Simulations Plus, Inc. · NASDAQ:SLP
Simulations Plus — Investor Day (November 2023)
81 slides from Simulations Plus's investor day presentation, Nov 14, 2023
Slide 1: Putting Clients First Drives Growth And Fuels Innovation
Putting Clients First Drives Growth And Fuels Innovation INVESTOR DAY NOVEMBER 14, 2023 NASDAQ: SLP
Slide 2: Agenda
Agenda + OPENING REMARKS | SHAWN O’CONNOR, CEO + PBPK & CHEMINFORMATICS | JOHN DIBELLA, M.S. + CLINICAL PHARMACOLOGY & PHARMACOMETRICS | JILL FIEDLER-KELLY, M.S., FISoP, JONATHAN CHAUVIN, PH.D. + QSP | BRETT HOWELL, PH.D. + REGULATORY STRATEGIES | JOHN DIBELLA, M.S. + SALES STRATEGY AND CLIENT APPRO
Slide 3: 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 4: Opening Remarks
Opening Remarks SHAWN O’CONNOR, CEO 4
Slide 5: Key Messages
Key Messages WE HAVE A LONG HISTORY OF INNOVATION IN BIOSIMULATION THAT IS TRANSFORMING DRUG + DEVELOPMENT AND R&D + WE HAVE A RICH FUTURE FOR GROWTH OPPORTUNITIES + WE HAVE A HIGHLY EXPERIENCED SCIENTIFIC LEADERSHIP TEAM + WE ARE ALIGNED WITH OUR CLIENTS TO MEET DEMAND FOR FUTURE GROWTH + WE HAVE A
Slide 6: 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 7: 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 D RU G A PPRO VA L C ONFIDENCE L EVEL OF D RUG A PPROVAL “…combining models and data results in higher confidence in clinical perfor
Slide 8: Our Goal Today
Our Goal Today To give you a better understanding of our expertise and capabilities in each of these scientific domains, future developments and directions and how we deliver value to our clients PUTTING CLIENTS FIRST DRIVES GROWTH AND INNOVATION 8
Slide 9: 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 is $200B GLOBAL PHARMA expected to expand at a 16.9% CAGR from 2022 - 20301 AND BIOTECH SPEND (3% CAGR)1 + Stra
Slide 10: 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 drug averages $1.5 to $2 billion and the + Simulations Plus offers
Slide 11: How We View Artificial Intelligence
How We View Artificial Intelligence ▪ We have been utilizing AI technics and approaches in our solutions since our beginning ▪ Data is key: our tenure in serving the drug development industry has provided significant access to data necessary to perfect and refine predictive algorithms with key partn
Slide 12: Strategic Objectives
Strategic Objectives + MAINTAIN LEADERSHIP IN MIDD + EXPAND OUR PRODUCTS AND SERVICES + PURSUE STRATEGIC ACQUISITIONS + GROW AT OR ABOVE MARKET + GROW PROFITABILITY AT OR ABOVE TOP LINE GROWTH 12
Slide 13: New Organizational Structure
New Organizational Structure CEO & President Business Units Shared Services Clinical Pharmacology & Physiologically Based Chief Revenue Officer Chief Financial Officer Pharmacometrics (CPP) Pharmacokinetics (PBPK) Quantitative Systems Cheminformatics Sales G&A Pharmacology (QSP) Regulatory Strategie
Slide 14: 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 Josh Fohey Chief Executive Officer Chief Financial Officer Vice President, Business Development Br
Slide 15: Video
VIDEO @B SimulationsPius
Slide 16: Cheminformatics & PBPK
Cheminformatics & PBPK JOHN DIBELLA, M.S. 16
Slide 17: Cheminformatics | ADME-Tox Property Predictions and AIDD
Cheminformatics | ADME-Tox Property Predictions and AIDD Physicochemical and Biopharmaceutical (PCB) MedChem Studio Metabolism Functionality ADMET Predictor ADMET Toxicity Performance Predictor® ADMET Modeler Usability Transporters AIDD HTPK Simulation 17
Slide 18: ADMET Predictor By the Numbers
ADMET Predictor By the Numbers 80+ 170+ ML property Companies licensing prediction models in worldwide version 11 300+ 70000+ Universities in 50+ Data points in the pKa countries with and ionization-related access to software descriptor models 5+ 55+ Data sharing and Peer-reviewed AIDD partnerships
Slide 19: Cheminformatics Partnerships in Fiscal 2023
Cheminformatics Partnerships in Fiscal 2023 ▪ pKa models have been rebuilt using proprietary data received from three new industrial partners – Partner 1: ~19,000 compounds – Partner 2: ~2,400 compounds – Partner 3: ~4,100 compounds ▪ Total number of ionization constants has increased from 33,640 to
Slide 20: Cheminformatics | The Future
Cheminformatics | The Future ▪ Expansion of machine learning models to inform inputs into other software offerings at the company ▪ Explore new AI/ML technologies to improve model performance and assist with data compilation/curation ▪ Develop additional descriptors (2D and 3D) to extend chemical co
Slide 21: Cheminformatics | Why We Win
Cheminformatics | Why We Win ▪ We’re ranked #1 for accuracy in published independent comparisons for different ADME endpoints ▪ Simulations Plus has the top-rated machine learning + top-rated PBPK models tightly integrated in ways no other company can accomplish ▪ We have generative AI with embedded
Slide 22: What Do We Mean When Describing PBPK Modeling?
What Do We Mean When Describing PBPK Modeling? ▪ Physiologically based pharmacokinetic (PBPK) models represent animals and humans virtually as a collection of organs and tissues, each defined by a system of mathematical equations ▪ PBPK models are developed using quantitative values (“parameters”) a
Slide 23: PBPK Modeling to Support Regulatory Interaction | The Push
PBPK Modeling to Support Regulatory Interaction | The Push 2018 2018 2020 2020 23
Slide 24: Common PBPK M&S Industry Applications
Common PBPK M&S Industry Applications FIH dose selection and clinical Support for optimal formulation Predictions of DDI liability; DDI study design development plans based on selection based on preclinical support and biowaiver plans preclinical data data Development of biopredictive dissolution me
Slide 25: GastroPlus By the Numbers
GastroPlus By the Numbers 200+ 15+ Regulatory agencies Companies licensing with reviewers worldwide trained on software 300+ 120+ Universities in 50+ Services projects countries with executed over past access to software 12 months 500+ 80+ Scientists received Peer-reviewed software training journal
Slide 26: Partners Driving PBPK | Funded Scientific Collaborations
Partners Driving PBPK | Funded Scientific Collaborations FDA: Ocular model extensions FDA: Oral cavity model extensions FDA: Pulmonary model extensions FDA: Dermal model extensions Large Pharma: Local GI disease extensions FDA: Oral absorption model extensions FDA: Virtual BE trial workflows FDA: Lo
Slide 27: Regulatory Applications of GastroPlus (2020-22)
Regulatory Applications of GastroPlus (2020-22) Client Survey Results 69 Success Stories (n = 31 innovator & generic companies) 27
Slide 28: Examples of Approved Drugs Supported By GastroPlus
Examples of Approved Drugs Supported By GastroPlus pH-dependent DDI metabolic DDI drug product specifications / pH-dependent DDIs pH-dependent DDI transporter DDI pH-dependent DDI drug product specifications transporter DDI pediatric dose support drug product specifications food effect drug product
Slide 29: A Recent Regulatory Win
A Recent Regulatory Win Problem Statement: The Solution: GastroPlus® PBBM – Commercial tablets for 2 dose – Model was validated across clinical datasets and applied to run VBE and strengths were being submitted by a justify, together with a risk analysis based on ER data, wider proposed mid-size pha
Slide 30: Celebrating the 25th Anniversary of GastroPlus
Celebrating the 25th Anniversary of GastroPlus 30 30
Slide 31: The Future of GastroPlus
The Future of GastroPlus The trusted science of GastroPlus is the same – the workflows & logic will be around for years to come! 31
Slide 32: PBPK | The Future
PBPK | The Future ▪ Integration of QSP and CPP technologies within the GastroPlus environment to expand product and service offerings ▪ Application of AI to provide expert PBPK coaching and support to users on a real-time basis to expand our client base ▪ Mechanistic delivery models around the body
Slide 33: PBPK | Why We Win
PBPK | Why We Win ▪ Ranked #1 for accuracy in all published independent comparisons of PBPK software – laser focus on science and innovation for 25+ years ▪ 1000+ peer-reviewed journal articles published citing GastroPlus ▪ Over 20 funded grant partnerships with the FDA since 2015 – reflects signifi
Slide 34: Clinical Pharmacology & Pharmacometrics (CPP)
Clinical Pharmacology & Pharmacometrics (CPP) JILL FIEDLER-KELLY, M.S., FISoP, JONATHAN CHAUVIN, PH.D. 34
Slide 35: The Clinical Pharmacology & Pharmacometrics Leadership Team
The Clinical Pharmacology & Pharmacometrics Leadership Team Jill Fiedler-Kelly – CPP Services Jonathan Chauvin – CPP Software ▪ Co-founded Cognigen in 1992 ▪ Lixoft in 2015 ▪ Joined Simulations Plus when it acquired Cognigen ▪ Joined Simulations Plus when it acquired Lixoft in in 2014 2020 ▪ +30 yea
Slide 36: Clinical Pharmacology & Pharmacometrics | Introduction
Clinical Pharmacology & Pharmacometrics | Introduction Software and consulting synergy – benefits of MonolixSuite capabilities and efficiencies ▪ Combining the most user-friendly modeling and simulation software with the extensive experience of the highly respected consulting team offers an unmatche
Slide 37: Clinical Pharmacology & Pharmacometrics | Services
Clinical Pharmacology & Pharmacometrics | Services Pharmacometrics Services… ▪ Quantitative support of model-informed drug development – Pharmacometric modeling to understand and explore variability in PK, PK/PD and exposure-response – Support for development and regulatory decision making: providi
Slide 38: Clinical Pharmacology & Pharmacometrics | Software
Clinical Pharmacology & Pharmacometrics | Software Pharmacometrics Software… ▪ MonolixSuite is the gold standard for user-friendly pharmacometric modeling and simulation software – Non-compartmental analysis with PKAnalix – Nonlinear mixed effects population PK/PD modeling with Monolix – Model-based
Slide 39: Clinical Pharmacology & Pharmacometrics | Success Stories
Clinical Pharmacology & Pharmacometrics | Success Stories Collaborative team Leveraging the strength Support for decision making support on many fronts of the software across all development stages Our pharmacometric consultants A team of modeling experts from the Modeling support provided to a clie
Slide 40: Clinical Pharmacology & Pharmacometrics | The Future
Clinical Pharmacology & Pharmacometrics | The Future ▪ Investing in expanding MonolixSuite functionality with input from in-house consultant users as well as the entire client base to: – Support further integration into the global environment and ecosystem of tools supporting model-informed drug dev
Slide 41: Clinical Pharmacology & Pharmacometrics | Why We Win
Clinical Pharmacology & Pharmacometrics | Why We Win Unparalleled Offering ▪ Synergistic combination of extensive experience and expertise in providing quantitative support for model-informed drug development programs across therapeutic areas and the best-in-class, most user-friendly software tool f
Slide 42: Quantitative Systems Pharmacology Solutions (QSP)
Quantitative Systems Pharmacology Solutions (QSP) BRETT HOWELL, PH.D. 42
Slide 43: QSP | Introduction
QSP | Introduction Software and consulting synergy... ▪ QSP is an exciting and rapidly growing field of biomedical research ▪ Our QSP team combines a knowledge of mathematics, disease pathophysiology and pharmacology to help our clients make better decisions ▪ Our QSP team now has the broadest range
Slide 44: QSP | Library of Existing QSP and QST Models
QSP | Library of Existing QSP and QST Models QSP: Inflammatory and Fibrotic Diseases QSP: Immuno-Oncology ▪ Non-alcoholic fatty liver disease / steatohepatitis ▪ Acute myeloid leukemia (AML) (NAFLD/NASH) ▪ Multiple myeloma (MM) ▪ Idiopathic pulmonary fibrosis (IPF) ▪ Solid tumor (NSCLC, melanoma) ▪
Slide 45: QSP | Services
QSP | Services ▪ Platforms across therapeutic development landscape including diseases ▪ Our coverage positions us to increase engagements ▪ Unique combined understanding of: – Drug effectiveness at treating disease – Safety – Negative drug side effects ▪ Optimize the balance between a therapies pos
Slide 46: QSP | Software
QSP | Software ▪ Includes proprietary infrastructure built within these environments: – Thales: drives oncology and autoimmune models – MATLAB: drives pharmacology focused models – Julia: drives our NASH / NAFLD model – C++: drives our liver and kidney safety platforms ▪ All of our platforms are ava
Slide 47: QSP | Success Stories
QSP | Success Stories FIERCE Pharma» Manufacturing Marketing Special Reports Fierce 50 “Pharma FDA Approves Novel Drug to Treat Moderate to Severe Hot Flashes Caused by Menopause Pfizer buys migraine partner oa Biohaven for $11.6B, betting on CGRP drugs in grand return to neuroscience By Angus Liu -
Slide 48: QSP | The Future
QSP | The Future Several Exciting QSP Initiatives ▪ Big emphasis on expansion into more indications within oncology ▪ Therapeutic area expansion in other arenas ▪ New client sponsored development is ongoing in neurology ▪ Combination of AI with QSP modeling 48
Slide 49: QSP | Why We Win
QSP | Why We Win Four key reasons why our clients choose to work with our QSP team: 1. Focused on diseases of relevance to our clients and the flow of capital 2. The QSP group is composed of a large team of knowledgeable experts, making the offering scalable and adaptable 3. Software + services: the
Slide 50: Regulatory Strategies
Regulatory Strategies JOHN DIBELLA, M.S. 50
Slide 51: Regulatory Strategies | What We Offer
Regulatory Strategies | What We Offer Comprehensive knowledge of drug product development Expertise in regulatory milestones and requirements Holistic understanding of M&S regulatory requirements and applications 51
Slide 52: Regulatory Strategies | How We Help
Regulatory Strategies | How We Help A proven partner for regulatory strategies and M&S consulting support 3% 2% CDE CDSCO (India) 4% ANVISA 16% 2% 12% Clinical Unknown NDA 24% Pharmacology Supplements Clinpharm 19% 16% & Biopharm Multiagency 505b2s (e.g. FDA, EMA, PDMA) 65% 58% NMEs FDA 14% 60% Biop
Slide 53: Sales Strategy and Client Approach
Sales Strategy and Client Approach JOSH FOHEY VICE PRESIDENT, BUSINESS DEVELOPMENT 53
Slide 54: Sales Strategy and Client Approach
Sales Strategy and Client Approach Simulations Plus is a cutting-edge modeling and simulation company specializing in serving pharmaceutical companies at every stage, from early discovery to post-approval. 54
Slide 55: Sales Strategy and Client Approach | Expertise
Sales Strategy and Client Approach | Expertise ▪ Our expertise lies in harnessing the power of machine learning in chemistry, as well as employing advanced methodologies such as PBPK , QSP, QST, pharmacometrics, and regulatory support. ▪ Our mission is to accelerate the delivery of safe and efficaci
Slide 56: Sales Strategy and Client Approach | Growth
Sales Strategy and Client Approach | Growth ▪ Bringing together strategic partnerships ▪ Bundling our solutions to maximize the value proposition of our partnership ▪ More therapeutic alignment with our partners to cater offerings 56
Slide 57: Sales Strategy and Client Approach
Sales Strategy and Client Approach CHEMINFORMATICS PBPK CPP QSP REGULATORY Maximize therapeutic and Accuracy of property More versatility and Consult and Coach Save experimental disease understanding predictions enhanced functionality work when coupled Monolix Differential vs competitors Optimize do
Slide 58: New Structure Aligns with Client Needs
New Structure Aligns with Client Needs QSP D RU G A PPRO VA L Discovery Pre-clinical Clinical Drug Approval 58
Slide 59: Sales Strategy and Client Approach | Fiscal 2023
Sales Strategy and Client Approach | Fiscal 2023 ▪ Increased bookings for large pharma partners ▪ Sold to over 400 accounts ▪ Increased client engagement in Alliance Management (Concierge Program) ▪ Over 90% of the bookings from Pharmaceutical companies ▪ Over 80% of software bookings were renewals
Slide 60: M&A and Integration
M&A and Integration SHAWN O’CONNOR, CEO STEVE CHANG, M.S. 60
Slide 61: M&A Strategy Supplements Organic Growth
M&A Strategy Supplements Organic Growth ▪ Target business expands our TAM or accelerates capture of market share in existing TAM ▪ Target technology/services are compatible with our existing capabilities ▪ Target culture is compatible with our culture ▪ Target valuation is reasonable ▪ Target is acc
Slide 62: M&A | Integration & Immunetrics Case Study
M&A | Integration & Immunetrics Case Study Integration and consolidation efficiencies ▪ QSP is a critical and growing field ▪ Immunetrics has increased the range of therapeutic areas addressed by our QSP software and services offerings by more than 50% ▪ Ideal fit as the business leverages our exist
Slide 63: Financial Overview & Guidance
FINANCIAL OVERVIEW & GUIDANCE WILL FREDERICK, CFO 63
Slide 64: Fiscal 2023 Highlights
Fiscal 2023 Highlights $59.6M $0.49 $0.67 35% $20M Revenue Diluted EPS Adjusted Adj. EBITDA as Backlog Diluted EPS % of Revenue ▪ Strong revenue and earnings results for fiscal 2023 ▪ Conditions in our market remain similar to what we have seen past several quarters – Small biotech slowdown – Large
Slide 65: Revenue Trends
Revenue Trends (in millions) FY23 Mix FY22 Mix +11% +12% +8% Total Revenue Software Revenue Services Revenue 65
Slide 66: Gross Margin Trends
Gross Margin Trends 91% 90% 88% —?2 ° os 80% 80% 77% =}: = ) io 65% 63% - 61% oO = FY21 FY22 FY23 —@- Software -@®=Services =@= Total 66
Slide 67: Capital Allocation Strategy
Capital Allocation Strategy ▪ Employee Engagement and ▪ Acquisitions (Immunetrics Q4) Development ▪ Investment Opportunities ▪ Product Development ▪ Strategic Partnerships and ▪ ERP Processes and Technology INTERNAL CORPORATE Alliances INVESTMENT DEVELOPMENT ▪ $0.06 per share paid Feb. 6th DIVIDEND
Slide 68: 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 68
Slide 69: Financial Profile
Financial Profile Delivering Double-Digit Revenue Growth / Industry Leading Margins + Double digit revenue growth FY18 FY19 FY20 FY21 FY22 FY23 5 Yr CAGR Strong recurring revenue + supported by a 90%+ Software REVENUE $29.7 $34.0 $41.6 $46.4 $53.9 $59.6 12.3% Fee Renewal Rate $ in millions + High
Slide 70: ESG
ESG WILL FREDERICK, CFO 70
Slide 71: Sustainability Framework
Sustainability Framework STRATEGIC PRIORITIES FORM THE FOUNDATION OF OUR SUSTAINABILITY FRAMEWORK 71
Slide 72: 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 73: Questions
Questions
Slide 74: Closing Remarks
CLOSING REMARKS SHAWN O’CONNOR, CEO
Slide 75: Our Path to Win
Our Path to Win ▪ Unparalleled offerings and client-centric business model ▪ Leaders in model informed drug development because we are focused on areas that our clients find most important ▪ Continue to lead the industry in ease of use for our software offerings ▪ Continue to build upon our strong
Slide 76: Conclusion | Key Messages
Conclusion | Key Messages WE HAVE A LONG HISTORY OF INNOVATION IN BIOSIMULATION THAT IS TRANSFORMING DRUG + DEVELOPMENT AND R&D + WE HAVE A RICH FUTURE FOR GROWTH OPPORTUNITIES + WE HAVE A HIGHLY EXPERIENCED SCIENTIFIC LEADERSHIP TEAM + WE ARE ALIGNED WITH OUR CLIENTS TO MEET DEMAND FOR FUTURE GROWT
Slide 77: Putting Clients First Drives Growth And Fuels Innovation
Putting Clients First Drives Growth And Fuels Innovation 77
Slide 78: NASDAQ: SLP
NASDAQ: SLP https://www.simulations-plus.com/
Slide 79: Appendix
Appendix
Slide 80: Workplace Recognition Awards
Workplace Recognition Awards 80
Slide 81: Non-GAAP Definitions
Non-GAAP Definitions Adjusted EBITDA Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, (gain) loss on currency exchange, any acquisition- or financial-transaction-related expenses, and any asset impairment charges. Currency