Schrodinger, Inc. (NASDAQ:SDGR) shares are trading higher on Tuesday. The company disclosed a research collaboration and license agreement with Novartis AG (NYSE:NVS) to advance multiple development candidates.
The companies also announced an extended three-year agreement that grants Novartis broad access to Schrödinger’s predictive modeling and informatics platform, enabling large-scale integration across research sites.
Karen Akinsanya, president of R&D, therapeutics at Schrödinger, said, “We are delighted to work with Novartis and leverage their strong expertise to jointly advance several of Schrödinger’s existing non-oncology discovery programs as well as collaborate on additional programs.”
Schrödinger will support full platform integration to enhance computational drug discovery for Novartis. As per the terms, Novartis will pay Schrödinger $150 million upfront, with potential for up to $892 million in research, development, and regulatory milestones, plus up to $1.38 billion in commercial milestones. Schrödinger will also earn tiered royalties.
Ramy Farid, chief executive officer of Schrödinger stated, “We are very pleased to enable the further integration of our platform across Novartis’ research teams to realize our shared vision for modernizing drug discovery through a computational “predict first” approach.”
Additionally, in a separate release, the company reported third-quarter revenue of $35.3 million, missing the consensus of $40.57 million.
Software revenue rose 10% to $31.9 million, led by increased hosted license contributions. Adjusted loss per share of 87 cents missed the street view for a loss of 60 cents.
As of September 30, 2024, Schrödinger had cash, cash equivalents, restricted cash and marketable securities stood at $398.4 million.
Outlook: Schrödinger now anticipates 2024 software revenue growth of 8% – 13%, compared to its previous 6% – 13% range, while lowering its drug discovery revenue guidance to $20 million – $30 million from the prior guidance of $30 million – $35 million.
Geoff Porges, MBBS, chief financial officer of Schrödinger said, “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.”
Investors can gain exposure to the stock via ARK Genomic Revolution ETF (BATS:ARKG).
Price Action: SDGR shares are up 14.6% at $22.40 at the last check Tuesday.
Image sourced from Shutterstock
Read Next:
- Novavax Lowers 2024 Forecast Despite Q3 Revenue Beat, Stock Falls
Comments