Simulations Plus Inc. shares fell more than 4 percent on Thursday after the developer of pharmaceutical simulation software reported a 17 percent drop in fiscal third quarter net income due to higher costs.

The Lancaster company reported net income from continuing operations of $869,000 for the quarter ended May 31, compared with $1.04 million in the same period a year earlier. Revenue rose 5 percent to $2.77 million.

Chief Executive Walt Woltosz said revenue from consulting services has been slower this year, but cited growth in software subscriptions. Simulations Plus sells its software on a subscription basis to drug companies and government research labs.

Shares closed down 18 cents, or 4.5 percent, to $3.86 on the Nasdaq.