Certara(US:CERT)2025-11-18 11:32Summary of Certara Conference Call Company Overview - Company: Certara - Industry: Pharmaceutical services supply chain, focusing on biosimulation and regulatory services Key Points Q3 Results and Market Reaction - Certara experienced a slowdown in bookings at the end of Q3, which alarmed the market [4] - The company had lower-than-expected bookings, particularly in the regulatory business, which has been volatile [5] - Despite the slowdown, Certara reported strong results with tier three biotech clients, indicating a successful strategy focusing on venture capital companies [4][6] Regulatory Business Review - The regulatory business has been under strategic review for over a year due to volatility and current disruptions at the FDA [8] - Certara expects the regulatory environment to stabilize by 2026, but the business is not considered strategically important as it once was [9][11] Biosimulation and Market Trends - Certara holds a leadership position in biosimulation, benefiting from FDA initiatives to reduce animal testing [12][15] - The company is seeing increased interest in biosimulation from clients, particularly in monoclonal antibody development [13][14] - Certara's QSP (Quantitative Systems Pharmacology) business is growing, with the launch of Certara IQ aimed at becoming a standard software product in the market [35] Service Bookings and Client Dynamics - Tier three services have been strong, while tier one clients showed a slowdown in service bookings [20] - Certara has focused on financial sponsors and larger VCs to stabilize its client base [21] - The company has a large backlog of work, indicating potential for future growth as the market recovers [22] Pricing Environment - The current pricing environment is weaker, with mid-single-digit pricing increases on software products being tempered [24] - Certara is prioritizing the growth of biosimulation usage over immediate price increases [24] Product Development and Innovation - Certara has expanded its software offerings, including new versions of Simcyp targeted at preclinical and formulation scientists [28][29] - The company is evolving its software portfolio into a cloud-based platform, with plans for further integration and AI enhancements by 2026 [39][41] Economic and Regulatory Pressures - Certara faces hesitancy from clients to spend due to uncertainties in the regulatory environment and macroeconomic factors [44] - Despite these challenges, there is a long-term trend towards increased interest in modeling as a cost-effective solution in pharma [45][46] Conclusion - Certara is navigating a complex environment with both challenges and opportunities, particularly in biosimulation and regulatory services, while maintaining a strong pipeline and backlog of work [22][23]