BICO Group AB

STO:BICO

Q3-2025 Earnings Call

[Operator]

Welcome to BICO Q3 2025 Report Presentation. [Operator Instructions]

Now I will hand the conference over to the speakers, CEO, Maria Forss; and CFO, Jacob Thordenberg. Please go ahead.

[Maria Forss, executive]

Hello, and welcome to BICO Group's Quarter 3 2025 Earnings Call. I'm Maria Forss, President and CEO, and I will, together with BICO's CFO, Jacob Thordenberg, present this interim report.

Here's today's agenda. I will open today's session by presenting how BICO serves the world's leading pharma and biotech companies with solutions that transform how labs operate and innovate. Following that, Jacob will provide a summary of the quarter's key developments and present the Group's financial performance. We will proceed and comment on our 2 business areas, Life Science Solutions and Lab Automation. Additionally, we will highlight our R&D pipeline with ongoing product development efforts. And this session will conclude with final remarks before opening up for Q&A.

At BICO, we serve the world's leading pharma and biotech companies. Our portfolio ranges from Biosero's market-leading Green Button Go software, enabling full lab orchestration to off-the-shelf automation products and bioprinting from our Life Science Solutions business. Our solutions enable smarter, faster and more efficient labs and here lies an underlying strong demand.

Pharma and biotech companies face the same fundamental challenge, long and costly development cycles for new therapies. And the development of a new therapy often takes more than 10 years and cost between USD 2 billion and USD 4 billion, where 90% of the pipeline ultimately fails. To overcome this, these companies are investing heavily in automation to increase efficiency, speed and quality, bringing innovations to the market faster and at a lower cost.

The next wave of automation goes beyond instrument orchestration to connect entire workflows and data streams, where AI and machine learning continuously optimize experimentation and decision-making. And BICO is at the core of this development, providing the data backbone that unifies AI-powered services with Lab Automation.

Our products and services enable our customers to connect data across diverse informatics systems and apply AI tools to plan, run and optimize experiments in real time. And already today, we are powering AI drug discovery workflows that follow the design, make, test, analyze paradigm using our Green Button Go platform. Further, we integrate AI-driven image analysis as high throughput analytical tools into cell line development workflows, enhancing speed and precision in bioprocess optimization.

Today, researchers spend too much time on manual tasks and fragmented data, resulting in wasted samples and stalled projects. And combined with macroeconomic pressure, talent shortages and cut of budgets, automation has become not just a competitive advantage, but a necessity for the future of discovery. BICO is at the core of this transformation, connecting workflows and data streams and enabling AI powered experimentation. And this is what our mission and vision is all about.

Our Vision is to enable and automate the life science lab of the future. And our mission is to be the first-choice lab automation partner and provider of selected workflows to pharma and biotech. And this brings us to a video I'm about to share, which shows an example of an integrated lab automation solution we have designed and delivered to one of our customers. And in my view, this truly reflects our mission.

[Presentation]

[Maria Forss, executive]

With this introduction, my aim has been to emphasize BICO's mission, our strategic direction and the value we deliver to our customers. We lead the way in solving the challenges in life science with speed, accuracy and efficiency.

Speed by reducing the time to find optimal candidates for treatment therapies and supporting our customers in driving forward a personalized approach to treatment.

Accuracy by enabling the development of physiological relevant models and enhancing the reproducibility through automated processes that reduce variability in experimental outcomes.

And by efficiency, we develop solutions to maximize productivity of automated lab equipment and scientists. All in all, our customers can run their processes faster, improve their quality of data and ultimately make better decisions.

I will now hand over to Jacob to present the results for the third quarter.

[Jacob Thordenberg, executive]

Thank you, Maria. I will summarize the third quarter of 2025 for the group and then provide more financial details for the quarter.

When looking at the performance for the third quarter, Life Science Solutions delivered 4% organic sales growth, in line with market performance. The growth was mainly driven by a positive uptick in diagnostics as well as increased demand for Lab Automation components.

Scienion continued to perform well, delivering double-digit growth after major commercial and operational improvements in a diagnostic market, which is coming back to more normal investment levels.

Lab Automation delivered 35% organic sales growth, rebounding after an abnormal Q2. Good progress has been made in the execution of the action plan, significantly enhancing processes, leadership and operational capabilities.

In addition, Biosero received orders from a global pharma company worth USD 15.2 million as a part of a global master framework agreement. This showcases the strong underlying demand for Lab Automation and Biosero's market-leading software suite, Green Button Go.

We have also resolved impairments in Discover ECHO and Biosero totaling SEK 1,036 million. These impairments will not affect cash flow but impacted EBIT for the quarter.

With that said, I would like to highlight that we anticipate long-term growth of around 10% CAGR, which is in line with our financial targets for both Discover ECHO and Biosero. I will elaborate more about this shortly.

The closing of the transaction of the divestments of MatTek and Visikol was finalized in early July. These divestments generated SEK 740 million, which significantly strengthened our cash position.

Next slide, please. Q3 was a quarter of solid progress. Net sales reached SEK 387 million despite ongoing macroeconomic challenges and funding headwinds in key markets with an organic sales growth at 12%. We also experienced that academic and biotech funding remains constrained, especially in North America, which has led to cautious customer spending and extended sales cycles.

Adjusted EBITDA amounted to SEK 17 million, corresponding to an adjusted EBITDA margin of 5%, which is an improvement in the adjusted EBITDA margin of 3 percentage points year-over-year. The improved margin is a result of continued cost control activities, mainly due to synergies derived from centralization of functions as well as initiatives for operational efficiencies.

Maria will now comment on the progress of the execution of the comprehensive action plan to scale up Biosero.

[Maria Forss, executive]

Since September, we have a new Managing Director in Biosero with long and extensive experience in the global life science industry, and he has the right toolbox to drive sustainable growth and create long-term value for customers and shareholders.

And we have made solid progress in executing the action plan, significantly strengthening not only leadership, but also processes and operational capabilities.

We have also continued substantial investments in operational resources to better serve our customers and accelerate closing of delayed projects.

Furthermore, we're implementing more standardization to scale the business and introducing new commercial concepts with shorter lead times to balance the project portfolio.

Also worth mentioning again is that Biosero secured several orders from a global pharma company valued at USD 15.2 million in the quarter. And this project will develop integrated lab automation solutions, which will support this big pharma customers' drug development process.

I will now hand over to Jacob again for comments on the divestments and impairments.

[Jacob Thordenberg, executive]

Thank you. Well, in Q3, we completed the divestments of MatTek and Visikol, generating SEK 740 million, as previously mentioned. And this significantly strengthened our cash position. And these divestments follow our updated strategy with a focus on Lab Automation and selected workflows. Sartorius acquired both companies at a 2024 sales multiple of 3.7x and an adjusted EBITDA multiple of 15.3x. The companies have been treated as discontinued operations from Q2 2025.

And if we move on to the next slide. In the quarter, we also resolved SEK 1,036 million in impairments for Discover ECHO and Biosero, which are noncash flow affecting one-off items, but affecting EBIT in Q3. In May 2024, we implemented an updated model for impairment with shortened the forecast period before terminal calculations from 10 to 5 years, following recommendation from the Swedish Financial Reporting supervision. The impairments stem from a short forecast period and lower year-to-date trading in 2025, leading to changed forecast assumptions compared with previous periods.

With that said, we see a strong underlying demand for Biosero's integrated lab automation solutions centered around the company's market-leading software suite, Green Button Go. And in ECHO, we see a market recovery in the U.S. academic segment over time. We anticipate long-term growth of around 10% CAGR in both companies, which is also in line with our financial targets.

I will now move on to the next section, group financial performance. In Q3, sales amounted to SEK 387 million and grew 5% in total and 12% in organic sales growth. The difference of 7 percentage points is mainly explained by a weaker U.S. dollar against the Swedish krona.

Adjusted EBITDA amounted to SEK 17 million, corresponding to a margin of 5%. The improved margin is a result of continued cost control activities, mainly from centralization of functions as well as initiatives for operational efficiencies.

And if we move on to Q3 cash flow. Cash flow from operating activities amounted to negative SEK 32 million, impacted by working capital changes of negative SEK 30 million. Total cash flow during the quarter amounted to SEK 570 million. And as mentioned before, MatTek and Visikol were divested as of July 1, 2025, and generated net proceeds of SEK 740 million. We also made a third bond buyback in our convertible debt in August 2025, which amounted to SEK 98 million. So in connection to this, I will also comment on BICO's outstanding convertible debt and our cash position.

In total, we have made 3 buybacks in our convertible bond between November 2024 and August 2025, totaling a nominal amount of SEK 492 million. The rationale for the bond buybacks has been to optimize BICO's capital structure and further reduce long-term debt. Post buybacks, the convertible debt now amounts to nominal SEK 1,008 million. As per Q3, BICO's cash position was SEK 1,241 million, leaving BICO with a positive net cash position.

As mentioned on the previous slides, the effects of changes in working capital amounted to negative SEK 30 million for the quarter. And out of this, operating receivables increased by SEK 96 million, inventories increased by SEK 1 million and operating liabilities increased by SEK 65 million. In percentage of last 12-month sales, net working capital in the quarter corresponded to 13%, confirming that the operational excellence actions implemented in 2023 and onwards have been successful.

For Q1 up until Q3 in 2025, the further decrease in net working capital to low double digits is primarily an effect of less net working capital in Biosero due to decreases in receivables.

I will now hand over to Maria to present the results in our 2 business areas.

[Maria Forss, executive]

Thank you, Jacob. Let's now turn to our target business -- largest business area, Life Science Solutions, which accounted for 2/3 of our revenue this quarter. Life Science Solutions delivered SEK 263 million in sales with a 4% organic sales growth and an adjusted EBITDA of SEK 19 million, corresponding to 7% adjusted EBITDA margin.

The growth was mainly driven by a positive uptick in diagnostics as well as increased demand for Lab Automation components. Scienion continued to perform well, delivering double-digit growth after major commercial and operations improvements in a diagnostic market, which is coming back to more normal investment levels.

And if we move on to our business area Lab Automation. In quarter 3, Lab Automation delivered 35% organic sales growth year-over-year, rebounding after the abnormal quarter 2. The business area sales for the quarter amounted to SEK 124 million. The adjusted EBITDA was SEK 10 million, corresponding to an adjusted EBITDA margin of 8%, turning the negative trend from the recent quarters.

The profitability is still impacted though by continued substantial investments in operational resources for the benefit of our customers to accelerate closing of projects. And as mentioned earlier in this presentation, good progress has been made during the quarter in the execution of the comprehensive action plan to scale Biosero. We have significantly enhanced processes, leadership and operational capabilities.

I will now introduce a new section where I will share our data on our ongoing product innovation efforts. One focus area for growth is continuous product innovation. BICO has a solid R&D pipeline and road map in place, and this is based on the portfolio strategy, which is part of BICO 2.0.

Our current product portfolio covers the full spectrum of lab automation solutions and selected workflows. And it's important to emphasize that we have lab automation products and solutions in both of our business areas. And this is illustrated on this slide where you can see instruments from various BICO business units positioned along different stages of the Lab Automation continuum. Products in the business area Life Science Solutions are also Green Button Go ready.

In BICO, we invest substantially in product development. We're continuing to bring new products and innovations to the market. Recent product launches include I.DOT LT and TurnStation. The I.DOT LT is a new addition to the I.DOT series and offers a compact solution optimized for automated low-volume liquid dispensing. This product is Green Button Go ready.

TurnStation by QINSTRUMENTS is a Lab Automation device for liquid handlers. It optimizes the workflows for plate handling and it's purpose-built for seamless Lab Automation. This is an example of how we are driving growth through synergies in the BICO Group.

Let's now move on to an example of a successful product launch from an ongoing external collaboration. This is a result of the scientific collaboration between Sartorius and BICO. Sartorius' Octet and Biosero's Green Button Go is an integrated solution, delivering faster results to the market, enabling labs to operate more efficiently and effectively. And these were just a few examples of recent launches and collaborations.

Let's now move on to look at R&D pipeline and road map. We have a comprehensive product development pipeline within our prioritized focus areas, as you can see on this slide. The majority of the R&D investments are made in software development, while there are several upgrades of the instrument portfolio meeting customer needs. Multiple product launches are planned for 2026, and these include both software, instruments and consumable products.

And as mentioned before, we are also introducing new commercial concepts in Lab Automation, with shorter lead times to balance the product portfolio. And these concepts are developed both through internal collaboration between the 2 business areas as well as together with external collaborators.

Before the Q&A, I will give some concluding remarks. One year ago, we launched BICO 2.0, which is our updated strategy to enable and automate the life science lab of the future. Since then, we have streamlined our portfolio, we have strengthened our commercial engine, we have invested in our people and culture and delivered operational excellence. It's been a year of change, and we have worked hard.

The impact that we together have achieved is clear, significantly strengthened cash position, leaner operations and a more customer-centric solutions, and this is just the beginning. We're excited to drive Lab Automation forward and equip pharma companies with tools to shorten drug development time lines. By enabling increased success rate and reducing time to market, we empower scientists to accelerate innovation and deliver breakthroughs that shape healthier societies.

I would also like to take the opportunity to thank our customers for your continued trust in BICO as well as our employees around the world for your work and dedication, which enable our customers to deliver what matters the most, the discoveries that advance human health.

This was our final slide before the Q&A. I will hand over to the earnings call host for further instructions.

[Operator]

[Operator Instructions] The next question comes from Ulrik Trattner from DNB Carnegie.

[Ulrik Trattner, analyst]

A few questions from my end. And if we can start off with Lab Automation, and you talked about healthy demand in Lab Automation. If you can clarify what that entails?

[Maria Forss, executive]

Well, as we can see in the quarter, we are landing substantial orders of more than USD 15.2 million, and we continue to see demand also from other big pharma customers, and that's what is the basis for our claim of healthy demand.

[Ulrik Trattner, analyst]

And just to sort of clarify, are you seeing increased tender activity? Are you seeing a growing order intake? Or is there customer assessment of your software or like just to get some sense on how this could be quantified?

[Maria Forss, executive]

As you know, like we are never guiding or talking about our order stock or order intake due to competitive reasons, but we have several ongoing discussions with customers and help the business.

[Ulrik Trattner, analyst]

And I know that you don't quantify sort of order intake, but in terms of any type of granularity, have this improved over the last 6 months versus -- in terms of customer interest? Or how should we view this?

[Maria Forss, executive]

I think the customer interest has been retained. But as we have talked about in previous calls, and we'll talk about today, too, is that the first half of 2025 has been a challenging first half for us as well as many other peers, and that has also been reflected in not the demand, but the time it takes to close orders. And some of those orders are now being executed.

[Ulrik Trattner, analyst]

Do you expect the sort of time line from sort of interest to close the deal have sort of shortened? Or is it still the same?

[Maria Forss, executive]

When you have master service agreements with large pharma customers or customers overall, of course, those will facilitate the time it takes to get orders in place.

[Ulrik Trattner, analyst]

Okay. And again, on Lab Automation, and you've done some structural changes in the management of these contracts. Does this apply for the newly assigned contract, the one you signed in September? Or is this under the sort of same type of agreement that you had in -- like prior to doing the restructuring?

[Maria Forss, executive]

We have changed the way we are operating overall, both in terms of how we run projects, how we are scoping the projects, the way we are structuring the contracts to make sure that, that is clear moving forward. So I would say it's a new way of working that has been implemented since earlier this year, which is now starting to show effect.

[Ulrik Trattner, analyst]

Great. And on the phasing of the USD 15 million contract, should we sort of assume and apply the same type of phasing that we have seen historically, which has been a lot of revenue and profit being front-end loaded and then that being tapered off gradually throughout '26 when -- since it's set to be delivered throughout '26 as well?

[Jacob Thordenberg, executive]

Yes. Maybe I can answer that question, Ulrik. And the short answer is yes, and that is due to the revenue recognition profile that we have in Biosero, which is based on percentage of completion. And our percentage of completion model is based on anticipated costs. And in these projects, a large chunk of the anticipated costs is indeed related to hardware. And roughly speaking, the other part of the anticipated cost is labor hours.

And given that we typically buy a lot of instruments when we start a project, you usually see a spike in revenues due to the purchase of hardware and that being a quite significant share of the anticipated costs. And then you have less acceleration in revenue recognition related to the labor hours. So yes, it has a similar profile as we have seen from previous large orders.

[Ulrik Trattner, analyst]

And I guess you assume given sort of your outlook that you will be signing new orders to bridge sort of that gap into '26?

[Jacob Thordenberg, executive]

I'm not sure I follow that question, Ulrik.

[Ulrik Trattner, analyst]

Given the tapering off of revenues into '26 in order for you to grow from the level in absolute terms, you would need to add additional contracts?

[Jacob Thordenberg, executive]

Yes, correct. Yes.

[Ulrik Trattner, analyst]

Great. And just on the discontinuation effects, both in the quarter as well as for Q4, if it's possible to quantify to what sort of -- what are the sort of actual numbers here that we should be modeling for Q4?

[Jacob Thordenberg, executive]

The numbers are -- we don't have any effect from MatTek and Visikol in the quarter, given that they were sort of completely out of our books as of July 1.

[Ulrik Trattner, analyst]

Yes. But if it's possible to quantify, I know that you've restated it, but based on sort of general modeling purposes for...

[Jacob Thordenberg, executive]

But there's nothing in our books in Q3. So there's nothing to quantify because the assets are not in our economic ownership anymore in the quarter.

[Ulrik Trattner, analyst]

Sure. But from a comparable perspective in Q3 last year, they were in your books and in reported numbers and [indiscernible] deviation.

[Jacob Thordenberg, executive]

Yes, [indiscernible] in the report. So there's no effect in the report. It has been excluded in the comparison.

[Ulrik Trattner, analyst]

Yes, yes. Sure. Yes, yes. But if we were to quantify it for Q4 then, I guess like you reported some sales in Q4 for some of these subsidiaries that will not be presenting for Q4...

[Jacob Thordenberg, executive]

Okay. So the comparison figure for Q4 last year. I can perhaps provide you that separately. I don't have those numbers in my head right now.

[Ulrik Trattner, analyst]

Okay. Great. And just last 2 questions from my end. I know that sales expenses is down sequentially while your top line is up. Is there something to read into that? Are you doing something different in terms of your selling expenses?

And secondly, where is kind of sort of a steady state like working capital level to top line in percentage terms?

[Jacob Thordenberg, executive]

Yes. Do you want to answer the first question, Maria, in terms of –

[Maria Forss, executive]

Yes. I think overall, we have -- as we have talked about earlier, we have made sure that we can get the commercial synergies as well as operational synergies in the group. And with our sales skills group as well as other commercial skills group, we are then reaping those synergies. Part of the cost management that Jacob talked about earlier in the call is about those synergies, but also centralizing some functions as well as operational efficiencies. So that's where the improvement in the margin comes from. And then this second part of...

[Jacob Thordenberg, executive]

I can answer the second question in terms of working capital in relation to sales. And as we mentioned in the call, we're very happy to see that we have had great progress in our working capital, and now it's down to 13% in relation to LTM sales. We do believe that a stable level should be between 15% and 20% of sales.

[Operator]

The next question comes from Ludvig Lundgren from Nordea.

[Ludvig Lundgren, analyst]

So continuing a bit on Lab Automation. Sales was positively affected by this order you received in September. So I just wonder if you could elaborate a bit more on the effect we saw here in Q3 and whether the positive contribution will increase sequentially as we move into Q4?

[Jacob Thordenberg, executive]

That's a good question, Ludvig. And I expect to see a similar type of impact in Q4. I won't disclose how much the impact will be, but we saw a positive impact from the purchase of hardware in Q3, and we will see a similar impact also in Q4 [indiscernible]

[Ludvig Lundgren, analyst]

Yes. Great. And then also on Lab Automation. So I think like median reported EBITDA margin in the last 3 years is close to the current level actually at 80%. So I just wonder like if you can give some flavor on this current margin level and if it's reasonable to expect a significant increase in margin for Lab Automation as we move into '26 because you highlight some elevated costs here in Q3 as well.

[Jacob Thordenberg, executive]

Yes. I won't go into sort of specifically commenting on what kind of margin we can expect, but we do have higher ambitions for the cost base in Biosero, and we expect to be able to scale that cost base in a more efficient way going into 2026. And by that, of course, also expand our EBITDA margins that we do believe could be higher than the margins that we see today.

[Ludvig Lundgren, analyst]

Okay. And so it's largely a consulting business. So like is it possible to quantify the utilization that you currently have? And like how much more projects could you add on this current cost base without -- yes.

[Jacob Thordenberg, executive]

Yes, we won't go into utilization rate because that would be quite commercially sensitive, but we do believe that we can gain more efficiencies on the cost that we have in Biosero and by that, also be able to take on more projects. But we won't comment specifically on what kind of utilization rate we have as of today. But we do believe that we can scale the cost base in a more efficient way in Biosero.

[Ludvig Lundgren, analyst]

Perfect. Great. And then finally, on the framework agreement, I just wonder if you could share a bit more on the potential for further similar orders from this customer. Like does this relate to only one location and then they could possibly expand it to other locations as well? Or how should we view this in the longer-term?

[Maria Forss, executive]

The framework agreement that was signed early in the quarter is a global framework agreement. And the orders that we won now in quarter 3 are for one project in one site, but the framework agreement applies to all the different sites for this big pharma customer.

[Ludvig Lundgren, analyst]

Okay. So is it fair to assume then if this is a successful project, then they could expand this to other sites as well, I guess?

[Maria Forss, executive]

Yes, that's correct. Having that framework agreement in place facilitates the whole procurement process, which is usually quite long and tedious in big companies. So it's a very good thing to have that in place.

[Ludvig Lundgren, analyst]

Okay. Just a follow-up on that then. So like what would you say is the visibility for an order from this customer? Like will you have some -- how much visibility will you have into an order coming in, so to say?

[Maria Forss, executive]

Well, with these type of large customers, it's really a strategic collaboration. And some of these strategic collaborations, they have usually plans for a couple of years ahead. And then it's a dialogue between us and the customers, so we can ensure that we have the capacity and resources when -- to meet their demands when the different orders will come in. So it's a good collaboration.

[Operator]

The next question comes from Suzanna Queckborner from SHB.

[Suzanna Queckbörner, analyst]

Suzanna Queckborner, Handelsbanken. Just a follow-on on the Biosero. Regarding the write-down, perhaps you could give us a better or like a more detailed explanation of how you're thinking about this given that you see continued high demand, but you have now reduced the forecast for 2025 and to some extent beyond. So maybe explain what the thinking is here and how we should think about it?

[Jacob Thordenberg, executive]

Yes. Thank you, Suzanna. Well, I think the way you should see it is that when we started 2025, we had much higher ambitions for Biosero and expected more out of Biosero. And now when we are about to conclude the year, we can see that we will not meet the expectations that we set for Biosero when we started 2025. And by that, we also see that the implicit growth then between what we expected in 2025 and what we then expect for 2026 was too ambitious given where current trading is at Biosero.

And when looking at year-to-date trading in Biosero and what we expected for 2026 going into 2025, we realized that the growth targets for 2026 were too high and have adjusted those targets, but with that said, still high ambition. But given the outcome in 2025 and the year-to-date trading in 2025, we realized that we had to revisit 2026. And by that, we also had knock-on effects for the following years following 2026.

[Suzanna Queckbörner, analyst]

Right. And then also a question on consumables and services. You've seen a pick up. Should I see this as a one-off? Or are you actually making some kind of transition to selling more consumables, for example? What's happening here?

[Maria Forss, executive]

There are several initiatives to increase recurring revenue. That's one of our 5 focus areas commercially. And as you can also see from other peers in the industry, consumables is going very well. We have also focused on increasing our service sales. And as you noted, Suzanna, there has been an increase in this particular quarter. I think we should look at that trend looking at several quarters and because there can also be an effect of the product mix, but much focus on consumables and service overall.

[Operator]

[Operator Instructions] The next question comes from Filip Einarsson from Redeye.

[Filip Einarsson, analyst]

So I'd be curious to get to understand a little bit more on the sort of operational efficiency and margin improvements, which we saw in Q3. Could you help us with sort of a reasonable expectations on the OpEx base for the coming quarters? That's the first.

[Jacob Thordenberg, executive]

Okay. Well, in terms of the OpEx base, I would say that it's quite stable at the moment. We do talk about in the report that we have elevated costs in Biosero as we're investing into our customers. And if anything, we want to continue to scale on the current OpEx base rather than increasing costs in the coming quarters. And as we have also been quite clear, we do keep a strict cost control, and we want to continue that and get operational leverage on our current cost base.

[Filip Einarsson, analyst]

Okay. And a short follow-up on that would be then on what sort of line item in the income statement would you see you can make the sort of primary savings with the current outlook?

[Jacob Thordenberg, executive]

No, I wouldn't say that we see any primarily savings. The opposite, I do believe that we should be able to grow while keeping all lines in OpEx flat.

[Filip Einarsson, analyst]

Okay. Okay. So I've got one more, which is sort of a broader type of question. But I mean, we saw that Sartorius lowered the equity exposure in the second half of 2025. And I just thought maybe you could provide some additional color on this. It might be hard for you, but anyway. And maybe if you could also provide some commentary on the current status of the collaboration with Sartorius after the divestments.

[Jacob Thordenberg, executive]

Yes, I can answer the first question, and then Maria can answer the second question. And the first question is quite simple. We cannot comment on sort of the activities of Sartorius. That's not our job to do that. It's the job of Sartorius.

[Maria Forss, executive]

And when it comes to our collaborations, we have a handful of different scientific collaborations ongoing that will eventually coming to the market and these are all going great, and are evaluated on a continuous basis to make sure that assumptions and business cases are holding. And so all fine when it comes to the collaborations. And you saw an example of a result of a collaboration with Sartorius in our presentation with Octet and powered by Green Button Go, which was launched earlier this year, has been a good commercial success so far.

[Filip Einarsson, analyst]

Right, right. So what -- that was out was more like there are no -- has there been any sort of changes in the sort of collaboration dynamics following the recent half year of happenings?

[Maria Forss, executive]

No.

[Filip Einarsson, analyst]

I would take that as a no then.

[Maria Forss, executive]

No, no. Things are going according to plan.

[Operator]

The next question comes from Ludvig Lundgren from Nordea.

[Ludvig Lundgren, analyst]

So just a follow-up on the cost base that you mentioned there. So R&D on a gross level has really decreased a lot in the last 12 months at, I think, around SEK 50 million now in Q3. Like is it fair to extrapolate this level of R&D ahead? Or will this increase in Q4 as you typically have somewhat of a sales increase there as well? Or for us to model this, how would you do it?

[Maria Forss, executive]

I think it's important to understand here that we do substantial investments in R&D. And what you find in the report is capitalized R&D, what is put on the balance sheet. And we have taken on a much, much more conservative way of capitalizing R&D. So then it's the different projects will have to pass toll gate 3 in our gate stage project model before we capitalize any R&D to make sure that we have more security and success of the project. So the capitalized R&D and the level of that is not an indication of the amount of R&D that we're doing, but rather what we put on the balance sheet or not.

[Ludvig Lundgren, analyst]

Okay. I was actually referring to the like gross total level, including both the amount in the P&L and in the balance or in the cash flow. And that one as well has decreased a lot. So just this SEK 50 million, is that a sustainable level in the P&L then?

[Jacob Thordenberg, executive]

Well, yes, it is a sustainable level. And I don't see that we will change this. However, as Maria mentioned, we have a much more stringent model now in terms of capitalizing R&D. And that is contingent that the different R&D projects within the group pass certain toll gates. But the level of R&D, I don't expect that to -- in terms of both P&L and what's capitalized I don't expect that to change dramatically in the coming quarters, no.

[Operator]

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Maria Forss, executive]

Thank you for all the questions received. And thank you for your continued interest and support in BICO Group. Together with Jacob, I wish you all a great Tuesday. Thank you, and goodbye.