About Simulations Plus

Simulations Plus, Inc. operates as a developer of modeling and simulation software for drug discovery and development, including the prediction of properties of molecules utilizing both artificial intelligence (AI) and machine-based technology. The company also provides consulting services ranging from early drug discovery through preclinical and clinical trial development to regulatory submissions supporting product approval. The company's software and consulting services are provided to major pharmaceutical, biotechnology, agrochemical, cosmetics, and food industry companies and academic and regulatory agencies worldwide for use in the conduct of industry-based research. The company is a global leader, delivering relevant, cost-effective software and creative and insightful consulting services. Pharmaceutical and biotechnology companies and hospitals use the company's software programs and scientific consulting services to guide early drug discovery (molecule design screening and lead optimization), preclinical, and clinical development programs, and the development of generic medicines after patent expiration, including using its software products and services to enhance their understanding of the properties of potential new therapies and to use emerging data to improve formulations, select and justify dosing regimens, support generic pharmaceutical product development, optimize clinical trial designs, and simulate outcomes in special populations, such as in elderly and pediatric patients. Segments The company operates through two segments, Software and Services. Software segment The company offers twelve software products for pharmaceutical research and development, as follows: Three simulation products that provide time-dependent results based on solving large sets of mechanistic differential equations: GastroPlus; DDDPlus; and MembranePlus. Two products that predict and analyze static properties of chemicals utilizing both AI and machine-learning technologies: ADMET Predictor and MedChem Designer. Six products that are based on mechanistic, mathematical models: DILIsym, NAFLDsym, ILDsym, IPFsym, RENAsym, and MITOsym. One product designed for modeling and simulation that allows for population analyses, rapid clinical trial data analyses and regulatory submissions: MonolixSuite (the combination of Monolix, PKanalix, and Simulx). The company's software business represented 61% of its total revenue during the year ended August 31, 2023, primarily generated by the following products: GastroPlus The company's flagship product is GastroPlus. GastroPlus mechanistically simulates the absorption and drug interaction of compounds administered to humans and animals. It is one of the most widely used commercial software products of its type by industry and regulatory agencies in the U.S. and globally. The company's goal with GastroPlus is to integrate the most advanced science into user-friendly software to enable researchers and regulators to perform sophisticated analyses of complex compound behaviors in humans and laboratory animals. The company works to release updated versions of the program on an ongoing basis. In October 2022, GastroPlus version 9.8.3, which included new mechanisms and updated documentation for key drug interaction standards models, was released. This version also added important new capabilities, including improvements to nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH) disease population simulations to inform the NAFLDsym platform, additional dosage route models, and improved reporting templates for the Monolix software to support the statistical analysis of virtual physiologically-based pharmacokinetic (PBPK) population results. Because of the widespread use of GastroPlus, the company has been able to enter both funded and unfunded collaborations with industry and government agencies to drive advances to modeling and simulation science. In all such collaborations, the company owns the intellectual property developed within the GastroPlus program, and updates are integrated into future versions and made available to all clients. In the year ended August 31, 2023, the company received six funded grants from the U.S. FDA to enhance PBPK modeling science. Recent collaborations include: Animal Health Models: In November 2022, the company entered into a funded collaboration with the University of Bath and the FDA to improve the accuracy of drug concentrations predicted locally within gut tissue and to outline novel strategies for applying in vitro systems and in silico models to assess new formulation approaches for addressing GI diseases. Long-acting Injectable (LAI) Formulation Model: In October 2022, through a joint proposal with the University of Florida's College of Pharmacy, the company was awarded a newly funded contract from the FDA to advance in vitro and (patho) physiology-based PBPK models to understand and predict pulmonary absorption and tissue retention of inhaled drugs. MonolixSuite The MonolixSuite is a unique solution for modeling and simulation for pharmaceutical companies, biotechnology enterprises, and hospitals. It supports nonparametric analyses, population analyses and modeling, and clinical trial simulation. The extended MonolixSuite contains three main products: Monolix, Simulx, and PKanalix. Monolix 2023R1 was released in March 2023, which combines the most advanced algorithms with a unique ease of use. The products are used by pharmaceutical companies across the globe at each step of drug development, from preclinical to first-in-human, clinical, and post-approval. ADMET Predictor ADMET (Absorption, Distribution, Metabolism, Excretion, and Toxicity) Predictor is a top-ranked, chemistry-based computer program that takes molecular structures as inputs and uses AI/machine-learning technology to predict different properties for them. This capability allows chemists to generate estimates for many important molecular properties without the need to synthesize and test the molecules. A chemist can then assess the likely success of many existing molecules in a company's chemical library, as well as molecules that have never been made. The optional ADMET Modeler Module in ADMET Predictor enables scientists to use their own experimental data to quickly create proprietary high-quality predictive models using the same powerful AI engine the company uses to build its top-ranked property predictions. Version 11 of ADMET Predictor was released in July 2023, which added many new features, including: New industry partner data that more than doubles the training dataset of ionization constants (pKa), leading to enhanced predictive accuracy and wider applicability of the company's S+pKa model. New functionality to perform 3D virtual screening based on shape and pharmacophore-feature similarity. New CYP inhibition (Ki) models to allow for rapid drug-drug interaction (DDI) risk assessment. Significant enhancements to the AI-driven drug design (AIDD) module. The company has made significant investments in three key areas with recent versions: improving integration of its top-ranked ADMET Predictor and GastroPlus models to leverage its novel high-throughput pharmacokinetic (HTPK) simulation approaches for chemists and safety researchers, enhancing its best-in-class AI/machine-learning engine to assist with drug discovery, and advancing on its innovative AIDD Module to apply generative AI technology to design and optimize lead molecules for any combination of properties. Recent collaborations include: Machine-learning Models for Ionization Constants (pKa): In August 2022, the company entered into a new collaboration with a large pharmaceutical company to leverage their expansive internal databases to improve the accuracy of predictions, and extend the chemical coverage space, of its pKa models using the novel AI/machine-learning and atomic descriptor calculation methods within ADMET Predictor. In February 2023, the company entered another new data-sharing collaboration with a large agrochemicals company to further extend its top-rated AI/machine learning models for predicting ionization descriptors and endpoints. Drug Design Collaboration Using the AIDD Module: In March 2023, the company entered into a collaborative research agreement with the Polish Academy of Sciences (PAS) to jointly design new compounds for the RORgamma/RORgammaT nuclear receptors using its cutting-edge AI/machine learning (ML) technology in the ADMET Predictor software platform. Emerging intellectual property, in the form of encouraging lead compounds, will be jointly owned by the company and PAS for further development opportunities. Strategic Collaboration to Discover Anticancer Therapies Using the AIDD Module: In March 2023, the company entered into a strategic research collaboration with the Sino-American Cancer Foundation (SACF) to leverage its staff and AIDD Module to support the discovery and design of novel inhibitors of methylenetetrahydrofolate dehydrogenase 2 (MTHFD2), an emerging cancer target. SACF will provide upfront funding to the company to design a set number of compounds for efficacy against MTHFD2 which will be exclusive to SACF. Subsequent milestone payments will be made to the company as key research and development goals are met. Services segment The company's scientists and engineers have extensive expertise in drug absorption via various dosing routes, pharmacokinetics, pharmacodynamics, drug-drug interactions, and other areas related to the drug development process. The company conducts contracted consulting studies for large customers with complex problems who recognize its expertise in solving them, as well as for smaller customers. The demand for the company's consulting services has been steadily increasing, and it has expanded its consulting teams to meet the increased workload. The company's services business represented 39% of its total revenue during the year ended August 31, 2023, primarily generated by the following service offerings: PKPD The company's clinical-pharmacology-based consulting services include population pharmacokinetic and pharmacodynamic (PKPD) modeling, exposure-response analyses, clinical trial simulations, data programming, and technical writing services in the support of regulatory submissions. In addition to modeling and simulation consulting services, the company provides expertise and assistance with development-related decision-making and support for regulatory interactions related to dose selection, clinical trial design, and understanding of the determinants of safety and efficacy for new medicines. QSP/QST The company provides creative and insightful consulting services to support its quantitative systems pharmacology/quantitative systems toxicology (QSP/QST) modeling focused on NAFLD, and NASH, idiopathic pulmonary fibrosis (IPF), heart disease, liver and kidney safety, as well as other areas. PBPK In 2014, the FDA and other regulatory agencies began to emphasize the need to encourage mechanistic PBPK modeling and simulation in clinical pharmacology, with final guidance documents completed in 2018. New draft guidance documents, which were released in October 2020, focused on additional biopharmaceutics applications for oral drug product development, manufacturing changes, and controls. This has resulted in an increased need for the company's scientific consulting staff to drawn upon its extensive experience across multiple therapeutic areas of modeling and simulation methods to provide consulting-related services in the support of this sophisticated technique. The company supports Model-Informed Drug Discovery and Development throughout the entire product lifecycle, from discovery through translational research and clinical development, when an organization does not have the time or resources to use its software directly. More specifically, the company's clients seek out its consulting services to acquire scientific, therapeutic-area-related modeling and simulation expertise that they do not have in-house. Early Drug Discovery (EDD) With its EDD services offering, the company provides end-to-end in silico drug design and optimization services, as well as help with individual steps in the process, including AIDD enabled drug discovery and optimization; high-throughput screening (HTS) library design and hit visualization and analysis; and QSAR/QSPR modeling and simulation. Sales and Marketing The company markets its software and services globally through attendance and presentations at scientific meetings, exhibits at trade shows, seminars at pharmaceutical companies and government agencies, online presentations, its website, and various communication channels to its database of prospects and customers. The company's sales and marketing efforts are handled primarily internally by sales and marketing staff, with its scientific team and several senior management staff assisting its marketing and sales staff with trade shows, seminars, and customer training both online and on-site. The company also has independent distributors in Japan, China, India, South Korea, and Brazil, who sell and market its products with support from its scientists and engineers. Research and Development (R&D) The company's research and development expenditures, which primarily relate to both capitalized and expensed salaries, R&D supplies, and R&D consulting, were $7.8 million during the year ended August 31, 2023. Customers The company's customers include companies involved in pharmaceuticals, biotechnology, agrotechnology, and cosmetics, as well as universities, hospitals, and government research organizations. The company concentrates on serving the needs of its customers in drug discovery, development, clinical trials, and post-patent generic formulation development. For the year ended August 31, 2023, the company's three largest customers in terms of revenue each accounted for 6%, 4%, and 3% of its revenues, respectively. Seasonality The company's revenues exhibit seasonal fluctuations, with the first fiscal quarter (September-November) (year ended August 31, 2023) generally having the lowest revenues. This is due to pharmaceutical industry buying patterns, as well as the company's revenue recognition policies for software, consulting service slowdowns due to summer vacations in the previous quarter, and lower customer and employee conference attendance in those periods. Government Regulations The company's pharmaceutical software products are tools used in research and development and are neither approved nor approvable by the FDA or other government agencies. History Simulations Plus, Inc. was founded in 1996. The company was incorporated in California in 1996.