Company Overview - Simulations Plus is celebrating its 30th anniversary, indicating a long-standing presence in the biosimulation market [2] - The company specializes in biosimulation, which supports drug development through the integration of technology, science, mathematics, and various biological disciplines [3] Product and Services - The platform offers a comprehensive range of solutions that cover the entire drug development process, from early-stage discovery to clinical studies and post-approval applications [4] - Biosimulation is utilized to enhance efficiency and accelerate timelines in drug development, including applications in animal testing and clinical trials [4][5] Industry Context - The acceptance of biosimulation has grown over the years, gaining recognition from both scientific communities and drug sponsors [5]

PresentationI'll turn it over to Shawn to give a brief overview of Simulations Plus and the platform, and then we can go through questions as well as any questions that we have from the audience. So over to you, Shawn.Well, thank you, everybody, for being here today. I'm delighted to introduce Shawn O'Connor, who's the CEO of Simulations Plus. Thank you for joining us, Shawn.Shawn O'ConnorChief Executive Officer Very good. Thank you, Mark. Thanks for having us here for the conference. Simulations Plus will ...

Summary of Simulation Plus Conference Call Company Overview - Simulation Plus is celebrating its 30th anniversary, indicating a long-standing presence in the bio simulation market [2] - The company specializes in software licensing and scientific consulting services to support drug development [4] Industry Insights - Bio simulation combines technology, science, and regulatory support to enhance drug development efficiency [3] - The FDA has shown increasing support for bio simulation, particularly in reducing animal testing requirements [3][22] Core Business and Services - The company provides tools for various stages of drug development, including discovery, preclinical, and clinical phases [5][6] - Key products include: - **Admet Predictor**: Focused on early-stage applications, representing 15% of client support [6][7] - **GastroPlus**: A PBPK modeling tool used extensively in translational medicine and clinical trial design [7][8] - **PKPD Modeling**: Used for profiling drugs and patient stratification, crucial for personalized medicine [8] AI and Drug Development - AI has been integrated into the company's products for decades, enhancing data analysis and candidate identification [9][10] - The use of AI is seen as a revolutionary tool in drug development, improving efficiency and success rates [10][12] - Challenges include ensuring data quality and managing large datasets effectively [11][13] Regulatory Environment - The FDA's roadmap to reduce animal testing presents opportunities for Simulation Plus, as biosimulation can potentially replace some traditional methods [22][23] - The adoption of biosimulation is expected to grow, but the process will take time due to regulatory scrutiny [24][25] Market Challenges - The biopharma and biotech sectors are currently facing a challenging demand environment, with cost constraints and low funding impacting client investments [31][32] - Despite these challenges, there is a strong need for improved ROI in drug development, which bio simulation can address [33][34] Strategic Realignment - The company has undergone a reorganization to create a more functional organization, enhancing collaboration across different scientific domains [35][36] - The integration of products and development of cloud technology aims to accelerate the company's roadmap and improve client offerings [37] Future Opportunities - The company is focused on staying current with advancements in science and regulatory guidance, particularly in oncology and other therapeutic areas [39][41] - There is a long runway for biosimulation value in drug development, with ongoing opportunities for innovation and market solutions [41][42]

Core Insights - Certara reported Q2 FY2025 earnings with GAAP revenue of $104.6 million, slightly exceeding analyst expectations, but non-GAAP EPS missed consensus by $0.03 [1][2] - The company experienced double-digit top-line growth primarily driven by its software segment, while the bottom line faced ongoing pressure [1][4] - GAAP net losses narrowed significantly year over year, indicating improved financial performance despite challenges in profitability [1][2] Financial Performance - Q2 2025 GAAP revenue was $104.6 million, a 12% increase from $93.3 million in Q2 2024 [2] - Non-GAAP EPS was $0.07, unchanged from the previous year, but below the estimate of $0.10 [2] - Adjusted EBITDA rose 21% year over year to $31.9 million, with an adjusted EBITDA margin of approximately 30% [2][8] - GAAP net income showed a loss of $2.0 million, a significant improvement from a loss of $12.6 million in Q2 2024, reflecting an 84.1% year-over-year reduction in losses [2] Business Segments - The software segment generated $46.7 million in revenue, marking a 22.3% increase from $38.2 million in Q2 2024, driven by organic sales and the acquisition of Chemaxon [2][5] - The services segment saw slower growth, with GAAP revenue up only 5%, but bookings increased by 15%, indicating potential future revenue growth [6][7] - The Non-Animal Navigator solution received strong interest, with over 400 webinar attendees, although its financial impact is expected to take time [6] Strategic Focus - Certara is focused on expanding its AI and machine learning capabilities within its software suite and integrating new technologies through acquisitions [4][9] - The company has made 21 acquisitions since 2013, enhancing its technology and global reach, serving over 2,400 biopharmaceutical companies [10] - Certara's tools have contributed to a majority of new drug approvals by the FDA, positioning the company favorably as regulatory standards evolve [11] Future Outlook - For FY2025, Certara targets revenue of $415–$425 million, adjusted EBITDA margins of 30–32%, and adjusted diluted EPS of $0.42–$0.46, indicating expected growth in the high single digits [13] - Management noted steady demand for biosimulation and increasing interest in model-informed solutions, while emphasizing the need for improvement in the services segment [13][14]

With this qualification in place, sponsors can now use the Simcyp Simulator in regulatory submissions across the EU to assess drug-drug interaction (DDI) risk without needing to re-establish the platform's credibility for the specified context of use (COU) scenarios. Simcyp has long been the leading biosimulation software used in submissions to the EU and other regulatory agencies, and this qualification makes the drug submission process easier and faster. "This first of its kind qualification by EMA regula ...