Certara to Acquire Chemaxon to Strengthen Drug Discovery Software Portfolio

Frequently Asked Questions:
1. What is the price that Certara has agreed to pay for Chemaxon?
a. A cash consideration of $90M subject to customary closing adjustments.
2. What is the strategic rationale for purchasing Chemaxon?
a. The combination of Certara and Chemaxon allows strategic entry into thediscovery biosimulation space at scale. Cheminformatics and biosimulation
can be used to uncover chemical and physiological insights earlier in thedrug development process, which will further de-risk decision making in leadoptimization.
b. By integrating Chemaxon with existing Certara software, users will be able torun analyses earlier in the development process than what is capable today.
3. What is Chemaxon’s mix of revenue from Software vs. Services?
a. Greater than 90% of Chemaxon’s revenues are derived from the sale ofsoftware products, with the remainder coming from implementation
services. Upon integration, Certara expects this mix to remain relativelyconsistent.
4. What are Chemaxon’s products and services and what are they used for?
a. Chemaxon has several software products, which are mainly used to inform
developers on the chemical properties of their molecules during drug
discovery. Chemaxon products include calculation, search and drawing
tools.
b. Chemaxon utilizes a computational chemistry engine called JChem to powerits software products. JChem allows a user to conduct a search by inputting
the chemical structure of a molecule, which then allows the user to look atsimilar molecules, competitive intelligence, and IP compliance.
c. These products are accessible through Chemaxon’s Design Hub Platform,
which allows users to access their various applications through a singlesign-on.

d. The suite of software products spans the DMTA (design, make, test, analyze)
process which is used to make lead optimization and pipeline prioritization
decisions.
5. What is Chemaxon’s TAM and does the acquisition expand Certara’s TAM?
a. Chemaxon’s end market falls into Certara’s biosimulation TAM, and expands
Certara’s software offering in the drug discovery phase of the TAM, as
depicted on slide 12 of Certara’s corporate deck.
6. What opportunities exist for Artificial Intelligence (AI) with Chemaxon?
a. The AI opportunity for Chemaxon is consistent with Certara’s AI strategy
across the software portfolio: to integrate AI into software products to create
workflow efficiencies and enhance predictive capabilities at decision points
in a drug development program.
b. By combining Chemaxon with Certara’s artificial intelligence technology, thecombined Certara/Chemaxon software platform will help drug developers
accelerate discovery workflows, increase connectivity among data sets andleverage analytical conclusions in subsequent phases of drug development.
7. Who are Chemaxon’s customers?
a. Chemaxon’s customers include over 500 life sciences and research
institutions, including 18 of the top 20 pharmaceutical companies.
b. There is some overlap between Certara’s customers and Chemaxon’s
customers, however each company’s products are used at different stages
and by different users within each organization.
8. How many employees does Chemaxon have?
a. Chemaxon has over 200 employees, including 30+ commercial employees
and 75+ software developers.
9. What is the financial profile of Chemaxon?
a. Chemaxon is expected to generate 2024 software revenues greater than $20million.
b. Chemaxon has a revenue growth profile comparable to Certara’s software
business.
c. Chemaxon has an Adjusted EBITDA margin below Certara’s corporateaverage.

10. What are Chemaxon’s EBITDA margins and what margin is Certara targeting
following integration?
a. The acquired business currently has an Adjusted EBITDA margin below
Certara’s corporate average. Chemaxon is expected to reach an adjusted
EBITDA margin near Certara’s corporate average by the end of 2025.
11. What are the immediate financial implications of the acquisition?
a. Certara, excluding Chemaxon, is reiterating its full-year 2024 guidance as oftoday, July 9th, 2024.
b. Given the transaction remains subject to regulatory review, there is no
immediate financial impact to Certara as of today’s deal announcement.
c. Following transaction close, Certara will update its 2024 guidance to include
contribution from Chemaxon and expects to maintain its 2024 adjusted
EBITDA margin guidance of 31-33%.
12. What action is Certara going to take to improve Chemaxon’s margins?
a. Commercial synergies and cross-selling are expected to support Chemaxonrevenue growth comparable to Certara’s software business.
b. The company expects to realize efficiencies in operating expenses byintegrating Chemaxon into Certara’s corporate organization.