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| 8-K - SIMULATIONS PLUS, INC. - Simulations Plus, Inc. | simulations_8k-011310.htm |
Exhibit 99.1
Simulations
Plus, Inc.
NASDAQ: SLP
First Quarter Fiscal Year 2010
Conference Call
January 13, 2010
NASDAQ: SLP
First Quarter Fiscal Year 2010
Conference Call
January 13, 2010
Introduction
and Welcome
• Introduction
and Welcome
• Agenda
– First
Quarter FY 2010 (1QFY10) Financial
Summary
Summary
– Progress
in Business Units
– Strategy
Going Forward
– Questions
and Answers
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 cause or
contribute to such differences include, but are not limited to: continuing
demand for the Company’s products; competitive factors; the
Company’s ability to finance future growth; the Company’s ability to
produce and market new products in a timely fashion; the Company’s
ability to continue to attract and retain skilled personnel; the Company’s
ability to identify, evaluate, and close suitable acquisitions; and the
Company’s ability to sustain or improve current levels of productivity.
Further information on the Company’s risk factors is contained in the
Company’s quarterly and annual reports and filed with the Securities
and Exchange Commission.
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 cause or
contribute to such differences include, but are not limited to: continuing
demand for the Company’s products; competitive factors; the
Company’s ability to finance future growth; the Company’s ability to
produce and market new products in a timely fashion; the Company’s
ability to continue to attract and retain skilled personnel; the Company’s
ability to identify, evaluate, and close suitable acquisitions; and the
Company’s ability to sustain or improve current levels of productivity.
Further information on the Company’s risk factors is contained in the
Company’s quarterly and annual reports and filed with the Securities
and Exchange Commission.
Safe
Harbor Statement Under the
Private Securities Litigation Reform Act
of 1995
Private Securities Litigation Reform Act
of 1995
1QFY10
(3 months) Financial Summary
• Gross
revenues =
$2.437 MM (up 14.2% from 1QFY09)
– Pharmaceutical
software and services = $1.735 MM (up 21.3% from $1.430 MM in
1QFY09)
– Words+
subsidiary = $702,000 (down 0.1% from $703,000 1QFY09)
• SG&A =
$1,004,000 (up 11.1% from $904,000 in 1QFY09)
– SG&A
increased due to travel and show expenses, bonuses to officer, and increases in
salaries
and benefits over 1QFY09. As percent of sales, SG&A decreased from 42.4% to 41.2%.
and benefits over 1QFY09. As percent of sales, SG&A decreased from 42.4% to 41.2%.
• R&D
Expense =
$261,000 (down 2.9% from $269,000 from 1QFY09)
– Greater
time on contract studies
• Income
Before Income Taxes =
$661,000 (up 46.0% from $453,000 in 1QFY09)
– Greater
pharmaceutical software and services revenues
• Net
Income =
$430,000 (up 38.0% from $312,000 in 1QFY09)
– High
margin on pharmaceutical business results in percentage earnings growth greater
than
percentage revenues growth once breakeven is passed
percentage revenues growth once breakeven is passed
• EPS =
$0.03/FD share (up $0.007 from $0.02/FD share in 1QFY09)
– Positive
results continue in spite of global economic crisis
– Share
repurchase reduced number of fully diluted shares
• Cash = $7.97
MM (up $1.91 MM or 31.5% from $6.06 MM in 1QFY09)
– Cash
increased even with >$1 MM share repurchase program spending over $1 MM in
FY09
• Shareholders’
Equity =
$10.812 MM (up 4.8% from $10.315 MM in 1QFY09)
– Again,
in spite of spending ~$1MM for share repurchases
Share
Repurchase Program
• Board of
directors authorized share repurchase program for up to
$2.5 million from October 2008 through October 2009. Actual
repurchases began December 2, 2008, so the board extended the
repurchase period through December 1, 2009.
$2.5 million from October 2008 through October 2009. Actual
repurchases began December 2, 2008, so the board extended the
repurchase period through December 1, 2009.
• Total of
1.02 MM shares were bought back at average price per
share of about $1.32.
share of about $1.32.
• No plans
at this time to repurchase shares; however, the board of
directors may decide to reinstitute repurchasing shares at any
time.
directors may decide to reinstitute repurchasing shares at any
time.
Progress
- 1
• ADMET
Predictor™ (Structure-property prediction program)
– Version
4.0 was released in July with new metabolism and toxicity models
– New Dose
Optimization Module developed under estimates dose amount
needed for new molecules based on mini-GastroPlus simulation
needed for new molecules based on mini-GastroPlus simulation
• Developed
under Pfizer funding and in active use at Pfizer now
– Expanded
graphics capability was added with Miner3D component
– Work
continues on our $525,000 SBIR Phase II grant with excellent
progress on advancing the predictions in ADMET Predictor through better
atomic and molecular descriptors. The rapid partial charge calculations we
have developed allow calculation of atomic partial charges at the rate of
hundreds of thousands of molecules per hour rather than one molecule per
day using traditional quantum methods.
progress on advancing the predictions in ADMET Predictor through better
atomic and molecular descriptors. The rapid partial charge calculations we
have developed allow calculation of atomic partial charges at the rate of
hundreds of thousands of molecules per hour rather than one molecule per
day using traditional quantum methods.
Solubility
in Biorelevant Fluids
• During
FY09 we funded a series of experiments with Northeastern
University to measure the solubility of 160 drugs and drug-like compounds
in three different types of biorelevant fluids:
University to measure the solubility of 160 drugs and drug-like compounds
in three different types of biorelevant fluids:
– Fasted
state simulated gastric fluid (FaSGF)
– Fasted
state simulated intestinal fluid (FaSSIF)
– Fed
state simulated intestinal fluid (FeSSIF)
• These data
have been used to build preliminary solubility models for
ADMET Predictor to provide estimates for in vivo solubilities for new
compounds without the need to measure them
ADMET Predictor to provide estimates for in vivo solubilities for new
compounds without the need to measure them
• We
presented a scientific poster at the American Association of
Pharmaceutical Scientists meeting in November, which generated very high
interest from scientists at the meeting
Pharmaceutical Scientists meeting in November, which generated very high
interest from scientists at the meeting
• We will
soon offer these data as a new product. We also intend to conduct
more of these experiments to expand the database and improve our
predictions. And we are considering funding other types of experiments to
improve different aspects of our modeling and simulation capabilities.
more of these experiments to expand the database and improve our
predictions. And we are considering funding other types of experiments to
improve different aspects of our modeling and simulation capabilities.
Progress
- 2
• ClassPharmer™
(Data Mining and de
novo
Molecule Design)
– Numerous
improvements were being incorporated during the 4th
quarter, and Version 4.7 was released in October.
quarter, and Version 4.7 was released in October.
– We
continue to enhance ClassPharmer’s capabilities in data mining and
de novo molecule design (design of new molecules) and to add
additional convenience features requested by our users.
de novo molecule design (design of new molecules) and to add
additional convenience features requested by our users.
– New
“scaffold hopping” capability was added in 4.7 - allows chemists
to change the core (or any portion) of a molecule while maintaining
other features and the bond distances between them.
to change the core (or any portion) of a molecule while maintaining
other features and the bond distances between them.
– Current
efforts are focused on refactoring the code to make it more
streamlined and efficient, and adding a number of additional
visualization and user convenience features.
streamlined and efficient, and adding a number of additional
visualization and user convenience features.
Progress
- 3
DDDPlus -
Simulates laboratory dissolution experiments
Sales
continue to increase steadily
Version
3.0 was released in Q3 with a number of important
enhancements
enhancements
Remains
the only tool of its kind
Further
development on hold during 1QFY10 to allow
greater support for contract studies
greater support for contract studies
Progress
- 4
• GastroPlus™
– Development
of Drug-drug Interaction module continues under funded
collaboration with Roche - initial capability is now in use at Roche. Full
capability to be released with Version 7.0.
collaboration with Roche - initial capability is now in use at Roche. Full
capability to be released with Version 7.0.
– Development
of ocular delivery capability under a funded collaboration
with Pfizer is complete - will be released with Version 7.0.
with Pfizer is complete - will be released with Version 7.0.
– Development
of a nasal-pulmonary delivery module under a funded
collaboration with GlaxoSmithKline is complete and in use at
GlaxoSmithKline. Full capability will be released with Version 7.0.
collaboration with GlaxoSmithKline is complete and in use at
GlaxoSmithKline. Full capability will be released with Version 7.0.
– Consulting
contracts continue to come in to assist pharmaceutical
companies worldwide in analyzing preclinical and clinical data with
GastroPlus. Multiple contracts currently underway with three top-5
pharmaceutical companies.
companies worldwide in analyzing preclinical and clinical data with
GastroPlus. Multiple contracts currently underway with three top-5
pharmaceutical companies.
– At AAPS
meeting in November, GastroPlus was mentioned by every
speaker in at least 3 different sessions as the tool used to run the analyses
that were being presented. One presentation by Novartis noted that
GastroPlus simulation results submitted to the FDA resulted in the FDA
agreeing to eliminate a clinical trial that would have otherwise been
required.
speaker in at least 3 different sessions as the tool used to run the analyses
that were being presented. One presentation by Novartis noted that
GastroPlus simulation results submitted to the FDA resulted in the FDA
agreeing to eliminate a clinical trial that would have otherwise been
required.
GastroPlus
Ocular Delivery - Funded
Collaboration with Pfizer
Collaboration with Pfizer
GastroPlus
Pulmonary Delivery - Funded
Collaboration with GlaxoSmithKline
Collaboration with GlaxoSmithKline
Progress
- 5
• Words+
subsidiary
– General
economy appears to be affecting this business -
many states are struggling, and a large percentage of our
sales come from 3rd-party sources (Medicaid, Medicare,
schools, state vocational rehabilitation programs, etc.)
many states are struggling, and a large percentage of our
sales come from 3rd-party sources (Medicaid, Medicare,
schools, state vocational rehabilitation programs, etc.)
– New
Conversa™ communication device selling well
– Full-time
national sales manager working to improve
marketing and sales activities and dealer relationships
marketing and sales activities and dealer relationships
– Two new
employee sales reps added in California during
2009.
2009.
– Significant
progress on a new product that includes a
patent disclosure with IP owned by Words+
patent disclosure with IP owned by Words+
Miscellaneous
Items
• Potential
acquisition we were working on for a number of months did not go
through - seller decided to go with another buyer. Potential remains to acquire
software part of the business, which was our primary interest.
through - seller decided to go with another buyer. Potential remains to acquire
software part of the business, which was our primary interest.
• Due
diligence currently in progress on three acquisition possibilities for
the
pharmaceutical side of the business.
pharmaceutical side of the business.
• Two new
Ph.D.s started recently and are making excellent contributions
already. Another has just accepted our offer and will join the team on March 1.
Our elite team continues to grow!
already. Another has just accepted our offer and will join the team on March 1.
Our elite team continues to grow!
• Dr. Robert
Clark will join the company on January 19 as Director, Life
Sciences. Experience as VP of Research of a public pharmaceutical software
company will provide valuable leadership for the Life Sciences team.
Sciences. Experience as VP of Research of a public pharmaceutical software
company will provide valuable leadership for the Life Sciences team.
Strategy
Going Forward
• Continue
to expand product line and services
– Pharmaceutical
software and services
• Continue
to expand Life Sciences team
– For
several new product development projects in our corporate strategic
plan
– To
increase capacity to conduct consulting studies and funded
collaborations
• Seek and
complete strategic acquisitions
– Goal is
to add both new products & services as well as additional scientific
staff
– Negotiations
continue at slow pace, but we expect results in 2010
• Continue
to examine additional SBIR opportunities
– Words+
subsidiary
• Continue
product improvements and more aggressive marketing and sales
• Added
staff and new billing software to process prior authorizations and
accounts
receivable more quickly - now collecting old receivables from state Medicaid
agencies
receivable more quickly - now collecting old receivables from state Medicaid
agencies
• Seek
SBIR funding opportunities that fit our expertise
• Continue
our expanded marketing and sales activities - increasing number
of conferences and meetings worldwide - lead list is growing
of conferences and meetings worldwide - lead list is growing
– China
appears to be significant potential market for pharmaceutical
business
• Two new
dealers in China now signed up
– Continue
our push into the environmental toxicology area
Additional
Factors
• State of
the pharmaceutical industry
– Mergers
have had no adverse effect on business to date - in fact licenses
have increased at the larger companies, academic and government
organizations.
have increased at the larger companies, academic and government
organizations.
–Large
companies continue
to adopt in
silico
(software) technologies in
various departments, and Simulations Plus software is independently
ranked as best-in-class.
various departments, and Simulations Plus software is independently
ranked as best-in-class.
–Government
agencies expanding
use (FDA added 10 more GastroPlus
licenses recently.)
licenses recently.)
–Smaller
companies are
recognizing the value of in
silico tools as
a result
of the many scientific presentations that are now being presented by our
customers at meetings around the world.
of the many scientific presentations that are now being presented by our
customers at meetings around the world.
– Outsourcing
of consulting studies is on the rise. We expect to see
continued growth in this area of business.
continued growth in this area of business.
Summary
• Simulations
Plus financial strength continues
– Excellent
cash position that continues to grow
– No
debt
• Record
first quarter! Strong marketing and sales efforts starting to show
results
results
– Pharmaceutical
software and services revenues up 21.3% from 1QFY09
– Words+
subsidiary flat for the quarter, but new product developments are
expected
to improve performance of this division in 2010
to improve performance of this division in 2010
• Focus is
on maintaining best-in-class position in product quality and superior
customer service in both business units
customer service in both business units
– Version
7.0 of GastroPlus is expected to generate significant additional interest in
this
industry-leading program
industry-leading program
– Internal
projects expected to add new products during
FY2010
– Price
increases and reduced discounts expected to further add to revenues and
earnings
• Continue
to actively seek strategic acquisitions.
• Slides
available by e-mail on request through
info@simulations-plus.com
Questions?