What happened

Shares of Simulations Plus (NASDAQ:SLP) jumped 35.9% in July, according to data from S&P Global Market Intelligence, after the specialized modeling and simulation software company announced strong results for its fiscal third quarter ended May 31, 2019. The company also entered into an intriguing new collaboration agreement with the U.S. Food and Drug Administration (FDA).

On the former, Simulations Plus stock jumped more than 6% on July 11, 2019 alone, the first trading day after the company's quarterly report hit the wires. In it, Simulations Plus revealed quarterly revenue had climbed 16.2% year over year, to $9.9 million. That translated to a 20.1% increase in net income, to $2.9 million, and an 18.8% gain in earnings per share, to $0.16. Analysts, on average, were expecting earnings of just $0.14 per share on slightly lower revenue.

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So what

Simulations Plus CEO Shawn O'Connor lauded "significant progress" in the company's strategic initiatives put into place at the start of the fiscal year.

"These initiatives include investments in sales and marketing strategies to take advantage of increasing adoption of modeling and simulation applications in the pharmaceutical market," O'Connor elaborated. "In addition, we have accelerated our efforts to attract scientific talent to increase our services capacity [and] initiated efforts to increase our local presence in global markets."

If that wasn't enough, the following week, Simulations Plus announced a new five-year research collaboration with the FDA's Center for Veterinary Medicine. Under the partnership, the FDA will use Simulations Plus' GastroPlus software with both in vitro and in vivo data to investigate how bioequivalence of certain locally acting drugs can be evaluated in canines without requiring clinical endpoint trials. If the FDA's efforts are successful, Simulations Plus added, "a framework can be provided to support these approaches for other drugs."

Now what

As it stands, it's encouraging to see Simulations Plus striking new partnerships that could not only result in groundbreaking scientific advancements but also effectively highlight extended-use cases of its software solutions. Coupled with the company's latest quarterly update, that seems to show the early fruits of Simulations Plus' efforts to expand its global reach, and it's no surprise the stock popped last month in response.