The biosimulation pioneer is making 2026 a transition year. However, that doesn't automagically mean things will get better in 2027. Both the looming pharma patent cliff and barebones early-stage pipelines across the industry could negatively impact Certara's business for the next few years. If that risk materializes (during, say, a recession), then shares could trade near $3 or less.

The business is still facing the same familiar headwinds. During Q1 2026, software revenue grew 7% while services revenue declined 4% from the year-ago period. Help is on the way, although it's more of an "addition by subtraction" type of help.

Certara finally found a buyer for its struggling medical writing and regulatory services business unit. The asset sale will net $85 million upfront, another $15 million for successfully transferring related assets, and up to $35 million in potential milestones based on the performance of the business.

The divestiture will also peel away 220 employees, resulting in a reduction of force of approximately 15% from the end of 2025. That will reduce ongoing operating expenses by a meaningful amount, while also tipping the revenue mix to a roughly 50/50 split between higher-margin software and moderate-margin services. That's a nice bump from the 46.5% to 53.5% split at the end of March 2026.

While the business has a lot to prove during its turnaround, the asset sale represents a quick win and trust-builder for new CEO Jon Resnick. But investors should acknowledge that customers might be less willing to spend on external solutions in the current moment, whether chalked up to the distribution of AI tools, pinched budgets, or both.