Welcome to the conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions -and -answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.
Good morning, everyone, and welcome to Gubra's conference call covering the third quarter of 2026. My name is Adam Lange, Head of Investor Relations at Gubra. Joining me today are members of Gubra's leadership team, who will walk you through the key developments during the quarter and discuss our financial performance. We will do a presentation expected to last approximately 20-25 minutes, and we will then afterward open the call for questions. Now, on slide two, I just need to remind everyone that today, during the presentation and the subsequent Q&A session, we may make forward-looking statements that are subject to risks and uncertainties. With that, I will hand over the call to our CEO, Markus Rohrwild, for opening remarks.
Good morning. Welcome from my side. Q3 has been very strong for Gubra. We have significant advancements in our R&D pipeline, and we have also seen strong CRO performance. On the biotech side, our two partnered obesity programs advanced to phase II, a great achievement for Gubra. Also, we are excited to see our GUB-UCN2, urocortin-2 analog, entering phase I clinical development. Overall, the CRO has shown 6% growth year-on-year, and our EBIT margin has significantly improved to 25%, which is great. On top of that, we are actively evaluating multiple opportunities on the venture side to augment our innovation pipeline. You have probably participated in our recent R&D investor event, and I would like to again summarize our ambition for 2030.
As we are scaling our differentiated drug discovery and development platform, by 2030, we would like to see 8-10 clinical assets in our pipeline, as well as also bringing forward one to two drug development candidates from our internal drug discovery unit every year. Moreover, we will be expanding our therapeutic flagship areas from our stronghold in metabolic diseases and obesity towards functional decline, as well as inflammation and immunology. In addition, the company will create value by launching two to three ventures, as well as continuing operating a growing specialist preclinical CRO under high profitability. With this, I hand over to the biotech unit, Louise.
Yeah. Thank you, Markus. Let's take a look at the biotech. Starting with the pipeline, what you see here is an overview of the Gubra R&D pipeline, and this growing pipeline is a direct result of the power and efficiency of a streamlined drug discovery platform. It covers both our internal proprietary, not yet partnered assets, and assets that are being progressed through strong partners. Starting with the internal proprietary assets, our most advanced asset is the long-acting UCN2 analog, currently in phase I for treatment of obesity. At the same time, we continue to advance the next wave of future opportunities for Gubra. Turning to the partner programs, this is assets that are being progressed through strong partners, with Gubra collecting milestones and royalties as they progress.
We now have two assets within obesity in phase II clinical development, the long-acting amylin analog with AbbVie and the triple agonist with Boehringer Ingelheim. Both companies have initiated phase II this quarter. At the same time, we continue to advance the next wave of future opportunities for Gubra with the leading biotech companies. This is assets that are being progressed by Hemab, Amylyx, and Camurus, and they really illustrate the platform's reproducibility and track record of consistently generating differentiated assets across a broad range of therapeutic areas. But now, let's take a look at some of these assets. Starting with the triple agonist, this asset is a long-acting, first-in-class asset targeting the GLP-1, the GIP, and the Y2 receptors to engage in complementary mode of action involved in body weight regulation.
The program was discovered in collaboration with Boehringer Ingelheim, and they're now sole responsible for advancing it through clinical development. After having seen encouraging phase I data showing a favorable safety profile and an encouraging weight loss profile, Boehringer Ingelheim has now initiated the phase II study. The study enrolls approximately 350 participants. There are six active dose groups, and primary endpoint is body weight reduction after 42 weeks of treatment. We really see this as further validation of the asset's potential and of Gubra's discovery capabilities. Next, let me turn to amylin. Amylin offers an attractive treatment alternative compared to current standard of care. The class of amylins has been shown to deliver clinically relevant weight loss with a favorable tolerability profile. That is exactly why we find this biology so compelling in context of ABBV-295.
ABBV-295 is a differentiated long-acting amylin analog discovered at Gubra, out-licensed to AbbVie. 295 has consistently demonstrating competitive clinical data throughout a comprehensive phase I programs. Early signs were seen already in the SAD study and further substantiated in the six-week MAD study, where six weeks treatment with 295 delivered almost 8% reduction in body weight. In the 12-13-week MAD study, 295 delivered almost 10% reduction. Across all studies, 295 were well tolerated. AEs were predominantly mild, GI-related, and transient. There's currently another phase I-B study ongoing with 295, and this study will enroll a higher proportion of female participants and a broader BMI range. This is to get data in a more representative patient population. Top-line data here is expected in the first half of 2027. But now, let's take a look at some of the data.
This graph shows a detailed overview of the data from the 12-13-week MAD phase I study presented recently by AbbVie at EASD. What you see is body weight reduction versus time, and you can see that the 295 delivers a dose-dependent competitive body weight reduction of almost 10%. I also want you to notice the yellow and the green dose cohorts here. Here, 295 are being injected every second week or even monthly. Here, we also see a very competitive weight loss. Remember that this is in a patient population being predominantly male with a lower BMI range. Collectively, what we see is that 295 delivers a competitive body weight reduction. It has a favorable safety and tolerability profile, and the pharmacokinetics support even every second weekly dosing or even monthly dosing.
Based on these encouraging results, AbbVie has now initiated the phase II trial with 295. This is a comprehensive study enrolling approximately 360 participants with six active dose groups, and primary endpoint is body weight reduction after 32 weeks of treatment. This is to support timely dose selection for a potential phase III study, while treatment will continue through week 52. Beyond obesity, we also have three other highly interesting programs with strong partners. The Hemab collaboration centers around the long-acting plasmin inhibitor discovered in collaboration with Hemab. This is for treatment of bleeding disorders, and Hemab has now initiated the phase I study with this asset. In the Amylyx collaboration, we have discovered a long-acting GLP-1 receptor antagonist for treatment of post-bariatric hypoglycemia, and Amylyx is currently running the IND-enabling activities here. Finally, we have the Camurus collaboration.
Here, a PTH analog is being formulated in Camurus' FluidCrystal technology to develop long-acting treatments for patients with hypoparathyroidism. Collectively, these programs demonstrates the versatility of a platform to generate differentiated assets across multiple disease areas. With that, I'm happy to turn over to Thomas, our CMDO, who will provide further details on our UCN2 program.
Thank you, Louise. I'm happy to provide more information about the UCN2 program. Obesity treatment is entering a new era. Incretin therapeutics have demonstrated how much weight loss is really possible with pharmacological therapy. However, this is driven by loss of fat mass, which is desired, but also by loss of lean mass, which is undesired. The new opportunity is to really improve on what patients lose, what they maintain, and how they function. GUB-UCN2 has the opportunity to address exactly that gap through improvement of body composition, reduction of body mass, reduction of fat mass, and maintenance or actually increase of lean mass. Let's have a look at the biology of UCN2.
UCN2 is an endogenous peptide that signals through a receptor called CRHR2, and the downstream biology involves target tissues that are relevant for the therapeutic strategy, in particular, the adipose tissue and the muscle tissue. In the adipose tissue, UCN2 reduces fat mass and results in a reduction in serum triglycerides. In the muscle, UCN2 drives anabolic processes, inhibits muscle catabolism, and improves oxidative metabolism. That together is the biological basis for thinking about GUB-UCN2 in the context of obesity treatment and improvement of body composition. If validated clinically, this biology also opens up to explore other indications related to loss of muscle mass and muscle function, which includes muscle wasting conditions such as sarcopenia, but also functional aging, where we know that loss of muscle mass and function is relevant. The biology also extends beyond adipose tissue and skeletal muscle into the heart and into the kidneys.
In the heart, UCN2 improves cardiac output and cardiac function. In the kidney, UCN2 improves renal function, for example, diuresis and natriuresis. These are biological processes that open up indication expansion opportunities into the cardiorenal space as well. On the right-hand side of the slide, you see key features of GUB-UCN2, which is our drug product candidate. GUB-UCN2 is a 38-amino acid peptide. It is highly selective for CRHR2 receptor and has excellent physical and chemical properties. It is designed and formulated for once-weekly subcutaneous administration. We have explored GUB-UCN2 in a number of pharmacological studies, of which we have really quite a few discussed at our recent investor R&D event last month. But I would like to explain a few key highlights from these experiments.
On this slide, you do see the experimental results from a study in obese rats where we tested GUB-UCN2 as a monotherapy and in combination with tirzepatide. As you can appreciate, monotherapy with GUB-UCN2, which is represented by the green bars, results in significant loss in fat mass, as shown in the middle panel, and a significant increase in lean mass, which is shown on the right-hand side. This effect was overall weight neutral, but it tells you that even if you do not have an effect on body mass, we have a substantial improvement in body composition. Tirzepatide alone results in the desired and expected reduction in body weight. These are the turquoise bars, and it is driven by a loss in fat mass predominantly. We do see, however, no effect or a slight trend towards reduction of lean mass, which is really undesired.
If you now combine both treatments, as shown by the dark blue bars, we do see that we can maintain the body weight loss that has been achieved with tirzepatide alone, but we have a significant improvement in body composition through further reduction of fat mass and an increase in lean mass. We have tested the concept in combination with other incretin-based therapies such as semaglutide and also with amylin analogs, and the picture is exactly the same, which suggests that GUB-UCN2 might be a useful addition to available obesity treatments. We have also asked the question whether the muscle mass is actually an important part of the improvement in lean mass, and to that end, we have demonstrated that the muscle wet weights increase substantially in this particular model, and we have demonstrated that muscle volume increases through measurement using Gubra's three-dimensional light sheet imaging technology.
This really tells us that muscle mass is really a part of the improvement of lean mass that we are observing. Overall, the data that we have generated across preclinical models demonstrate that GUB-UCN2 has the potential to be used as a monotherapy, as a combination partner with other obesity treatments, and potentially as a follow-on treatment once patients have achieved the desired weight loss with available obesity treatments. How do we now test that in the clinic? We have initiated a comprehensive phase I/II-a trial in the clinic with the phase I SAD component currently ongoing. This is a trial that assesses the safety tolerability and PK, but also goes beyond that and will deliver early efficacy signals that are relevant to determine the further development strategy for GUB-UCN2. The trial aims at the enrollment of approximately 188 participants.
These will be healthy participants in the SAD portion of the trial and participants with obesity in the MAD and 16-week multiple dose portion of the trial. These participants will have comorbidities or only obesity. We will test GUB-UCN2 as monotherapy and in combination with incretin-based therapy to test how GUB-UCN2 performs in different therapeutic setting. As I indicated earlier, the treatment regimen will be based on a once-weekly subcutaneous administration. What is very important is that we will be looking at body composition and functional endpoints. Body composition will be evaluated based on MRI, whole body scanning, and functional endpoints will include a Short Physical Performance Battery, but also strength of thigh muscles.
This is important because it will help us to understand what part of the biology really translates from preclinical species into the clinic, and will help us to inform the further expansion beyond obesity into age-related functional decline and potentially also cardiorenal indications. With that, I would like to hand over to Trine, our Head of the CRO.
Thank you, Thomas. The CRO is Gubra's core value enabler, and there are vast synergies between our three business units. The CRO provides deep scientific and translational expertise, reproducible preclinical disease models, and advanced technology platforms, and we deliver reliable, high-quality data and execution. In this way, we enable our customers, internal and external customers, to progress their drug discovery projects with speed and certainty. After a period of volatility and uncertainty in the markets, the preclinical market is evolving in Gubra's direction again. Biotech funding has rebounded strongly in 2026, and more preclinical R&D is being outsourced, and we see that trend towards 2030 and beyond. The scientific complexity in drug discovery projects really increases the value of the differentiated services that we can deliver in the CRO. In Q3, the CRO has delivered a solid external revenue of 6% sequentially and year-on-year.
Also, services delivered to our internal customer, the biotech business, has increased significantly in Q3, and growth in both customer segments has contributed positively to substantial improvement in the EBIT margin that we've seen in Q3. Throughout 2026, we have seen growth in our services delivered to large pharma companies. Obesity is still our largest segment. However, revenue in services related to kidney diseases is up more than 60% for the first nine months of 2026 compared to 2025, and it's now our second-largest segment. We have a healthy order intake in Q3 or Q4, and the commercial outlook for the remainder of the year is increasingly positive, and we are excited about that. I will now hand it over to Kristian, our CFO.
Thank you, Trine. As everyone has seen, it's been a great quarter for Gubra in Q3. This is the second-best quarter in Gubra's history, so we're, of course, very pleased with that. I will provide just a few words on the Q3 results on divisional level, and then I will take you through the outlook. Looking at the biotech business, again, Q3, strongly driven by the milestones from AbbVie entering phase II, and similarly, Boehringer Ingelheim also entering phase II, bringing milestone revenue to Gubra. That, of course, also impact that we have a very solid earnings in the biotech business in Q3. Of course, if we compare the full nine months this year compared to last year, where we had the upfront payment from AbbVie, it is, of course, down.
Again, a very strong biotech year in 2026, and following on from also a very, very strong year in 2025. The CRO business, as Trine said, now improving in Q3, both compared to previous quarter and the same quarter last year. We also have solid sales to the biotech units. All in all, we see a strong performance and earnings going up quite significantly. We are at an EBIT margin in Q3 of 25%, which is a sound and good level for Gubra. I think it's important to understand the CRO business is, it has a lot of fixed costs, so whenever revenue goes up, it filters down to earnings quite immediately. Very good to see the momentum currently, and as Trine said, a sound order book.
Looking at the outlook, just taking the biotech first at the top, we've reduced cost slightly, and that is mainly due to timing. A very minor reduction. The external revenue, we've narrowed the range as we're now approaching the full year, so we guide a 2%-6% external revenue growth and an EBIT margin of 10%-30%. Remember, Q3 had 25%, and we were just having a small profit in the first half of the year. Just looking at the anticipated news flow, I think we've covered most of the second half already, including- Very important messages from our biotech partners initiating phase II and phase I studies. Looking into the first half of next year, we have, of course, UCN2 and also AbbVie, where there's potential for release of phase I-b data.
And similar for Hemab, the initiation of the phase I trial. All in all, repeating myself again, a very strong quarter. With that, we open up for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Romy O'Connor from Kempen. Please go ahead.
Hi, team. Thank you for taking my question. Congrats on. Sorry, I think I am getting some loop feedback, but I will continue. Yeah, congrats on the strong quarter. The first question on the CRO EBIT margin improvement versus Q2. I was wondering if you can help us understand how much of that improvement was driven by the higher external customer activity versus better utilization from internal biotech projects, and how sustainable do you see this going into Q4? Because you also mentioned healthy order intake supporting future growth. With the kidney-related studies being a strong driver of Q3 growth, is that coming from existing customers or is this new area you expect to demand to remain strong? Thank you.
Trine, with regards to this question, maybe you take a start.
Oh, sorry for that. We had that technical issue here, but there were two questions from Romy. Thanks a lot for those questions. The first one related to the EBIT margin, we will go to CFO Kristian, and then afterwards on the question related to kidney studies and whether that mainly comes from new or existing customers, we will have Head of CRO Trine provide some color on that. Go ahead, Kristian.
Yep. The EBIT margin, it is contribution from both growth in external studies and growth in internal studies. Again, as I mentioned, it is to a large extent a fixed cost business. Whenever we see both sound growth in external studies and internal studies, that has an impact on our EBIT margin. How we look in Q4, I think you can do the math yourself. Quick guide for EBIT margin. I think you can do the math yourself without disclosing it.
Yeah, clear.
Thank you for the question on the customer segment within kidney diseases. We have seen a growth over the last couple of years in this segment. It is a segment where we have a broad variety of different services, servicing different customer segments, sub-segments in this segment. We do see the increase in services this year from both the new customers and existing customers ramping up. It is also both biotech companies and large pharma companies that are increasing their activity in the kidney area. However, it is relatively small numbers, but still it is a significant growth in this segment.
Great. Thanks a lot.
Thank you.
We are ready for the next set of questions.
The next question comes from Thomas Bowers from SEB. Please go ahead.
Yes, thank you. Two questions from me. Firstly, just on the spending, would you be able to give a little bit granularity on 2027 compared to your current 2026 guidance? Of course, there is some spillover from the adjustments you just made there this morning, but how should we think about underlying R&D cost trajectory when looking at UCN2 progress and also the proprietary pipeline? That would be very helpful. Then just lastly, just NPY2 question, or maybe just a reminder. BI discontinued in obesity, still being explored in other indications. I am just wondering, do you have any insight to whether Boehringer is actually advancing the asset or does it sort of remain in indication exploration phase or whatever you want to call it?
Is there any contractual obligation for Boehringer to actually return that asset to Gubra if there is not any progression here within a certain time? Could you actually be thinking about using this for internal projects if you get that one back? Thank you.
Thanks a lot for those questions, Thomas. I think the first question again here on potential granularity around underlying R&D costs, given the reduced guidance and operating costs for the biotech business, we will go to Kristian, and then afterwards, I think CSO Louise can provide some color on the NPY2 mono receptor agonist, which Boehringer discontinued for obesity, but is now exploring potential in other indications. Let's go with Kristian first.
Yeah. Thank you, Thomas. It is a very minor reduction to the expected cost in 2026. Sometimes it is just a little bit of timing when we expect those to occur. You asked about the biotech cost guidance for 2027, and I think we will return to that when we have the annual report. I think I will leave it with that.
Yeah. In regards to the Y2 receptor agonist that has been discontinued within obesity, it is true that it is still in the indication exploration phase. Boehringer will provide information about that when they have it, but we do not have any news to disclose now with regards to that.
Anything on the contract that can give you back the asset?
I think from that perspective, that is something that we will communicate about if and when such things happen.
That is a bit speculative, not something we can provide comment on for the time being. Thanks a lot for the questions, Thomas.
Thank you.
All right, are we ready for the next questions?
The next question comes from Theodora Rowe Beadle from Goldman Sachs. Please go ahead.
Hi. Thank you for taking my questions. Firstly, on the CRO business, the updated full-year guidance range implies quite a large range in revenue growth rates for the bottom and top end for the quarter. I know Q4 2025 was the trough for CRO, but would you be able to give us more color on what the key drivers would be for you to reach the top end and the bottom end of the full-year revenue growth range? Secondly, just remind us of any milestone payments that we should expect for Gubra in 2027. Thank you.
Studies we can perform in Q4 also. As you know, even though we have a sound order book, some of the studies that were selling Q4 might be performed in Q1, so some of the revenue can be deferred to start of next year. That is why we have a little bit of flexibility in our range, the 2%-6% external revenue growth. On the biotech milestones for next year, this is not something we disclose. I will leave it with that.
All right. Thank you, Kristian, and thanks for the questions, Theodora. Any other questions? Then we are ready. All right. Then no further questions from the teleconference. We have one question in writing, I can see, so I will just read it up here. You have a new pipeline project, UCN2 sarcopenia, which is currently categorized at the preclinical stage. In principle, do not you already have all the necessary ADME-Tox data and produced enough API to be able to start a phase I trial for that UCN2 project in sarcopenia? Is it simply the approval of a new protocol that is needed to initiate a phase I clinical trial, or what would be the actual trigger point? I think that question I will hand over to Chief Medical and Development Officer Thomas to comment on.
Yeah, happy to cover. Unmute yourself, Adam, please. Thank you. For sarcopenia, we would need additional information in order to set up a meaningful development program, and that indeed includes preclinical assessments on the exposure response relationship, particular with respect to effects on the muscle. This is a data package we are currently generating. Then we have, as I indicated earlier, set up the clinical program in a way to generate data that tells us what part of the biology is really translatable from preclinical species to humans. You might recall we have a very comprehensive assessment of muscle composition and muscle function included in our current clinical trial, and results from that clinical trial will really then drive how the further regulatory and development strategy look like. So, this would be a trigger point.
Great. Thanks a lot, Thomas, for that added clarity. We have no further questions, so thanks a lot for your attendance and for the questions, and look much forward to connecting at upcoming events and conferences in the next few weeks and months. Thanks a lot, and have a good day.