Slides to be shown during investor and securities analyst presentations

Forward-Looking Statements

This presentation includes forward-looking statements, including statements regarding our

financial

model,

growth

opportunities

and

strategic

investments,

our

market position, the

demand and market opportunity for our products and services, financial and product

performance, expected benefits to customers from the use of our products, our customer base

and our expectations for revenue, net cash flow, gross margin and net income for the fiscal year

ending

March

31,

2007.

These

forward-looking statements involve risks and uncertainties, and

factors that could cause actual results to differ materially include the following: uncertainties

involved in pharmaceutical drug development, changes in government regulation of the

pharmaceutical industry, changes in the demand for our products and services, changes in our

research and development focus or operating strategies, the failure to develop new products and

services

keep

pace

with

technological

changes,

the

failure

the market for our products

and

services

develop

expected,

for

new

customers

beyond

large

pharmaceutical

customers, who form a large component of our client base, to adopt our solutions, and the

failure of our products and services to meet customer’s expectations.

Further information on potential factors that could affect actual results is included in Pharsight’s

Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on August

14, 2006. All forward-looking statements are based on information available to Pharsight as of

the date hereof, and Pharsight assumes no obligation to update such statements, whether as a

result of new developments or otherwise.

Overview

•

Profile

–

Founded in 1995 with IPO in August 2000

–

Offices in Mountain View, CA (HQ) and Cary, NC (R&D)

–

Global headcount approximately 90

–

Stock traded OTCBB: PHST

•

Key Industry Considerations

–

Large Pharmaceutical and biotech marketplace

–

Outsourcing of development activities escalating

–

Rising drug development costs driving need for analytical drug

development tools

–

FDA focus on modeling and simulation for Critical Path Initiative

•

Key Company Considerations

–

Leading innovator in modeling and simulation

–

Largest base of modeling and simulation skills and experience

–

Leverageable software and professional service business models

–

Industry standard software for PK/PD analysis

–

FDA Cooperate Research and Development Agreement (CRADA)

Pharsight Enables Strategic Decision

Making in Clinical Drug Development

•

Market-leading software

improves the value and availability

of clinical pharmacology data for PK/PD modeling, analysis and

reporting, PK data repositories, and clinical trial simulation

–

Decisions are faster, more reliable and more robust

•

Strategic consulting

based on quantitative, predictive

models improves the quality, visibility, and therefore the value

of critical drug development decisions

–

Decisions explicitly account for the interaction of treatment, patient

population, endpoint, risk, cost and benefit

–

Decisions can create better trials, better portfolios and ultimately

higher market value

Management Team

Shawn M. O’Connor

President, Chairman and Chief Executive Officer

QRS, Diasonics Ultrasound, Peat Marwick

Will Frederick

Chief Financial Officer

Versata, Clarent, ACT Networks, Disney

James Hayden

SVP Global Sales

Accelrys, Bio-Rad Laboratories, Raytheon

Mark Hovde

SVP Marketing

Hovde Associates, Fast Track Systems, DataEdge

Daniel Weiner, PhD

SVP Software Products

IVAX, Merrell Dow, Syntex, Quintiles

William Gillespie, PhD

VP and Lead Scientist, Consulting Services

GloboMax, FDA (CDER), Univ. of Texas at Austin-College of Pharmacy

Greg Lee, PhD

VP Research and Development

Sunrise Test Systems, Weitek, Schlumberger

Rene Bruno, PhD

Managing Director, Consulting Services, Europe

Genentech, Rhone-Poulenc Rorer, Syntex

Market Opportunity

Product Diversification

•

Customers “crossing the chasm”

to full use of the Pharsight

family of products can create increases of 60x in initial revenue

and 15x in ongoing revenue

WinNonlin Licenses

Before

Diversification

4 WNL Pro Users

$6K

$360K

0 1 2 3 4 5 6 7 8

WNL Enterprise

WNL Val Suite

IVIVC Toolkit

AutoPilot

PKS

PKS Val Suite

After Diversification

$6K

$360K

FDA and Pharsight sign CRADA -

June 2006

•

Pharsight will make available a comprehensive suite of software tools, including:

Pharsight

Knowledgebase

Server™

(PKS™),

PKS

Validation

Suite™,

WinNonlin

Validation

Suite™,

Trial

Simulator™

and

Drug

Model

Explorer™

(DMX™).

•

FDA

will

use

the

Pharsight

tools

review

clinical

trial

data,

especially for clinical

pharmacology and clinical safety reviews, and will provide feedback to Pharsight.

FDA

Unveils

Critical

Path

Opportunities

List

March 2006

•

#51 Clinical Trial Simulation. Clinical trial simulation can predict efficient

designs for development programs that reduce the number of trials and patients,

improve

decisions

dosing,

and

increase

informativeness.

Stakeholders

are

looking for first steps, such as identification of tools and best practices.

FDA Issues Critical Path Paper -

June 2004

•

The Critical Path Initiative is FDA's effort to stimulate and facilitate a national

effort to modernize the scientific process through which a potential human drug,

biological product, or medical device is transformed from a discovery or "proof of

concept" into a medical product.

FDA Influence

Driving Market Adoption

•

Analytics

–

WinNonlin

–

WinNonMix

–

Trial Simulator™

–

IVIVC Toolkit™

for WinNonlin

•

Data Management & Compliance

–

Pharsight

Knowledgebase Server™

–

PKS Reporter

–

WinNonlin AutoPilot™

•

Validation

–

WinNonlin Validation Suite™

–

PKS Validation Suite™

•

Model Visualization

–

Drug Model Explorer

(DMX

)

Key Software Offerings

Overview

In vivo-in vitro correlations (IVIVC)

•

Key Benefits

–

Speed formulation development

–

Improve success of bioequivalence studies

–

Avoid expense and time of unnecessary in vivo studies

•

Potential Growth Drivers

–

Increase interoperability with other Pharsight tools

–

Enlarge the WinNonlin user base and expand PKS demand

•

Sales Model

–

Subscription license

–

Low-cost inside sales force

–

Distributor in Asia

•

ASP approx. $3,000 per seat

Key Software Offerings

IVIVC Toolkit™

for WinNonlin

UNDER

DEVELOPMENT

Key Software Offerings

Pharsight

Knowledgebase Server™

(“PKS™”)

•

Key Benefits

–

Dramatically improves data management and data access

–

Increases productivity in analysis and reporting tasks

–

Supports

compliance

with

FDA

requirements

for

electronic

records

and signature,

CFR 21 part 11

•

Potential Growth Drivers

–

Installed

base

current

large

pharma

clients

–

expand seat count within current

clients

–

Optimize adoption pattern of industry

–

Provide upgrade path, expanded utility

•

Sales Model

–

Subscription and perpetual license

–

Software license plus services

–

Direct sales force

–

Distributor in Asia

•

ASP approx. $15,000 per seat

Enterprise Data Management Systems for Secure Storage and Management

of PK/PD Data

Streamlining Routine Clinical PK Analyses and Reporting

•

Key Benefits

–

Capture and implement best practices and business rules within a

department and across sites.

–

Standardize content and formatting of analyses and reports to reduce

authoring/review effort and improve consistency and quality.

–

Automate analyses with computer-based scripts to ensure repeatability and

traceability.

–

Decrease reporting backlog and submission delays, and increase ability to

respond to requests for interim analyses.

–

Free-up PK scientific resources to focus on trial simulation, population PK

modeling and model-based drug profile exploration.

–

Extend PK automation gains to regulatory-compliant workflows and report

generation through integration with PKS and PKS Reporter.

•

Potential Growth Drivers

–

Extend AutoPilot to preclinical analysis and reporting

•

Sales Model

–

Subscription and perpetual license

–

Software license plus services

–

Direct sales force

–

Distributor in Asia

•

ASP approx. $35,000 per seat (five seat purchaser)

Key Software Offerings

WinNonlin AutoPilot™

UNDER

DEVELOPMENT

Key Software Offerings

Drug Model Explorer™

(“DMX

”)

•

Key Benefits

–

Facilitates

efficient

collaboration

within

project

teams

explore key drug

attributes, and their respective uncertainties

–

Enables more flexible scenarios and generates views of program data from

underlying model outputs and simulated responses over defined problem-space

•

Potential Growth Drivers

–

Expand client base of early adopters

–

Expand utility and footprint of application

–

Increase interoperability with other

Pharsight tools

–

Bundling with strategic consulting services

•

Sales Model

–

Subscription and perpetual license model

•

ASP approx. $10,000 per seat

Software-Based Communication Technology, Designed to Facilitate

Quantitative Decision-Making in Drug Development

Return on Investment Example

“Within 2 years of (implementing Pharsight’s WinNonlin automation and other

measures) the two people conducting the routine pharmacokinetic studies

had completed 45 studies in 1 year.”

(previous staff of 19 for the same work)

“The cycle time to issue final reports decreased from 16 months on average

to less than 3 months.”

Richard Lalonde, PharmD, Executive Director, Department of Clinical Pharmacokinetics and

Pharmacodynamics, Pfizer Global Research and Development, Ann Arbor, Mich. et al,, from

the

International

Journal

Pharmaceutical

Medicine

18(1):13-17, 2004

Higher productivity

Faster cycle times

Pfizer

Quantitative Modeling Supports Both Trial-

and Program-Level Decisions

Animal

PK Data

Human

PK Data

Treatment,

Exposure

Patient

Endpoints

Trial

Outcomes

Market

Acceptance

Drug and Patient Models

Trial Models

Market Models

•

Optimize treatment

regimens and

patient populations

for the market and

for a trial

•

Compare probable

safety and efficacy

of new drug to

competitors

•

Match trial design to

the purpose of the

trial

•

Optimize design via

clinical trial

simulations

•

Choose the decision

path with greatest

economic return

–

Treatment regimen(s)

–

Trial design

–

Development

program

•

World-class experts in clinical

pharmacology, PK/PD, decision

analysis, and statistics

•

Senior scientific leadership with

extensive drug development

experience

•

Seasoned practitioners from

industry, academia, and

consulting

•

Serving all major drug

development geographies,

including US, EU, and Japan

Overview of Consulting Services

Strategic Consulting Services

Growth Drivers

•

Industry Factors

–

Increased acceptance of modeling and simulation to achieve

efficient drug development decision making

–

FDA Critical Path Initiative advocates increased use of

modeling and simulation to overcome poor development

productivity

•

Internal Factors

–

Focused effort and investment to diversify client base showing

momentum

–

Expanding scope and increasing efficiency of consulting

engagements

–

Broad therapeutic area expertise

–

Advanced modeling and simulation skills, knowledge and

experience

Return on Investment Example

Aventis turned to a computer model from …

Pharsight. Using its own

animal and human test data, Aventis was able to simulate later-stage

clinical trials. Based on that simulation, “we stopped funding development

of the compound. The ratio between the therapeutic benefit and side effect

demonstrated that this compound was not as beneficial as Evista.”

Douglas estimates that the Pharsight computer model saved Aventis $50M

to $100M, the cost of later-stage clinical trials. “We were able to switch to

another project with a greater chance of success.”

Frank Douglas, former Aventis Chief Scientific Officer and Executive VP of Drug Innovation and

Approval

Forbes ASAP,

10/7/02

Faster failure

Higher productivity

sanofi-aventis

•

Over

35 active consulting clients YTD Fiscal Year 2007

–

21 of the Top 50 Pharma

are active consulting clients

–

9 new consulting clients

•

Over 100 projects engaged during Fiscal Year 2006

–

24 new consulting clients

•

Diverse Customer Workplans

–

Hourly engagements to annual engagements

–

Several thousand dollars to multi-million dollars

–

Time-and-material based or milestone based

Strategic Consulting Services

Market Acceptance

As of September 30, 2006

Pharma Exec 50: Pharmaceutical Executive, May 2006

Accomplishments and Guidance

FY06 Accomplishments

•

Revenue growth

–

Y/Y revenue growth of 1%

–

consecutive year of revenue growth

•

Gross Margin

–

66% of revenue

•

Profitability

–

Net income of $530,000

–

consecutive year of profitability

•

Achieved positive annual net cash

flow

FY07 Guidance

•

Continued revenue growth

–

Y/Y revenue growth of approx. 10% to

15%, or approx. $25M -

$26M

•

Gross Margin

–

Approx. 65% to 70% of revenue

•

Continued profitability

–

Net income of approx. 5% -

10% of

revenue

–

Diluted EPS of $0.01 -

$0.06

•

Continued positive annual net

cash flow

Summary Income Statements

(in thousands)

Consol.

SPBU

SCS

Consol.

SPBU

SCS

Revenue

6,284

3,553

2,731

5,920

4,005

1,915

Y/Y growth

-11%

43%

17%

60%

-25%

Cost of revenue

1,817

353

1,464

2,054

664

1,390

Gross profit

4,467

3,200

1,267

3,866

3,341

525

Gross margin

71%

90%

46%

65%

83%

27%

Operating expenses

3,753

2,609

1,144

3,585

2,531

1,053

Operating income

714

591

123

281

810

(528)

Net income

713

263

Q2 FY07

Q2 FY06

Note: Q2 FY07 Net income reflects $216 for stock-based compensation expense included in Cost of revenue and

Operating expenses

Summary Balance Sheets

(in thousands)

Sep. 30,

2006

March 31,

2006

Cash & cash equivalents

6,438

10,832

Short-term investments

4,749

Accounts receivable, net

3,397

4,585

Total current assets

15,170

15,715

Total assets

16,998

17,786

LIABILITIES & STOCKHOLDERS' DEFICIT

A/P & accrued expenses

3,612

3,981

Deferred revenue

6,816

7,605

Notes payable

1,300

1,519

Total current liabilities

11,728

13,105

Deferred revenue - long term

Notes payable - long term

242

392

Redeemable conv. pref. stock

6,858

6,641

Stockholders deficit

(2,064)

(2,659)

Total liabilities & stockholders' deficit

16,998

17,786

ASSETS

Equity Overview

•

Common Shares Outstanding¹

19.7M

•

Preferred Shares Outstanding¹

2.0M

–

1.8 million Series A and 0.2 million Series B

–

Conversion ratio to Common at 4:1

•

Common Equivalent Shares (as converted) ¹

27.5M

•

PIPE Financing 6/02 and 9/02 = $7.5M

–

1.8 million Units = 1 share Series A redeemable convertible stock + 1 warrant

–

Warrants exercisable for 1 common share @ $1.15

–

Preferred dividend rights of 2% quarterly in cash or Series B shares

–

Conversion:

•

Upon consent of at least 75% of preferred holders, or

•

Upon close of public offering of at least $3.006 per share and proceeds of $40M

–

Redemption:

•

Upon election of at least 75% of preferred holders, or at Pharsight’s option, after June

2007 (5

anniversary of initial issuance)

•

Price of $4.008 per share

As of September 30, 2006

Summary

•

Current pharmaceutical market trends look favorable…

•

Increasing mindshare for quantitative-based modeling and

simulation…

•

FDA's call for more modeling and simulation in the Critical Path

Initiative…

•

Financially stable and leveragable business model…

All support our drive towards expanding Pharsight’s

market footprint to achieve sustainable revenue growth

and profitability