Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $54 million, a 54% increase from Q3 2024, driven by strong execution across the business [5][9] - Software revenue was $40.9 million, representing a 28% year-over-year growth, exceeding expectations [5][10] - Drug discovery revenue was $13.5 million, up from $3.4 million in Q3 2024, reflecting successful execution across collaborations [10] - Net loss was $33 million, or $0.45 per diluted share, compared to a net loss of $38 million, or $0.52 per diluted share in Q3 2024 [11] Business Line Data and Key Metrics Changes - Software gross margin remained at 73% for both Q3 2025 and Q3 2024 [10] - R&D expenses decreased by 16% to $42.8 million from $51 million in Q3 2024, primarily due to lower employee-related expenses [10] - Sales and marketing expenses decreased by 8% to $9.5 million, while G&A expenses decreased by 13% to $21.7 million [10] Market Data and Key Metrics Changes - The company updated its software revenue growth guidance for 2025 to 8%-13% from 10%-15% due to delays in pharma scale-up opportunities [6][11] - Drug discovery revenue guidance was increased to $49-$52 million, slightly exceeding prior expectations of $45-$50 million [12] Company Strategy and Development Direction - The company is focusing on increasing customer adoption of its software, delivering scientific advancements, and advancing its therapeutics portfolio [9][20] - The decision was made to not advance internal discovery programs into the clinic independently, aiming to improve operational efficiency and long-term profitability [7][51] - The company plans to leverage partnerships for clinical development, allowing for a broader range of discovery programs [37][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential of the business despite current macroeconomic pressures [6][12] - There are early signs of recovery in the biotech sector, including capital markets and new capital formation, which could create additional opportunities [12] - The company remains committed to managing expenses and expects cash used in operating activities to be significantly lower than in 2024 [13][14] Other Important Information - The company has made significant improvements to its platform, including enhancements for challenging modalities and ongoing beta testing for predictive toxicology solutions [8][20] - The company has generated approximately $600 million in cash from collaborations and licensing activities since 2020 [20] Q&A Session Summary Question: Implications of reduced spend year over year - Management confirmed that a $30 million expense reduction was announced in May, with more than half achieved, aiming to improve profitability [23][24] Question: Software guidance and market slowdown - Management acknowledged a slowdown in customer discussions and delays in scale-up opportunities, leading to a slight reduction in software revenue guidance [27][30] Question: Predictive toxicology product monetization - The predictive toxicology solution is still in beta, with significant interest from customers, but it is too early to discuss monetization [32][33] Question: Discovery programs and partnerships - The company will continue to work on discovery stage programs and seek partnerships for clinical advancement, emphasizing the value of discovery partnerships [36][37] Question: Update on SGR-1505 and clinical data - Management provided updates on SGR-1505, highlighting a complete response in an aggressive lymphoma patient and upcoming data presentations [58][61] Question: NLRP3 inhibitor SGR-6016 progress - The company is excited about SGR-6016, a brain-penetrant NLRP3 inhibitor, and is in discussions with potential partners for its development [45][48] Question: Novartis partnership progress - Management reported excellent progress with Novartis, with teams working well together on program advancements [53][55]

Core Insights - Relay Therapeutics reported a strong second quarter for 2025, exceeding analyst expectations in both earnings and revenue, with GAAP earnings per share of $0.41 compared to an expected $(0.49) and GAAP revenue of $0.7 million versus an estimate of $0.07 million [1][2] Financial Performance - The company achieved a year-over-year reduction in R&D expenses by 30.6%, amounting to $63.9 million, and a decrease in G&A expenses by 32.3%, totaling $13.6 million [2][7] - Cash, cash equivalents, and investments stood at $656.8 million as of June 30, 2025, down from $710.4 million at the end of Q1 2025, but projected to fund operations into 2029 [2][8] Clinical Development - The lead drug candidate, RLY-2608, demonstrated positive results in clinical trials, with a median progression-free survival of 10.3 months and a 39% objective response rate in patients with specific breast cancer mutations [5][6] - The initiation of the Phase 3 ReDiscover-2 trial for RLY-2608 combined with fulvestrant marks a significant milestone, with additional studies exploring combination therapies for advanced breast cancer [6][9] Strategic Focus - The company is concentrating on advancing its clinical trials, managing costs effectively, and leveraging strategic collaborations to enhance drug development and commercialization [4][10] - Relay Therapeutics did not provide specific financial guidance for future quarters but emphasized the importance of enrolling patients for the pivotal Phase 3 trial of RLY-2608 [9][10]

SGR-1505 Development & Rationale - Schrödinger's computational platform aims to improve drug discovery success rates by accurately calculating molecular properties [8, 10] - MALT1 is identified as a key regulator of NF-κB signaling in B-cells and T-cells, making it a potential target for B-cell malignancies where BTK inhibitor resistance develops [18] - The company rapidly designed SGR-1505, a best-in-class MALT1 inhibitor, by modeling 8.2 billion compounds and synthesizing 78 in the SGR-1505 series within 10 months [21] Phase 1 Clinical Trial Results - The Phase 1 study of SGR-1505 showed a favorable safety profile and was well-tolerated in patients with relapsed/refractory B-cell neoplasms [36, 42] - Approximately 43% of patients experienced treatment-related adverse events (TRAEs), and there were no dose-limiting toxicities or deaths due to treatment-emergent adverse events (TEAEs) [44] - SGR-1505 demonstrated strong target engagement, with ~90% inhibition of IL-2 in the majority of PD-evaluable patients treated at ≥150 mg QD and all Q12H doses at steady state [47] - Encouraging preliminary efficacy was observed across a range of B-cell malignancies, including monotherapy signals in CLL and Waldenström macroglobulinemia (WM) [36, 49] Market Opportunity & Future Steps - There is a potential MALT1 opportunity in higher-risk CLL patients, as well as in relapsed/refractory lymphoma where resistance to BTK agents has emerged [29, 60, 67] - The company plans to discuss the recommended Phase 2 dose with the FDA later this year [57] - Preclinical data suggests that combining SGR-1505 with BTK and/or BCL-2 inhibitors may lead to deeper anti-tumor activity [66] - Ibrutinib, a BTK inhibitor, has achieved $10.9 billion in sales, indicating a significant market for B-cell malignancy treatments [68]