Simulations Plus SLP recently announced the acquisition of Pro-ficiency Holdings, Inc. and its subsidiaries from QHP Capital and its minority shareholders. The company specializes in offering simulation-powered compliance, learning and intelligence solutions for life sciences.
The transaction, valued at roughly $100 million in cash, signifies a strategic move for Simulations Plus in augmenting its footprint across the drug development continuum, from pre-clinical protocols to product commercialization.
SLP aims to harness Pro-ficinency’s rich portfolio of software and services, infused with AI capabilities, to offer a comprehensive suite of solutions spanning clinical trial operations, medical affairs and commercial market launches to pharmaceutical and biotech companies.
The acquisition solidifies Simulation Plus’ portfolio, bolstering its scientific skills, drug development expertise, data management acumen, predictive analytics and biosimulation capabilities.
The Pro-ficiency buyout doubles SLP’s total addressable market by adding $4 billion of revenue opportunity in the clinical simulations training, analytics and medical communications market. It not only expands the total addressable market for SLP but also presents compelling cross-selling opportunities and strengthens client relationships within the life sciences sector.
Simulation Plus is a well-known name in the biosimulation market and consulting services that focuses on drug discovery, development, research and regulatory submissions.
The company’s performance is primarily gaining from higher software and services revenues. In the last reported quarter, overall sales were up 16%, driven by higher software revenues in the Clinical Pharmacology & Pharmacometrics and Cheminformatics business units.
Revenues from Software (63% of total quarterly revenues) increased 11% year over year to $11.6 million. Services’ revenues (37%) improved 27% to $6.7 million. The segment’s top line gained from higher revenues from Quantitative Systems Pharmacology and Physiologically Based Pharmacokinetics business units.
Frequent product launches are also aiding top-line expansion.
In May 2024, it introduced the GastroPlus X (GPX), which is its latest platform for physiologically based pharmacokinetics and biopharmaceutics modeling and simulation. GPX is capable of handling tasks, including early discovery high-throughput PK simulations, drug-drug interactions and population predictions. It consolidates these functions into one platform, which significantly reduces time spent on model setup, data management and reformatting results.
In April 2024, SLP’s DILIsym software licenses were renewed by the FDA for the seventh time in a row. The software is specifically designed to aid pharmaceutical development teams in the understanding of compounds as well as outlining safe dosing methods.
Currently, Simulations Plus carries a Zacks Rank #3 (Hold). Shares of the company have gained 6.2% compared with the industry’s growth of 24.9%
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Stocks to Consider
Arista Networks, Inc. ANET, sporting a Zacks Rank #1 (Strong Buy) at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven and data-centric approach to help customers build their cloud architecture and enhance their cloud experience. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista has a long-term earnings growth expectation of 15.7% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters.
Motorola Solutions, Inc. MSI, carrying a Zacks Rank #2 (Buy) at present, delivered an earnings surprise of 7.5%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 9.5%.
Motorola provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure service providers. It develops and services both analog and digital two-way radio, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets.
NVIDIA Corporation NVDA, sporting a Zacks Rank #1 at present, is another key pick in the broader industry. It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
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