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
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 |
|
|
|
— |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005795/en/
Contacts
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
