The bottom line might not fully show it, but tiny Lancaster software developer Simulations Plus Inc. isn’t much feeling the recession expect perhaps in its sub-$2 stock price.

Simulations Plus, which makes several software products that enable drug developers and other life science companies to simulate costly and time-consuming laboratory tests, has just about more business than it can handle.

It’s even hiring, though the job requirements are rather specific: laboratory scientists who also can write code.

The 40-person company, which reports third quarter earnings this week, is showing revenue growth even though some of its smaller customers have folded or were acquired in the tough economy. Why? Virtually all the world’s 25 largest drug developers license at least one Simulations Plus product; one copy of the software costs roughly $90,000 a year but can save millions of dollars in drug development costs.

“There’s still a wide-open market for what we’re doing,” said Chief Executive Walt Woltosz, a former aerospace simulation program engineer who founded the company. “In the early days of computer-assisted design software it was like pulling teeth to get engineers to use it. Now they wouldn’t do it any other way. We’re reaching the same tipping point with drug companies on the value of simulation software.”

Simulations Plus’ products are most commonly used by drug developers to evaluate molecules and determine whether they might be worth investing hundreds of millions of dollars to turn them into drugs. Regulators like the U.S. Food & Drug Administration often use the same software when evaluating generic drugs or an existing brand-name drug being proposed for another use.

In addition, academics use the software for basic research. Simulations Plus is seeing increased interest from the environmental toxicology industry for using its software to analyze environmental threats, Woltosz said.

Then there’s the shortage of researchers with both the technical expertise and the experience using its simulation software. So large companies and small firms have begun asking Woltosz’s company for help in performing actual studies.

These consulting contracts are poised to become an unexpected growth area for the company. The company also brings in extra revenue by customizing its software for some clients, with the proviso that the enhancements can eventually be used in updates available to all customers.

That’s a lot of work for a company with only 40 employees, only nine of them trained to do the contract analysis work. That prompted Simulations Plus in May to hire as business development director Michael Pelekis, a veteran user of the company’s software in both the pharmaceutical and toxicology fields. He will oversee the services business and evaluate potential acquisitions of the products it develops in-house.

“We have ($7 million) to $8 million in cash and while we are buying back some stock, you don’t get rewarded for keeping your cash lying around in money markets,” Woltosz said.

Well-Wired

In an era when BlackBerry aficionados are being likened to drug addicts, you might expect physicians to be aghast at the prospect of putting a desktop computer in a hospital room.

But officials at Glendale Adventist Medical Center, which added a computer to each room of its 65-bed patient wing when it opened two years ago, have actually found the appliance a therapeutic aid.

Glendale Adventist’s parent, Adventist Health, has been so pleased by the pilot project that it is starting to make it available at its other institutions. And IBM, which supplied the terminals as part of a pilot project, is looking to market the idea to other health care institutions.

“We believe it can actually enhance the healing process,” said Alicia Gonzales, a hospital spokeswoman.

Patients who aren’t bedridden can use the terminals to research their conditions or keep in touch with friends and family via Facebook or MySpace. Visiting family members keeping a bedside vigil have been using the terminals to keep in touch with the office, too, she said.

The hospital saves costs by using so called “thin client” computers, which have limited applications and cost half as much as a traditional desktop model. They also are designed to last more than twice as long.

Staff reporter Deborah Crowe can be reached [email protected] or at (323) 549-5225, ext. 232.