Arena: Market Conditions Before Certara
Clinical pharmacology teams at drug companies · 1999 · Global, led by US and European regulators
Regulatory shiftBarriers to participation
By 1999 the FDA expected drug developers to work out how a new drug was metabolized and whether it interacted with other drugs, with guidance on laboratory studies (1997) and on clinical interaction studies and labeling (1999) CT51. Missing an interaction was expensive: mibefradil was withdrawn in 1998 over adverse interactions with 26 drugs, and terfenadine, astemizole and cisapride were withdrawn between 1998 and 2000 over a dangerous heart-rhythm effect CT53. Academic groups had shown that clearance and interactions could in principle be predicted from human liver enzymes tested in the laboratory CT52, but the physiological models needed to do it were complex and data-hungry, which kept them with specialist modelers CT2. So developers answered each interaction question with a dedicated clinical study.
How each step happened
Step 1 of 5 · 1996–2008
Virtual patient populations in a simulator pharmacologists run without programming
Simcyp's innovation was to test a drug in a crowd of virtual patients rather than in one average body, in software a clinical pharmacologist could run without programming. Physiologically based pharmacokinetic (PBPK) models, which follow a drug through the body's organs, had been left to specialist modelers CT2. Geoff Tucker and Amin Rostami-Hodjegan at the University of Sheffield wrote population models in FORTRAN in the mid-1990s, and from 1999 turned them into the Windows-based Simcyp Simulator CT32. It varied age, body size, ethnicity, diet and the genes for drug-metabolizing enzymes, so a company could see which patients were at extreme risk, including from a second drug CT33 CT31. GastroPlus, the other commercial simulator, predicted how a pill is absorbed CT28; Simcyp was built for the question regulators pressed hardest, how a new drug is metabolized and which drugs it interacts with CT51.
Later releases added a paediatric simulator and, by version 8 in 2008, patients with cirrhosis, renal impairment or obesity CT33 CT54. Each answered a question developers had otherwise settled with a clinical study, and each came from the drug companies paying for it, which is the next step.
Rivals Simulations Plus, founded in 1996 by the aerospace engineer Walter Woltosz, launched GastroPlus in 1998 to simulate oral drug absorption CRT-2 CT28. It too was software for non-specialists, but its strength was absorption and formulation, not interactions across a varied population CT28.
Democratize the Expert Task
Step 2 of 5 · 1999–2019
Competing drug makers fund and steer one shared simulator
This step starts in 1999, inside step 1's years, because the simulator and the way it was paid for began together. Rostami-Hodjegan says the founders worked with the people who would use the product from the beginning, and that this was part of the business model of the consortium they created in 1999 CRT-1 CT3. Member companies licensed the simulator and consultancy while contributing to their development, shared pre-competitive data, and voted each year on the features the next release should add CT30 CT2 CT48. By 2008 nine of the top ten drug companies were members, and by 2019, 37 companies CT54 CT3.
Pooled fees paid for a broader, better-tested library of enzymes and populations than any one company could keep up alone; Simcyp's scientists put the upkeep at more than 40 person-years a year CT2. The annual vote pointed that work at what members needed for their filings, and release by release the simulator grew from static interaction calculations to full PBPK models CT2.
Simcyp also trained the people who run the models. It has held more than 232 workshops, certifying about 8,500 scientists, and gives sponsored licences to more than 110 academic institutions CT4. Pharmacologists across the industry learned one tool.
Rivals Simulations Plus sold GastroPlus licences to each customer directly; nearly 100 firms licensed its software by 2007 CRT-2. The other choice was a drug company's own in-house models, each built and validated alone CT2.
Practitioner Community
Step 3 of 5 · 2005–23
Regulators run the same simulator, so each approval becomes precedent
Regulators sat in the same consortium as the drug companies by 2005 CT30. Simcyp's scientists built a data-management system for validation and automated testing, which they describe as particularly significant to agencies CT2. By 2020 eleven regulatory agencies used Simcyp to evaluate submissions, and FDA divisions held more than 400 licences to Certara software CT25 CT38.
When the reviewer runs the same simulator and has seen its validation, a sponsor using it argues less about the model. Rostami-Hodjegan counts building that confidence, among drug companies and regulators alike, as his main achievement CRT-1. After the FDA and the EMA issued PBPK guidance in 2018, each approval that relied on a Simcyp analysis became a precedent the next sponsor could cite CT27. Of 243 novel drugs the FDA approved in 2019–23, 74 used PBPK models; 80.5% of those used Simcyp, and drug interactions made up 74% of uses CT26.
Rivals The FDA's Office of Clinical Pharmacology, which analyzes population variability and drug interactions, licensed GastroPlus only in October 2013; earlier FDA users were its generic-drug, food-safety and veterinary offices CRT-3. GastroPlus appeared in 5.2% of PBPK-backed novel approvals in 2019–23 and the free PK-Sim in 2.6% CT26.
Trust
Step 4 of 5 · 2008–21
Owners buy the standard tools and sell them with services to the same drug makers
This step starts in 2008, inside step 3's years, because owners were assembling Simcyp's future buyer while Simcyp built its record. Vector Capital, owner of the Tripos software business from 2007, paid about $57 million in 2008 for Pharsight, whose WinNonlin was the industry-standard tool for analyzing drug levels, licensed by all of the top 50 drug companies CT14 CT15 CT17. Pharsight already sold nearly as much consulting as software CT17. In 2012 the combined company, Certara, bought Simcyp for $32 million, which its CEO Jim Hopkins called 'an end-to-end solution' across discovery and clinical research CT6.
Arsenal Capital, owner from 2013, added Synchrogenix, the largest contract firm for regulatory writing, in 2014 CT14 CT39, and EQT bought Certara at an $850 million enterprise value in 2017 CT40. The combination sold: by 2020 more than 90% of the top 50 customers used both biosimulation and regulatory or market-access work CT25. Certara listed in December 2020 at $23 a share, with services at 69% of revenue, and ended the year worth $5.15 billion CT35 CT34 CRT-4. Revenue rose from $164 million in 2018 to $419 million in 2025 CT24. The owners bought the two standard tools rather than building them; selling them with services to the same drug makers gave Certara the size for a public listing.
Rivals Simulations Plus, run by Shawn O'Connor, Pharsight's CEO until 2008, stayed mostly a software company CT47 CT15. It bought the pharmacometric consultancy Cognigen for $7 million in 2014 and the Monolix maker Lixoft for up to $16.5 million in 2020; its market value peaked at $1.43 billion at the end of 2020 CRT-6 CT43 CRT-5.
M&A StrategyMulti-Product
Step 5 of 5 · 2019–26
Catch-up barrier: regulatory record and validated library
The record from step 3 is the catch-up barrier: a rival can match Simcyp's science faster than it can rebuild that record. Certara counts more than 375 label claims for over 115 drugs informed by Simcyp in place of clinical studies CT1. In August 2025 the EMA gave Simcyp its first and only qualification opinion for a PBPK platform, covering three drug-interaction contexts; within them, sponsors no longer have to re-establish the platform's credibility CT37. The library behind it, funded by the consortium in step 2, takes more than 40 person-years a year to maintain CT2. In a comparative study the platforms' average predictive performance did not clearly differ, and GastroPlus did better on poorly absorbed drugs CT28; yet GastroPlus and PK-Sim together held only about 3% of FDA PBPK submissions CT27.
Refocusing on the software
The barrier protected the software, not the services bought in step 4. In 2025 software revenue grew 18% and services 3% CT10; early in 2026 services bookings fell 14% while software bookings rose 20%, and the company blamed 'execution and go-to-market challenges' in services CT41. Jon Resnick, from IQVIA, became CEO in January 2026 CT19 and sold the regulatory and medical writing business, about $50 million of revenue, to Veristat for up to $135 million CT11, a unit a William Blair analyst called 'less differentiated' CT12. Software rose to 53% of revenue CT50. Market value had fallen to $1.16 billion by September 2026 CT61; what kept growing was the simulator that drug makers and regulators built in steps 2 and 3.
Rivals GastroPlus and PK-Sim are accepted by the FDA, which also uses other vendors' tools, but only Simcyp holds the EMA qualification CT18 CT26 CT37. Simulations Plus also saw weaker demand in 2025 and cut its fiscal 2025 revenue guidance to $76–80 million, from $90–93 million CT46.
Accumulated assets & catch-up barriersTrustLicenses & approvalsResource allocation