Press Release

Schrödinger Reports Second Quarter 2022 Financial Results

Software Revenue of $30.0 Million, a 25 Percent Increase Over Second Quarter of 2021; Total Revenue of $38.5 Million, up 29 Percent Over Second Quarter of 2021

Company Maintains Full-Year 2022 Financial Outlook

Phase 1 Clinical Study of SGR-1505, Schrödinger’s MALT1 Inhibitor, On-Track to Begin in the Fourth Quarter of 2022

NEW YORK--(BUSINESS WIRE)--Aug. 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 second quarter of 2022.

“We are very pleased with our performance for the quarter and for the first six months of 2022, with both software and drug discovery revenue contributing to strong growth, and our cash position is strong,” stated Ramy Farid, Ph.D., chief executive officer at Schrödinger. “Additionally, we are seeing continued progress across our collaborative and internal drug discovery pipeline. In the second quarter, our investigational new drug application for our MALT1 inhibitor, SGR-1505, was cleared to proceed to Phase 1 clinical development. We are on track to initiate our Phase 1 study of SGR-1505 in patients with relapsed or refractory B-cell lymphoma in the fourth quarter of 2022.”

Second Quarter 2022 Financial Highlights

 

Three Months Ended

 

June 30,

 

2022

 

2021

 

% Change

 

(in millions)

 

Total revenue

$

38.5

 

$

29.8

 

29

%

Software revenue

 

30.0

 

 

24.1

 

25

%

Drug discovery revenue

 

8.5

 

 

5.7

 

48

%

 

 

 

 

Gross profit

$

17.1

 

$

12.0

 

43

%

Software gross margin

 

76

%

 

77

%

 

 

 

 

 

Operating expenses

$

60.6

 

$

42.3

 

43

%

Other income (expense)

$

(4.2

)

$

(4.6

)

 

Net loss

$

(47.7

)

$

(35.0

)

 

At June 30, 2022, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $513 million, compared to approximately $529 million at March 31, 2022.

Recent Company Highlights

Collaborative Programs and Internal Pipeline

  • In June, Schrödinger announced that its investigational new drug (IND) application for its MALT1 inhibitor, SGR-1505, was cleared to proceed to Phase 1 clinical development. Schrödinger expects to initiate a Phase 1 trial of SGR-1505 in patients with relapsed or refractory B-cell lymphoma in the fourth quarter of 2022. The planned multi-center, dose-escalation study will be conducted in patients with relapsed or refractory B-cell lymphoma to evaluate the safety, pharmacokinetics, pharmacodynamics, and early signals of clinical activity of SGR-1505 as a monotherapy. Once the recommended dose is determined, an expansion cohort is planned to evaluate SGR-1505 in combination with other anti-cancer agents, such as BTK and BCL-2 inhibitors, in patients with specific B-cell malignancies.
  • Schrödinger continues to optimize multiple lead series within its Wee1 program and expects to select a Wee1 development candidate with a differentiated profile by the end of this year and to submit an IND at the end of 2023. Wee1 is emerging as a potentially important therapeutic target for a range of solid tumors, including ovarian and uterine cancer.
  • Schrödinger continues to advance its CDC7 inhibitor, SGR-2921, through IND-enabling studies. The company expects to submit an IND to the U.S. Food and Drug Administration (FDA) in the first half of 2023 and to initiate a Phase 1 clinical study in the second half of 2023, subject to regulatory clearance. 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 is progressing multiple undisclosed research programs in the areas of oncology and immunology. In the first half of this year, the company added four new programs to its wholly-owned pipeline, for a total of six early discovery programs, including targets with first-in-class potential.
  • The company’s collaborative programs continue to progress through discovery, preclinical and clinical development. A total of eight collaborative programs are in the clinic, which underscores the impact of its platform.

Underlying Science

  • Schrödinger continues to make scientific advances underlying the predictive power of the company’s computational platform. Schrödinger scientists were authors on seven recent publications in peer-reviewed life sciences and materials science journals, including the publication of data validating the use of the company’s recently developed next-generation induced fit docking methods to optimize homology models to enable predictive modeling of targets where experimental structures have been unavailable, broadening the applicability of Schrödinger’s platform. Additionally, Nimbus Therapeutics and Schrödinger scientists co-authored a manuscript based on data from the companies’ ongoing collaboration describing how Schrödinger’s predictive computational methods accelerated Nimbus’s discovery of potent, selective Tyk2 inhibitors with activity in preclinical models of psoriasis.
  • In June, Schrödinger hosted its second annual Educator’s Day, which brought together educators from across the globe to discuss the growing opportunity for incorporating computational tools in the classroom. Schrödinger is committed to empowering and training the next generation of computational scientists, and Educator’s Day is one component of Schrödinger’s ongoing educational initiatives.

2022 Financial Outlook

As of August 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 third quarter of 2022, software revenue is expected to range from $23 million to $25 million.

Webcast and Conference Call Information

Schrödinger will host a conference call to discuss its second quarter 2022 financial results on Thursday, August 4, 2022, at 4:30 p.m. ET. The live webcast can be accessed under “News & Events” in the investors section of Schrödinger’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 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 Schrödinger’s expectations about the speed and capacity of its computational platform, its financial outlook for the fiscal year ending December 31, 2022, and third quarter ending September 30, 2022, its progress towards achieving its key strategic goals, its plans to continue to invest in research and its strategic plans to accelerate the growth of its software business and advance its collaborative and internal drug discovery programs, its ability to improve and advance the science underlying its platform, the timing of potential IND submissions as well as initiation of clinical trials for its internal drug discovery programs, the potential of SGR-1505 to be used for the treatment of certain B-cell lymphomas, the therapeutic potential of SGR-2921, the therapeutic potential of its Wee1 inhibitors, 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 Schrödinger’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 Schrödinger’s control, including the demand for its software solutions, 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 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 the direct and indirect impacts of the ongoing COVID-19 pandemic on its business 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 quarterly period ended June 30, 2022, filed with the Securities and Exchange Commission on August 4, 2022, 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, Schrödinger 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)

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

June 30,

 

For the Six Months Ended

June 30,

 

 

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

 

Software products and services

 

$

30,011

 

 

$

24,052

 

 

$

63,092

 

 

$

50,392

 

Drug discovery

 

 

8,458

 

 

 

5,732

 

 

 

24,040

 

 

 

11,519

 

Total revenues

 

 

38,469

 

 

 

29,784

 

 

 

87,132

 

 

 

61,911

 

Cost of revenues:

 

 

 

 

 

 

 

 

Software products and services

 

 

7,101

 

 

 

5,641

 

 

 

14,612

 

 

 

11,547

 

Drug discovery

 

 

14,234

 

 

 

12,163

 

 

 

27,403

 

 

 

22,220

 

Total cost of revenues

 

 

21,335

 

 

 

17,804

 

 

 

42,015

 

 

 

33,767

 

Gross profit

 

 

17,134

 

 

 

11,980

 

 

 

45,117

 

 

 

28,144

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

31,123

 

 

 

21,092

 

 

 

58,945

 

 

 

42,540

 

Sales and marketing

 

 

7,428

 

 

 

5,380

 

 

 

14,099

 

 

 

10,619

 

General and administrative

 

 

22,056

 

 

 

15,850

 

 

 

44,189

 

 

 

29,239

 

Total operating expenses

 

 

60,607

 

 

 

42,322

 

 

 

117,233

 

 

 

82,398

 

Loss from operations

 

 

(43,473

)

 

 

(30,342

)

 

 

(72,116

)

 

 

(54,254

)

Other income (expense):

 

 

 

 

 

 

 

 

Gain (loss) on equity investments

 

 

11,828

 

 

 

 

 

 

11,828

 

 

 

(1,781

)

Change in fair value

 

 

(15,700

)

 

 

(4,918

)

 

 

(21,864

)

 

 

19,906

 

Other (expense) income

 

 

(296

)

 

 

357

 

 

 

32

 

 

 

777

 

Total other (expense) income

 

 

(4,168

)

 

 

(4,561

)

 

 

(10,004

)

 

 

18,902

 

Loss before income taxes

 

 

(47,641

)

 

 

(34,903

)

 

 

(82,120

)

 

 

(35,352

)

Income tax expense

 

 

33

 

 

 

67

 

 

 

5

 

 

 

141

 

Net loss

 

 

(47,674

)

 

 

(34,970

)

 

 

(82,125

)

 

 

(35,493

)

Net income (loss) attributable to noncontrolling interest

 

 

12

 

 

 

(326

)

 

 

1

 

 

 

(820

)

Net loss attributable to Schrödinger common and limited common stockholders

 

$

(47,686

)

 

$

(34,644

)

 

$

(82,126

)

 

$

(34,673

)

Net loss per share attributable to Schrödinger common and limited common stockholders, basic and diluted:

 

$

(0.67

)

 

$

(0.49

)

 

$

(1.15

)

 

$

(0.49

)

Weighted average shares used to compute net loss per share attributable to Schrödinger common and limited common stockholders, basic and diluted:

 

 

71,161,892

 

 

 

70,582,062

 

 

 

71,106,470

 

 

 

70,328,254

 

Condensed Consolidated Balance Sheets (Unaudited)

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

 

 

 

 

 

Assets

 

June 30, 2022

 

December 31, 2021

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

127,319

 

 

$

120,267

 

Restricted cash

 

 

3,500

 

 

 

3,000

 

Marketable securities

 

 

382,246

 

 

 

456,212

 

Accounts receivable, net of allowance for doubtful accounts of $124 and $108

 

 

18,767

 

 

 

31,744

 

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

 

 

12,978

 

 

 

8,807

 

Prepaid expenses

 

 

12,062

 

 

 

5,030

 

Total current assets

 

 

556,872

 

 

 

625,060

 

Property and equipment, net

 

 

11,524

 

 

 

10,025

 

Equity investments

 

 

21,903

 

 

 

43,167

 

Goodwill

 

 

4,791

 

 

 

 

Intangible assets, net

 

 

853

 

 

 

 

Right of use assets

 

 

90,133

 

 

 

75,384

 

Other assets

 

 

1,804

 

 

 

2,851

 

Total assets

 

$

687,880

 

 

$

756,487

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

5,263

 

 

$

8,079

 

Accrued payroll, taxes, and benefits

 

 

16,533

 

 

 

18,405

 

Deferred revenue

 

 

47,440

 

 

 

55,368

 

Lease liabilities

 

 

7,180

 

 

 

2,042

 

Other accrued liabilities

 

 

9,174

 

 

 

7,317

 

Total current liabilities

 

 

85,590

 

 

 

91,211

 

Deferred revenue, long-term

 

 

20,105

 

 

 

30,064

 

Lease liabilities, long-term

 

 

88,112

 

 

 

77,827

 

Other liabilities, long-term

 

 

1,000

 

 

 

300

 

Total liabilities

 

 

194,807

 

 

 

199,402

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

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

outstanding at June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value. Authorized 500,000,000 shares; 62,027,061 and 61,834,515 shares issued and outstanding at June 30, 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 June 30, 2022 and December 31, 2021

 

 

92

 

 

 

92

 

Additional paid-in capital

 

 

807,827

 

 

 

786,964

 

Accumulated deficit

 

 

(312,078

)

 

 

(229,952

)

Accumulated other comprehensive loss

 

 

(3,403

)

 

 

(651

)

Total stockholders’ equity of Schrödinger stockholders

 

 

493,058

 

 

 

557,071

 

Noncontrolling interest

 

 

15

 

 

 

14

 

Total stockholders’ equity

 

 

493,073

 

 

 

557,085

 

Total liabilities and stockholders’ equity

 

$

687,880

 

 

$

756,487

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(82,125

)

 

$

(35,493

)

Adjustments to reconcile net loss to net cash used in

 

 

 

 

operating activities:

 

 

 

 

(Gain) loss on equity investments

 

 

(11,828

)

 

 

1,781

 

Noncash revenue from equity investments

 

 

 

 

 

(11

)

Fair value adjustments

 

 

21,864

 

 

 

(19,906

)

Depreciation and amortization

 

 

2,095

 

 

 

1,614

 

Stock-based compensation

 

 

19,561

 

 

 

11,382

 

Noncash research and development expenses

 

 

 

 

 

811

 

Noncash investment amortization

 

 

1,719

 

 

 

2,343

 

(Gain) loss on disposal of property and equipment

 

 

(4

)

 

 

19

 

Gain on lease termination

 

 

(2

)

 

 

 

Decrease (increase) in assets, net of acquisition:

 

 

 

 

Accounts receivable, net

 

 

13,489

 

 

 

10,064

 

Unbilled and other receivables

 

 

(4,095

)

 

 

(925

)

Reduction in the carrying amount of right of use assets

 

 

3,140

 

 

 

2,663

 

Prepaid expenses and other assets

 

 

(8,719

)

 

 

(3,914

)

(Decrease) increase in liabilities, net of acquisition:

 

 

 

 

Accounts payable

 

 

(2,938

)

 

 

(2,489

)

Accrued payroll, taxes, and benefits

 

 

(1,872

)

 

 

(1,460

)

Deferred revenue

 

 

(17,887

)

 

 

(8,030

)

Lease liabilities

 

 

364

 

 

 

(2,816

)

Other accrued liabilities

 

 

2,860

 

 

 

4,074

 

Net cash used in operating activities

 

 

(64,378

)

 

 

(40,293

)

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(3,670

)

 

 

(3,427

)

Purchases of equity investments

 

 

(600

)

 

 

(1,700

)

Distribution from equity investment

 

 

11,828

 

 

 

375

 

Proceeds from sale of equity investments

 

 

 

 

 

15,735

 

Acquisition, net of acquired cash

 

 

(6,427

)

 

 

 

Purchases of marketable securities

 

 

(111,215

)

 

 

(222,725

)

Proceeds from maturity of marketable securities

 

 

180,710

 

 

 

164,645

 

Net cash provided by (used in) investing activities

 

 

70,626

 

 

 

(47,097

)

Cash flows from financing activities:

 

 

 

 

Issuances of common stock upon stock option exercises

 

 

1,304

 

 

 

5,268

 

Contribution by noncontrolling interest

 

 

 

 

 

25

 

Net cash provided by financing activities

 

 

1,304

 

 

 

5,293

 

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

7,552

 

 

 

(82,097

)

Cash and cash equivalents and restricted cash, beginning of period

 

 

123,267

 

 

 

202,796

 

Cash and cash equivalents and restricted cash, end of period

 

$

130,819

 

 

$

120,699

 

 

 

 

 

 

Supplemental disclosure of cash flow and noncash information

 

 

 

 

Cash paid for income taxes

 

$

171

 

 

$

224

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

Purchases of property and equipment in accounts payable

 

 

80

 

 

 

51

 

Acquisition of right of use assets, contingency resolution

 

 

1,513

 

 

 

 

Acquisition of right of use assets

 

 

14,767

 

 

 

 

Acquisition of lease liabilities

 

 

14,767

 

 

 

 

 

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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