Simulations Plus (SLP) Stephens 26th Annual Investment Conference | NASH2024 summary

Market and industry outlook

• Demand indicators include clinical trials, pharma spend, and biotech funding, but direct client discussions are the most reliable metric for outlook.

• Budget planning season from September to December is a key period for gauging client appetite for investment in biosimulation solutions.

• Recent client discussions have been positive, with expectations of more rationalized budgets for 2025 after a year of cost-cutting.

• Bookings at the end of the fiscal first quarter (November) and into December are important metrics for assessing year-end budget flush activity.

• Guidance for fiscal 2025 is based on a status quo, cost-constrained environment, with potential for growth if market demand increases.

Regulatory and competitive landscape

• FDA leadership changes are not expected to impact the growing emphasis on modeling and simulation, which has consistently increased over time.

• The industry is focused on productivity and efficiency, aligning with broader cost constraint trends in drug development.

• Competitive differentiation is driven by user-friendly, efficient software built on strong scientific foundations, enabling broader adoption among scientists.

• Integration and ease-of-use in software tools are key to expanding the user base and maintaining a competitive edge.

Acquisition strategy and integration

• M&A strategy targets filling portfolio gaps, supplementing focus areas, and expanding into adjacent markets with scientific and technological alignment.

• The Pro-ficiency acquisition doubled the addressable market and provides access to new client budgets, supporting growth objectives toward $200M and $300M revenue milestones.

• Pro-ficiency enhances protocol adherence in clinical trials, addressing a major source of FDA citations and improving trial success rates.

• Sales and marketing teams have been fully integrated, presenting a unified product and service suite to clients and leveraging existing pharma relationships.

• Cross-selling opportunities are being pursued, with Pro-ficiency now benefiting from established master service agreements.