August 2021 Accelerating Medicines - Certara Investor ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Accelerating Medicines
August 2021
Disclaimer
The following presentation has been prepared by Certara, Inc. (“we”, “us”, or “the Company”) solely for informational purposes and should not be construed to be, directly or indirectly, in whole or in part, an offer to buy or sell and/or
an invitation and/or a recommendation and/or a solicitation of an offer to buy or sell any security or instrument or to participate in any investment or trading strategy, nor shall any part of it form the basis of, or be relied on in
connection with, any contract or investment decision in relation to any securities or otherwise. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks
and special considerations involved with an investment in the securities of the Company. Nothing contained in this document shall be relied upon as a promise or representation as to the past or future performance of the Company.
Past performance does not guarantee or predict future performance. You acknowledge that any assessment of the Company that may be made by you will be independent of this document and that you will be solely responsible for
your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the
Company.
Forward-Looking Statements
This document contains certain statements that constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, with respect to the future of the
Company’s industry and markets, customer partnerships, business performance, strategies and expectations. These statements typically contain words such as “believe,” “may,” “potential,” “will,” “plan,” “could,” “estimate,” “expects”
and “anticipates” or the negative of these words or other similar terms or expressions. Any statement in this document that is not a statement of historical fact is a forward-looking statement and involves significant risks and
uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot provide any assurance that these expectations will prove to be correct. You should not rely upon
forward-looking statements as predictions of future events and actual results, events, or circumstances. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of
assumptions, uncertainties, risks and factors that are beyond our control, including the acceptance of model-informed biopharmaceutical discovery and development by regulators, actions by our competitors, changes in the
regulatory or business environment of our customers, and the and the other factors detailed under the captions “Risk Factors” and “Special Note Regarding Forward-Looking Statements” and elsewhere in our Securities and
Exchange Commission filings, and reports, including the Form 10-K filed with the SEC on March 15, 2021. Any forward-looking statements speak only as of the date of this release and, except to the extent required by applicable
securities laws, we expressly disclaim any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. Factors that may materially affect our results and those risks listed
in filings with the Securities and Exchange Commission.
Neither the delivery of this document nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since
that date.
.
© Copyright 2020 Certara, L.P. All rights reserved. 2Our Mission
We accelerate medicines to patients
using biosimulation software and technology
to transform traditional drug discovery and development.
© Copyright 2020 Certara, L.P. All rights reserved. 3Certara at a Glance: A Global Leader in Biosimulation
Business End-to-End Platform Customers Second Quarter Financials
Software
20+ Year • Biosimulation
1,650+
History of innovation • Regulatory Submissions
Customers across $70.1mm
61 countries 2Q 2021 Revenue
• Value Communication
15% YoY Growth
Tech-Enabled Services
~1,000 Employees • Drug Discovery & 10+ Year
~300 with PhDs, Development Average tenure
PharmDs and MDs with Biosimulation for top 30 customers
• Regulatory Science $25.5mm
14 Acquisitions • Market Access 261 customers with ACV 2Q 2021 Adjusted EBITDA
Track record of accretive > $100,000 36% Adjusted EBITDA
and complementary $11.6B+ TAM growing at 53 customers with ACV Margin
transactions 12-15% CAGR1 > $1M
Customer data as of 12/31/2020.
1. Market research reports from GrandView and SpendEdge
© Copyright 2020 Certara, L.P. All rights reserved. 4Biosimulation is transforming traditional drug R&D
Traditional R&D Pain Points Benefits of Biosimulation
• On average, it takes more than • In silico trials can replace human clinical trials in
10 years and $2B to bring a drug to market1 certain cases, saving significant time and
money
• The probability of success of compounds • Biosimulation helps to increase probability of
entering Phase I trials is only 7%2, and even in success in human clinical trials, the most
Phase III, just 53%3 of drugs reach the market expensive part of drug development
• ~70% of drugs that failed in Phase II or Phase • Biosimulation helps to optimize dosing for
III trials4 failed due to safety and efficacy issues different populations for enhanced safety and
efficacy
Biosimulation can deliver significant time and cost savings in drug discovery and development
1. Biopharmaceutical Research and Development: The Process Behind New Medicines. www.PhRMA.org, January 2012, Washington, US http://phrma-docs.phrma.org/sites/default/files/pdf/rd_brochure_022307.pdf
2. Dowden, H. et al. Trends in clinical success rates and therapeutic focus. Nature Reviews Drug Discovery 18, 495-496 (2019)
3. EvaluatePharma. World Preview. 2020
4. Harrison, R. Phase II and phase III failures: 2013 – 2015. Nat Rev Drug Discov 15, 817-818 (2016). https://doi.org/10.1038/nrd.2017.184
© Copyright 2020 Certara, L.P. All rights reserved. 5Biosimulation utilizes virtual patients to conduct in silico trials
Biosimulation is the computer-aided mathematical modeling of biological processes and systems to simulate and predict
how the body affects the drug and how the drug affects the body
Biosimulation Software Applications
Skin Brain
First-in-Human Drug-Drug
Dosing Interactions
Liver Heart
Clinical Study Design Pediatric Dosing
Lung Kidney
Bioequivalence Formulation
Adipose Muscle
Renal Impairment Hepatic Impairment
Gut Bone Reduced Cardiac
Food Effect
Output
We have created 25 different virtual patient populations and mathematical models for 10 organs
© Copyright 2020 Certara, L.P. All rights reserved. 6Growing industry and regulatory adoption of biosimulation
growing
Number of Scientific Publications Increased Incorporation of Biosimulation with
about PKPD or PBPK Biosimulation1 FDA Guidance2
35,000 24 FDA Guidances to Date
Number of Scientific Publications
10 FDA
30,000 Guidances
• Pediatric
25,000 • Rare
diseases
20,000 6 FDA • Drug-drug
5 FDA Guidances interaction
15,000
Guidances • Pediatric • PBPK
• Renal • HIV
10,000 3 FDA • Animal
impairment Biosimulation
Guidances • Hepatic
5,000 Pilot Program
• PopPK impairment
0
2016 to
2000 - 2004 2005 - 2009 2010 - 2014 2015 - 2019Our biosimulation software has informed ~250 labels for 80+ novel drug approvals
Agios Tibsovo (Ivosidenib) Daiichi Sankyo Turalio (Pexidartinib) Pfizer Bosulif (Bosutunib)
AstraZeneca Calquence (Acalabrutinib) Genentech Polivay (Polatuzumab vedotin-PIIQ) Pfizer Lorbrena (Lorlatinib)
Celgene Inrebic (Fedratinib hydrochloride) Janssen Balversa (Erdafitinib) Spectrum Beleodaq (Belinostat)
Lilly Verzenio (Abemaciclib) Novartis Zykadia (Certinib) Ariad Alunbrig (Brigatinib)
Genentech Cotellic (Cobimetinib) Novartis Piqray (Alpelisib) Ariad (Takeda) Iclusig (Ponatinib)
Loxo Oncology Vitrakvi (Larotrectinib) Novartis Odomzo (Sonidegib) AstraZeneca Tagrisso (Osimertinib)
Oncology
Amgen Blincyto (Blinatumomab) Novartis Kisqali (Ribociclib succinate) Eisai Lenvima (Lenvatinib)
AstraZeneca Lynparza (Olaparib) Novartis Farydak (Panobinostat) Genetech Alecensa (Alectinib)
Verastem Copiktra (Duvelisib) Novartis Rydapt (Midostaurin) Janssen Erleada (Apalutamide)
Sanofi Jevtana (Cabazitaxel) Novartis Tabrecta (Capmatinib) Incyte Pemazyre (Pemigatinib)
Seattle Genetics Tukysa (Tukatanib) BluePrint Medicines Ayvakit (Avapritmib) Lilly Retevmo (Selpercatinib)
BluePrint Gavreto (Pralsetinib)
Akarx Doptelet (Avatrombopag maleate) Global Blood Therapeutics Oxbryta (Voxelotor) Vertex Symdeko (Tezacaftor/ivacaftor)
Rare Disease PTC Therapeutics Emflaza (Deflazacort) Sanofi Genzyme Cerdelga (Eliglustat tartrate) Vertex Trikafta (Elexacaftor/ivacaftor/tezacaftor)
Intercept Ocaliva (Obeticholic acid) Pfizer Isturisa (Osilodrostat) AstraZeneca Koselugo (Selumetinig)
Alkermes Aristada (Aripiprazole) GW Research Epidiolex (Cannabidiol) Kyowa Kirin Nourianz (Istradefylline)
Central Nervous System Eisai Dayvigo (Lemborexant) Novartis Mayzent (Siponimod fumaric acid) UCB Briviact (Brivaracetam)
Lilly Reyvow (Lasmiditan succinate)
GSK Dectova (Zanamivir) Janssen Olysio (Simeprevir) Novartis Egaten (Triclabendazole)
Infectious Disease Merck Prevymis (Letermovir) Nabriva Zenita (Lefamulin acetate) Tibotec Edurant (Rilpivirine)
Merck Pifeltro (Doravirine)
Johnson & Johnson Xarelto (Rivaroxaban) Actelion (J & J) Opsumit (Macitentan) Actelion (J & J) Uptravi (Selexipeg)
Cardiovascular
Pfizer Revatio (Sidenafi)
Shionogi Symproic (Naldemedine) AstraZeneca Movantik (Naloxegol) Helsinn Akynzeo (Fosnetupitant/palosetrom)
Gastroenterology
Shire Motegrity (Prucalopride)
Galderma Aklief (Trifarotene) Lilly Olumiant (Baricitinib) Pfizer Revatio (Sildenafil)
Other
Janssen Invokana (Canagliflozin) Merck Steglatro (Ertugliflozin) AbbVie Orilissa (Elagolix)
We believe that our customers would have faced millions in additional costs and significant launch delays
had they conducted human clinical trials for these drug label claims
© Copyright 2020 Certara, L.P. All rights reserved. 8Blue chip customer base spanning large biopharma and biotech
Select Customers Number of FDA Approvals Since 2014
Orphan Drug Designation
Oncology
Infectious Disease
Hematology
Pulmonary
Cardiology
Dermatology
90% of novel drug and
Diabetes
biologic approvals were
Neurology
achieved by our customers
Gastroenterology
Psychiatry
Bone
Migraine
Sleep Disorders
Other
0 10 20 30 40 50 60 70 80 90 100
*Includes NDA’s and BLA’s and excludes diagnostic and device products
**Other includes liver, neuromuscular, metabolism, endocrinology, ophthalmic, and more
Orphan drug designation applies across therapeutic areas
We have more than 1,650 customers worldwide, including all top 10 biopharma companies
in each of the U.S., Europe and Japan by R&D spend
© Copyright 2020 Certara, L.P. All rights reserved. 9The Certara End-to-End Platform
Discovery Preclinical Clinical Post-Approval
Across All Drug Types (NDAs and BLAs)
Biosimulation Software Platforms
Software
Regulatory Submission Software
30% of
revenue¹ Market Access Software
Drug Discovery and Development Services with Biosimulation
Tech-enabled
Services
Regulatory Science
70% of
revenue¹ Market Access
For over 20 years, we have purpose-built and invested in our proprietary
end-to-end platform with strategic acquisitions and innovation
1. As of 12/31/2020
2. Percentage of revenue based on management estimates
© Copyright 2020 Certara, L.P. All rights reserved. 10Our end markets are large and growing
• Drastic need for digital transformation
$17B+ in $188B biopharma R&D market1
2024 TAM
$11.6B+ • Industry is in paradigm shift, with
TAM Today CAGR biosimulation adoption accelerating
and increasing acceptance from
Biosimulation $2.4B+ ~15%
regulatory agencies
Regulatory Science $7.9B+ ~12%
Market Access $1.3B+ ~12% • Technology and analytics-driven
improvements continue to grow
exponentially in Life Sciences
We use biosimulation and technology throughout R&D to reduce costs and improve outcomes
1. As of 2020
Sources: Grand View Research, SpendEdge
© Copyright 2020 Certara, L.P. All rights reserved. 11Differentiated scientific and technology expertise
Software Tech-Enabled Services
✓ Industry standard built over 20 years ✓ Scalable service model powered by proprietary technology
✓ Proprietary models and 9.3 million lines of code ✓ High net revenue repeat rate of 116% in 2020
Key Differentiators
✓ Adopted by 17 global regulatory agencies ✓ Integrated services with 90% of our top 50 customers using
✓ Embedded in customers’ R&D processes – 90%+ renewal rate both biosimulation solutions and regulatory & access services
✓ Validated by 34k+ scientific publications ✓ Renowned for key opinion leadership
✓ Used by ~400 academic institutions ✓ Depth and breadth of experience across every therapeutic area
and modality
✓ 10+ year average tenure for top 30 customers
Our differentiated strengths enable us to win new customers and projects
1. Listed on Euronext Paris Exchange
© Copyright 2020 Certara, L.P. All rights reserved. 12Deeply experienced leadership team and global talent footprint1
35+ Locations
Global Resource Centers
~300 Scientists
~350 in
Europe
~75 in
Canada Shanghai Office
Regulatory Experts
~220
October 2020
Headquarters
Princeton, NJ
~425 in
U.S. ~150 in
~100 Market Access Specialists Asia Pacific
Software Developers &
~100
Technologists
Of our ~1000 employees, ~300 hold PhD, PharmD, or MD degrees and an
additional 260+ have Master’s or other advanced degrees
1. As of 6/30/2020
© Copyright 2020 Certara, L.P. All rights reserved. 13Certara’s Industry-Standard Software
Biosimulation Regulatory & Market Access
Phoenix
Leading mechanistic biosimulation Industry-leading software for PK/PD,
platform used to predict how drugs work, toxico-kinetic, and non-compartmental GlobalSubmit BaseCase
without human or animal studies analyses – required for regulatory
submissions
Cloud-based platforms to
Supported ~250 label claims 34,000+ Google Scholar citations help customers manage
for 80+ drugs regulatory submissions
and market access
communication
Integrated informatics platform with 45+ proprietary databases for meta-
self-service access and analytics to analysis of a new drug’s safety and
help manage discovery projects efficacy relative to other products
~28,000 users
D360 Used by ~6,000+ discovery CODEx Covers more than 8,500 trials
research scientists
Our industry-leading software is adopted by more than 48,000 users worldwide across 61 countries
© Copyright 2020 Certara, L.P. All rights reserved. 14Certara’s platform is built to meet clients where they are
Customer Journey Large Biopharma Biotech
Tangible cost and
time savings Generates new biosimulation use Retains services for expansion
Innovate case for novel therapy of indications
drive renewal
and retention
Adopts regulatory Partners to develop and execute
$ Cross-Sell software to aid submission on regulatory strategy
Increases licenses to expand use
Licenses software for additional
Deeper Adoption across drug programs; adopts
development projects
additional biosimulation modules
Licenses biosimulation Uses services to conduct
First Landing software biosimulation project
Time
© Copyright 2020 Certara, L.P. All rights reserved. 15Our R&D framework advances innovation in biosimulation
• Consortia collaboration
• User group meetings
Customer
• Scientific Advisory Board
Centricity
• 1,000+ scientific customer
projects per year
• Collaboration with 120+ • Regulatory guidances
academic institutions Scientific
Innovation
Regulatory • Regulatory workshops
• 5,000+ peer-reviewed articles Research Alignment • Regulatory meetings for
• 34,000 Google Scholar citations customer programs
Data • 25 virtual populations
Collection • 18,000+ peer-reviewed manuscripts
& Curation
• 8,000+ studies in our databases
We have a regular cadence of incremental and breakthrough innovations
with 10+ new software applications and updates in the past two years
© Copyright 2020 Certara, L.P. All rights reserved. 16We consistently expand our customer partnerships over time
Our Customer Growth Strategy
Land & Expand Cross-Sell Grow Deeper
% of Top 300 Customers Purchasing
Customers with ACV > $100,000 Customers with ACV > $1M
2+ Solutions
72%
261 67% 53
228 44
2019 2020 2019 2020 2019 2020
© Copyright 2020 Certara, L.P. All rights reserved. 17Our Proven Growth Strategy
Inspire Our
People
Scale through
Expand Our Acquisitions
Customer Base
Globally
Grow within
Existing Customers
Advance Our
Technology
© Copyright 2020 Certara, L.P. All rights reserved. 18Long history of innovation driven by investment in our platform
10 new software applications and
updates in the past two years
• FDA grant for Alt. First FDA
Drug comes Simcyp dermal FDA grant Two FDA Acne drug 90% of new drug
FDA CRADA for formulation First gene complex
Regulatory off FDA safety model for grants for approval
veterinary drug approval therapy eCTD generic virtual approvals achieved
Milestones hold using • Orphan drug DDI supersaturat virtual without
development study waived solely using submission bioequiv. by our customers
biosim. ing drugs bioequivalence pediatric testing
using biosim. PBPK approval
• First immuno- • D360 • Covidpharma-
Virtual Phoenix genicity QSP incorporating cology.com Version 20 of Simcyp
Simcyp Cardiac Launch of consortium biologics Certara launch Platform with
Product monkey for in PK/PD CoEs
Phoenix v1.3 Safety Pre-clinical Integral Data
Innovation silico animal in China and • Reg. mechanistic • First immuno- • 25+ COVID-19 expanded Biologics
Simulator Safety Store modeling Repository Simulator
testing Japan oncology QSP programs
workshops consortium
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
PIRANA
IN SILICO
BIOSCIENCES
Well-positioned to continue delivering growth through organic and inorganic opportunities
© Copyright 2020 Certara, L.P. All rights reserved. 19Certara Financial Highlights
Predictable bookings drive substantial revenue growth
Highly recurring revenue driven by strong renewal rates supports significant
visibility
Robust margins with attractive free cash flow conversion
Investment in platform to drive future growth opportunities
Near-term COVID resiliency and long term potential for accelerated adoption of
biosimulation solutions
© Copyright 2020 Certara, L.P. All rights reserved. 20Our Business Models
Software Tech-Enabled Services
• Simcyp • CODEx • Biosimulation • Market Access
Products • Phoenix • GlobalSubmit • Regulatory Science
• D360 • BaseCase
Individual or bundled licenses depending Master Services Agreement or project
Contract Type
on customer specific
Contract Term 1 – 3 years Project and program dependent
Recurring Aggregate Renewal Rate Net Revenue Repeat Rate
Revenue1 90% 116%
% of Revenue1 30% 70%
1. Data as of 12/31/2020
© Copyright 2020 Certara, L.P. All rights reserved. 21FY 2021 Financial Guidance
FY 2021 Guidance
(In millions, except earnings per share data) Prior FY 2021 Guidance (excluding Pinnacle 21)
Revenue $277 - $285 $283 - $289
Adjusted EBITDA(1) $100 - $102 $101 - $103
Adjusted Diluted Earnings Per Share(1) $0.20 - $0.24 $0.21 - $0.25
Certara expects continued mid-teens growth in revenue and adjusted EBITDA
(1) We have not reconciled the adjusted EBITDA and adjusted diluted EPS forward-looking guidance above to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low
visibility with respect to costs related to acquisitions, financings, and employee stock compensation programs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable,
and a potentially significant, impact on our future GAAP financial results.
© Copyright 2020 Certara, L.P. All rights reserved. 22We have a deeply experienced leadership team
William F. Feehery, PhD Andrew Schemick Robert Aspbury, PhD Jieun W. Choe Nicolette Sherman Justin Edge
Chief Executive Officer Chief Financial Officer President, Simcyp™ Chief Strategy & Chief Human Resources President, Regulatory &
Marketing Officer Officer Commercial Sciences
Mark Hovde Thomas Kerbusch, PhD Jaap Mandema, PhD Leif E. Pedersen Craig R. Rayner Amin Rostami, PhD Richard M. Traynor
SVP, Corporate Strategy Chief Growth Officer Chief Innovation Officer President, Software President, Integrated Chief Scientific Officer General Counsel
& Development Drug Development
© Copyright 2020 Certara, L.P. All rights reserved. 23Certara Investment Highlights
Attractive end markets growing in mid-teens driven by R&D efficiency demands and global
adoption of biosimulation
Technology leader with highly predictable business model with 90%+ renewal rates
Deeply embedded scientific solutions at the core of R&D with 1,650+ customers
Significant opportunities to expand within underpenetrated customer base and add new
customers worldwide
Proven track record of innovation and 14 successful strategic acquisitions
Long track record of growth and profitability with 35%+ EBITDA margins and strong free cash flow
© Copyright 2020 Certara, L.P. All rights reserved. 24Covering Analysts
Bank Analyst
Baird Vikram Kesavabhotla
Bank of America Michael Ryskin
Barclays Luke Sergott
Credit Suisse Erin Wright
Jefferies David Windley
Morgan Stanley Vikram Purohit
William Blair John Kreger
© Copyright 2020 Certara, L.P. All rights reserved. 25Accelerating Medicines
You can also read
