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Annual Report 2023 – Revenue in the CRO business growing by 29% to record high level

In 2023, organic revenue growth in the CRO business was 29% compared to latest guidance of 25-28%, while adjusted EBIT-margin amounted to 27.4% (guidance 26-28%). Revenue in the Discovery & Partnerships business (D&P) amounted to DKK 36.5 million compared to DKK 68.8 million in 2022. In the outlook for 2024, Gubra expects strong organic growth of 10-15% within the CRO business with an adjusted EBIT-margin of 25-28% and to continue partnership dialogues in the D&P business with the expectation to sign 1-2 new partnerships.

Henrik Blou, CEO of Gubra, says:
“2023 has been an outstanding year for Gubra and we upgraded our financial outlook twice during the year. Our CRO business grew strongly to a record-high revenue with growth founded across many disease areas. I am specifically satisfied to see the relatively new disease areas – kidney and IPF/lung – being received very positively by our customers. We also saw strong tailwind for Gubra’s traditional core areas, obesity and fatty liver (NASH/MASH).
In our Discovery & Partnerships business, we signed two new partnerships and brought our Amylin anti-obesity asset to clinical Phase 1. We also upgraded our AI-based drug discovery engine, the streaMLine platform, to handle more complex peptide structures, which opens a broader palette of therapeutic targets and new treatment options, and potentially enable the development of orally available peptides.
Looking ahead, we expect to continue high growth in the CRO business in 2024 and guide for 10-15% organic revenue growth compared to the record-high level in 2023. For D&P, our focus for 2024 is on continuing to strengthen our R&D pipeline with innovative novel drug candidates and advance our partnership discussions. Another key focus is of course the ongoing Phase 1 trial for GUBamy where we expect to complete enrollment by mid-2024.”

Key financial highlights for 2023

Key ratio CRO segment D&P segment Group incl. Gubra Green
DKK million 2023 2022 2023 2022 2023 2022
Revenue 169 131 36 69 205 199
Organic revenue growth 29% (16%) (47%) (31%) 3% (22%)
EBIT 39 26 (86) (24) (48) (1)
Adjusted EBIT* 46 36 (80) (17) (34) 19
Adjusted EBIT-margin* 27% 28% (215%) (25%) (17%) 9%
Total costs adjusted (cost of sales and OPEX)* (122) (95) (117) (86) (239) (181)
Amylin costs (24) (11) (24) (11)
Total costs adjusted less costs for Amylin* (122) (95) (93) (75) (216) (170)

* Adjusted for special items, which comprise IPO costs, cost recognition of share based incentive programs from 2022 and earlier (non-cash impact) and costs related to Gubra Green.

CRO segment – strong performance in 2023
In the CRO segment, revenue growth was seen across many disease categories and most notably within Obesity, Liver, Kidney and IPF/Lung studies. This resulted in a 29% organic revenue increase for the CRO business year-over-year (Q4-2023: 31% growth y/y).

The market interest in the Obesity area has been very significant in 2023, which has led to an increased demand for our CRO services in this field. Obesity is a core area in Gubra and has been so since the inception of the company in 2008. This expertise enabled us to capitalize on the high activity in this field in 2023.
The growth within Liver studies in 2023 followed the positive trend seen since Q4-2022 where positive late-stage clinical data rejuvenated the market interest in this field. This has translated into increased demand for Gubra’s pre-clinical liver models.

The Kidney disease category also experienced substantial growth in 2023 compared to 2022. In recent years, Gubra has developed a comprehensive and well-established catalogue of kidney models. In 2023, we witnessed solid demand from both major pharmaceutical companies and small biotech firms.

Adjusted EBIT for the CRO business increased by 28% year-over-year to DKK 46.1 million, driven by revenue growth (Q4-2023: 40% growth y/y). In terms of adjusted EBIT-margin, it stood at 27.4% compared to latest guidance of 26-28% (2022: 27.5%).
Discovery & Partnership segment – two new partnerships in 2023
Revenue from D&P is volatile by nature as it to a large extent is driven by milestone payments in a particular year. In 2023, it amounted to DKK 36.5 million down from DKK 68.8 million in 2022.

In the second half of 2023, two new partnerships were signed compared to guidance of 1-2 new partnerships. The revenue effect in 2023 from these two partnerships were rather limited as they were signed in the second half of the year and that upfront payments are recognised as revenue throughout the collaboration periods that go beyond 2023.

Total costs, cost of sales and OPEX, excluding special items, amounted to DKK 116.7 million in 2023. This was slightly above the expected range of DKK 105-110 million. The higher costs were related to timing effects driven by the fast progress for the development of the Amylin asset where first human was dosed in November 2023. Excluding Amylin costs, the total costs were DKK 93.1 million, which was in line with the guided range of DKK 85-95 million.

Outlook for 2024
Gubra’s expansion of its offerings will continue in 2024 and we expect organic revenue growth in the CRO business of 10-15% following the record high revenue level in 2023. In terms of CRO earnings, we expect an adjusted EBIT-margin between 25-28%. Our mid-term target remains 35-40%, but Gubra is still investing in new disease areas and new models wherefore EBIT in 2024 remains below that figure.

For D&P, we will add new drug candidates to our pipeline, advance the existing pipeline and expect to sign 1-2 new partnerships. More specifically for our Amylin obesity drug candidate, we expect to finalize enrolment of subjects in the Phase 1 trial by mid-2024. Total costs, cost of sales and OPEX, are expected to amount to DKK 145-155 million. Excluding the costs for Amylin, costs in the D&P business are expected to be DKK 100-110 million.

Key ratio Outlook 2024 Mid-term guidance Results 2023
CRO Segment
Organic revenue growth yearly 10-15% 10% annually 29%
EBIT-margin (adj. for special items/non-recurring) 25-28% 35-40% 27%
Discovery & Partnership Segment
Number of new partnerships per year 1-2 1-2 2
Total costs* (adj. for special items/non-recurring) DKK 145-155 million n/a DKK 117 million
Total costs* (adj. for special items/non-recurring) DKK 100-110 million n/a DKK 93 million

* Total costs are cost of sales and operating costs

Comments to 2024 outlook
In the adjusted EBIT-margin outlook for the CRO business, we have excluded expected buildup costs of the Minipig business that was acquired in 2023 (revenue effects from Minipig will also be deducted) as well as expected buildup cost of new technology platforms.

For the buildup of the Minipig business and the technology platforms, we expect to expand Gubra’s workforce by 5-10% gradually in 2024.

The adjustments are made to present the underlying business excluding effects from buildup costs.
Conference call
A presentation for analysts and investors will be held today 28 February at 10:00am CET. The event will be hosted by the company’s CEO Henrik Blou, CSO Niels Vrang and CFO Kristian Borbos. The presentation will be held in English.

To participate in the telephone conference, please use the dial-in details shown below:
DK: +45 32 74 07 10
UK: +44 20 34 81 42 47
When dialing-in, please state the name of the call “Gubra earnings release Q4-2023” or the conference ID: 9493928.

The presentation can also be followed live via the link:

It will also be possible to take part of the audiocast afterwards at the same abovementioned link.


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