First Quarter Total Revenue of $36.6 Million,
Software Revenue of $33.4 Million
Announces FDA Clearance of Investigational New
Drug Application for SGR-3515, a Novel Wee1/Myt1 Inhibitor
SGR-1505 and SGR-2921 on Track for Initial
Phase 1 Data Readouts in Late 2024 or 2025
Schr�dinger, Inc. (Nasdaq: SDGR), whose physics-based
computational platform is transforming the way therapeutics and
materials are discovered, today announced financial results for the
first quarter of 2024.
“Over the past year, we have witnessed unprecedented interest in
computational drug discovery, and we are excited by the growing
appreciation for using computation to drive pharmaceutical
innovation. We are excited about the opportunities we have to
increase customer adoption of our platform this year and drive
revenue growth going forward,” said Ramy Farid, Ph.D., chief
executive officer of Schr�dinger. “We are also pleased with the
continued progress of our proprietary pipeline. Today we reported
FDA clearance of our IND application for SGR-3515, our novel
Wee1/Myt1 inhibitor, and expect to initiate a Phase 1 clinical
study in patients with solid tumors this year. Our Phase 1 clinical
studies of SGR-1505 and SGR-2921 remain on track, and we look
forward to reporting data from these two trials in late 2024 or
2025.”
First Quarter 2024 Financial Results
- Total revenue for the first quarter was $36.6 million, compared
to $64.8 million in the first quarter of 2023. The decrease was
primarily due to a large collaboration milestone payment that
favorably impacted revenue in the first quarter of 2023.
- Software revenue for the first quarter increased 3.7% to $33.4
million, compared to $32.2 million in the first quarter of 2023.
The increase reflects a growing contribution from hosted licenses,
partially offset by multi-year agreements signed in the first
quarter of 2023.
- Drug discovery revenue was $3.2 million for the first quarter,
compared to $32.6 million in the first quarter of 2023. The first
quarter of 2023 included a large collaboration milestone payment
associated with the progression of a collaboration project.
- Software gross margin decreased to 76% for the first quarter,
compared to 78% in the first quarter of 2023, largely due to higher
technology expenses.
- Operating expenses were $86.3 million for the first quarter,
compared to $76.2 million for the first quarter of 2023. The
increase was primarily due to higher R&D expenses.
- Other income, which includes changes in fair value of equity
investments and interest income/expense, was $13.2 million for the
first quarter, compared to other income of $186.0 million for the
first quarter of 2023. Other income for the first quarter of 2023
included a $147.3 million gain relating to the cash distributions
from Nimbus in connection with the sale of Nimbus’s TYK2 inhibitor
to Takeda.
- Net loss for the first quarter was $54.7 million, compared to
net income of $129.1 million in the first quarter of 2023. For the
three months ended March 31, 2024, Schr�dinger reported a non-GAAP
net loss of $62.4 million compared to a non-GAAP net loss of $27.6
million for the three months ended March 31, 2023. A reconciliation
of non-GAAP net loss to GAAP net (loss) income can be found in
“Non-GAAP Information” and financial tables below.
- At March 31, 2024, Schr�dinger had cash, cash equivalents,
restricted cash and marketable securities of approximately $435.7
million, compared to approximately $468.8 million at December 31,
2023.
Three Months Ended
March 31,
2024
2023
% Change
(in millions)
Total revenue
$
36.6
$
64.8
(44)%
Software revenue
33.4
32.2
3.7%
Drug discovery revenue
3.2
32.6
(90)%
Software gross margin
76
%
78
%
Operating expenses
$
86.3
$
76.2
13%
Other income
$
13.2
$
186.0
—
Net (loss) income
$
(54.7
)
$
129.1
—
2024 Financial Outlook As of May 1, 2024, Schr�dinger
maintained its financial guidance for the fiscal year ending
December 31, 2024:
- Software revenue growth is expected to range from 6% to
13%.
- Drug discovery revenue is expected to range from $30 million to
$35 million.
- Software gross margin is expected to be similar to software
gross margin for the full year 2023.
- Operating expense growth in 2024 is expected to range from 8%
to 12%.
- Cash used for operating activities in 2024 is expected to be
above cash used for operating activities in 2023.
For the second quarter of 2024, software revenue is expected to
range from $31 million to $33 million.
Key Highlights Platform
- In March, Schr�dinger launched LiveDesign Biologics, an
enterprise cloud-based, informatics solution that allows drug
discovery teams designing biologics to centralize access to
computational modeling tools and data in a single interface.
LiveDesign Biologics builds on Schr�dinger’s existing LiveDesign
offering, which is primarily focused on integrating tools and data
for the design of small molecules.
- In March, Schr�dinger presented the discovery of SGR-1505, its
MALT1 inhibitor, during the First Time Disclosure Session at the
American Chemical Society Spring 2024 Meeting. The presentation
provided an overview of how Schr�dinger leveraged its computational
platform at scale to discover SGR-1505. Schr�dinger’s platform
enabled vast exploration of chemical space, evaluating 8.2 billion
compounds, allowing Schr�dinger to synthesize only 78 of the most
promising molecules in the lead series, and identify SGR-1505 in
approximately 10 months.
- Schr�dinger is accelerating the validation of computational
predictive models of off-target drug activity. There is an emerging
requirement for such models to predict drug toxicity risks before
animal or human studies are initiated. Schr�dinger is exploring the
deployment of its core technologies and capabilities, at scale, to
provide computational solutions to meet these requirements. The
company’s recent advances characterizing the structure of key
proteins such as hERG (recently published in Cell) and cytochrome
P450 enzymes are examples of these efforts.
Proprietary Pipeline
- Today, Schr�dinger also announced that the U.S. Food and Drug
Administration (FDA) cleared the investigational new drug (IND)
application for SGR-3515, its Wee1/Myt1 inhibitor. Schr�dinger
expects to initiate a Phase 1 dose-escalation trial of SGR-3515 in
patients with solid tumors in the third quarter of 2024.
- The company is advancing the Phase 1 dose-escalation study of
SGR-1505, its MALT1 inhibitor, in patients with relapsed/refractory
B-cell malignancies, and enrollment is ongoing in the U.S. and EU.
The company expects to report initial data from this study in late
2024 or 2025.
- Schr�dinger also continues to advance its Phase 1 study of
SGR-2921, its CDC7 inhibitor, in patients with acute myeloid
leukemia (AML) or myelodysplastic syndrome. Patient enrollment is
ongoing in the U.S., and the company expects to report initial data
from the study in late 2024 or 2025.
- Today Schr�dinger announced that the rights to the SOS1
inhibitor discovered and developed as part of the collaboration
with Bristol Myers Squibb have reverted to Schr�dinger based on
portfolio prioritization decisions at BMS. In 2023, Schr�dinger
completed and delivered a development candidate, and BMS had been
conducting IND-enabling studies.
- Schr�dinger is progressing its discovery pipeline, including
programs targeting EGFRC797S, PRMT5-MTA and NLRP3. The company
continues to anticipate submitting at least one IND in 2025.
Webcast and Conference Call Information Schr�dinger will
host a conference call to discuss its first quarter 2024 financial
results on Wednesday, May 1, 2024, at 4:30 p.m. ET. The live
webcast can be accessed under “News & Events” in the investors
section of Schr�dinger’s website,
https://ir.schrodinger.com/events-and-presentations/event-details/2024/Schrdinger-First-Quarter-2024-Financial-Results-Conference-Call/default.aspx.
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
Schr�dinger’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 Schr�dinger’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 Schr�dinger Schr�dinger is transforming the way
therapeutics and materials are discovered. Schr�dinger has
pioneered a physics-based computational platform that enables
discovery of high-quality, novel molecules for drug development and
materials applications more rapidly and at lower cost compared to
traditional methods. The software platform is licensed by
biopharmaceutical and industrial companies, academic institutions,
and government laboratories around the world. Schr�dinger’s
multidisciplinary drug discovery team also leverages the software
platform to advance a portfolio of collaborative and proprietary
programs to address unmet medical needs.
Founded in 1990, Schr�dinger has approximately 850 employees and
is engaged with customers and collaborators in more than 70
countries. 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
Schr�dinger’s expectations about the speed and capacity of its
computational platform, its financial outlook for the fiscal year
ending December 31, 2024 and second quarter ending June 30, 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 CDC7, MALT1, and Wee1 inhibitors,
including SGR-1505, SGR-2921, and SGR-3515, the clinical potential
and favorable properties of its collaborators’ product candidates,
the expected timeline for submitting investigational new drug
applications, 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 Schr�dinger’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 Schr�dinger’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, factors adversely
affecting the life sciences industry, fluctuations in the value of
the U.S. dollar and foreign currencies, its reliance upon its
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 March 31, 2024, filed with the Securities and
Exchange Commission on May 1, 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, Schr�dinger 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 March
31,
2024
2023
Revenues:
Software products and services
$
33,415
$
32,213
Drug discovery
3,183
32,569
Total revenues
36,598
64,782
Cost of revenues:
Software products and services
7,976
7,115
Drug discovery
9,732
11,974
Total cost of revenues
17,708
19,089
Gross profit
18,890
45,693
Operating expenses:
Research and development
50,611
40,741
Sales and marketing
10,171
9,145
General and administrative
25,541
26,308
Total operating expenses
86,323
76,194
Loss from operations
(67,433
)
(30,501
)
Other income:
Gain on equity investments
—
147,322
Change in fair value
8,137
35,737
Other income
5,028
2,937
Total other income
13,165
185,996
(Loss) income before income taxes
(54,268
)
155,495
Income tax expense
456
26,359
Net (loss) income
$
(54,724
)
$
129,136
Net (loss) income per share of common and
limited common stockholders, basic:
$
(0.76
)
$
1.81
Weighted average shares used to compute
net (loss) income per share of common and limited common
stockholders, basic:
72,291,134
71,467,097
Net (loss) income per share of common and
limited common stockholders, diluted:
$
(0.76
)
$
1.75
Weighted average shares used to compute
net (loss) income per share of common and limited common
stockholders, diluted:
72,291,134
73,818,611
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except for share
and per share amounts)
Assets
March 31, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
130,236
$
155,315
Restricted cash
4,638
5,751
Marketable securities
300,843
307,688
Accounts receivable, net of allowance for
doubtful accounts of $130 and $220
19,839
65,992
Unbilled and other receivables, net for
allowance for unbilled receivables of $130 and $100
25,781
23,124
Prepaid expenses
12,349
9,926
Total current assets
493,686
567,796
Property and equipment, net
26,133
23,325
Equity investments
91,387
83,251
Goodwill
4,791
4,791
Right of use assets - operating leases
118,578
117,778
Other assets
3,187
6,014
Total assets
$
737,762
$
802,955
Liabilities and Stockholders'
Equity:
Current liabilities:
Accounts payable
9,974
$
16,815
Accrued payroll, taxes, and benefits
19,549
31,763
Deferred revenue
49,497
56,231
Lease liabilities - operating leases
16,927
16,868
Other accrued liabilities
10,560
11,996
Total current liabilities
106,507
133,673
Deferred revenue, long-term
8,016
9,043
Lease liabilities - operating leases,
long-term
108,988
111,014
Other liabilities, long-term
545
667
Total liabilities
224,056
254,397
Stockholders' equity:
Preferred stock, $0.01 par value.
Authorized 10,000,000 shares; zero shares issued and outstanding at
March 31, 2024 and December 31, 2023, respectively
—
—
Common stock, $0.01 par value. Authorized
500,000,000 shares; 63,472,866 and 62,977,316 shares issued and
outstanding at March 31, 2024 and December 31, 2023 ,
respectively
635
630
Limited common stock, $0.01 par value.
Authorized 100,000,000 shares; 9,164,193 shares issued and
outstanding at March 31, 2024 and December 31, 2023,
respectively
92
92
Additional paid-in capital
906,193
885,973
Accumulated deficit
(393,142
)
(338,418
)
Accumulated other comprehensive (loss)
income
(72
)
281
Total stockholders' equity
513,706
548,558
Total liabilities and stockholders'
equity
$
737,762
$
802,955
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(54,724
)
$
129,136
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Gain on equity investments
—
(147,322
)
Fair value adjustments
(8,137
)
(35,737
)
Depreciation and amortization
1,436
1,760
Stock-based compensation
12,218
10,880
Noncash investment accretion
(2,683
)
(964
)
Decrease (increase) in assets:
Accounts receivable, net
46,153
9,262
Unbilled and other receivables
(2,657
)
(336
)
Reduction in the carrying amount of right
of use assets - operating leases
2,152
—
Prepaid expenses and other assets
(2,559
)
(5,750
)
(Decrease) increase in liabilities:
Accounts payable
(7,150
)
2,468
Income taxes payable
—
25,963
Accrued payroll, taxes, and benefits
(12,214
)
(11,730
)
Deferred revenue
(7,761
)
(11,603
)
Lease liabilities - operating leases
(1,967
)
(623
)
Other accrued liabilities
(1,383
)
3,502
Net cash used in operating activities
(39,276
)
(31,094
)
Cash flows from investing activities:
Purchases of property and equipment
(4,095
)
(3,580
)
Purchases of equity investments
—
(4,125
)
Distribution from equity investment
—
111,329
Purchases of marketable securities
(37,126
)
(58,823
)
Proceeds from maturity of marketable
securities
46,300
127,401
Net cash provided by investing
activities
5,079
172,202
Cash flows from financing activities:
Issuances of common stock upon stock
option exercises
392
867
Principal payments on finance leases
(14
)
—
Issuance of common stock upon ATM
offering, net
7,627
—
Net cash provided by financing
activities
8,005
867
Net (decrease) increase in cash and cash
equivalents and restricted cash
(26,192
)
141,975
Cash and cash equivalents and restricted
cash, beginning of period
161,066
95,717
Cash and cash equivalents and restricted
cash, end of period
$
134,874
$
237,692
Supplemental disclosure of cash flow
and noncash information
Cash paid for income taxes
$
180
$
86
Supplemental disclosure of non-cash
investing and financing activities
Purchases of property and equipment in
accounts payable
501
218
Purchases of property and equipment in
accrued liabilities
282
86
Acquisition of right of use assets -
operating leases, contingency resolution
2,848
1,820
Reconciliation of GAAP to
Non-GAAP Financial Measures (Unaudited)
Three Months Ended
March 31,
2024
2023
(in thousands, except per share
data)
Net (loss) income (GAAP)
$
(54,724
)
$
129,136
Income tax expense
456
26,359
Gain on equity investment
—
(147,322
)
Change in fair value
(8,137
)
(35,737
)
Non-GAAP net loss
$
(62,405
)
$
(27,564
)
Non-GAAP net loss per share of common and
limited common stockholders, basic and diluted:
$
(0.86
)
$
(0.39
)
Weighted average shares used to compute
net loss per share of common and limited common stockholders, basic
and diluted:
72,291,134
71,467,097
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501730541/en/
Matthew Luchini (Investors) Schr�dinger, Inc.
matthew.luchini@schrodinger.com 917-719-0636
Allie Nicodemo (Media) Schr�dinger, Inc.
allie.nicodemo@schrodinger.com 617-356-2325
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