiscernible]. Starting with muscle from this study in very good and that prudent extended period of time. We will see that [indiscernible] has a neutral effect on body weight. When it [indiscernible] mass and decreasing [ blackness ]. We can also appreciate the other [indiscernible] such as [indiscernible] and sadness. So when combined with semaglutide treatment. You can see that CMT really prevents the lean mass breakeven increases. [indiscernible] its, resin into macro type pre-feeded beat and CMT firmer completely restore the new mass and content that massive reduction. [indiscernible] business. So we're looking at data biomarker at the end of the study, we saw no retilevels were in line with the reduction in [indiscernible]. We also observed a decrease in plasma for [indiscernible]. This is a [indiscernible] reflecting less fat circulating in the blood stream with no changes in cholesterol. So collectively, this shows the epitope to deliver all beneficial metrified profile. Looking [indiscernible] we advanced 3D imaging platform, best and live resin microscopy. This technology provides using wanted to attain volume of individual muscles in the [indiscernible]. You've seen this approach. We exit the [indiscernible] increases total loss volume in the highly octane [indiscernible]. Both of monotherapy were important also in combination with [indiscernible]. This indicates that we then tie analyzed muscle tissue. [indiscernible] CMC has concisely is shown to improve project [indiscernible]. Here, we expect these filings using a nonactive [indiscernible] to analog in a rat model of clinic heart failure. In this model, [indiscernible] has increased by permanent placation has the left interior [indiscernible]. This creates impact in the left [indiscernible]. So operating and please control assembly. 1 month after in my induction, once the state impairment is fully established and tie bidding in black. We achieved lower [indiscernible] standard of care combination as soon [indiscernible]. Animals succeeded for [indiscernible], which shows the marked reduction in private [indiscernible] to the animals versus [indiscernible]. In this setting, we [indiscernible] a significantly improved product demonstrating its ability to also improve by a function. [indiscernible] preclinical finance because new CMC has a differentiated by high-quality [indiscernible] with improvements in key obesity [indiscernible]. So we're now [indiscernible] and we expect to start the clinical study in the first half of next year. So now, Kristian, over to you for an update on the financial results.

Thank you, Louise. And as we said in the beginning, the first 9 months has been nothing but fantastic for Gubra. And we had a revenue in the discovering partnership business of above DKK 2 billion, of course, affected by the AbbVie deal and the upfront payment there. We're also increasing our cost as fully as expected as we drive a number of projects for in parallel, of course, the amylin and [indiscernible] in particular, over and above an extremely strong results for Gubra the first 9 months of this year. That was the results for the D&P unit. Looking at our CRO business, we have a very strong position in metabolic and fibrotic diseases. And in '25 in particular, we have been building out the women's health area, which is a growing area of importance for Gubra that we will speak more about in the future. We, of course, have our established area, obesity, kidney, mesh and so on. But definitely, women's health is an area that we spend more and more money to build up. And as I said, we will speak more about this in the future. As we also spoke about, we have wide variety of customers from the smaller buying customers to the very large big pharma customers. And we cater to 15 out of the top 20 big pharma customers. I will comment shortly what we're seeing in the first 9 months in the market dynamics, and I'll take that on the next. So again, coming back to comments earlier. We had an extremely high growth rate for the last couple of years. And in '23 and '24, we grew this -- the [indiscernible] service business by 30% organic growth in both years higher than our overall ambition to grow 10% annually. This year, we've seen a slight decline with down 5% in the first 9 months compared to the same period last year, primarily as we face some macroeconomic headwinds affecting the conditions for our small biotech companies, where they are taking longer time to place new studies. When we look out, we see some signs of improvement, and the funding conditions seems to have improved a bit [indiscernible] company. So we sense a bit of optimism when we're looking at 3 quarters ahead. Looking at the costs. As I said, we're building up the women's health area, and this is something that we can establish a good decision within. When revenue goes down a bit, it, of course, affects our margins and be hovering around the 20% EBIT margin for the first 9 months. Talking about the outlook for the full year '25. We did a minor revision. And we said that previously, there will be slightly below and we lever in '24 for the CRO segment, and I would say we've [indiscernible] 10% below for the full year margins unchanged and also the function expectations to the cost in our discovery and partnership segment. So overall, again, reiterating a fantastic 9 months for Gubra and record results by all measures. I will hand over to Markus now for concluding remarks.

Very good. So what should you watch for? I think Gubra is preparing for the next wave of growth to the expansion of our pipeline and increased [indiscernible] efforts. So certainly, [indiscernible] moving into the clinic is for us, I think, the driver, and we are confident that we are on the runner [indiscernible] difference in, say, the gross market. Also, in terms of strategic areas and [indiscernible] where we already have a very, very good stronghold. So we're looking into this right now and there will be more [indiscernible]. To deal is [indiscernible] a good deal for us that, of course, we want to expand our partnership building on the apartment listing and we will still focus on being peptide innovation house and on the edge on designing needs that we [indiscernible]. Now over on the innovation side, of course, also for our CRO, it's extremely important that the brand and the cutting edge of innovation technology. And since it will be very important in support of our [indiscernible] as well as our [indiscernible]. This also our strategic growth levers and [indiscernible] here, and we can now go to Q&A segment.

So operator, we are ready to take questions, please.

[Operator Instructions] The first question comes from Thomas Bowers from SEB. The next question comes from [indiscernible] from Goldman Sachs.

So firstly, please, could you provide your perspective on the [indiscernible] data from Lilly yesterday? What are the implications do you think for GUBamy? And do you think it can show similar efficacy? And then secondly, what are your expectations for the non weight-lowering benefits for GUBamy and the amylin class? In particular, do you think there's potential for cardiovascular benefit, for example?

Thank you very much for those excellent questions. I'll this question to Louise.

Definitely. So thank you this question. So just on a general notice we usually refrain from commenting directly on clinical data from other companies, but from the -- for the overall amylin plus the data looks promising. We see a huge potential in the class of amylin to deliver clinically relevant weight loss, well in line with the recent published data. So for the second question regarding did you talk about the cardiovascular benefits or what was it related to?

So just what your expectations are in terms of any non-weight lowering benefits, so cardiovascular would be kind of the first example of that. But in terms of any other impacts you expect from the Amylin class?

6 Yes. So one, expectation is that, of course, we will need to see the true value in the clinical studies, the [indiscernible] clinical studies, but on a general notice losing weight usually translate into an overall improved beneficial metabolic profile also on the cardiovascular side.