Lancaster drug simulation software developer Simulations Plus Inc. hopes a new distribution agreement will get it a bigger foothold in Asia’s fast-growing market for pharmaceutical research and computer testing of new drugs. The company, which sells its software licenses to national and international drug makers and universities and provides consulting, recently signed an agreement with South Korean’s Quantum Bio Solutions, a drug simulation software distributor. John DiBella, Simulations Plus’s vice president of marketing and sales, said it took three years to find a distributor that fit well with the company, meaning one that doesn’t sell similar software and has deep connections to its target customers. “They’ve got a really strong reputation, especially through their founder at Korea University,” DiBella said, adding that Quantum’s President and Chief Scientific Officer Art Cho teaches at the university. “They have a reputation for employing intelligent scientists and a history of being able to successfully market and distribute successfully to Korean companies,” DiBella said. In 2016, the Asian market accounted for about one-quarter of Simulations Plus’ licensing sales, according to its annual shareholders’ presentation. But South Korea represented only 4 percent of Asian sales. Analysts who follow Simulations Plus at brokerage Taglich Brothers Inc. in Huntington, N.Y. reported last year that the Asia Pacific biosimulation market is expected to grow to $3.8 billion by 2024 at a pace of 17 percent a year due to an aging population, unhealthy living habits and an increase in related chronic diseases, such as diabetes. These conditions demand that more effective drugs be developed more quickly, the authors wrote, and computer testing can accelerate that process. “These above-mentioned factors serve as key reasons responsible for the heightened market demand,” the report states. While South Korea has a sophisticated drug development market, the country still imports heavily from the U.S. and Japan, so the government recently announced a new $9 billion investment program to boost production. “That’s the more exciting part – the county’s pledge to invest in research and development,” DiBella said. Since the beginning of the year, Simulations Plus stock has gained 28.6 percent. It closed April 12 at $11.15. The company currently sells to about 10 or 12 South Korean drug makers but there’s 40 to 50 still to reach, DiBella said. Simulations Plus has had more success in Japan and China where it sells through distributors, he added. Those arrangements give the company a local presence in marketing, sales and training, and it wants to do the same in South Korea.
