SIMULATIONS PLUS, INC. AND ABSORPTION SYSTEMS LP TO FORM JOINT VENTURE TO CREATE UNPARALLELED DATA WAREHOUSE AND PREDICTIVE SOFTWARE FOR PHARMACEUTICAL DISCOVERY

Simulations Plus, Inc. (http://www.simulations-plus.com), a premier developer of new drug discovery and development simulation software for the pharmaceutical industry, and Absorption Systems LP, Exton, PA, a premier contract research facility, have announced that they have signed a Letter of Intent to form a joint venture to create an unparalleled data warehouse and predictive computer capability for key compound ADME characteristics for new drug discovery and development. The acronym "ADME" stands for "Absorption, Distribution, Metabolism and Elimination" and is commonly used in the pharmaceutical industry to refer to how these processes affect a drug compound after it is taken orally.

Under the joint venture, Absorption Systems will conduct laboratory testing of drug molecules and compounds for member companies of a new ADME Consortium. Measurements will be made of approximately 30 parameters for each compound that describe critical absorption, metabolism, efflux, solubility, and other ADME characteristics. Simulations Plus will then use the data to build and continually improve predictive computer models to predict these 30 parameters for new drug compounds without the need for laboratory testing. This will allow drug companies to screen very large numbers of new compounds in the computer, without the need to actually make every compound, saving considerable time and money.

Millions of drug molecules and compounds are studied each year, generally using cell or tissue cultures or animals, and very few make it to market. The value of the database and computer models will be in eliminating much of the time, expense and animal rights concerns common to early drug discovery today, with the ultimate goal of expediting the release of important new pharmaceutical agents. The parties to this transaction know of no such software, or database from which to produce such software, in existence today. The market for the proposed joint venture includes, but is not limited to, the $300 billion worldwide pharmaceutical industry, generic drug developers, and biotechnology companies and organizations.

Absorption Systems LP was founded in 1996 as a Contract Research Laboratory for the pharmaceutical and biotechnology industries. Absorption Systems conducts in vitro bioavailability assessments, in which compounds are examined generally in cell culture models, to determine the potential of compounds to cross biological barriers between the site of administration and the site of action. Absorption Systems has over forty clients worldwide, including some of the leading pharmaceutical and biotechnology companies in the world.

In commenting on this letter of intent, Walt Woltosz, Chairman and Chief Executive Officer of Simulations Plus, said, "This is a gigantic step toward in silico (in the computer) ADME screening of large numbers of drug candidates in early drug discovery. By combining the laboratory assets of Absorption Systems with our expertise in mathematical modeling and software development, the joint venture can realize this goal in a much shorter period of time. The ADME Consortium will benefit its member companies and, we believe, will become the standard for predictive modeling of ADME characteristics from molecular structure."

Patrick Dentinger, Chief Executive Officer of Absorption Systems LP, commented, "This is an exciting opportunity for us and for the pharmaceutical industry at large. We are planning to break new ground with not only the introduction of several new and proprietary permeability models but the generation of an unparalleled database of compound information and innovative computer models that can predict what now involves the high cost and time of animal, tissue and cell culture studies."

Dentinger continued, "It is widely recognized that cell culture models used in absorption studies produce permeability values that exhibit large inter-laboratory variability. This variability makes it difficult to compile databases of suitable quality to develop predictive tools. The Absorption Systems/Simulations Plus consortium initiative will incorporate Absorption Systems' standardized cell culture models and rigorous experimental protocols. Through this approach, Absorption Systems will be able to minimize phenotypic drift and obtain accurate and reproducible data month after month, year after year."

Simulations Plus, Inc. is a premier developer of drug discovery and development simulation software, including its revolutionary GastroPlus simulation software, which is licensed to and used in the conduct of drug research by major pharmaceutical companies worldwide. The Company also has two other businesses, Words+, Inc. and FutureLab, which are based on its proprietary software technologies and which provide support for the emerging pharmaceutical enterprise. Simulations Plus, Inc. is headquartered in Southern California and trades on the NASDAQ under the symbol "SIMU".

Safe Harbor Statement Under the Private Securities Litigation Act 1995 - With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of the Company could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to include: the successful launch of this consortium; the availability of new capital for this enterprise; the cooperation and demands of the pharmaceutical and biotechnology organizations; competitive factors and changes in the pharmaceutical industry's acceptance of technology. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission.