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Thursday, May 19, 2022

For Drug Modeler, French Connection Pays Off

 Simulations Plus bought French medical software company Lixoft in April, despite a pandemic that hampered in-person communication.The Lancaster company, which also provides drug modeling and simulation software to pharmaceutical companies, bought Lixoft for $6 million in cash, taking the company’s Monolix suite into its product portfolio.For Simulations Plus Chief Executive Shawn O’Connor, the acquisition complemented the company’s other drug modeling software such as GastroPlus and DILIsym technology. Other acquisitions, like Buffalo, New York-based Cognigen seven years ago and DILIsym in North Carolina four years ago, were carefully curated to fill a very niche market.“Monolix is a product that fits nicely with the techniques we already have,” O’Connor told the Business Journal. “Lixoft is a company we’ve had visibility of for many years and they have established themselves in our marketplace, the pharmaceutical industry’s use of modeling and simulation.”Lixoft, based in Paris, increases Simulations’ presence in Europe too.“Not only was it an international acquisition, it was an international acquisition in a timeframe in which, at various stages, we were locked down. We were prevented from traveling in either direction. It took a bit more orchestration than usual but we successfully got it done in April,” O’Connor explained.Proven profitabilityThat month, O’Connor expected the Lixoft acquisition to add $3 million in revenue for publicly traded Simulations Plus, but the acquisition quickly proved its value.It bumped up revenue for the drug modeling company — for the full fiscal year, Simulations enjoyed $41.6 million in revenue, an increase of 22 percent from the prevous year, with a net income of $9.3 million, or 50 cents a share, the company reported in November.Simulations is very careful with its acquisition targets, opting for companies that are already in the same market. That way its sales force won’t have to learn about a new market in the process, O’Connor said.“Strategically, we stay focused in that market space. In this world of modeling and simulation, there are many techniques and methodologies applied to broaden our skillsets internally, our product, our software portfolio that we license to our clients,” he added. “We believe that enhances our value to our clients and our ability to do more of the modeling and simulation requirements that they have to fill.”Just this year, Simulations’ DILIsym platform was noted in a U.S. Food and Drug Administration review of Turalio, a cancer drug maketed by Daiichi Sankyo. The tech platform helped the Japanese biotech company show safety and efficacy with modeling data.The same Simulations platform was used by the California Office of Environmental Health Hazard Assessment in assessing whether or not acetaminophen should be labeled as having the potential to cause cancer.Model behaviorO’Connor said Monolix uses a “population pharmacokinetic” model, which takes a top-down approach to determine the right dosage for a pipeline drug before the pharma company settles on specifics in a clinical trial.“We’d like to get more of this drug, but there’s a limit to how much you can give to the patient without more toxicity, more adverse side effects. The Monolix tool is used in that evaluation,” added O’Connor.In contrast, Simulations’ flagship platform GastroPlus is a physiologically based pharmacokinetic platform. This kind of modeling software starts at a molecular level to predict a drug’s effect on the body.Tools like Monolix often help biopharma companies with making the difficult decision to stop R&D on a certain drug, what those in the industry call “failing fast,” O’Connor said.“It doesn’t make for a great marketing tagline, but often our success is in helping the clients understand that their investment dollars may be better placed elsewhere,” he explained.The average cost of drug development in the U.S., from conception through FDA approval, can cost $1.5 billion on average, O’Connor said.Simulations Plus’ sales force and consultants have been trained to push the Monolix suite alongside its other products this year.Added O’Connor: “Our approach with acquisitions is typically to allow them to operate as a separate entity but look to integrate and leverage operationally where it can provide benefit to the company as a whole.” 

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