Schrödinger Reports First Quarter 2024 Financial Results
First Quarter Total Revenue of
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
“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
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 endedMarch 31, 2024 , Schrödinger 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 endedMarch 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 , Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately$435.7 million , compared to approximately$468.8 million atDecember 31, 2023 .
|
Three Months Ended |
|||||||||
|
||||||||||
|
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
- 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
Key Highlights
Platform
- In March, Schrödinger 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 Schrödinger’s existing LiveDesign offering, which is primarily focused on integrating tools and data for the design of small molecules.
-
In March, Schrödinger 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 Schrödinger leveraged its computational platform at scale to discover SGR-1505. Schrödinger’s platform enabled vast exploration of chemical space, evaluating 8.2 billion compounds, allowing Schrödinger to synthesize only 78 of the most promising molecules in the lead series, and identify SGR-1505 in approximately 10 months.
- Schrödinger 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. Schrödinger 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 inCell) and cytochrome P450 enzymes are examples of these efforts.
Proprietary Pipeline
-
Today, Schrödinger 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. Schrödinger 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.
-
Schrödinger 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 Schrödinger announced that the rights to the SOS1 inhibitor discovered and developed as part of the collaboration with
Bristol Myers Squibb have reverted to Schrödinger based on portfolio prioritization decisions at BMS. In 2023, Schrödinger completed and delivered a development candidate, and BMS had been conducting IND-enabling studies.
- Schrödinger 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
Schrödinger will host a conference call to discuss its first quarter 2024 financial results on
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
Other companies in Schrödinger’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 Schrödinger
Schrödinger is transforming the way therapeutics and materials are discovered. Schrödinger 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. Schrödinger’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, Schrödinger 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 Schrödinger’s expectations about the speed and capacity of its computational platform, its financial outlook for the fiscal year ending
Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except for share and per share amounts) |
|||||||
|
Three Months Ended |
||||||
|
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 |
|
|
|
||||
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 |
|
19,839 |
|
|
|
65,992 |
|
Unbilled and other receivables, net for allowance for unbilled receivables of |
|
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 |
|
|
|
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, |
|
— |
|
|
|
— |
|
Common stock, |
|
635 |
|
|
|
630 |
|
Limited common stock, |
|
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 |
||||||
|
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 |
||||||
|
|||||||
|
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/
Schrödinger, Inc.
matthew.luchini@schrodinger.com
917-719-0636
Schrödinger, Inc.
allie.nicodemo@schrodinger.com
617-356-2325
Source: Schrödinger