Simulations Plus, Inc. · NASDAQ:SLP
Simulations Plus — Q2 FY2024 Earnings Presentation
37 slides from Simulations Plus's earnings presentation, May 14, 2024
Slide 1: Investor Presentation Q2 FY24 Update
Investor Presentation NASDAQ : SLP Q2 FY24 Update
Slide 2: Safe Harbor Statement
Safe Harbor Statement With the exception of historical information, the matters discussed in this presentation are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, b
Slide 3: Mission: Improve Health Through Innovative Solutions
Mission: Improve Health Through Innovative solutions To create value for customers by accelerating development timelines and reducing the cost of drug development R&D through innovative science-based software and consulting solutions that optimize treatment options and improve patient lives. 3
Slide 4: SLP At A Glance
SLP At A Glance Leading Provider of Software and Consulting Services in the Biosimulation Market AI-powered technology solutions optimize the outcomes of drug discovery, development, research, and regulatory submissions processes. Our software-based technology both models and simulates how drugs and
Slide 5: Investment Highlights
Investment Highlights + + + Industry Leader Biosimulation Compelling in Large and Growing Technology Leader Customer Value Market Leveraging AI Proposition + + + Seasoned Strong Competitive Attractive Management Team Position and Barriers Financial Profile and Scientific to Entry Leadership 5
Slide 6: Biosimulation Overview
Biosimulation Overview Biosimulation is software-based technology that models and simulates how drugs and diseases behave in the human body Biosimulation combines core principles in biology, chemistry and pharmacology with proprietary mathematical algorithms to predict how biology and drugs inter
Slide 7: Drug Development Challenges | Biosimulation Solution
Drug Development Challenges | Biosimulation Solution Our core mission – accelerating the development and delivery of better, safer, and more effective drugs CHALLENGES SIMULATIONS PLUS SOLUTIONS The median cost of developing a new Simulations Plus offers AI-powered technology – drug averages $1.5 t
Slide 8: Leader in Large and Growing Market
Leader in Large and Growing Market Spending for biosimulation products continues to increase given need to bring drugs to market faster + Biosimulation market valued at $2.8B in 2022 and $200B GLOBAL PHARMA is expected to expand at a 16.9% CAGR from 2022 - 20301 AND BIOTECH SPEND (3% CAGR)1 + Stra
Slide 9: Compelling Customer Value Proposition
Compelling Customer Value Proposition • GastroPlus® • Early drug discovery to preclinical • ADMET Predictor® • Clinical data analysis • MonolixSuite (includes Monolix, Wide range of software Solutions offerings span • Submission to regulatory agencies Pkanalix, Simulix) solutions and consulting
Slide 10: End-to-End Solutions Across the Development Life Cycle
End-to-End Solutions Across the Development Life Cycle Decrease development uncertainty, cost and time CHEMINFORMATICS PBPK / PBBM/ QST/ QSP PHARMACOMETRICS REGULATORY DRUG A P P R OVA L CONFIDENCE L EVEL OF D RUG A PPROVAL “…combining models and data results in higher confidence in clinical perform
Slide 11: Strong Competitive Position
Strong Competitive Position LEADING POSITION IN LARGE, GROWING, FRAGMENTED AND + UNDERPENETRATED MARKET + LARGE, GROWING AND DIVERSE CUSTOMER BASE + MOST COMPREHENSIVE AND WIDELY RECOGNIZED TOOLS IN THE INDUSTRY + 300+ CUSTOMERS ACCUMULATED PUBLIC AND PRIVATE DATA THAT INFORMS OUR ALGORITHMS + AND
Slide 12: Financial Profile
Financial Profile Delivering Double-Digit Revenue Growth / Industry Leading Margins + Double digit revenue growth Strong recurring revenue FY18 FY19 FY20 FY21 FY22 FY23 6 Yr CAGR + supported by a 90%+ Software REVENUE Fee Renewal Rate $29.7 $34.0 $41.6 $46.4 $53.9 $59.6 14.9% $ in millions High g
Slide 13: M&A | Integration & Immunetrics Case Study
M&A | Integration & Immunetrics Case Study Integration and consolidation efficiencies ▪ Quantitative Systems Pharmacology (QSP) is the discipline of building mathematical models to mechanistically stimulate the dynamics of diseases and treatments. These models incorporate public and proprietary data
Slide 14: Capital Allocation Strategy
Capital Allocation Strategy ▪ Employee Engagement and ▪ Acquisitions (Immunetrics Development Q4’23) ▪ Product Development ▪ Earlier Stage Investments ▪ ERP Processes and Technology INTERNAL CORPORATE ▪ Strategic Partnerships and INVESTMENT DEVELOPMENT Alliances ▪ $0.06 per share paid quarterly DIVI
Slide 15: Corporate Development Initiative
Corporate Development Initiative Strategic investments in early-stage companies to drive innovation and collaboration Key investment objectives: ▪ Enhance Innovation and Adoption of Emerging Technologies: Explore software and services innovation and seek deeper visibility into evolving technologies,
Slide 16: Seasoned Management Team and Scientific Leadership
Seasoned Management Team and Scientific Leadership Highly experienced management team with deep life science industry expertise, track record of growth and strong returns Shawn O’Connor Will Frederick Dan Szot Chief Executive Officer Chief Financial Officer Chief Revenue Officer Chief Operating Off
Slide 17: Conclusion
Conclusion CONTINUED LEADERSHIP POSITION IN BIOSIMULATION MARKET Delivering on our Enhancing our client facing Challenges being commitment to scientific Focus on capital allocation capabilities addressed leadership • Internal R&D investment • Appointed new CRO to • Software renewal timing • ASR prog
Slide 18: Appendix
Appendix
Slide 19: Secular Trends Driving Sustained Long-Term Growth
Secular Trends Driving Sustained Long-Term Growth Drivers include: + Biosimulation taking greater percentage of drug development spend annually + Scarcity of blockbuster drug opportunities drive industry focus to smaller market targets requiring increased development efficiency + Increased scrutiny
Slide 20: Drug Discovery & Development
Drug Discovery & Development The Drug Discovery and Development Industry can be broken down into several subindustries, including: 1. TARGET DISCOVERY AND VALIDATION 2. LEAD COMPOUND IDENTIFICATION AND OPTIMIZATION Each of these subindustries represents a different stage of the drug development pro
Slide 21: Fiscal 2023 ESG Achievements
Fiscal 2023 ESG Achievements ENVIRONMENT SOCIAL HUMAN CAPITAL GOVERNANCE Reduced footprint of US-based Updated company privacy policy and Established a paid parental leave Engaged a third-party consulting facilities by 35% from 19,300 sf to processes in the PDP Program to program to support working
Slide 22: Software Products Overview
Software Products Overview Biosimulation Technology Leader Leveraging AI and Machine Learning + SLP software licensed to major pharma (19 of 20 largest) GastroPlus - mechanistically based simulation software package that simulates intravenous, oral, oral cavity, ocular, + inhalation, dermal, subcut
Slide 23: PBPK Software Solutions and AI Data
PBPK Software Solutions and AI Data LEAD SELECTION PHARMACOLOGY SERVICES TREATMENT REGIMEN PBPK / PBBM Preclinical Regulatory SAFETY Consulting CLINICAL EFFICACY ADMET DMPK 23
Slide 24: QSP/QST Solutions
QSP/QST SolutionsMining LEAD SELECTION PHARMACOLOGY TREATMENT REGIMEN SERVICES QSP Consulting QST Consulting SAFETY CLINICAL EFFICACY ADMET DMPK 24
Slide 25: Pharmacometrics Solutions
Pharmacometrics Solutions LEAD SELECTION PHARMACOLOGY SERVICES TREATMENT REGIMEN Pharmacometrics Clinical Pharmacology SAFETY Clinical Regulatory Consulting CLINICAL EFFICACY ADMET DMPK 25
Slide 26: Services Overview
Services Overview + Provides customers with specialized knowledge and expertise Delivers complementary capabilities to software application solutions + • Drives greater demand for its software solutions • Provides stable, steady revenue streams Helps clients minimize or eliminate questions pose
Slide 27: Financial Results
Financial Results
Slide 28: Revenue - Trailing Twelve Months (TTM)
Revenue - Trailing Twelve Months (TTM) (in millions) 2Q24 Mix 2Q23 Mix +19% +22% +14% Total Revenue Software Revenue Services Revenue 28
Slide 29: Gross Margin Trends - TTM
Gross Margin Trends - TTM 1 1 Decrease in gross margin was partially due to a shift in reporting effective 1Q’24, where certain cost items are reflected in cost of revenues for services that were previously in SG&A expense. 29
Slide 30: Software Revenue by Business Unit
Software Revenue by Business Unit 2Q24 YTD TTM Software Business Unit as % of Software Revenue 30
Slide 31: Software Performance Metrics - TTM
Software Performance Metrics - TTM Commercial Customers Avg. Revenue per Customer Renewal Rates (in thousands) 31
Slide 32: Services Revenue by Business Unit
Services Revenue by Business Unit 2Q24 YTD TTM Services Business Unit as % of Services Revenue 32
Slide 33: Services Performance Metrics
Services Performance Metrics Total Projects Backlog (in millions) 33
Slide 34: Income Statement Summary - YTD
Income Statement Summary - YTD (in millions, except Diluted EPS) 2Q24 % of Rev 2Q23 % of Rev Revenue $32.8 100% $27.7 100% Revenue growth 18% 2% Gross profit 23.1 70% 22.4 81% R&D 2.5 8% 2.5 9% S&M 3.9 12% 3.2 12% G&A 11.2 34% 11.8 43% Total operating exp 17.7 54% 17.5 63% Income from operations 5.4
Slide 35: Balance Sheet Summary
Balance Sheet Summary (in millions) February 29, 2024 August 31, 2023 Cash and short-term investments $108.5 $115.5 Total current assets 128.0 130.4 Long-term investments* $9.0 $— Total assets $194.0 $186.1 Current liabilities 14.5 12.0 Long-term liabilities 2.4 4.1 Total liabilities 16.9 16.1 Share
Slide 36: Fiscal 2024 Guidance
Fiscal 2024 Guidance Guidance Total Revenue $66M to $69M Total Revenue Growth 10% to 15% Software Revenue Mix 55% to 60% Services Revenue Mix 40% to 45% Diluted EPS $0.66 to $0.68 36
Slide 37: Investor Relations Contacts
Investor Relations Contacts: Lisa Fortuna Financial Profiles 310-622-8234 slp@finprofiles.com Renee Bouche Simulations Plus Investor Relations 661-723-7723 renee.bouche@simulations-plus.com