Simulations Plus, Inc. · NASDAQ:SLP
Simulations Plus — Shareholder Meeting (February 2018)
48 slides from Simulations Plus's shareholder meeting presentation, Feb 28, 2018
Slide 1: Annual Shareholders' Meeting February 26, 2018
(NASDAQ:SLP) Annual Shareholders’ Meeting February 26, 2018
Slide 2: Agenda
• Chairman : Walt Woltosz • Welcome and Introductions • Chairman’s Remarks • Chief Financial Officer: John Kneisel • Discussion of Voting Issues • Financial presentation • John DiBella, President Lancaster Division of Simulations Plus • Ted Grasela, Ph.D., President , Cognigen • Brett Howell, Ph.D P
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 . The actual results of the Company could differ significantly from those statements . Factors that could c
Slide 4: Management & Directors
Management & Directors • Board of Directors: – Thaddeus H. “Ted” Grasela, Pharm D., Ph.D ., Director and President and Founder, Cognigen Corporation – John K. Paglia Ph.D., CFA, CPA, Director • Associate Dean; Associate Professor of Finance, Pepperdine University – David Ralph, Ph.D., Director • Cha
Slide 5: Auditors, Tax Specialists and Outside Counsel
• Registered Independent Auditors • Rose, Snyder, & Jacobs LLP, Encino, CA • Tax Specialists • Rose, Snyder, & Jacobs LLP, Encino, CA • Legal Counsel • Procopio, Cory, Hargreaves, & Savitch LLP Outside Counsels 5
Slide 6: Simulations Plus, Inc. Overview
• Major provider of simulation and modeling software for pharmaceutical research and development • Consulting services for problem drugs and formulations • Leader in Drug Induced Liver Injury (DILI) simulation sciences • Expertise and software tools span from earliest drug discovery through clinical
Slide 7: Products and Services
Products and Services • Modeling and simulation software • Related consulting services Technology • Molecule design • QSAR • PBPK modeling • Population PK/PD analyses • QSP/QST modeling • Data Integration and management Markets • Pharmaceutical and biotech research (preclinical and clinical) • Chemi
Slide 8: End-to-end M&S Solutions Provider
N H O OH O CH 3 CH 3 CH 3 ADMET Predictor™ GastroPlus ™ MedChem Studio™ MedChem Designer™ DDDPlus ™ MembranePlus™ Consulting Services and Collaborations Discovery Preclinical Clinical PKPlus™ KIWI™ End - to - end M&S Solutions Provider DILIsym ® NAFLDsym™ 8
Slide 9: Proxy Resolutions and Results; Financial Presentation
• PROXY Resolutions and Results • Financial Presentation John Kneisel, CFO 9
Slide 10: Voting Issues/Proxy Proposals
10 • Two Proposals - through this morning, 91+% of outstanding share votes have been cast – Proposal 1 : Election of Directors • Result: All elected with greater than 95+% voting for all – Proposal 2 : Ratify Rose, Snyder, & Jacobs LLP as Independent Registered Public Accountants • Result: Ratified
Slide 11: Financial Presentation
• FY2017 ended August 31, 2017 vs. FY2016 • 1QFY2018 ended November 30, 2017 vs 1QFY2017 • Balance Sheet Highlights • Financial Charts Financial Presentation 11
Slide 12: Income Statement: FY17 Versus FY16
12 Income Statement: FY17 Versus FY16 (in millions) Lancaster Buffalo North Carolina (ACQ. 6/01/17) FY17 FY16 Diff % chg Net sales $ 15.6 $ 7.3 $ 1.2 $ 24.1 $ 20.0 $ 4.1 20.9% Gross profit 13.0 4.2 0.7 17.8 15.4 2.4 16.0% Gross profit margin 83.0% 57.4% 55.2% 73.9% 77.0% - 3.1% - 4.0% SG&A $ 5.5 $ 2
Slide 13: Revenues by Fiscal Year
Revenues by Fiscal Year - 10 Year History Simulations Plus, Inc. (pro forma prior to 2012) 6.1 6.3 7.62 8.74 9.45 10.07 11.46 13.08 14.42 15.6 5.23 5.55 7.3 1.24 18.31 19.97 24.14 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Lancaster Buffalo No Carolina 13 ▪ Cognigen(Buffalo) acquired Sept. 20
Slide 14: Fiscal Year Revenues by Company
14 Fiscal Year Revenues by Company (in millions) 11.4 0 0 11.4 13.1 5.2 0 18.3 14.4 5.5 0 19.9 15.6 7.3 1.2 24.1 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 $21 $22 $23 $24 $25 $26 SLP(Lancaster) Cognigen(Buffalo) DILIsym(No. Carolina) Consolidated 2014 2015 2016 2017 ▪
Slide 15: Fiscal Year Net Income by Company
15 Fiscal Year Net Income by Company (in millions) 3.0 0 0 3.0 3.1 0.7 0 3.8 4.3 0.6 0 4.9 4.4 1.1 0.2 5.7 $0 $1 $2 $3 $4 $5 $6 SLP Cognigen DILIsym Consolidated 2014 2015 2016 2017 ▪ Cognigen(Buffalo) acquired Sept. 2014 (1 st Qtr. 2015) ▪ DILIsym (No Carolina) acquired June 2017 (4 th Qtr. 2017)
Slide 16: Consolidated Diluted Earnings Per Share
16 Consolidated Diluted Earnings Per Share $0.18 $0.23 $0.29 $0.33 $ - $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 FY14 FY15 FY16 FY17
Slide 17: Consolidated Annual EBITDA
17 Consolidated Annual EBITDA (in Millions) $5.6 $7.7 $9.2 $10.4 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 FY14 FY15 FY16 FY17
Slide 18: Selected Balance Sheet Items
18 Selected Balance Sheet Items (in millions, except where indicated) August 31, 2017 August 31, 2016 Cash and cash equivalents $ 6.216* $ 8.030* Cash per share ( in Dollars ) $ 0.36 $ 0.47 Total current assets 12.668 12.700 Total assets 38.512 27.814 Total current liabilities 2.042 2.126 Total liab
Slide 19: Cash Position Remains Excellent
19 Cash Position Remains Excellent (in millions) Over $24 million cash paid out over last three FYs $0.5 $0.6 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $1.0 $1.0 $2.5 $2.1 $0.8 $0.7 $0.8 $1.0 $5.1 $0.3 $10.1 $10.6 $11.0 $7.8 $8.6 $5.8 $6.1 $6.4 $8.6 $7.2 $7.1 $8.8 $8
Slide 20: Income Statement: 1QFY18 Versus 1QFY17
20 Income Statement: 1QFY18 Versus 1QFY17 (in millions) Lancaster Buffalo North Carolina (ACQ. 6/01/17) 1QFY18 1QFY17 Diff % chg Net sales $ 4.0 $ 1.9 $ 1.1 $ 7.1 $ 5.4 $ 1.7 30.5% Gross profit 3.3 1.2 0.8 5.3 4.1 1.3 30.6% Gross profit margin 82.4% 63.1% 71.2% 75.4% 75.3% 0.1% 0.1% SG&A $ 1.4 $ 0.7
Slide 21: Consolidated Revenues: Fiscal Quarter
21 Consolidated Revenues: Fiscal Quarter ( in millions) 2.64 3.08 3.74 2.00 4.01 4.57 5.94 3.71 4.84 5.16 6.01 3.96 5.42 5.71 6.75 6.26 7.07 $0 $1 $2 $3 $4 $5 $6 $7 $8 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018
Slide 22: Consolidated EBITDA: Fiscal Quarter
22 Consolidated EBITDA: Fiscal Quarter (in millions) 1.20 1.35 2.30 0.67 1.22 1.97 3.33 1.19 2.22 2.18 3.28 1.51 2.48 2.30 3.60 1.99 3.16 $0 $1 $2 $3 $4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018
Slide 23: Lancaster Division of Simulations Plus: Products & Services
Lancaster Division of Simulations Plus 23 • Products & Services John DiBella , President
Slide 24: FDA Voice blog
FDA Voice blog: July 7 th , 2017
Slide 25: Recent PBPK Modeling Trends: Regulatory Information
Recent PBPK Modeling Trends: Regulatory Information Mehrotra et al., DMD, 2016 Sato et al., CPT 2017 Cole et al., 2016 JPAG Meeting • 180 PBPK modeling citations in the FDA’s Office of Clinical Pharmacology database (2008 - 15) • 60 submissions received by EMA containing PBPK models (2013 - 15) • 17
Slide 26: Software Product News
26 • Version 9.6 scheduled for March 2018 ‒ New special population physiology models – enhancement to optional add - on module ‒ Improvements to all absorption models – enhancement to optional add - on module • Version 9 scheduled for April 2018 ‒ New models (ECCS, toxicity endpoints) – enhancement
Slide 27: PBPK Consulting Projects
PBPK Consulting Projects • Working on 21 projects + 2 FDA grants: – Formulation optimization – Preclinical development and First - in - Human predictions – Virtual bioequivalence trial simulations – DDI predictions – Non - oral absorption modeling – Food effect/PPI modeling – Pediatric population si
Slide 28: Marketing Activities
Marketing Activities Website Content • Designing new menu system and homepage to illustrate 3 divisions • Increased focus on SEO performance/analytics • Continued producing new video content Workshops and Conferences • PBPK modeling workshops scheduled for San Diego, Germany, China, Korea, India, an
Slide 29: Re-imagining the Future of Science-based Research and Development
29 Re - imagining the Future of Science - based Research and Development Ted Grasela, PharmD , Ph.D. President , Cognigen
Slide 30: Cognigen Growth
Cognigen Growth • Activities supporting continued growth – Successful recruiting and on - boarding of software engineers and scientists – New marketing initiatives and business/sales models – Increasing synergy and cross - selling between divisions – Accelerating KIWI TM development 30
Slide 31: Cognigen Status Report: Pharmacometric Services
31 Cognigen Status Report Pharmacometric Services • In FY2018 relationships with 21 companies on 34 drugs, 54 projects – 2 new companies in FY2018 – 14 new projects in FY2018 – 8 projects expanded scope in FY2018 – 3 projects with reduced scope – 37 outstanding proposals with 25 different companies
Slide 32: Model-Informed Drug Development for Malaria Therapeutics
32 ‘Annual Review of Pharmacology and Toxicology Model-Informed Drug Development for Malar Therapeutics Kayla Ann Andrews,'? David Wesche,’ James McCarthy," Jorg J. Mohrle,® Joel Tarning,”® Luann Phillips,! Steven Kern, and Thaddeus Grasela! * Cognigen Corporation, subsitiany of Simulations Ps, Bull
Slide 33: Modeling and Simulation for Antimalarial Research and Development
Modeling and Simulation from Discovery Through Confirmatory Trials For Antimalarial Research and Development 33 Annu Rev Pharmacol Toxicol . 2017 Oct 6.
Slide 34: KIWI Pharmacometric Communication Platform
34 • Continue to work on contract to design, develop, and implement KIWI TM Pharmacometric Communication Platform for individuals and global teams engaged in model - informed drug development • Deployed KIWI 2 – Pharmacometric - centric data repository to bridge inter - organization and interdiscipl
Slide 35: Demonstrating the value of KIWI
Demonstrating the value of KIWI in an interdisciplinary approach to model building 35 Annu Rev Pharmacol Toxicol . 2017 Oct 6.
Slide 36: Cognigen Summary
36 • Increased Marketing and Sales • Pharmacometric services continue to expand; healthy pipeline of new projects, including global health initiative projects, bridging global regulatory filings, and embedded client partner opportunities from first - in - human to commercialization of new medicines
Slide 37: Drug-Induced Liver Injury and Liver Diseases
37 Drug - Induced Liver Injury and Liver Diseases Brett A. Howell, President DILIsym Services, Research Triangle Park, NC
Slide 38: DILIsym Services, Inc. – Our Vision
DILIsym Services, Inc. – Our Vision 38 • DILIsym Services, Inc. offers comprehensive program services: – DILIsym software licensing, training, development (DILI - sim Initiative) – DILIsym and NAFLDsym simulation consulting projects – Consulting and data interpretation – in vitro assay experimental
Slide 39: DILIsym: Quantitative Systems Toxicology
DILIsym: Quantitative Systems Toxicology Kuepfer 2010, Molecular Systems Biology Mitochondrial dysfunction Cellular life - cycle Patient variability ( SimPops ) Drug distribution & metabolism 39
Slide 40: DILIsym Predicts DILI
DILIsym Predicts DILI via the Intersection Between Exposure, Mechanisms, and Inter - Patient Variability Exposure DILI Mechanisms Inter - Patient Variability DILI 40
Slide 41: NAFLDsym Predicts Efficacy
NAFLDsym Predicts Efficacy via the Intersection Between Exposure, PD, and Inter - Patient Pathophysiologic Variability 41 Exposure Pharmacodynamics Pathophysiologic Variability Efficacy PBPK modeling capabilities provide ability to predict intracellular compound concentrations at site of target Dire
Slide 42: DILIsym Services Status Report
DILIsym Services Status Report • The DILI - sim Initiative is moving into Stage 3 of its lifecycle – Contracts cover years 2018 - 2020 – Focused on adding new science and features to DILIsym including adaptive immune components, new simulated populations, and advanced integration with GastroPlus • C
Slide 43: DILIsym Services 1QFY18 Sales Review
DILIsym Services 1QFY18 Sales Review • DILIsym software consulting projects – 17 active consulting projects using our DILIsym software – 7 project proposals outstanding for new consulting – DILIsym software is focused on helping companies predict drug - induced liver injury probability for drugs and
Slide 44: DILIsym Services Software Product News
DILIsym Services Software Product News • DILIsym version 7A was released on Monday, January 8 th to DILI - sim consortium members for internal software use – Includes large number of expanded features and exemplar drugs • Actively working towards increased communication between DILIsym software and
Slide 45: DILIsym Services Summary
DILIsym Services Summary • Enhanced version of flagship product, DILIsym, just released • Active development across multiple products for expanded applications • Continuing to work with Simulations Plus Lancaster and Cognigen on integrative marketing and other synergies • Number of consulting client
Slide 46: Summary & Wrap-up
46 Summary & Wrap - up Walt Woltosz, Chairman and CEO
Slide 47: Summary
47 Summary • For FY2017: - Financial performance continues our >10 - year profitable trend - Continuing to achieve record revenue and profitability - Continuing to expand our R&D team - Acquired DILIsym Services in June 2017 • Expanding sales team and activities - Greater staff time spent on marketi
Slide 48: Thank you for your kind attention… Questions?
48 Thank you for your kind attention… Questions?
Simulations Plus — Shareholder Meeting (February 2018) on 6ix