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. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star followed by the number one on your telephone keypad. To withdraw your question, you may press star followed by the number one again. I will now turn the call over to Marcus Warfield, CEO. Please go ahead.
Good morning, everybody. Also welcome from my side. My name is Marcus Warfield. I'm the CEO of Gubra. I'm joined here by Louise, our CSO, and our CFO, Kristian. We will start with our presentation. I will give a general overview followed by Louise, and then the financial results by Christian before I wrap up. As you know, at the core of our strategy, we have a dual business model. We have our Discovery & Partnerships segment, our key value driver, and our CRO services, which are a strong enabler for our internal pipeline as well as our partnering. Our CRO business has had remarkable growth over the long run. We had 30% growth year on year, and we deliver great data and service to 16 out of top 20 customers in the pharma and biotech area.
Our primary focus has been obesity, and I think our recent year with Action Energy has demonstrated and validated our business model. Now, let's look at the first nine months, and I think this chart speaks for itself. Obviously, it's going to be a record year for Gubra, both on the revenue side as well as the margin side, driven by the upfront of the extraordinary business upbeat, which has brought us significant liquidity. In terms of highlights for 2025, of course, our UCM2 program has demonstrated fantastic pre-clinical results, and we look forward to bringing this asset to the clinic in the first half of 2026. This program is developed for equal high-quality weight loss, and you will hear more about it from Louise. I mentioned the equity deal. Obviously, this is a milestone deal for us, and we have also had an extraordinary dividend of GBP 1 billion.
Emily has shown great results, and it's called ABBV-295 now, and phase I was very, very good. We also have demonstrated great half-life for Gubra and significant weight reduction, which is why we strongly believe in the Emily plan. Our CRO business has seen a slight decline, driven by macroeconomic uncertainties, which has led to some delays in decision-making among our customers, but we believe there is light at the end of the tunnel. Of course, also news from my side, I joined the company in September this year, and I'm excited to lead the team and the company to its full potential. I'm handing over to Louise now.
Yes, so thank you. Let's take a look at an internal discovery pipeline. At Gubra, with peptide experts, we discover novel peptide-based therapeutics either alone or with a partner, or our work is done using an in-house developed drug discovery platform, Greenline. Using this platform, we can quickly develop a peptide hit into a novel IP-protected development candidate. The platform takes advantage of AI and machine learning combined with the high-throughput wet lab screening of multiple peptide libraries, thousands of peptides. We use multi-parameter optimization, which saves time and enables the identification of better molecules faster. What you see here is an overview of the Gubra R&D pipeline. This growing pipeline is a direct result of the power and efficiency of a streamlined drug discovery platform and our extensive peptide expertise. Green represents our internal programs for biocellular assets, not yet partnered.
Our most advanced internal asset is a UCM2 program for high-quality weight loss headed towards the clinic. In parallel, we are advancing a diversified portfolio of early-stage programs, ensuring a strong flow of future opportunities. Pink highlights the partner programs, reflecting successful collaborations with leading industry players. Key highlights are the partnering of our phase I Amylyx program with AbbVie, the biggest out-licensing deal for Gubra so far. This underscores both the scientific strength and commercial potential of the pipeline. At Gubra, we have been dedicated to understanding and treating obesity since the inception of the company. Over the years, we've built deep scientific expertise in this field from early discovery to clinical translation. Today, we'll take a look at two of our most advanced obesity programs, both designed with a differentiated profile compared to current standard of care.
Before going into the data, let's take a moment and look at the broader obesity landscape and what the next generation of obesity treatment will likely focus on. It's no secret that obesity continues to be a growing global health challenge with a well-recognized need for novel treatment opportunities. While today's therapies can produce substantial weight loss, we need more tools in the toolbox if we want to treat all patients efficiently. In addition, it's well acknowledged that lean body mass accounts for 20-40% of the weight loss. There will be a paradigm shift in the next generation of obesity treatment with a focus on the quality of the weight loss and not just the quantity. In other words, we should aim to maximize fat mass loss while preserving or even increasing lean muscle mass.
Additionally, the next generation of obesity agents will likely differentiate from improved tolerability profile and by addressing key obesity-related comorbidities. Gubra's pipeline is strategically positioned to meet these emerging trends. First of all, we have a long-acting amylin analog, ABBV-295, now out-licensed to AbbVie. ABBV-295 is in development for weight management indication and could be persistent both as an alternative or an add-on to GLP-1-based treatment. It features a balanced receptor profile on the amylin and calcitonin receptors, just like native amylin. It has an exceptionally long half-life of 11 days and has been designed to be stable at neutral pH, allowing co-formulation with other anti-obesity agents. In the ongoing phase one multiple ascending dose study, interim results from part A showed that ABBV-295 was well tolerated. Adverse events were predominantly GI-related and mild.
It demonstrated a dose-dependent weight loss of almost 8% in the 2 mg cohort compared with a 2% weight gain in the placebo group after just six weeks of treatment. These findings support Amylyx's potential to deliver clinically meaningful weight loss with an improved tolerability profile. Next in line is the internal obesity program focused on high-quality weight loss. This program builds on a new mechanism, a long-acting UCM2 designed to deliver a healthier and more sustainable weight loss outcome. We have designed a selective UCM2 analog with a target profile of once-weekly dosing in humans. UCM2 has the potential to treat the multi-morbid obese patient by improving body composition, increasing muscle mass, reducing fat mass, but also addressing key obesity-related comorbidities such as cardiovascular and kidney diseases. Today, we will zoom in on the beneficial effect of UCM2 on muscle and cardiac tissue.
Starting with muscle, from this study in very old diet-induced obese rats treated for an extended period of time, you can see that UCM2 alone, as shown in green, has a neutral effect on body weight, but it improves body composition by increasing lean mass and decreasing fat mass. You can also appreciate that other weight-lowering agents such as semaglutide, shown in purple, will decrease both lean and fat mass. When combined with semaglutide treatment, as shown in blue, you can see that UCM2 fully prevents the lean mass loss. It even increases lean mass and further reduces fat mass. Additionally, in semaglutide pretreated rats, adding UCM2 from retreat, as shown in pink, completely restored the lean mass and potentiated fat mass reduction, highlighting UCM2's potential as both a protective and a restorative agent in combination treatment.
When looking at plasma biomarkers at the end of the study, we saw lower leptin levels, well in line with a reduction in fat mass. We also observed a decrease in plasma fatty acid rates. This is a favorable metabolic outcome reflecting less fat circulating in the bloodstream with no changes in cholesterol. Collectively, this shows the potential of UCM2 to deliver an overall beneficial metabolic profile. Looking more specifically at muscle tissue, we used our advanced 3D imaging platform based on light-speed fluorescent microscopy. This technology provides high-resolution quantitative data on volume of the individual muscles in the hind leg, and it is powered by AI and automatic section. Using this approach, we observed that UCM2 increases total muscle volume in the hind leg of eight diet-induced obese rats, both as monotherapy, but importantly, also in combination with GLP-1. This indicates a direct beneficial effect on muscle tissue.
In the scientific literature, UCM2 has consistently been shown to improve cardiac function. Here we extend these findings using a long-acting UCM2 analog in a rat model of chronic heart failure. In this model, chronic myocardial infarction is induced by permanent ligation of the left anterior descending artery. This creates an infarct in the left ventricular wall. Kian operated animals for the soft control as shown in green. One month after MRI induction, once systolic impairment is well established, animals are treated with reading in black, UCM2 low high dose in green, or triple standard of care combination as shown in purple. Animals are treated for eight weeks. Cardiac function is then assessed using echocardiography, which shows a marked reduction in cardiac output in reading-treated animals versus Kian. In this setting, the UCM2 analog significantly improves cardiac output, demonstrating its ability to also improve cardiac function.
These compelling preclinical findings support UCM2 as a differentiated asset combining high-quality weight loss with improvements in key obesity-related comorbidities. We're now preparing UCM2 for the clinic, and we expect to start the clinical study in the first half of next year. Christian, over to you and an update on the financial results.
Thank you, Louise. As we said in the beginning, you know, the first nine months has been nothing but fantastic for Gubra. We had a revenue in the Discovery & Partnerships segment of above DKK 2 billion, of course, affected by the API deal and the upfront payment there. We're also increasing our cost as fully as expected as we drive a number of projects forward in parallel, of course, the amylin and the UCM2 in particular. Over and above, an extremely strong result for Gubra in the first nine months of this year. That was the results for the DNP unit. Looking at our CRO business, you know, we have a very strong position in metabolic and fibrotic diseases.
In 2025 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. Women's health is an area that we, you know, spend more and more money to build up. As I said, we will speak more about this in the future. As we also spoke about, you know, we have a wide variety of customers from the smaller biotech customers to the very large big pharma customers. We cater to 16 out of the top 20 big pharma customers. I will come into shortly what we're seeing in the first nine months in the market dynamics, and I will take that on the next slide.
Again, coming back to comments earlier, you know, we had an extremely high growth rate for the last couple of years. In 2023 and 2024, we grew the CRO 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 nine months compared to the same period last year, primarily as we faced some macroeconomic headwinds affecting the conditions for our smaller biotech companies, where they are taking longer time to place new studies. When we look out, we see some signs of improvements, and the funding conditions seem to have improved a bit for our biotech companies. We sense a bit of optimism when we're looking at a few quarters ahead.
Looking at the cost, you know, as I said, we're building up the women's health area, and this is something that we, you know, feel that we can establish a good position within. When revenue goes down a bit, it, of course, affects our margins, and we're hovering around the 20% EBIT margin for the first nine months. Talking about the outlook for the full year 2025, we did a minor revision, and we said that previously that we would be slightly below the levels in 2024 for the CRO segment. I would say we're 5%-10% below for the full year. Margins unchanged and also the unchanged expectations to the cost in our Discovery & Partnerships segment. Overall, again, reiterating a fantastic nine months for Gubra and record results by all measures. I will hand over to Marcus now for concluding remarks.
Very good. What should you watch for? I believe Gubra is preparing for the next wave of growth, the expansion of our pipeline and increased internal R&D efforts. Certainly, UCM2 moving into the clinic is for us a big value driver, and we are confident that we are a front runner in this biology and is going to make a difference in the growth market. Also, in terms of therapeutic areas and building a pipeline, we will expand beyond obesity and metabolic diseases, where we already have a very, very good stronghold. We are looking into this right now, and there will be more about this in the next annual report. The deal with AbbVie was a very good deal for us, and of course, we want to expand our partnerships building on the partnering blueprint.
We will still focus on being a peptide innovation house and owning the edge on designing new therapeutic peptides in different high-value therapeutic areas. Moreover, on the innovation side, of course, also for our CRO, it is extremely important that we stand on the cutting edge of innovation technology, and this will be very important in the support of our biotech unit as well as our partnering efforts as well. Those are our strategic growth leaders. I will stop here, and we can now go to the Q&A session. Opera, we are ready to take questions, please.
At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. The first question comes from Thomas Bowers from SEB. Your line is open. Hi, Thomas. You may now ask your question. The next question comes from Theodora Blou from Goldman Sachs. Your line is open.
Hi, thank you very much for taking my questions. Firstly, please could you provide your perspectives on the orforglipron data from Lilly yesterday? What are the implications, do you think, for GUBamy, and do you think it can show similar efficacy? Secondly, what are your expectations for the non-weight lowering benefits for GUBamy and the amylin class? In particular, do you think there is potential for cardiovascular benefits, for example? Thank you.
Thank you very much for those excellent questions. I will hand this question to Louise.
Yeah, definitely. Thank you for this question. Just on a general notice, we usually refrain from commenting directly on clinical data from other companies, but for the overall amylin class, 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. For the second question regarding, did you talk about the cardiovascular benefits or what was it related to?
Just what your expectations are in terms of any non-weight lowering benefits. Cardiovascular would be kind of the first example of that, but in terms of any other impacts you expect from the amylin class?
Yes. Overall expectation is that, of course, we will need to see the true value in the clinical studies, the larger clinical studies, but on a general notice, losing weight usually translates into an overall improved beneficial metabolic profile, also on the cardiovascular side.
Good. We take the next question now.
The next question comes from Romy O'Connor from Van Lanschot Kempen. Your line is open.
Hi, good morning, everyone. Thanks for taking my questions. I have two, if I may. The first, I was wondering how you expect the areas of mesh and kidney to develop. Is obesity still the main contributor, or is your focus shifting mainly towards women's health? The second, with UCM2 entering the clinic, are you able to provide some color on anything related to trial design, patient characteristics, and will you also be exploring cardiac benefits as we've seen those benefits in preclinical settings? Thank you.
Yeah, so definitely. Regarding biggest contributors to the CRO revenue, obesity continues to be a key driver for revenue for Gubra, but of course, we also see results from mesh and kidney, but we are constantly expanding on our service options. As Christian also alluded to, we are establishing women's health as a new important area for us to make sure that we have a competitive pipeline of services in the CRO business. Regarding, and I lost you a little on the line there on the second question, but I believe you were talking to the trial design for the UCM2 program. From that perspective, we have not disclosed much yet on the clinical platform, but of course, we want to explore as many options as possible with such an asset, but usually the phase one clinical studies are designed to explore safety and pharmacokinetics.
Yeah, I think we can talk more about this in one of the next calls.
Great, thank you.
Next question, please.
Judy has a question. Kindly press star followed by the number one. The next question comes from Thomas Bowers from SEB. Your line is open.
Thank you. Can you hear me now? That was a problem before.
Yes, Thomas, you were.
Perfect. Great. Thank you. Yeah, I was cut off. Actually, I'm sorry if I'm repeating one question because I sort of missed a few minutes, but I just wanted to ask, first of all, on the CRO business. In regards to US customers, with the current order book, would you consider that to be within the normal range to secure that 10% year-over-year growth, or is there still some catching up to do here in the US? In regards to 2026, I know, of course, you're not guiding yet, but should we expect some sort of a catch-up effect from those CRO clients in the US coming back now? Is the order book going to be a little bit bigger for 2026, or are you still going to stick to your 10% limit in order to prioritize DNP?
I think there was a question also on allora lentide, but I'll just ask in regards to the whole concept here on selectivity to the amylin receptor. Is there anything that makes you think differently now in regards to targeting or being more sort of non-selective, so both targeting calcitonin and amylin, or is this still something that is up for grab, so to say? Any comments here would be appreciated. Thank you.
Thank you very much. The first question goes to Christian, and Louise will comment on the second one.
Yeah. When we talk about the funding climate for biotech customers, I think we have a sense that that is improving a bit and that impacts the order intake for our CRO business. We have an overall ambition to grow our CRO business by around 10% every year, and we overshooted this several times during the last couple of years. In certain years, there are some headwinds as we had this year, but again, coming up from a very high level in 2024. I think we see a slight improvement to how smaller customers see their ability to finance new preclinical studies. We will see when we come back with the annual report how we guide for next year. It is just to provide you a little bit of insight into the biotech customers, which is one segment in our CRO business.
We see a slight improvement there, and we hope that will continue going into 2026.
Yeah. Thank you for the second question. It is an ongoing discussion in the field of amylin biology. To remind you, ABBV-295 has a balanced profile on the amylin and calcitonin receptors, just like native amylin. We saw a very nice result from the MAD study with an almost 10% weight loss delivered by 295. We see huge potential in this asset. No, we have not changed our perspective on this.
Okay. Great. Thank you very much.
Next question, please.
Since there is no one left in the Q&A queue, I will now turn the call over to Gubra Management for written questions.
Okay. I can see there are no written questions either. Marcus, round off.
Thank you very much for your time today. I really appreciate your interest and questions about Gubra, and I look forward to our next call next time. Thank you.
That concludes our Q&A session. Ladies and gentlemen, this concludes today's call. Thank you all for joining.