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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Schrodinger Inc | NASDAQ:SDGR | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.86 | 3.52% | 25.29 | 24.72 | 25.50 | 25.80 | 24.62 | 24.84 | 1,585,058 | 01:00:00 |
From Aug 2024 to Feb 2025
Schrdinger to Receive $150 Million Upfront for New Multi-Target Collaboration with Novartis
Third Quarter Total Revenue of $35.3 Million, Software Revenue of $31.9 Million
Updates 2024 Financial Guidance
Schrdinger, Inc. (Nasdaq: SDGR) today announced financial results for the third quarter of 2024 and provided a business update. In a separate press release issued earlier today, Schrdinger announced a multi-target research and licensing collaboration with Novartis. Under the terms of the agreement, Novartis will pay Schrdinger $150 million upfront, and Schrdinger will also be eligible to receive up to $2.3 billion in milestone payments. Schrdinger also announced an expanded three-year software agreement that substantially increases Novartis's access to Schrdinger’s computational predictive modeling technology and enterprise informatics platform.
“We have continued to make important advances across our business this year. Recent progress, including the collaboration with Novartis and milestones achieved by our co-founded companies underscore the strength of our business model,” said Ramy Farid, Ph.D., chief executive officer of Schrdinger. “While our third quarter software revenue was slightly below our expectations, we are excited about the opportunities we have in the fourth quarter to drive software growth through increasing utilization among our customers. Our proprietary pipeline is progressing, and we look forward to sharing the initial Phase 1 data from each of our three lead programs next year.”
Third Quarter 2024 Financial Results
Three Months Ended
September 30,
2024
2023
% Change
(in millions)
Total revenue
$
35.3
$
42.6
(17
)%
Software revenue
31.9
28.9
10
%
Drug discovery revenue
3.4
13.7
(75
)%
Software gross margin
73
%
76
%
Operating expenses
$
86.2
$
79.8
7.9
%
Other income (expense)
$
30.2
$
(8.7
)
—
Net loss
$
(38.1
)
$
(62.0
)
—
For the three and nine months ended September 30, 2024, Schrdinger reported non-GAAP net losses of $63.7 million and $174.2 million, respectively, compared to non-GAAP net losses of $50.4 million and $134.8 million for the three and nine months ended September 30, 2023. A reconciliation of non-GAAP net loss to GAAP net (loss) income can be found in “Non-GAAP Information” and financial tables below.
2024 Financial Outlook
Today Schrdinger updated its 2024 full-year financial guidance. The company’s updated financial expectations for the fiscal year ending December 31, 2024, are as follows:
“We have increased the lower end of our software revenue growth guidance for the year, reflecting our confidence in the opportunities to meet our growth goals and the continued enthusiasm for the deployment of computation in drug discovery across the industry,” stated Geoff Porges, MBBS, chief financial officer of Schrdinger. “Collaborations continue to be an important element of our business model, and we are pleased Novartis has recognized the value of our platform and the capabilities of our team with this agreement. This quarter we added $48 million to our cash balance as a result of Lilly’s acquisition of Morphic and expect to add even more capital from the payments associated with the collaboration announced today.”
Recent Highlights Collaborators, Partners, and Co-Founded Companies
Proprietary Pipeline
Platform
Webcast and Conference Call Information
Schrdinger will host a conference call to discuss its third quarter 2024 financial results and the recently announced Novartis collaboration on Tuesday, November 12, 2024, at 8:00 a.m. ET. The live webcast can be accessed under “News & Events” in the investors section of Schrdinger’s website, https://ir.schrodinger.com/news-and-events/event-calendar. To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrdinger’s website for approximately 90 days following the event.
Non-GAAP Information
Included in this press release is certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The company presents non-GAAP net income (loss) and non-GAAP net income (loss) per share, which exclude gains and losses on equity investments, changes in fair value of equity investments, and income tax benefits and expenses. Adjusting net income to exclude the impact of these items results in a financial presentation for the company without the impact of our equity investments and tax benefits and expenses. Management believes non-GAAP net income (loss) and non-GAAP net income (loss) per share are useful measures for investors, taken in conjunction with the company’s GAAP financial statements because they provide greater period-over-period comparability with respect to the company’s operating performance, by excluding non-cash mark-to-market and other valuation adjustments for the company’s equity investments, non-recurring cash distributions from the company’s equity investments and the tax impact of these distributions that are not reflective of the ongoing operating performance of the business. However, the non-GAAP measures should be considered only in addition to, not as a substitute for or as superior to, net income (loss) and net income (loss) per share or other financial measures prepared in accordance with GAAP.
Other companies in Schrdinger’s industry may calculate non-GAAP net income (loss) and non-GAAP net income (loss) per share differently than we do, limiting their usefulness as comparative measures. For a reconciliation of non-GAAP net income (loss) and non-GAAP net income (loss) per share to GAAP net income (loss) and GAAP net income (loss) per share, respectively, please refer to the tables at the end of this press release.
About Schrdinger
Schrdinger is transforming molecular discovery with its computational platform, which enables the discovery of novel, highly optimized molecules for drug development and materials design. Schrdinger’s software platform is built on more than 30 years of R&D investment and is licensed by biotechnology, pharmaceutical and industrial companies, and academic institutions around the world. Schrdinger also leverages the platform to advance a portfolio of collaborative and proprietary programs and is advancing three clinical-stage oncology programs. Founded in 1990, Schrdinger has approximately 900 employees operating from 15 locations globally. To learn more, visit www.schrodinger.com, follow us on LinkedIn and Instagram, or visit our blog, Extrapolations.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 including, but not limited to those statements regarding Schrdinger’s expectations about the speed and capacity of its computational platform, its financial outlook for the fiscal year ending December 31, 2024, its plans to continue to invest in research and its strategic plans to accelerate the growth of its software licensing business and advance its collaborative and proprietary drug discovery programs, the long-term potential of its business, its ability to improve and advance the science underlying its platform, the initiation, timing, progress, and results of its proprietary drug discovery programs and product candidates and the drug discovery programs and product candidates of its collaborators, the clinical potential and favorable properties of its MALT1, CDC7, and Wee1/Myt1 inhibitors, including SGR-1505, SGR-2921, and SGR-3515, the clinical potential and favorable properties of its collaborators’ product candidates, the potential of its collaboration with Novartis to develop new therapies, its ability to realize potential milestones, royalties or other payments under the collaboration, including the risk that the company may not realize the expected benefits of the collaboration as well as expectations related to the use of its cash, cash equivalents and marketable securities. Statements including words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and statements in the future tense are forward-looking statements. These forward-looking statements reflect Schrdinger’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the company and on assumptions the company has made. Actual results may differ materially from those described in these forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and important factors that are beyond Schrdinger’s control, including the demand for its software platform, its ability to further develop its computational platform, its reliance upon third-party providers of cloud-based infrastructure to host its software solutions, its reliance on Novartis to perform its obligations to develop and commercialize any development candidates discovered under the collaboration, its reliance upon other third-party drug discovery collaborators, the uncertainties inherent in drug development and commercialization, such as the conduct of research activities and the timing of and its ability to initiate and complete preclinical studies and clinical trials, whether results from preclinical studies will be predictive of the results of later preclinical studies and clinical trials, uncertainties associated with the regulatory review of IND submissions, clinical trials and applications for marketing approvals, the ability to retain and hire key personnel and other risks detailed under the caption “Risk Factors” and elsewhere in the company’s Securities and Exchange Commission filings and reports, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the Securities and Exchange Commission on November 12, 2024, as well as future filings and reports by the company. Any forward-looking statements contained in this press release speak only as of the date hereof. Except as required by law, Schrdinger undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, changes in expectations or otherwise.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except for share and per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenues:
Software products and services
$
31,884
$
28,904
$
100,703
$
90,469
Drug discovery
3,406
13,665
18,519
52,071
Total revenues
35,290
42,569
119,222
142,540
Cost of revenues:
Software products and services
8,479
7,034
23,622
20,844
Drug discovery
9,083
11,896
27,647
38,554
Total cost of revenues
17,562
18,930
51,269
59,398
Gross profit
17,728
23,639
67,953
83,142
Operating expenses:
Research and development
50,977
46,833
152,423
130,279
Sales and marketing
10,349
9,109
30,213
27,276
General and administrative
24,824
23,890
73,901
73,414
Total operating expenses
86,150
79,832
256,537
230,969
Loss from operations
(68,422
)
(56,193
)
(188,584
)
(147,827
)
Other income (expense)
Gain on equity investments
—
—
—
147,322
Change in fair value
25,459
(14,522
)
27,763
61,869
Other income
4,737
5,804
14,363
13,067
Total other income (expense)
30,196
(8,718
)
42,126
222,258
(Loss) income before income taxes
(38,226
)
(64,911
)
(146,458
)
74,431
Income tax (benefit) expense
(90
)
(2,887
)
449
3,041
Net (loss) income
$
(38,136
)
$
(62,024
)
$
(146,907
)
$
71,390
Net (loss) income per share of common and limited common stockholders, basic:
$
(0.52
)
$
(0.86
)
$
(2.02
)
$
1.00
Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, basic:
72,813,006
71,924,451
72,606,033
71,679,765
Net (loss) income per share of common and limited common stockholders, diluted:
$
(0.52
)
$
(0.86
)
$
(2.02
)
$
0.95
Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, diluted:
72,813,006
71,924,451
72,606,033
74,966,791
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except for share and per share amounts)
Assets
September 30, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
160,416
$
155,315
Restricted cash
9,760
5,751
Marketable securities
228,263
307,688
Accounts receivable, net of allowance for doubtful accounts of $250 and $220
13,281
65,992
Unbilled and other receivables, net for allowance for unbilled receivables of $130 and $100
31,542
23,124
Prepaid expenses
13,136
9,926
Total current assets
456,398
567,796
Property and equipment, net
24,922
23,325
Equity investments
65,216
83,251
Goodwill
4,791
4,791
Right of use assets - operating leases
112,816
117,778
Other assets
5,153
6,014
Total assets
$
669,296
$
802,955
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable
11,210
$
16,815
Accrued payroll, taxes, and benefits
33,611
31,763
Deferred revenue
41,773
56,231
Lease liabilities - operating leases
16,887
16,868
Other accrued liabilities
7,636
11,996
Total current liabilities
111,117
133,673
Deferred revenue, long-term
5,200
9,043
Lease liabilities - operating leases, long-term
103,257
111,014
Other liabilities, long-term
297
667
Total liabilities
219,871
254,397
Stockholders' equity:
Preferred stock, $0.01 par value. Authorized 10,000,000 shares; zero shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
—
—
Common stock, $0.01 par value. Authorized 500,000,000 shares; 63,681,858 and 62,977,316 shares issued and outstanding at September 30, 2024 and December 31, 2023 , respectively
637
630
Limited common stock, $0.01 par value. Authorized 100,000,000 shares; 9,164,193 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
92
92
Additional paid-in capital
933,424
885,973
Accumulated deficit
(485,325
)
(338,418
)
Accumulated other comprehensive income
597
281
Total stockholders' equity
449,425
548,558
Total liabilities and stockholders' equity
$
669,296
$
802,955
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(146,907
)
$
71,390
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Gain on equity investments
—
(147,322
)
Fair value adjustments
(27,763
)
(61,869
)
Depreciation and amortization
4,395
4,198
Stock-based compensation
37,424
35,307
Noncash investment accretion
(6,260
)
(4,962
)
Loss on disposal of property and equipment
8
140
Decrease (increase) in assets:
Accounts receivable, net
52,711
36,069
Unbilled and other receivables
(8,418
)
884
Reduction in the carrying amount of right of use assets - operating leases
7,914
5,722
Prepaid expenses and other assets
(5,314
)
(13,048
)
(Decrease) increase in liabilities:
Accounts payable
(5,442
)
742
Income taxes payable
—
729
Accrued payroll, taxes, and benefits
1,848
626
Deferred revenue
(18,301
)
(28,114
)
Lease liabilities - operating leases
(7,738
)
(2,577
)
Other accrued liabilities
(4,412
)
2,607
Net cash used in operating activities
(126,255
)
(99,478
)
Cash flows from investing activities:
Purchases of property and equipment
(6,438
)
(10,924
)
Purchases of equity investments
(3,000
)
(4,125
)
Distribution from equity investment
—
147,136
Proceeds from disposition and sale of equity investments
48,798
—
Purchases of marketable securities
(187,466
)
(224,513
)
Proceeds from maturity of marketable securities
273,467
345,074
Net cash provided by investing activities
125,361
252,648
Cash flows from financing activities:
Issuances of common stock upon stock option exercises
1,356
7,099
Principal payments on finance leases
(43
)
(5
)
Payment of offering costs
—
(373
)
Issuance of common stock upon ATM offering, net
8,691
—
Net cash provided by financing activities
10,004
6,721
Net increase in cash and cash equivalents and restricted cash
9,110
159,891
Cash and cash equivalents and restricted cash, beginning of period
161,066
95,717
Cash and cash equivalents and restricted cash, end of period
$
170,176
$
255,608
Supplemental disclosure of cash flow and noncash information
Cash paid for income taxes
$
847
$
2,194
Supplemental disclosure of non-cash investing and financing activities
Purchases of property and equipment in accounts payable
30
274
Purchases of property and equipment in accrued liabilities
138
685
Acquisition of right of use assets - operating leases, contingency resolution
2,848
514
Acquisition of right of use assets in exchange for lease liabilities - operating leases
—
15,085
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(in thousands, except per share data)
Net (loss) income (GAAP)
$
(38,136
)
$
(62,024
)
$
(146,907
)
$
71,390
Income tax (benefit) expense
(90
)
(2,887
)
449
3,041
Gain on equity investment
—
—
—
(147,322
)
Change in fair value
(25,459
)
14,522
(27,763
)
(61,869
)
Non-GAAP net loss
$
(63,685
)
$
(50,389
)
$
(174,221
)
$
(134,760
)
Non-GAAP net loss per share of common and limited common stockholders, basic and diluted:
$
(0.87
)
$
(0.70
)
$
(2.40
)
$
(1.88
)
Weighted average shares used to compute net loss per share of common and limited common stockholders, basic and diluted:
72,813,006
71,924,451
72,606,033
71,679,765
View source version on businesswire.com: https://www.businesswire.com/news/home/20241112811047/en/
Matthew Luchini (Investors) Schrdinger, Inc. matthew.luchini@schrodinger.com 917-719-0636
Allie Nicodemo (Media) Schrdinger, Inc. allie.nicodemo@schrodinger.com 480-251-3144
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