A new product could bolster performance in fiscal 2012 (August). Membrane Plus will be a high priced adjunct to Simulations Plus's core Gastro Plus line. Introduction is slated for Q2. Attach rates probably will be gradual at first but a significant portion of the installed base could adopt the product as customers familiarize themselves with the software. Most new sales are made by Simulations Plus's scientific staff who demonstrate the technology face to face.
A new Words Plus product could boost margins. That segment remains a marginal contributor to financial performance. But the new machine will cost 75% less to produce than the current hardware sold by the company to speech impaired users.
The project to develop new molecules from software alone is making progress. Most scientists use the company's programs to evaluate potential drugs that already have gone through some laboratory work. Simulations Plus is trying to create a candidate for malaria from scratch, just using the software. A promising design has been created. Laboratory testing now is being arranged to confirm that potential. Success could encourage R&D outfits to rely more extensively on the company's expertise.
Work with the FDA on a toxicology application is continuing. That line probably will take a few years to develop but it could generate significant diversification over the long haul. Acquisitions continue to be pursued but nothing appears imminent.
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