Welcome to this investor presentation. We are today happy to present our full year 2023 figures for you. So I'm helped out by Kristian, our CFO, and Niels, our CSO. So Gubra has a hybrid business model. In the one business arm, we do contract research services. As a specialty CRO, we are particularly strong within metabolic diseases, and we deliver preclinical research services to a range of pharma and biotech companies within that niche. We are servicing 15 out of top 20 pharma companies in the world, either now or have done so in the past, and we have a strong and growing client base. The other arm of the business, that's the discovery and partnerships. This is where it's our internal ideas and programs that we mature to the right level, and then we partner, typically with biotech or pharma companies.
Today, we are approximately 220 colleagues here at our site in Hørsholm, north of Copenhagen. However, we have also recently opened a sales office in Boston, as we have more than half of our revenue in the service business from U.S. clients. And diving in to the full year figures, we are proud to announce that we've actually fulfilled the targets we had for the year, and actually even more so. So when we did the IPO in March last year, we guided with 10% organic revenue growth in the service business, and what we realized was an organic revenue growth of 29%. So we've upgraded our guidance twice, and we are proud that we've reached this very high level of organic growth. Also, the adjusted EBIT margins for the service business came in a little higher than guided.
So we guided original, or originally with 25%, and we can now see that that came in around 27%. For the DNP, so the pipeline part of the business, we guided 1-2 new partnerships, and we came in at the high end of that interval with 2 new partnerships signed last year. For the most advanced pipeline program that is not yet partnered, the Amylin program, we initiated a first-in-human clinical phase I trial, and we dosed the first human subject late November last year. If we are zooming in on the Q4 , in that quarter alone, we saw organic revenue growth in the service business of 31% compared to the same period the year before.
In the discovery and partnerships, as mentioned, we made some new partnerships, and the last one of these, the one with Boehringer Ingelheim, the fourth collaboration with Boehringer Ingelheim, was signed in Q4. And also, as mentioned, the first dosing of a human with our GUBamy amylin agonist happened in November. The Boston office we opened in October, and that really enables us to be close to the service customers that we have in the United States. So on the overall, what are we doing at Gubra? Where is our special focus? So we started out delivering preclinical services within obesity and diabetes, and that grew into MASH, so the fatty liver disease that are associated with obesity. And really, that became a strong driver of growth for several years, and we've invested or reinvested the profits from that into developing our model catalog.
So today, we see also nice customer uptake within the kidney space, within IPF, so lungs, and within other disease areas where we are active, such as the brain, the CVD space, heart, and also intestines. So Gubra is an end-to-end service provider, and that means that we're not only conducting the laboratory models here at Gubra, we also do all the associated analysis needed in order to be able to deliver a full preclinical study report to our clients. And really, by having all steps in-house enables us to control the quality and timelines, and that is of high value to our customers. And with that, I will hand over the word to Kristian, our CFO.
Thank you, Henrik. I'm turning to slide 7. As Henrik mentioned in the beginning, we've had an excellent year, and the growth has been seen across many disease categories. The strongest areas have been the same as we talked about on the last couple of calls, that being the fatty liver, the obesity, kidney, and the IPF lung fields that has driven the growth for our CRO business in 2023. Within fatty liver, we saw solid demand for our preclinical studies. We saw that already in Q4 in 2022, and that has continued throughout 2023. As you probably remember, in the fall of 2022, we saw positive industry data from the late-stage clinical trials.
That has sparked the interest to develop new treatments to cure the MASH or the NASH disease, and thereby the demand for the industry to test their compounds in our highly ranked preclinical liver models. On obesity, I don't think it surprises anyone that there's been a great momentum within this field and gained a lot of attention in 2023 and onwards, and that we can also see in our order books. Obesity, as you remember, has been a field where Gubra has been since the company was formed in 2008, and we have a very strong position to capitalize on this strong trend. Another field of particular strong growth is in the kidney field, as Henrik also talked about.
It's very encouraging to see that the investments we've made in this area have paid off, and we offer a large and mature kidney model catalog, which is clearly making its way to our customers. And last but not least, a relatively new disease area, the IPF or the lung field, is also experiencing high activity, and we see strong growth within this area. Very encouraging to see the investments we made in this relatively new area, you know, is making its way to customer and orders. With that, I leave the word over to Niels. Niels, please.
Thank you, Kristian. And now it's time for our discovery and partnership business, the DNP business. This is a part of Gubra where we discover, design, and develop peptide-based drug candidates that will hopefully become the medicine of the future. We have developed a platform called streaMLine, which has enabled us to run programs very fast through you can say, the early discovery phases and actually deliver what we call clinical candidates within about a year from we start our programs. This has helped us a lot, and we can now have more programs in our pipeline at the same time. If we look on our pipeline, you can see that we have currently five active partnerships.
The most advanced of these partnership is the Y2 receptor collaboration we have with Boehringer Ingelheim, and they are currently testing this molecule in combination with both semaglutide, but also survodutide, at the Boehringer Ingelheim. We also have another three obesity programs partnered with Boehringer. One of these was actually partnered in 2023, and then we have a collaboration ongoing with Hemab, which is a drug discovery collaboration focusing on bleeding disorders. That partnership was also created in 2023. As you can see from all the green ones, these are Gubra's own programs. You can see we have one program that has actually been advanced into the clinic. That's the amylin program that I'll talk a little bit more about.
Then we have an additional three obesity programs and some other stuff that we're looking quite much forward to driving further. In summary, 2023 has actually been quite a successful year for our DNP business. As I mentioned, we have created this new partnership with Boehringer Ingelheim, our fourth obesity partnership with them. We have established a new partnership with Hemab in bleeding disorders. We actually received a program back from Bayer, a cardiorenal peptide collaboration, that Bayer decided not to continue for strategic reasons, and we are now refocusing that program in healthy weight loss.
As you can also see from the bars to the right, we have had a slight decline in our revenue in this part of the business, but it is a really fluctuating revenue-generating part of the business because you can never really foresee when upfronts and milestones are hitting the Gubra. All in all, everything is in line with expectations for 2023, and as a very last comment on this slide, the most important part I think we achieved in 2023 was actually dosing the first patient with our own amylin analog. And I will come back to that in a little bit.
So the GUBamy, that's Gubra's own developed amylin analog, which is a peptide, a long-acting amylin analog that can be used for treatment of obesity. So, our amylin analog is unique in the sense that it can be formulated at neutral pH and has a very long half-life, and therefore, it actually is very compatible with co-formulation with other GLP-1 or GLP-1 dual agonists. So we have nice data from preclinical studies showing that our amylin analog leads to profound weight loss, either alone or in combination with the other anti-obesity drugs. We have not seen any safety concerns in these preclinical studies.
And then importantly, and I'll come back to that now, we have started a phase I single-ascending dose study in humans, including a total of 48 potential subjects, and we started this study in November 29. So just a little bit of highlights from the preclinical data we have. In this graph, you can see in purple, you can see the GUBamy, and you can see that if we dose this compound to obese rats over 4 weeks, that these animals lose about 10% of body weight.
If we then combine this molecule with either a GLP-1 alone, that's a semaglutide, a GLP-1 GIP co-agonist like tirzepatide or GLP-1 glucagon co-agonist like survodutide, we can actually see an additive effect on weight loss, which is really nice and confirms what is known about the amylin analogs out there. So importantly, we have started our phase I first-in-human trial, single-ascending dose with amylin, the GUBamy molecule. This is a very classical single-ascending dose trial, where primary endpoints is to assess the tolerability and safety of this molecule. We are investigating this in lean to overweight, but otherwise healthy male subjects. It's up to 6 groups of 8 subjects, and we are running the study in U.K. We have already administered the first dose group, and we saw no side effects in this dose group.
We are expecting to complete enrollment in this trial by mid-2024. For the objectives of the study, as I already mentioned, the primary objective is, of course, to assess the safety. Secondary objectives that would be great to have is potential pharmacodynamic effects. That includes assessment of gastric emptying rate, and it also includes effects on a variety of different hormones, insulin, C-peptide, glucagon, and also glucose levels. Now I'll hand over the word to Henrik for some extra remarks.
A short note on our strong green commitment, an important part of the company DNA and a key motivating factor for all of us working here at Gubra. We have this 10% policy, where 10% of our pre-tax profits are invested in green activities via our fully owned subsidiary, Gubra Green. Currently, we are still looking into solar power panel site, which will enable us to generate the electricity that we are consuming here on site ourselves.
Thank you, Henrik, and turn to slide 15 and financial guidance. Of the record high level for our CRO business in 2023, we continue to see strong positive momentum and guide for 10%-15% organic growth in 2024. In terms of CRO earnings, we expect an adjusted EBIT margin of 25%-28% in 2024. Our midterm target remains 35%-40%. In 2024, we are investing in new disease areas and setting up new models, and therefore, our EBIT in 2024 remains somewhat below the midterm guidance. For the discovery and partnership business, the guidance, as we had in 2023, is also maintained in 2024 with 1-2 new partnerships.
On cost guidance, the main driver in 2024 is the amylin development program, which explains why we expect a bit higher cost compared to 2023. That concludes our presentation, and now we open up for questions. Operator, please.
Thank you. At this time, I would like to remind our teleconference participants, in order to ask a question, please press the star followed by the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Thank you. Our first question comes from the line of Joseph H from Rx Securities. Please go ahead.
Good morning, and congratulations on a good set of results. First question I just wanted to ask was about the guidance, 10%-15% on revenue growth when you did 29% last year. Just wanted to kind of work out where the kind of differences are. Is it a factor of capacity or perhaps the demand that you're seeing?
Thank you. Sorry, thank you for that question. So, we have gradually built up capacity. We've also recently opened a new facility here, so we do have the capacity to meet the growth that we are anticipating. So really, our guidance is based on a very strong 2023, and we are guiding now with even growing from that high level, with this 10%-15%. So, it's based on our knowledge right now of the market and the circumstances, and we continue to have this growth as part of our guidance.
... Okay, that's great. Thanks. And then, perhaps on amylin, if the study enrollment is completed on the timelines that you expect, when do you hope for, to see the data? And then perhaps if you could just give us a refresher on the competitive pipeline environment for, amylin. Thank you.
So, the last part, I just want to make sure that I heard that. This is Niels, so, you wanted me to also reflect on the competitive landscape in the amylin. Was that it?
Yeah. So, you know, any pipeline assets also seeking to kind of be an add-on with the same or similar mechanism of action to the GLP-1, so obesity at the moment.
Yeah. So, for the first part, so, we still expect enrollment of the critical groups by mid summer, and we'll have the data coming out during the H2 of this year. So we feel very confident on that part. Of course, we're still awaiting, it would be great to see some kind of efficacy data reading out from that study, but we don't know yet because we're not that fine, but we haven't seen any safety effects or signals so far, which is very comforting. On the landscape, I think, of course, in Denmark, there's quite a few amylin analogues you can say, so there is both Novo and Zealand, they're working on amylin, as well as Gubra.
On the broader horizon, there are not that many amylins out there, maybe that's due to a particular peptide expertise in the Copenhagen region that, that, because it's a difficult molecule to work with.
Okay. And then, you know, picking that up, is there anything that gives you particular confidence that yours is a capable competitor with the other Danish amylin analogs? Or is it a case of you see this space is so big that there's room for all?
Yeah, we're not claiming that this is particularly better than any of the other amylins. We have an advantage in our own view relative to the cagrilintide, in the sense that our molecule can be formulated at neutral pH, which is also the pH range where all the GLPs are formulated. So that's a clear, you can say, a formulation and product advantage. On the other hand, the receptor profile across the amylins that we are developing and Novo and others are developing are relatively similar. But the...
As you mentioned, the landscape is huge, and there is room for a lot of different players, even though you're not, so we're not claiming that this is particularly better than the others, but we hope, of course, that it will pan out with some nice data in the clinical trials that we're running.
Okay, that's great. Very insightful. Thanks very much.
Thanks.
Thank you. As a reminder, if you'd like to ask a question, please press the star followed by the one on your telephone keypad. Our next question comes from line of Martin Parkhøi from SEB. Please go ahead with your question. Mr. Martin Parkhøi from SEB, your line is open.
Sorry, yeah, I'll start over. I'll have quick three questions to start with, and I will just continue on the amylin, because, Niels, you are actually, you know, you are very much focusing on the, on the combination potential of the product, but now you mentioned some of the other manufacturers earlier, and the smallest one of them are maybe more focusing on the possibility as a standalone, because there are, you know, a significant portion of patients quitting GLP-1 based treatments due to, due to side effects, of course, related to GI.
So, don't you think you are focusing a little bit too much on the combination, but also on it as a mono therapy, also, when we are looking at the partnership potential, maybe it should not only be for people who would already have GLP-based products in the pipeline, but maybe also can just use it as a monotherapy? That was the first question. Yeah, I'll take the two others afterwards.
Yeah. So, thanks a lot, Martin. Yes, of course, you're right in the sense that it may be used as a monotherapy. I think, as you know, we are not developing this all the way to the market. And we are always on the lookout for potential partners whenever we can strike a deal that's right. We're not excluding anyone from this game. We are openly discussing our molecule, and of course, we need to see some data from the clinical trials before it really can show the potential of this molecule. Whether it's gonna make it as a standalone or not, I think time will show. It's definitely a possibility.
It does have very nice effects, at least in the animal models and also in humans, of course, as a standalone molecule, but we're not trying to oversell or undersell this product. It can be used for co-formulation. We think that's an advantage if there are players that would like to bring it into such a combo, but it does certainly also hold potential for a standalone. So we are not excluding anything, but this was the initial track we took, but we are developing it right now, as you can see, as a standalone ourselves.
And just a follow-up, because you have decided to bring this into Phase I, but are you getting interest from, you know, I guess that the, with all the, I don't know, I should call it, hype in the obesity segment, are you getting, you know, interest from companies already right now who would like to maybe look at it earlier than you would like to sell it?
So this is Henrik answering. Of course, there's right now a lot of general interest in the industry on obesity assets. And, as always, we have a series of discussions ongoing at all times with regards to our pipeline and the assets in it. So, you know, but we have our hands on the wheel, and we are deciding when it's a good time to partner it. So, you know, we do as we always do, we keep the relevant players updated, and then we take the discussions from there. We're not precluding anything, but we are, you know, the ones who are in the driver's seat.
Then, also continue on the partnership business. In connection with the IPO last year, you gave some estimates on the aggregated milestone potential for current partnerships of DKK 420 million in the time period 2023 to 2026. Now, of course, we saw a slight the numbers for you delivered for 2023. But we have also seen some changes in the partnerships, both new coming in and others going out. So could you maybe give some kind of updated flavor of the aggregated milestone potential for 2024 to 2026 now?
So, it's true. As part of the IPO process in the prospectus, we gave some figures on the overall potential. We have not updated those figures. It's not public. So, but you know, yes, the partnership situation is always dynamic, and we've seen some partnerships go. We have added a couple of new ones, so of course, the figures will have changed, but we have not given out any new details on this.
No. But with the movements we've seen, two new partnerships coming in and two leaving, should we see this as net positive or net negative for the previous guidance you gave?
Yeah, that, that I can, of course, not comment on. So, so, it's, again, it's very dynamic, the partnering situation. And, and I can say on the overall, in general, we, we're very confident with our pipeline, and also we are, we hold on to our strategy of, of seeking, a, a couple, 1-2 partnerships every year. And, and, and, that's, that's how far we can comment on this.
And, and then just on the minipig, where, on the-- maybe on the CRO business, where you, you make some, you make some adjustments in, in 2024, but as I understand it from, from Kristian, then, then it would be a normal part of your business in, in twenty, five. What kind of... Now, you have given some flavor on the cost side, with the 5%-10% extra additional workforce, but what are the-- what do you see as the, as the sales potential when you have built up the workforce, through two thousand and 2024? How much can it be?
Yeah. So first, to comment on the 5%-10%. So it does cover the minipig build-up and also other tech platform build-up. So it's not only associated with the minipig facility and services we are delivering. With regards to the potential, it remains intact. Our view on this, that the minipigs is a very good larger animal model for a number of diseases. There are, you know, rodents like mice and rats, and also a range of other laboratory testing is sort of, you know, cell-based assays, and so can take you so far. But at some point in time, for many types of disease programs, you need to go into higher species, and there, the minipig is a very good model system. So we do see high potential in this area.
However, it is, we haven't provided specific figures on, on where we see that business going.
But if I can make a comment also on the minipig stuff. I mean, the minipigs will, we see it as a great potential, not only to deliver some key data to our own internal programs, but definitely also to deliver a PK data on a non-GLP basis to a lot of the discovery partners that we work with in the CRO business. We also see some areas for great opportunity, and that includes the obesity area, and it also includes the 3D imaging area in the pig space. And this is, of course, something that we need to develop because the clients don't even know how to assess this, but it's a great large animal model, and it definitely holds promise.
Also, because there are a lot of issues with the non-human primate studies that are being run out there.
I'll just take the final question. A lot of things have happened since the IPO, and one thing that happened is that we no longer call it NASH, now we call it MASH. But that aside, do you think that we have seen this significant increase in liver studies following the medical data in the Q4 of 2022? Do you think the data we saw for survodutide earlier this week could will that, you know, just keep the momentum of the area, or could we even see a further acceleration to the liver studies?
That's super difficult to predict. But of course, we think that anytime that a company reports a great data from either phase two or phase three, or even actually makes it to the market, that of course opens up the possibility for a lot of other players to move in to that game. And I think we are still very much on the forefront with our animal model in the liver disease area, and it is really yeah for us, it's a great model. So I think it's very likely that the interest will even increase after this these positive readouts from from the Boehringer trial.
Okay. Thank you very much.
Thanks, Martin.
Thank you. Our next question comes on the line of Lars of ABG. Please go ahead.
Hey, guys, thank you for taking my questions. Congratulations on a great 2023. I have three questions to begin with, if I may. One, probably to Niels on the R&D pipeline. It's beginning to be quite a long list of potential programs in the IPO process. You were quite firm that anything that was not meeting the standards would be turned out quite rapidly. Is there anything here that suggests that you are changing how you think about the prioritizations of this pipeline internally? And also, are you considering maybe following the Amylin footstep and bringing some of these into the pipeline yourself going forward as well?
Second, on the Amylin asset, yeah, you say that you are on track for summer 2024 finalizing the enrollment, and that you have reached the first cohort. Could you be a little bit more specific on are you on track with the enrollment rate? Where in the second cohort are you? Just so we can get some little bit more feeling for whether you're sort of outperforming or underperforming your enrollment targets. And then thirdly, probably to Kristian, the margin side in the CRO business, obviously exceeded in 2023, but margins target for 2024 is ± unchanged. But you have these midterm targets out there that is coming up, and you need to reach that.
Could you give us a little bit more clarity on, or maybe comfort that you still feel that that target is very achievable? Because there's not a lot of bridge here in the 2024 patterns. Let's start with those three.
All right, so I will start on the pipeline part. So I think you have not seen massive changes to the pipeline, so it depends a little bit on what you call the pipeline. If you call it only the clinical programs, the pipeline, or if you call everything that we are moving forward for the pipeline.
Everything.
Everything. Okay. So the Amylin is clearly there. We also have a GLP-1 that we will most likely not bring into the clinic because, you know, we have this 1-2 programs in the clinic at any given time. Then we have a third obese program, and we have some. We have a lot of stuff going on, on the internal lines, which we call before they even ever hit the pipeline. So of course, we need to work on different things that we can bring forward. So we don't foresee massive changes to the pipeline, but we will of course hope to have partnerships as we guide in 2024.
But we feel that the pipeline is very healthy relative to the size of company we are, and we'll see what happens.
I can take off from there. I think it's also fair to say, as we have communicated previously, that the asset we got back from the Bayer collaboration, which we are, well, we are now generating some data, and, and then we will, you know, seek partnerships for, for this, healthy weight loss asset. So we see quite, quite some promise, from that pipeline asset, as well, with, with, with a great, partnering potential too. So I think that, that was it for, for the next question, where you asked into the, the enrollment of patients. So, we have, as communicated, we expect to have the, critical enrollment, or the enrollment from the critical cohorts in place by mid this year.
Currently, the study is ongoing, and as Niels mentioned, we have, you know, received good news that there's no adverse events seen so far. So that's the status that we are giving from the ongoing Amylin study. And then I think for the third question, that was for you, Kristian, right?
Yes. So, regarding the EBIT margin for the CRO business. So we have this midterm target of 35%-40%, and midterm is, you know, say, 3-5 years... Going back to the IPO. So why are we pursuing, you know, adding people and not only prioritizing earnings? That is because we see great opportunities in taking market share and, you know, growing our position. And I think the growth we saw last year of almost 30%, and we guided with 10%-15% this year, I mean, that's I think that's a good testimony that we prioritize, you know, gaining market share and getting on more customers rather than just, you know, sweating the company and going for pure margins.
I think that's the strategy, and I think it's working quite well.
Okay. If I may have two follow-ups on that. On the enrollment rate in the Amylin, Niels is now indicating data in H2 of 2024. I believe I have seen somewhere that you earlier were targeting maybe some data in the late summer 2024. Can you-
We will have interim-
Give more flavor for it?
We will have some. Yeah, but we will have some interim data that we, of course, can look at. We will not have completed the study by summer, that we have never guided. So, and I think that's all, that would also be the fastest I've ever seen a SAD study being conducted from November to summer. So I think what we have told you before is that we will have some interim data from some of the first groups by summer, and that's also what we expect. But we will not have the report concluded until H2 of 2024. And the thing is, of course, that we need some data to come out in order to strengthen the ongoing, you could say, partnership discussions.
We are on track also for the MAD study and everything is actually as it looks.
Yeah, I think that's a really important point here, that, you know, the SAD study, really the main purpose is to be a lead-in to an MAD study. And, also the planning and the conduction of, you know, all the preclinical studies going into that is ongoing exactly as planned, and we are currently investing in that. So, you know, that is really the main purpose of an SAD study, is to be enabling the MAD study.
Okay, brilliant. Second, just on the minipig, and I know it's a small one. You're guiding on organic growth. Can you just highlight how much you believe that the minipig business will add in terms of revenues for 2024?
Yep. So, in the guidance of 10%-15%, we have excluded, you know, minipig in total, so to speak. So we don't include any revenue in the guidance there 'cause we see this as a build-up. So we take out, you know, both any revenue, you know, effects and cost effects in our guidance for revenue and EBIT margin. So, but we, you know, we hope to be able to, you know, do some studies this year also. But it takes a little bit of time to build up this business, and we expect to be fully ready, you know, later this year or at least in 2025.
Mm-hmm. Brilliant. Thanks, guys.
Thank you. There are no further questions at this time. Kristian Borbos, Chief Financial Officer, I turn the call back over to you.
Okay, I think that concludes the presentation, and we look forward to meet you again, when we present our Q1 results. Thank you very much for listening in.
Thank you. This concludes today's conference call. We thank you for participating, and you may now disconnect.