Schrödinger (SDGR) Jefferies Global Healthcare Conference summary

Vision and technology platform

• Focus on enumerating chemical space and developing algorithms to predict molecular properties for drug discovery and materials science.

• Combines physics-based and AI/machine learning methods for accurate property prediction, validated across the industry.

• Platform is licensed globally to pharma, biotech, materials, academic, and government sectors.

• Software is agnostic to drug modality and applicable to a wide range of material science uses.

• Synergies between software, collaborations, and proprietary programs drive platform validation and demand.

Pipeline and collaborations

• Proprietary pipeline includes two clinical-stage drugs: MALT1 inhibitor (Phase I) and CDC7 inhibitor (AML, Phase I), with a third IND (Myt1/Wee1 inhibitor) cleared and more oncology/immunology programs advancing.

• Clinical data for MALT1 and CDC7 expected late 2024 into 2025; Wee1/Myt1 dosing to begin soon.

• Multiple collaboration programs, some in Phase 3 or approved, reflect strong platform impact.

• Some collaborations yield equity value rather than milestones, as with Structure.

Financial performance and guidance

• Q1 software revenue was $33.5M (up from $32M YoY); drug discovery revenue was $3.2M, impacted by non-recurring milestones last year.

• Software gross margin remains high (high 70s%, expected to sustain ~80%).

• Full-year software revenue growth guided at 6%-13%, lower due to a large Q4 multi-year deal in 2023; drug discovery revenue guided at $30M-$35M.

• Cash position at quarter-end was $436M; operating expenses rose mainly from increased R&D.

• Revenue is heavily weighted to Q4 (about 40%), reflecting customer purchasing cycles.