Press Release

Schrödinger Reports First Quarter 2022 Financial Results

Software Revenue of $33.1 Million, a 26 Percent Increase Over First Quarter of 2021; Total Revenue of $48.7 Million, up 51 Percent Over First Quarter of 2021

Company Maintains Full-Year 2022 Financial Outlook

Internal Pipeline Progressing, With IND Submission for SGR-1505, Schrödinger’s MALT1 Inhibitor, On-Track for First Half of 2022

NEW YORK--(BUSINESS WIRE)--May 4, 2022-- Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, today announced financial results for the first quarter of 2022.

“We began 2022 with a strong quarter, which included software revenue of $33.1 million, a 26 percent increase over the first quarter of 2021, driven primarily by continued adoption and scale up by existing customers,” said Ramy Farid, Ph.D., chief executive officer of Schrödinger. “We are also seeing continued progress across our collaborative and internal drug discovery pipeline, further demonstrating the impact of our platform. Last month, we presented preclinical data from our Wee1 program, which highlighted our opportunity to advance a potential best-in-class Wee1 inhibitor into the clinic. We are working rapidly to progress our three most advanced internal programs into clinical development and are on track to submit an investigational new drug application for our MALT1 inhibitor, SGR-1505, to the FDA in the first half of 2022.”

First Quarter 2022 Financial Highlights

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

% Change

 

 

 

(in millions)

 

 

 

 

 

 

Total revenue

$

48.7

 

 

$

32.1

 

 

51

%

 

 

Software revenue

 

33.1

 

 

 

26.3

 

 

26

%

 

 

Drug discovery revenue

 

15.6

 

 

 

5.8

 

 

169

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

28.0

 

 

$

16.2

 

 

73

%

 

 

Software gross margin

 

77

%

 

 

78

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

56.6

 

 

$

40.1

 

 

41

%

 

 

Other income (expense)

$

(5.8

)

 

$

23.5

 

 

 

 

 

 

Net loss

$

(34.5

)

 

$

(0.5

)

 

 

 

 

 

At March 31, 2022, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $529 million, compared to approximately $579 million at December 31, 2021.

Strategic Objectives and Recent Business Highlights

In February 2022, Schrödinger laid out several strategic objectives for 2022-2023. Recent highlights include the following:

Internal Pipeline

  • Schrödinger is on track to submit an investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA) for SGR-1505, its MALT1 inhibitor, in the first half of 2022. The company continues to plan to initiate a Phase 1 clinical study of SGR-1505 in patients with relapsed and resistant lymphoma in the second half of 2022. MALT1 is considered a potential therapeutic target for several non-Hodgkin’s B-cell lymphomas.
  • In April, Schrödinger presented new preclinical data from its Wee1 inhibitor program at the American Association of Cancer Research (AACR) Annual Meeting. These data underscore the therapeutic potential of Schrödinger’s Wee1 inhibitors for use as monotherapy and as part of combination therapy with other agents. Wee1 is emerging as a potentially important therapeutic target for a range of solid tumors, including ovarian and uterine cancer. Schrödinger continues to expect to select a Wee1 development candidate this year.
  • The company continues to advance its CDC7 development candidate through IND-enabling studies and expects to submit an IND to the FDA in early 2023. Targeting proteins such as CDC7 that play important roles in DNA replication and replication stress is gaining momentum as a new therapeutic approach based on the proliferative capacity of cancer cells to bypass DNA damage responses.
  • Schrödinger also continues to advance multiple undisclosed research programs in the areas of oncology and immunology.

Collaborative Programs

  • In March 2022, Morphic Therapeutic announced the initiation of a Phase 2a clinical study of MORF-057 in patients with moderate to severe ulcerative colitis. MORF-057 is a potent and selective, oral small molecule inhibitor of the α4β7 integrin being studied in patients with gastrointestinal disorders, initially targeting inflammatory bowel disease.

Materials Science

  • Today, Schrödinger announced that it recently entered into a three-year collaboration with Eonix LLC to accelerate the discovery and design of materials for safer, energy dense lithium ion batteries. As part of the agreement, Schrödinger received an equity stake in Eonix.

Underlying Science

  • During the first quarter, Schrödinger scientists continued to make scientific advances and were authors on 11 publications in peer-reviewed life sciences and materials science journals. Recent publications include reporting a novel extension to our neural network interaction potentials to more accurately model charge-charge interactions. Schrödinger anticipates that these improvements may enable more predictive modeling of polarization effects, reactivity, and polymorph stability, among a number of other endpoints of high importance to drug discovery and materials design.

2022 Financial Outlook

As of May 4, 2022, Schrödinger maintained the following expectations for the fiscal year ending December 31, 2022:

  • Total revenue expected to range from $161 million to $181 million, representing 17 percent to 31 percent growth over 2021
  • Total software revenue expected to range from $126 million to $136 million, representing 11 percent to 20 percent growth over 2021
  • Total drug discovery revenue expected to range from $35 million to $45 million, representing 42 to 82 percent growth over 2021
  • Operating expense growth is expected to be slightly lower than the 42 percent reported for the year ended December 31, 2021
  • Software gross margin percentage is expected to be in the mid-70s

For the second quarter of 2022, software revenue is expected to range from $28 to $30 million.

Webcast and Conference Call Information

Schrödinger will host a conference call to discuss its first quarter 2022 financial results on Wednesday, May 4, 2022, at 4:30 p.m. ET. To participate in the live call, please dial (833) 727-9520 (domestic) or +1 (830) 213-7697 (international) and refer to conference ID 7896009. The webcast can also be accessed under “News & Events” in the investors section of Schrödinger’s website, https://ir.schrodinger.com/news-and-events/event-calendar. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.

About Schrödinger

Schrödinger is transforming the way therapeutics and materials are discovered. Schrödinger has pioneered a physics-based software 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 used 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 collaborative programs and its own pipeline of novel therapeutics to address unmet medical needs.

Founded in 1990, Schrödinger has over 700 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 Twitter, 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 our expectations about the speed and capacity of our computational platform, our financial outlook for the fiscal year ending December 31, 2022, and second quarter ending June 30, 2022, our progress towards achieving our key strategic goals, targets and objectives for the fiscal years ending December 31, 2022 and 2023, our plans to continue to invest in research and our strategic plans to accelerate the growth of our software business and advance our collaborative and internal drug discovery programs, our ability to improve and advance the science underlying our platform, the timing of potential IND submissions as well as initiation of clinical trials for our internal drug discovery programs, the potential of our MALT1 inhibitors to be used for the treatment of certain B-cell lymphomas, the therapeutic potential of our CDC7 inhibitors, the therapeutic potential of our Wee1 inhibitors, as well as our expectations related to the use of our 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 our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have 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 our control, including the demand for our software solutions, our ability to further develop our computational platform, our reliance upon third-party providers of cloud-based infrastructure to host our software solutions, our reliance upon our 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 our 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 the direct and indirect impacts of the ongoing COVID-19 pandemic on our business and other risks detailed under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed with the Securities and Exchange Commission on May 4, 2022, as well as future filings and reports by us. Any forward-looking statements contained in this press release speak only as of the date hereof. Except as required by law, we undertake 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,

 

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Software products and services

 

$

33,081

 

 

$

26,340

 

Drug discovery

 

 

15,582

 

 

 

5,787

 

Total revenues

 

 

48,663

 

 

 

32,127

 

Cost of revenues:

 

 

 

 

 

 

 

 

Software products and services

 

 

7,511

 

 

 

5,906

 

Drug discovery

 

 

13,169

 

 

 

10,057

 

Total cost of revenues

 

 

20,680

 

 

 

15,963

 

Gross profit

 

 

27,983

 

 

 

16,164

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

27,822

 

 

 

21,448

 

Sales and marketing

 

 

6,671

 

 

 

5,239

 

General and administrative

 

 

22,133

 

 

 

13,389

 

Total operating expenses

 

 

56,626

 

 

 

40,076

 

Loss from operations

 

 

(28,643

)

 

 

(23,912

)

Other (expense) income:

 

 

 

 

 

 

 

 

Loss on equity investments

 

 

 

 

 

(1,781

)

Change in fair value

 

 

(6,164

)

 

 

24,824

 

Interest income

 

 

328

 

 

 

420

 

Total other (expense) income

 

 

(5,836

)

 

 

23,463

 

Loss before income taxes

 

 

(34,479

)

 

 

(449

)

Income tax (benefit) expense

 

 

(28

)

 

 

74

 

Net loss

 

 

(34,451

)

 

 

(523

)

Net loss attributable to noncontrolling interest

 

 

(11

)

 

 

(494

)

Net loss attributable to Schrödinger common and

limited common stockholders

 

$

(34,440

)

 

$

(29

)

Net loss per share attributable to Schrödinger

common and limited common stockholders, basic and diluted:

 

$

(0.48

)

 

$

(0.00

)

Weighted average shares used to compute net loss

per share attributable to Schrödinger common and

limited common stockholders, basic and diluted:

 

 

71,050,432

 

 

 

70,071,625

 

Condensed Consolidated Balance Sheets (Unaudited)

 

(in thousands, except for share and per share amounts)

 

 

 

 

 

 

 

 

 

 

Assets

 

March 31, 2022

 

 

December 31, 2021

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

117,257

 

 

$

120,267

 

Restricted cash

 

 

3,500

 

 

 

3,000

 

Marketable securities

 

 

408,275

 

 

 

456,212

 

Accounts receivable, net of allowance for doubtful accounts of $127 and $108

 

 

29,321

 

 

 

31,744

 

Unbilled and other receivables, net for allowance for unbilled receivables of $40 and $30

 

 

16,273

 

 

 

8,807

 

Prepaid expenses

 

 

11,542

 

 

 

5,030

 

Total current assets

 

 

586,168

 

 

 

625,060

 

Property and equipment, net

 

 

11,120

 

 

 

10,025

 

Equity investments

 

 

37,002

 

 

 

43,167

 

Goodwill

 

 

4,791

 

 

 

 

Intangible assets, net

 

 

986

 

 

 

 

Right of use assets

 

 

78,136

 

 

 

75,384

 

Other assets

 

 

1,334

 

 

 

2,851

 

Total assets

 

$

719,537

 

 

$

756,487

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

9,766

 

 

$

8,079

 

Accrued payroll, taxes, and benefits

 

 

10,951

 

 

 

18,405

 

Deferred revenue

 

 

53,771

 

 

 

55,368

 

Lease liabilities

 

 

4,151

 

 

 

2,042

 

Other accrued liabilities

 

 

6,893

 

 

 

7,317

 

Total current liabilities

 

 

85,532

 

 

 

91,211

 

Deferred revenue, long-term

 

 

24,582

 

 

 

30,064

 

Lease liabilities, long-term

 

 

77,353

 

 

 

77,827

 

Other liabilities, long-term

 

 

1,400

 

 

 

300

 

Total liabilities

 

 

188,867

 

 

 

199,402

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value. Authorized 10,000,000 shares; zero shares issued and

outstanding at March 31, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value. Authorized 500,000,000 shares; 61,972,400 and 61,834,515

shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

 

620

 

 

 

618

 

Limited common stock, $0.01 par value. Authorized 100,000,000 shares; 9,164,193 shares

issued and outstanding at March 31, 2022 and December 31, 2021

 

 

92

 

 

 

92

 

Additional paid-in capital

 

 

797,004

 

 

 

786,964

 

Accumulated deficit

 

 

(264,392

)

 

 

(229,952

)

Accumulated other comprehensive loss

 

 

(2,657

)

 

 

(651

)

Total stockholders’ equity of Schrödinger stockholders

 

 

530,667

 

 

 

557,071

 

Noncontrolling interest

 

 

3

 

 

 

14

 

Total stockholders’ equity

 

 

530,670

 

 

 

557,085

 

Total liabilities and stockholders’ equity

 

$

719,537

 

 

$

756,487

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(34,451

)

 

$

(523

)

Adjustments to reconcile net loss to net cash used in

 

 

 

 

 

 

 

 

operating activities:

 

 

 

 

 

 

 

 

Loss on equity investments

 

 

 

 

 

1,781

 

Noncash revenue from equity investments

 

 

 

 

 

(5

)

Fair value adjustments

 

 

6,164

 

 

 

(24,824

)

Depreciation and amortization

 

 

969

 

 

 

887

 

Stock-based compensation

 

 

9,134

 

 

 

4,366

 

Noncash research and development expenses

 

 

 

 

 

498

 

Noncash investment amortization

 

 

1,504

 

 

 

1,955

 

(Gain) loss on disposal of property and equipment

 

 

(4

)

 

 

19

 

Decrease (increase) in assets, net of acquisition:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

2,935

 

 

 

20,153

 

Unbilled and other receivables

 

 

(7,390

)

 

 

(3,065

)

Reduction in the carrying amount of right of use assets

 

 

1,221

 

 

 

1,264

 

Prepaid expenses and other assets

 

 

(7,725

)

 

 

(3,549

)

Increase (decrease) in liabilities, net of acquisition:

 

 

 

 

 

 

 

 

Accounts payable

 

 

1,328

 

 

 

(1,230

)

Accrued payroll, taxes, and benefits

 

 

(7,454

)

 

 

(1,655

)

Deferred revenue

 

 

(7,079

)

 

 

(8,447

)

Lease liabilities

 

 

489

 

 

 

(1,352

)

Other accrued liabilities

 

 

637

 

 

 

2,806

 

Net cash used in operating activities

 

 

(39,722

)

 

 

(10,921

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,696

)

 

 

(513

)

Distribution from equity investment

 

 

 

 

 

40

 

Proceeds from sale of equity investments

 

 

 

 

 

15,735

 

Acquisition, net of acquired cash

 

 

(6,427

)

 

 

 

Purchases of marketable securities

 

 

(55,068

)

 

 

(143,671

)

Proceeds from maturity of marketable securities

 

 

99,495

 

 

 

66,500

 

Net cash provided by (used in) investing activities

 

 

36,304

 

 

 

(61,909

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Issuances of common stock upon stock option exercises

 

 

908

 

 

 

3,656

 

Net cash provided by financing activities

 

 

908

 

 

 

3,656

 

Net decrease in cash and cash equivalents and restricted cash

 

 

(2,510

)

 

 

(69,174

)

Cash and cash equivalents and restricted cash, beginning of period

 

 

123,267

 

 

 

202,796

 

Cash and cash equivalents and restricted cash, end of period

 

$

120,757

 

 

$

133,622

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow and noncash information

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

37

 

 

$

119

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment in accounts payable

 

 

317

 

 

 

52

 

Purchases of property and equipment in accrued liabilities

 

 

343

 

 

 

 

Acquisition of right of use assets, contingency resolution

 

 

1,513

 

 

 

 

Acquisition of right of use assets

 

 

1,146

 

 

 

 

Acquisition of lease liabilities

 

 

1,146

 

 

 

 

 

Jaren Irene Madden (Investors)
Schrödinger, Inc.
jaren.madden@schrodinger.com
617-286-6264

Tracy Lessor (Media)
Schrödinger, Inc.
tracy.lessor@schrodinger.com
617-519-9827

Source: Schrödinger, Inc.

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