Schrodinger(US:SDGR)2025-05-07 20:09Financial Performance - Revenue for the three months ended March 31, 2025, was $59.6 million, representing a year-over-year increase of 63% from $36.6 million in the same period of 2024[185]. - The company reported a net loss of $59.8 million for the three months ended March 31, 2025, compared to a net loss of $54.7 million for the same period in 2024[185]. - Total revenues for the three months ended March 31, 2025, increased by 63% to $59,551,000 compared to $36,598,000 in the same period of 2024[211]. - The net loss for the three months ended March 31, 2025, was $59,808,000, compared to a net loss of $54,724,000 in the same period of 2024[211]. - Gross profit rose by 65% to $31,124,000, with total cost of revenues increasing by 61% to $28,427,000[211]. Drug Discovery and Development - The FDA cleared the IND for the MALT1 inhibitor SGR-1505 in June 2022, with initial data from the ongoing Phase 1 clinical trial expected in Q2 2025[170]. - The FDA granted orphan drug designation to SGR-1505 for the potential treatment of mantle cell lymphoma in August 2023[171]. - The company has initiated dosing in a Phase 1 clinical trial for the CDC7 inhibitor SGR-2921, with initial data expected in the second half of 2025[172][173]. - Drug discovery revenue surged by 237% to $10,735,000, driven by collaborations and milestone achievements[211]. - The company expects fluctuations in drug discovery revenue due to the uncertain nature of milestone achievements[194]. Collaborations and Partnerships - The company has entered into a collaboration with Novartis, receiving an upfront fee of $150 million and is eligible for up to $2.272 billion in total milestone payments[184]. - The collaboration with Bristol-Myers Squibb includes potential milestone payments of up to $482 million and tiered royalties on net sales ranging from mid-single digits to low double digits[182]. Research and Development Expenses - Research and development expenses decreased by 9% to $45,844,000, reflecting a strategic focus on proprietary drug discovery programs[211]. - Total research and development expense decreased by 9% to $45.8 million for the three months ended March 31, 2025, compared to $50.6 million in the same period of 2024[224]. - External costs for programs in preclinical and clinical development decreased by 15% to $12.7 million, primarily due to a reduction in costs for early-stage product candidates[224]. - Internal costs for discovery, preclinical, and clinical development decreased by 13% to $9.3 million, mainly due to a reduction in personnel-related expenses[225]. Cash Flow and Financial Position - Net cash provided by operating activities was $144.1 million for the three months ended March 31, 2025, compared to a cash outflow of $39.3 million in the same period of 2024[247]. - As of March 31, 2025, the company had cash, cash equivalents, restricted cash, and marketable securities totaling $512.1 million[239]. - The company plans to utilize existing cash and marketable securities primarily to fund software and drug discovery activities[241]. - The accumulated deficit as of March 31, 2025, was $585.3 million, reflecting a history of significant operating losses[235]. - Financing activities for Q1 2025 generated approximately $0.4 million in cash, primarily from stock option exercises[253]. Operating Expenses - Sales and marketing expenses increased by 2% to $10.2 million, primarily driven by a $0.2 million increase in personnel-related expenses[227]. - General and administrative expenses increased by 1% to $25.5 million, with increases in professional services and cloud computing expenses[229]. - The change in fair value of equity investments resulted in an unrealized loss of $13.1 million for the three months ended March 31, 2025[231]. Software Segment - The company operates through two reportable segments: software and drug discovery, with the software segment generating revenue from various sources including software licenses and subscriptions[178]. - The increase in software contribution revenue was due to agreements with the Bill & Melinda Gates Foundation aimed at accelerating the computational software platform[217]. - The gross margin for software products and services was 72%, down from 76% in the previous year, attributed to increased expenses related to collaborations[220][221]. Market Risks - There have been no material changes in reported market risks or risk management policies since the last Annual Report filed on February 26, 2025[254].