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

Market and industry outlook

• Demand trends are closely tied to pharma spend, clinical trials, and biotech funding, but direct client discussions during budget season are the most reliable indicator of future business.

• Recent client interactions suggest positive budget preparation for 2025, though last year's optimism was tempered by subsequent cost-cutting at large pharma accounts.

• Bookings at the end of the fiscal first quarter (ending November) are a key metric for assessing year-end budget flush activity.

• Guidance for fiscal 2025 assumes a cost-constrained environment, with potential upside if client demand increases.

• FDA leadership changes are not expected to impact the growing emphasis on modeling and simulation, which remains a regulatory priority.

Competitive landscape and differentiation

• Focus remains on software tools that enable clients to perform modeling and simulation internally, supported by consulting services.

• Emphasis on ease of use and workflow guidance distinguishes products, making them accessible to a broader range of scientists.

• The competitive environment has not shifted dramatically, but integration and cross-selling are key strategies.

Pro-ficiency acquisition and integration

• Pro-ficiency acquisition aligns with a three-pronged M&A strategy: filling portfolio gaps, supplementing focus areas, and expanding into adjacent markets.

• The deal doubled the addressable market and expanded access to clinical ops and medical affairs budgets.

• Integration is complete, with a unified sales and marketing team presenting a full suite of solutions to clients.

• Pro-ficiency's client base is being leveraged through existing large pharma relationships and master service agreements.