Simulations Plus Reorganizes, Boosts AI in Drug Discovery Software

Ticker: SLP · Form: 10-K · Filed: Dec 1, 2025 · CIK: 1023459

Sentiment: bullish

Topics: Biopharma, Drug Discovery, AI/ML, Biosimulation Software, Clinical Trials, R&D Efficiency, Healthcare Technology

Related Tickers: SLP

TL;DR

**SLP's strategic pivot to a function-based model and aggressive AI integration positions it for continued growth in the critical biopharma R&D market, making it a strong buy.**

AI Summary

Simulations Plus, Inc. (SLP) reported a significant shift in its operational structure during fiscal year 2025, reorganizing from a business unit to a function-based model encompassing Services, Operations, Product and Technology, Research and Development, Sales and Marketing, and General and Administrative. The company, a global leader in biopharma software and consulting, generated 58% of its total revenue from software products during the fiscal year ended August 31, 2025. Key software updates include the June 2025 release of ADMET Predictor Version 13, which added new models for liver microsomal and hepatocyte intrinsic clearance and enhanced AI-driven drug design. GastroPlus, a core biosimulation product, saw its GPX.2 version released in September 2025, featuring new AI and automation. DILIsym Version 11, released in May 2025, introduced new pediatric and post-menopausal women simulated populations. The company continues to focus on accelerating drug development, reducing R&D costs, and improving patient outcomes through its model-informed drug development (MIDD) solutions.

Why It Matters

Simulations Plus's strategic reorganization and continuous software enhancements, particularly in AI/ML, are critical for investors as they signal a proactive approach to market demands and competitive positioning in the biopharma sector. By optimizing drug discovery and development, SLP helps pharmaceutical companies bring therapies to market faster and more cost-effectively, directly impacting patient access to new treatments. This focus on efficiency and innovation strengthens SLP's competitive edge against other biosimulation and consulting firms, potentially leading to increased market share and sustained revenue growth. Employees benefit from a more integrated operational structure, while customers gain access to cutting-edge tools that streamline complex R&D processes.

Risk Assessment

Risk Level: medium — The company is a non-accelerated filer and a smaller reporting company, as indicated by the 'x' marks on the Form 10-K cover page, which suggests a potentially higher risk profile compared to larger, more established filers. While the company has filed all required reports, its smaller size and classification could imply less robust internal controls or greater susceptibility to market fluctuations, despite its strong product offerings and collaborations.

Analyst Insight

Investors should consider SLP's strong focus on AI/ML integration and strategic reorganization as positive indicators for future growth in the biopharma sector. Monitor the impact of the new organizational structure on operational efficiency and the adoption rates of its updated software, particularly ADMET Predictor and GastroPlus, to gauge sustained competitive advantage.

Financial Highlights

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Revenue Breakdown

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Consulting ServicesNot DisclosedNot Disclosed

Key Numbers

Key Players & Entities

FAQ

What were Simulations Plus's key financial highlights for the fiscal year ended August 31, 2025?

For the fiscal year ended August 31, 2025, Simulations Plus's software business accounted for 58% of its total revenue. The aggregate market value of its common stock held by non-affiliates was approximately $478,929,073 as of February 28, 2025, with 20,144,564 shares outstanding as of November 14, 2025.

How has Simulations Plus reorganized its internal structure?

At the beginning of the fourth quarter of fiscal year 2025, Simulations Plus reorganized from a business unit to a function-based organizational structure. This new structure includes Services, Operations, Product and Technology, Research and Development, Sales and Marketing, and General and Administrative departments.

What new features were introduced in ADMET Predictor Version 13?

ADMET Predictor Version 13, released in June 2025, introduced new models for liver microsomal and hepatocyte intrinsic clearance for monkeys and dogs, plasma protein binding, melting point, and Gibbs free energy. It also featured enhanced models for aqueous solubility and blood-brain barrier penetration, and an expanded REST API.

What is the significance of the GastroPlus GPX.2 release for Simulations Plus?

GastroPlus GPX.2, released in September 2025, is significant as it incorporates new and expanded models, along with new AI and automation functionality. This update supports complex simulations and workflows, building on 27 years of validated science and advanced models to better serve scientific partners.

What are the primary risks associated with investing in Simulations Plus (SLP)?

Simulations Plus is classified as a non-accelerated filer and a smaller reporting company, which can indicate a potentially higher risk profile. This classification might suggest less extensive internal controls or a greater vulnerability to market volatility compared to larger, more established companies.

How does Simulations Plus contribute to reducing drug development costs and timelines?

Simulations Plus contributes by offering model-informed drug development (MIDD) software and services, such as GastroPlus and ADMET Predictor, which accelerate drug development, minimize animal testing, and reduce R&D costs. These tools help clients optimize formulations, select dosing regimens, and improve clinical trial designs, ultimately shortening the average 10-15 year development timeline and reducing the average $2.2 billion cost per drug.

What collaborations has Simulations Plus engaged in recently?

Recent collaborations include validating ADMET Predictor models with the Institute of Medical Biology of the Polish Academy of Sciences in July 2025, and a research grant from the NIH in October 2024 with the University of Southern California for AI drug discovery. Additionally, Simulations Plus partnered with the Enabling Technologies Consortium in January 2025 and received a funded grant from the FDA in November 2024 with the University of Connecticut for GastroPlus enhancements.

What is Pro-ficiency and its role in Simulations Plus's offerings?

Pro-ficiency is an adaptive learning/simulation-based training platform offered by Simulations Plus. It provides bespoke education for clinical trials, supporting protocol compliance through rapid content development, multi-language adaptability, and insights derived from learned behavior to address performance risks before trials begin.

What is Simulations Plus's mission in the biopharma sector?

Simulations Plus's mission is to create value for its clients by accelerating and reducing the costs of research and development through innovative science-based software and consulting solutions. This optimization of treatment options ultimately aims to improve patient lives.

What is the purpose of the Thales software platform from Simulations Plus?

Thales is an end-to-end quantitative systems pharmacology (QSP) platform designed to support scientists in building models, optimizing simulated populations to reported clinical efficacy, and visualizing/analyzing simulation results. It helps evaluate drug candidates for efficacy and toxicity and guides clinical trial designs and optimal dosing protocols.

Risk Factors

Industry Context

Simulations Plus operates in the highly competitive biopharmaceutical software and consulting sector. The industry is characterized by a strong demand for solutions that can accelerate the lengthy and costly drug development process, estimated at 10-15 years and $2.2 billion per drug. Key trends include the increasing adoption of model-informed drug development (MIDD), the integration of artificial intelligence (AI) into R&D workflows, and a focus on improving clinical trial efficiency and patient outcomes.

Regulatory Implications

The biopharmaceutical industry is heavily regulated by bodies like the FDA and EMA. SLP's MIDD solutions must align with evolving regulatory guidance and best practices for drug approval. Any shifts in regulatory requirements or increased scrutiny on simulation-based evidence could impact the adoption and perceived value of their offerings, necessitating continuous adaptation and validation.

What Investors Should Do

  1. Monitor adoption of new AI features
  2. Assess impact of organizational restructuring
  3. Track competitive landscape and product innovation
  4. Evaluate revenue diversification

Key Dates

Glossary

Model-Informed Drug Development (MIDD)
An approach that uses modeling and simulation throughout the drug development process to integrate various sources of data and knowledge, aiming to optimize decision-making, reduce risk, and accelerate timelines. (This is the core methodology SLP's software and services are built upon, enabling clients to improve efficiency and reduce costs in drug R&D.)
Biosimulation
The use of computer simulations to model and predict the behavior of biological systems, particularly in the context of drug efficacy, safety, and pharmacokinetics. (GastroPlus is a key biosimulation product, and its advancements directly impact SLP's value proposition to pharmaceutical clients.)
Pharmacokinetics (PK)
The study of how a drug moves through the body over time, including absorption, distribution, metabolism, and excretion (ADME). (ADMET Predictor and GastroPlus are designed to predict and simulate these processes, crucial for drug safety and efficacy assessments.)
Pharmacodynamics (PD)
The study of the biochemical and physiological effects of drugs and their mechanisms of action. (Understanding PD is essential for drug development, and SLP's solutions aim to integrate PK/PD modeling for better predictions.)
Artificial Intelligence-Augmented Insights
The use of AI algorithms to analyze data, identify patterns, and generate predictions or recommendations that enhance human decision-making in drug design and development. (SLP is increasingly incorporating AI into its products (e.g., ADMET Predictor, GastroPlus) to accelerate discovery and improve prediction accuracy.)
Drug-Drug Interactions (DDIs)
The effect that one drug has on the activity of another drug when administered together. (Predicting DDIs is a critical challenge in drug development, and SLP's software aims to help clients address this through simulation.)

Year-Over-Year Comparison

The company reported a significant organizational shift in fiscal year 2025, moving from a business unit to a function-based model. While specific year-over-year financial comparisons for revenue growth and margin changes are not detailed in this excerpt, the focus on product updates like ADMET Predictor v13 and GastroPlus GPX.2 suggests continued investment in innovation. New risks related to the integration of the functional structure and the ongoing evolution of regulatory policies are likely to be more prominent compared to the previous filing.

Filing Stats: 4,211 words · 17 min read · ~14 pages · Grade level 19.8 · Accepted 2025-12-01 16:16:05

Key Financial Figures

Filing Documents

– BUSINESS

ITEM 1 – BUSINESS 2

– RISK FACTORS

ITEM 1A – RISK FACTORS 15

– UNRESOLVED STAFF COMMENTS

ITEM 1B – UNRESOLVED STAFF COMMENTS 29

- CYBERSECURITY

ITEM 1C - CYBERSECURITY 29

– PROPERTIES

ITEM 2 – PROPERTIES 30

– LEGAL PROCEEDINGS

ITEM 3 – LEGAL PROCEEDINGS 30

– MINE SAFETY DISCLOSURES

ITEM 4 – MINE SAFETY DISCLOSURES 30 PART II

– MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 5 – MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 31

– [RESERVED]

ITEM 6 – [RESERVED] 32

– MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33

– QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 42

– FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 42

– CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 42

– CONTROLS AND PROCEDURES

ITEM 9A – CONTROLS AND PROCEDURES 43

– OTHER INFORMATION

ITEM 9B – OTHER INFORMATION 44

– DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 44 PART III

– DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 45

– EXECUTIVE COMPENSATION

ITEM 11 – EXECUTIVE COMPENSATION 45

– SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 45

– CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 45

– PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES 45 PART IV

– EXHIBITS, FINANCIAL STATEMENT SCHEDULES

ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES 46

SIGNATURES

SIGNATURES 48 i Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (this "Report") includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements may appear throughout this Report, including, without limitation, in the following sections: "Business" (Part I, Item 1 of this Report), "Risk Factors" (Part I, Item 1A of this Report), "Cybersecurity" (Part I, Item 1C of this Report), "Management's Discussion and Analysis of Financial Condition and Results of Operations" (Part II, Item 7 of this Report), and "Quantitative and Qualitative Disclosures About Market Risk" (Part II, Item 7A of this Report). These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions, as well as current plans, expectations, estimates, forecasts, and projections about our business and the industry in which we operate, that are subject to risks and uncertainties that may cause actual results to differ materially. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. We describe certain risks and uncertainties that could cause actual results and events to differ materially in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitat

–BUSINESS

ITEM 1 –BUSINESS As used in this Report, each of the terms "we," "us," "our," the "Company," and "Simulations Plus" refers to Simulations Plus, Inc. and its wholly owned subsidiaries (both current and previous, as applicable). Simulations Plus, Inc. was incorporated in California on July 17, 1996. The Company is a global leader and premier provider in the biopharma sector, offering advanced software and consulting services that enhance drug discovery and development, clinical trial operations, and commercialization. The Company supports its clients across the drug development lifecycle from early discovery through all phases of clinical research and development ("R&D"), including clinical operations, to product commercialization. The Company serves clients as a strategic partner throughout the entire drug development lifecycle, offering solutions that integrate scientific software platforms, artificial intelligence-augmented insights, and expert consulting. This optimizes efficiency, costs, and time-to-market for our clients, thereby enhancing our competitive position. Our clients face many challenges. Developing new therapies is time-consuming and expensive, requiring an average of 10-15 years at an average cost of $2.2 billion to develop a single drug according to Drug Discovery Today. Drug sponsors must prioritize not only the safety and efficacy of the drug, but also navigate issues such as drug-drug interactions, inclusion of diverse populations, evolving regulatory policies, increasing compliance during clinical trials, and achieving commercial success. Our model-informed drug development ("MIDD") software and services solutions allow clients to use modeling and simulation to accelerate the drug development timeline, minimize animal testing, reduce the costs of R&D, comply with regulatory guidance and best practices, and increase confidence in the safety and efficacy of their drugs. Our clinical operations solutions support the success of clinical trials

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