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Sustainability Framework

At Simulations Plus, our core mission – accelerating the development and delivery of better, safer, and more effective therapeutics – and the potential it offers for improving patients’ lives, and advancing and improving global health, has broad and indisputable positive impacts for society. The fact that we have been engaged in these endeavors since 1996 is evidence, we believe, of our company’s long-term financial sustainability.

We are proud of what we have accomplished, but we never take anything for granted – not our customers, collaborators, and partners, whose support has contributed to our growth and fueled many of our innovations, and certainly not our brilliant and dedicated employees, who share our vision of contributing to global health and a healthier planet. And always, we feel a deep commitment to our shareholders, many of whom have been with us from the beginning, whose enthusiasm, confidence, and trust propel us forward and inspire us to conduct our operations with the highest integrity.

These are the strategic priorities that form the foundation of our sustainability framework, based on the four primary pillars of Environment, Social, Human Capital, and Business Governance presented below:

01. Environmental

Environmental

Our Commitment to the Environment
We are committed to reducing our environmental footprint and pursuing responsible business practices in all our operations. The Company has four office locations, three of which are close to public transportation and have secure bicycle storage available. Additionally, two office locations have electronic vehicle charging stations available. We proudly support our local waste and energy management programs at our Lancaster, CA, Raleigh, NC, and Buffalo, NY, locations.

Our operations are built on continual improvements in efficiency and clean energy. Our Company redesigned its data center located in Buffalo, NY to be more energy efficient as part of our ongoing and increasing commitment to reduce our environmental footprint and energy usage. The Company achieved 90% reduction in energy usage for data center cooling. The Company exclusively uses technology hardware vendors that embrace environmental sustainability. At our Lancaster location, we participate in a recycling program through our local waste management facility to divert all recyclable materials – bottles, cans, plastics, paper, and cardboard – from landfills. Across the Company, our facilities provide for recycling, and our electronic waste is sent to local approved e-waste recycling centers. We are also attentive to our energy use in our office operations. For instance, our Lancaster facility recently switched to renewable energy. Lancaster Choice Energy (“LCE”) is the locally run power program created by the City of Lancaster, and we now proudly participate in LCE’s Smart Choice 100% renewable energy program. Our decision to opt into the program not only contributes to the city’s goal of becoming one of the world’s first net-zero cities, but also reflects our dedication to creating positive impacts on the environment and local communities.

The Company is operating through a hybrid workforce model that offers our employees flexibility to work on a fully remote basis or to come to the onsite office locations, which provides greater flexibility to our employees as well as enables us to contribute toward the reduction of the use of paper and fuel consumption, produce fewer emissions and have a smaller carbon footprint. Over 74% of our workforce currently works remotely. The Company is committed to the hybrid work model, as it believes it is in the best interest of the planet and in turn helps the Company retain high caliber talent. The Board is regularly briefed on the Company’s commitment and progress to the environment. The Company currently produces little to no hazardous waste material.

Paper & Waste Management
At our Lancaster office, we participate in a recycling program through our local waste management facility to divert all recyclable materials – bottles, cans, plastics, paper, and cardboard – from landfills. Across the company, our facilities provide for recycling, and our electronic waste is sent to local approved e-waste recycling centers.

Carbon Emissions & Energy Management
Our operations are built on continual improvements in efficiency and clean energy. From 2012 to 2019, the company redesigned its data center to be more energy efficient as part of our ongoing and increasing commitment to reduce our environmental footprint and energy usage. Examples of upgrades are installation of an uninterruptible power supply with hot and cold dial separation, regulating the temperature and airflow through in-row cooling units with high efficiency fans based on cooling needs. Additionally, we have significantly reduced the number of physical servers from 140 units to 60 units by virtualizing them.
Prior to this change, we were maxing out the 30 kVA UPS capacity; now, we use only 45% of our capacity. Our decision to opt into the program not only contributes to the city’s goal of becoming one of the world’s first net zero cities, but also reflects SLP’s dedication to creating positive impacts on the environment and local communities. We are also attentive to our energy use in our office operations. Lancaster Choice Energy (LCE) is the locally run power program created by the City of Lancaster, and we now proudly participate in LCE’s Smart Choice 100% renewable energy program.

02. Social Impact

Social

According to Pharmaceutical Research and Manufacturers of America, the research and development costs of bringing a new drug to market are estimated between $1 and $2.6 billion, at an average time of 12-15 years. These costs are inevitably borne by individuals, place a heavy burden on society and can have a profound impact on global health. Simulations Plus was founded and built on the concept that by integrating the complex scientific processes involved in drug discovery, development and approval into simulation and modeling software applications, thereby simulating laboratory experiments in silico, we enable researchers and regulators to perform sophisticated analyses of complex drug behaviors in humans and animals. The use of simulation and modeling applications allows our customers the opportunity to reduce unnecessary animal testing and lowers the risks of exposure to humans in clinical trials. Our software and consulting solutions, that bridge machine learning, physiologically based pharmacokinetics (PBPK), quantitative systems pharmacology/toxicology (QSP/QST), and population pharmacokinetic/pharmacodynamic (PK/PD) modeling approaches, support the companies and regulatory agencies involved in these life-saving endeavors.

To read more about our work in this area please see our website PBPK Modeling and Simulation

Corporate Philanthropy & Academic Support
We believe corporate philanthropy and academic support are both a privilege and a responsibility. We are privileged to be in a position where we can provide donations of time, financial support, and scientific expertise to academic institutions, research institutes, and to students. Our sense of responsibility is based on a belief that supporting academia and research is vital to the advancement of science, leads to greater collaboration between the academic and private sectors, and will unquestionably benefit society and the world, at large.

Our support for the academic community is broad and deep. We provide academics worldwide with free reference site licenses for nonprofit research and teaching, including free access to our software in university instruction, and substantial discounts on our training courses and workshops. We also offer a 90% discount on our software to government agencies and non-profit organizations. In recent years, we have sponsored several students with awards given by the Society of Toxicology.

We provide sponsorships to numerous conferences, symposia, and associations such as the American Conference on Pharmacometrics (ACoP), American Association of Pharmaceutical Scientists (AAPS), American Chemical Society (ACS), Controlled Release Society (CRS), Groupe de Métabolisme et Pharmacocinétique (GMP), and the Gordon Research Conferences. Individually, many of our employees, including our division presidents and scientists at all levels, volunteer their time to teach and mentor at universities and professional organizations, and frequently serve as peer reviewers for scientific journals.

At the local level, we promote a culture of volunteerism, and we offer our employees the flexibility they need to participate, from sponsoring and participating in charity golf tournaments to volunteering to serve hot meals to the disadvantaged. In recent years, we have joined the global GivingTuesday movement and donated food, clothing, and financial support to several organizations that serve those in need in our communities.

Our commitment to community, to education, and to gender equity can best be summarized by how our Lancaster office has, for more than a decade, funded a summer scholarship to Tech Trek, a one-week residential science, technology, engineering and math (STEM) camp founded and operated by the American Association of University Women (AAUW) that is designed to inspire young women to attend college, to major in STEM fields, and to pursue STEM careers. Our own female scientists, who are excellent role models for these young women, have volunteered their time to personally present our Tech Trek scholarship each year.

03. Our People

Human Capital

We are committed to our people, and we embrace a culture of engagement, empowerment, and equity. With an estimated 137 employees across three U.S. cities (Lancaster, CA; Buffalo, NY; and Research Triangle Park, NC) and Paris, France, over 90 percent of our employees are employed full-time, and more than two-thirds work within our life sciences software or consulting divisions.

Given the specialized nature of our business, candidates for our open positions are strategically selected for their unique education and skills. The majority of our employees have advanced degrees in mathematics, chemistry, biomedical engineering, and/or the pharmaceutical sciences; more than half hold doctorate degrees and approximately one-fifth hold master’s degrees.

Diversity, Equity & Inclusion

In 2020, we added an HR resource who is currently implementing unified and consistent policies, procedures, and employee training across all of our business units. In our recruitment and hiring, we embrace diversity with the knowledge that it can lead to greater innovation, and in our workplace, we foster inclusion, so all employees feel part of our team with equal access to all opportunities. One of our goals is to expand our focus on Diversity, Equity and Inclusion.

Ethnic minority groups comprise more than one-third of our U.S. workforce (39%), and an estimated one-half of our employees originate from countries outside the United States. In terms of gender equity, women comprise 47% of our workforce and men comprise 53%.

In the wake of the Black Lives Matter movement, in June 2020, we publicly acknowledged the reality of systemic racial discrimination and injustice, and we offered assurances and support to our Black colleagues.

 

04. Business Governance

Governance

Product Quality & Innovation
Quality Management System

As we continue to integrate the operations of our four divisions, we are working toward developing a comprehensive cross-functional Quality Management System (QMS), with policies, procedures and controls that are consistent across all of SLP. A comprehensive QMS is currently in place at Cognigen – SLP’s largest consulting division – which we are leveraging to implement a company-wide QMS system. Cognigen’s QMS is led by an Executive Leadership team that oversees and approves all activities of the cross-functional QMS team, and the QMS team oversees all QMS functions, including defining processes, creating and maintaining QMS documentation, and providing QMS training to employees.

The QMS is comprised of policies, standard operating procedures (SOPs), and general procedural guidelines, including the roles and responsibilities for each functional area. It provides uniform, permanent records of operational methods, development techniques, and other tasks relating to our business processes and procedures, thereby creating operational standardization and consistency. We believe our QMS also serves as an important foundation for employee training.

The QMS team has operational responsibility for assessing its implementation and full compliance, including an annual employee review process. Every project is subject to a QMS review upon completion, and external audits are conducted by clients several times a year. Additionally, we conduct our own internal audit of each functional area approximately every three years to ensure that we are doing everything possible to meet our customers’ needs.

When our cross-functional QMS is fully implemented across all SLP divisions, our goal going forward will be to continuously improve our processes and procedures to achieve quality, consistency, and excellence in all our operations.

Innovation

As a technology company, we recognize that innovation is vitally important to achieving our objectives. We are continuously improving our products and services, and collaborations and partnerships with the pharmaceutical industry, universities, and government agencies – many fully funded – have resulted in some of our most advanced product features. Together with our focus on improving how scientists utilize knowledge and data to predict the properties and outcomes of pharmaceutical and biotechnology agents, and our expertise in integrating new and existing science from medicinal chemistry, computational chemistry, pharmaceutical science, biology, and physiology into our software, we are now among the leading solution providers of computational, or in silico, physiologically based pharmacokinetic (PBPK) modeling, physiologically based biopharmaceutics modeling (PBBM), and quantitative systems pharmacology/toxicology (QSP/QST) software and services.

Although we value all of our partnerships, it is a distinct privilege to have collaborated with several government agencies, including the U.S. Food and Drug Administration and the National Institutes of Health, on numerous projects. Some of these projects have been fully funded and others have involved research collaboration agreements (RCAs) and material transfer agreements (MTAs), and all have resulted in important advancements to our software applications as well as valuable contributions to their efforts in expediting and improving the drug approval process. In addition to these collaborations, we provide software licenses, training, and scientific expertise to these and other U.S. and international governmental regulatory and health agencies. We believe these collaborations have not only resulted in important innovations, they have served to validate our technology and to advance its acceptance by regulatory agencies and the pharmaceutical industry, worldwide. A partial list of our Partners and Collaborators is on our website.

05. Sustainable Development Goals
Alignment with United Nations Sustainable Development Goals

In accordance with guidance from the United Nations, we aim to integrate the Sustainable Development Goals (SDGs) into our business strategy. At SLP, we are focused on five SDGs and targets most relevant to our core business.

Certainly, we have a role to play across all 17 SDG goals, but these five represent areas where we are particularly well positioned to drive significant progress based on our core business and specialized citizenship initiatives.