8-K
Simulations Plus, Inc. (SLP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
May 20, 2021
Date of Report (Date of earliest event reported)
Simulations Plus, Inc.
(Exact name of registrant as specified in its charter)
| California | 001-32046 | 95-4595609 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
42505 10^th^ Street West, Lancaster, California 93534-7059
(Address of principal executive offices) (Zip Code)
661-723-7723
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | SLP | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company □
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
| Item 7.01 | Regulation FD Disclosure |
|---|
On May 20, 2021, Simulations Plus, Inc., a California corporation (the “Company”), presented at the 16^th^ Annual Needham Virtual Technology & Media Conference using the presentation attached as Exhibit 99.1 to this Current Report on Form 8-K. The presentation has also been posted to the Company’s website in the “Investors” section.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed subject to the requirements of Item 10 of Regulation S-K, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.
Forward-Looking Statements
This Current Report on Form 8-K (the “Report”), including the disclosures set forth herein and in Exhibit 99.1 attached hereto, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms “anticipates,” “expects,” “estimates,” “believes” and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.
Forward-looking statements in this Report or hereafter, including in other publicly available documents filed with the Securities and Exchange Commission (the “Commission”), reports to the stockholders of the Company and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management’s best estimates based upon current conditions and the most recent results of operations. These forward-looking statements speak only as of the date of this Current Report and are subject to a number of risks, uncertainties and assumptions. The events and circumstances reflected in such forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements due to risks, uncertainties and other factors described in the Company’s press releases and in its filings with the Commission, including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K and any subsequent filings with the SEC. Moreover, the Company operates in a very competitive and rapidly changing environment. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d) Exhibits
| 99.1 | Investor conference presentation, dated May 20, 2021. |
|---|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SIMULATIONS PLUS, INC. | |
|---|---|
| Dated: May 20, 2021 | By: /s/ Will Frederick |
| Will Frederick | |
| Chief Financial Officer |
Ex 99.1
1 | NASDAQ: SLP 16 th Annual Needham Technology & Media Conference Shawn O’Connor, CEO May 20, 2021
2 | NASDAQ: SLP 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, 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
3 | NASDAQ: SLP Our mission is to create value for our customers by accelerating and reducing the costs of R&D through innovative science - based software and consulting solutions that optimize treatment options and improve patient lives . Mission
4 | NASDAQ: SLP □ Industry - leading provider of modeling and simulation solutions used by major pharmaceutical, biotech, chemical, consumer goods companies and regulatory agencies worldwide □ Innovative software and services to improve drug development from discovery to regulatory approval with supportive guidance from the FDA and ability to lower cost and time to market with a higher likelihood of success □ Solutions bridge machine learning and include pharmacokinetic - pharmacodynamic ( PKPD ), quantitative systems pharmacology & toxicology ( QSP/QST ), and physiologically based pharmacokinetic ( PBPK ), Physiologically - Based Biopharmaceutics ( PBBM ) Modeling □ 10+ year track record of consistent revenue and profitability growth and successful M&A strategy Company Overview
5 | NASDAQ: SLP Our solutions allow customers to model and predict results of chemical and biological tests required in the R&D process to improve success rates at multiple points in the process: – Computational AI models help scientists streamline and improve their processes – Machine learning improves the models with ever - growing data sets – Better informed clinical trial design and analyze clinical results – Identify potential safety liabilities earlier, avoiding costly clinical failures – Optimize efficacy and minimize toxicity by efficiently identifying dosing regimens Our Value Proposition Avg. cost of $1.4B and 10+ years to bring a drug to market 1,2 We’ve helped bring 40+ drugs to market and informed multiple development programs
6 | NASDAQ: SLP We Improve Drug Discovery and Development
7 | NASDAQ: SLP PBPK Software Solutions and AI Data Mining Simulating IV, oral, oral cavity, ocular, inhalation, skin and IM absorption, PBPK, PBBM, PD modeling and drug - drug interactions QSAR modeling enabling rapid prediction of 140+ ADMET properties Used for lead generation and optimization Mechanistic simulation engine for the in vitro dissolution predictions to accelerate and optimize drug formulation Predict how fast a drug candidate will pass across the important physiological membrane barriers (GI, BBB) Chemical sketching tool with ADMET property predictions in connection with ADMET Predictor GastroPlus ® ADMET Predictor ® DDDPlus Œ MembranePlus Œ MedChem Designer Œ
8 | NASDAQ: SLP PKPD Software Solutions Population PKPD Model to support dose regimen, risk exposure, clinical trial protocol design and analysis, drug label specifications and regulatory submission Cloud - based data management application Datxplore PKanalix Mlxplore Monolix Simulx Exploration and visualization of data Non - compartmental and compartmental analysis Exploration and visualization of complex models Non - linear mixed effects (NME) modeling engine Clinical trial pharmacometrics simulations Monolix Suite ® KIWI Œ
9 | NASDAQ: SLP QSP/QST Software Solutions Determine potential drug - induced liver injury hazard posed by individual drug candidates to support clinical trial optimization Assess the potential for drug - induced kidney injury of drug candidates to support clinical trial optimization and clinical trial decision making NASH model to predict efficacy for treatment modalities to support clinical trial optimization and clinical trial decision making IPFsym (Idiopathic pulmonary fibrosis) RADAsym (Acute radiation exposure) RENAsym Œ DILIsym Œ RADAsym Œ NAFLDsym Œ IPFsym Œ
10 | NASDAQ: SLP • 70+ scientific PhD experts provide insightful solutions to improve the productivity of science - based drug development • Focusing on lead selection, pharmacology, ADMET and DMPK, dose regimen, efficacy and safety • Capabilities include: – Population PKPD data assembly, modeling, simulation, analysis and regulatory submission – PBPK modeling and simulation – Liver and kidney safety modeling and analysis – QSP/QST modeling support and analysis – AI drug candidate prioritization – Global regulatory strategies – Regulatory and scientific writing Services Solutions
11 | NASDAQ: SLP Janssen Case Study: Accelerating Regulatory Interactions Virtual crossover trials to establish drug product specification after manufacturing changes • Janssen changed the manufacturing process to improve efficiencies with scale - up techniques post approval • FDA requested clinical study to confirm bioequivalence • Built and validated the baseline model in GastroPlus® using existing clinical data from previously approved lots • Assessed impact of formulation changes; defined drug product specifications • Performed virtual trial simulations in different populations to confirm bioequivalence • FDA accepted the GastroPlus® modeling results, clinical study request was waived
12 | NASDAQ: SLP In Silico Methods Improve the Probability of Phase 3 Success Client Case Study: Strategic Use of Modeling & Simulation • Client with novel antibody for prophylactic use in competitive migraine market had Phase 3 development plan with predicted probability of success of <15% • Iteratively developed model throughout Phase 1 & Phase 2 • I mplemented model - based clinical trial simulation strategy to improve Phase 3 design • Phase 3 trials demonstrated safety and efficacy in preventing migraine • Months of development time and millions of dollars saved by avoiding failed Phase 3 trials, also reduced time to approval and market • Reduced unnecessary burden on patients by evaluating multiple alternatives in silico before running trials
13 | NASDAQ: SLP Growth Drivers Increasing acceptance of modeling and simulation by FDA and drug industry High customer satisfaction with ~95% software contract renewal rate (by fees) Recently improved and expanded sales infrastructure Increasing opportunities for product and service cross - selling Synergistic acquisitions Steadily increasing industry R&D spend 19%+ Revenue CAGR
14 | NASDAQ: SLP $14.9 $17.0 $18.5 $21.6 $14.0 $9.2 $12.7 $15.5 $20.0 $9.8 FY17 FY18 FY19 FY20 FY21 YTD Software Services Consistent Revenue Growth FY21 YTD (through Q2) (in millions) $24.1 $29.7 $34.0 $23.8 $41.6
15 | NASDAQ: SLP Software and Services Performance FY21 YTD (through Q2) Software Products % of Software Revenues 56% 19% 17% 8% GastroPlus Monolix Suite ADMET Predictor Other Software 19% 29% 52% PBPK QSP/ QST PKPD Services Offerings % of Services Revenues 59% of Total Revenue 41% of Total Revenue
16 | NASDAQ: SLP Global Customer Base 66% Americas 23% EMEA 11% Asia Pacific Revenue by Region FY21 YTD (through Q2)
17 | NASDAQ: SLP • Expand product offerings through opportunistic acquisitions – Fill gaps in the current product offerings – Focus on immediately or near - term accretive opportunities – Fragmented industry amenable to consolidation • Further expand global sales reach – Increase sales effort to drive new customer growth in U.S., Europe and Asia – Expand client base in the small and mid - sized biotechnology space – Focus on cross - selling efforts to increase average revenue per customer • Increase R&D investment to enhance existing models and develop new tools to broaden product offerings Strategic Opportunities for Expansion and Growth
18 | NASDAQ: SLP • Total Revenue Growth – YTD performance: 21% y/y growth – Full - year guidance range: 15 - 20% y/y organic growth plus 3 - 5% from Lixoft • Software Revenue Growth – YTD performance: 40% y/y growth – Full - year guidance range: 20 - 25% y/y growth • Services Revenue Growth – YTD performance: 1% y/y growth – Full - year guidance range: 25 - 30% y/y growth • YTD Profitability – Gross margin was 78%, up from 73% prior fiscal year – Net income increased 35% y/y to $5.7 million – Diluted earnings per share increased 17% y/y to $0.27 • M&A Efforts – Continuing to explore opportunities and acquisitions that would be incremental to revenue growth targets above FY21 Q2 YTD Performance & FY21 Full Year Guidance
19 | NASDAQ: SLP x Leading provider of innovative modeling and simulation software and consulting services focused on pharmaceutical and biotechnology companies » Solutions from early discovery through regulatory approval x Pure play in the in silico drug discovery space x Growing acceptance of technology by regulators and industry with supportive guidance issued by the FDA x Products have the potential to reduce drug development costs and time while improving success rates x Steady growth in pharmaceutical industry R&D expenditures provides expanding target market » ~$170B in 2020 growing around 3% per year 3 x 10+ year track record of consistent revenue and profitability growth » Recent revenue CAGR of 20%+ Investment Highlights
20 | NASDAQ: SLP Financial Summary and Selected Financial Information Nasdaq Global Select Market SLP Q2 Cash and short - term investments $118M Q2 Borrowed Debt Outstanding $0 Market Capitalization (a/o 5/12/21) $1.1B Q2 Fully Diluted Shares Outstanding 20.8M 30 - Day Avg. Daily Trading Volume (a/o 5/12/21) ~204K
21 | NASDAQ: SLP Covering Analysts Bank Analyst Craig - Hallum Matt G. Hewitt Oppenheimer & Co. Francois Brisebois Raymond James Dane Leone
22 | NASDAQ: SLP Q&A Questions & Answers Thank you!
23 | NASDAQ: SLP 1. J Health Econ . 2016 May;47:20 - 33. 2. Brochure: “Biopharmaceutical Research & Development: The Process Behind New Medicines” . PhRMA. 3. EvaluatePharma® World Preview 2017, Outlook to 2022, 10th Edition, June 2017, p. 19. References