William Feehery: We have been an advocate of this for obvious reasons for a long time. So Simcyp contains animal models in it as well and it’s been our position that a lot of animal testing is unnecessary given the modeling capabilities. And we have had conversations over the years with the FDA. The industry has been quite conservative on moving in despite what I said the industry that has been quite conservative on moving away from animal testing, in particular primates. If that is a step change, there is potentially an opportunity for us. But we want to be conservative and watch how this unfolds.
Operator: Our next question comes from the line of Dan Leonard from Credit Suisse.
Dan Leonard: So two for me. First, can you speak to whether you’re able to capture pricing in the current environment, what is the expectations for pricing in 2023 and how that compares to historicals?
William Feehery: So we — I’d hard time hearing you. The pricing expectations for this year are consistent with historical and I’d say, across the product line in the 3% to 5% range.
Dan Leonard: And then for my follow-up, similar to Luke’s question. Have you had — have your frequency, velocity of conversations changed at all, following the FDA Modernization Act 2.0? And does that specific legislation impact your business opportunity in any way given the language around using computer modeling as a substitute for animal testing?
William Feehery: So the language actually helps us a lot. So it fosters alternative methods like modeling, which basically falls into what we provide. So the short answer is, yes, it’s a benefit to us.
Operator: Our next question comes from the line of Max Smock from William Blair.
Unidentified Analyst: It’s Christine on for Max. Two for me, the first one, in terms of just sort of geographic strategy. Can you just discuss what are the biggest opportunities and challenges you see in each of your key geographies? I know you’ve recently called out some headwinds in China. If you could just discuss your business dynamics here and if the situation has gotten incrementally better or worse.
William Feehery: I can start and then Andy can chime in. China is an opportunity for us. We opened an office there at the very beginning of the pandemic, and then it was a little hard to grow it given the travel situation and the pandemic situation and everything else. The opportunity still remains, we are making an investment in it. Having said that, I think China today, and Andy can chime in, it’s like 2% or 3% of our revenues. So it’s still got some ways to go. And then other geographies, we have the bulk of our — Certara’s revenue pretty much follows where the global pharmaceutical industry is. So the bulk of the revenues are in North America and then Europe. We have been slightly underweight in Europe for the past couple of years, and so we’ve been — we’ve made some investments in sales and we — a couple of bolt on acquisitions as well to bolster our footprint there and that’s been paying off.
So I think that’s been growing. And then in Japan, we have a longstanding customer base and significant interest and participation in biosimulation that’s been going on for quite some time. Outside of that then you get into places like South Korea and India, which are — there’s certainly an interesting set of customers starting there and an opportunity for us that we’re sort of slowly building our sales force so that we can tap into that.
Unidentified Analyst: And then my last one in terms of your regulatory business upside. Have you started to see any increase in business wins potentially from some large CROs given some of the restructuring and maybe potential distractions at a couple of the larger players to the questions?
