Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $54.8 million, a 16% increase from Q2 2024 [6][10] - Software revenue reached $40.5 million, reflecting a 15% year-over-year growth [6][11] - Drug Discovery revenue was $14.2 million, marking a 19% increase compared to Q2 2024 [12] - Software gross margin decreased to 68% from 80% in 2024 due to changes in revenue mix and investments in predictive toxicology [12] - Net loss for the quarter was $43 million, or $0.59 per share, compared to a net loss of $54 million, or $0.74 per share in Q2 2024 [14] Business Line Data and Key Metrics Changes - Software revenue growth was primarily driven by higher revenue from hosted contracts and contributions from the Gates Foundation grant [11] - Drug Discovery revenue growth was attributed to the recognition of a $150 million upfront payment from the Novartis collaboration [12] Market Data and Key Metrics Changes - The macroeconomic environment remains uncertain, but demand for the software platform is strong due to the industry's need for validated computational approaches [7] - The biotech segment has faced challenges, while discussions with pharmaceutical customers remain constructive [38] Company Strategy and Development Direction - The company aims to accelerate the growth of its software business and advance its drug discovery programs [4] - There is a focus on integrating predictive methods into all stages of molecular discovery [7] - The company is exploring strategic opportunities for its proprietary drug SGR1505 to maximize its potential [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining full-year software revenue growth guidance despite macroeconomic challenges [7] - The company expects to report initial Phase I data from two clinical programs in Q4 2025 [23] - Discussions with customers about renewals and scale-ups are encouraging, particularly for the fourth quarter [14] Other Important Information - The company has a strong cash position with $462 million in cash and equivalents as of June 30 [14] - Operating expenses are expected to be lower in 2025 compared to 2024 due to a $30 million expense reduction initiative [15] Q&A Session Summary Question: How has the tone of customer conversations changed regarding investments in the platform? - Management noted that discussions are positive, with clear demand for advanced predictive technologies despite macroeconomic concerns [27] Question: Why decide to out-license the product at this stage of development? - The company believes that SGR1505 is best developed in partnership with a company that has expertise in hematology, which can accelerate the program [32] Question: What is the demand setup for the back half of the year? - Demand remains strong, with good conversations about renewals and potential scale-ups, particularly in the pharmaceutical sector [38] Question: Can you provide details on the adoption of the predictive toxicology feature? - There is significant excitement and demand for the predictive toxicology technology, with ongoing beta testing [44] Question: What is the timeline for feedback on the beta version of the predictive toxicology solution? - Feedback will be collected as beta testing progresses, but a specific timeline for rollout is not yet established [51] Question: What is the rationale behind the recent headcount reductions? - The reductions were part of a broader cost management strategy and did not impact strategic initiatives [61] Question: What data can be expected in Q4 for SGR2921 and SGR3515? - Initial data will include safety, PKPD, and preliminary clinical activity, with updates planned for the end of the year [71] Question: How might the expanded collaboration with Ajax impact future milestones? - The collaboration will contribute to discovery revenue, with potential for future milestones and royalties [74]

Core Insights - Simulations Plus, Inc. has launched DILIsym 11, enhancing its quantitative systems toxicology platform for improved drug-induced liver injury prediction, particularly with pediatric representation and an advanced T-cell model [1][2][3] Group 1: Product Enhancements - DILIsym 11 introduces significant enhancements, including pediatric modeling to assess liver toxicity risk in children, which is a notable advancement in predictive toxicology [3][5] - The new T-cell module offers deeper insights into CD8+ T-cell-mediated liver damage, alongside improved simulations for bile acid-related and cholestatic liver injuries [5][6] - The platform is recognized as a regulatory-grade simulation tool, having been reviewed by the FDA's DILI team, which underscores its clinical relevance [4][6] Group 2: Financial Performance - Simulations Plus reported a 23% year-over-year revenue increase to $22.4 million, driven by demand for its software and services, with contributions from the recently acquired Pro-ficiency business units [7][9] - The company anticipates revenues between $90 million and $93 million for fiscal 2025, reflecting a 28-33% increase from fiscal 2024, with Pro-ficiency expected to add $15-$18 million [9] Group 3: Market Context - Despite the positive performance of Simulations Plus, the broader biopharmaceutical sector faces financial challenges, impacting research and development investments [8] - The company is positioned to gain traction in the market as it continues to innovate in biosimulation and predictive modeling, which is critical for improving drug safety [6][8]

Summary of Schrödinger (SDGR) 2025 Conference Call Company Overview - Schrödinger combines physics-based methods with artificial intelligence (AI) and machine learning to accelerate the discovery of novel chemical materials for life sciences and material sciences applications [2][5] - The company has approximately 1,800 global customers, primarily in the life sciences sector, including nearly every academic institution studying chemistry [3][4] Financial Performance - In the previous year, Schrödinger reported $180 million in software revenue, growing at 13% [6] - Drug discovery revenue was $27 million, down from $57 million due to a large milestone payment in 2023 [7] - Q1 revenue reached nearly $60 million, a 63% year-over-year increase, with software revenue at $48.8 million (46% growth) and drug discovery revenue at $10.7 million [8][9] - The company forecasts total software revenue growth of 10% to 15% for the year, with drug discovery revenue expected to recover to $45 million to $50 million [9] Business Model and Revenue Streams - Schrödinger's business model includes software licensing, drug discovery collaborations, and a proprietary pipeline with over eight active programs, three of which are in clinical stages [5][6] - The company benefits from cash inflows from collaborations and equity investments in co-founded companies that have gone public or been acquired [8] Strategic Priorities - The focus is on increasing adoption of computational technology among existing customers rather than acquiring new customers [12] - Enhancements to the platform will enable its use for biologics and predicting toxicology risks, aligning with FDA initiatives to phase out animal testing [12][51] Clinical Programs and Pipeline - The company is advancing three proprietary clinical programs, with data readouts expected in the second half of the year [10][20] - Preliminary efficacy data for SGR1505, a MALT1 inhibitor, shows promising results in heavily pretreated patients [14][15] Collaborations and Partnerships - Recent collaborations include a significant deal with Novartis, which involved a $150 million upfront milestone payment for drug discovery collaboration [33] - The partnership with Novartis has led to a substantial increase in software revenue, with Novartis now among the top tier of customers [36][62] Market Dynamics and Customer Insights - The company has observed no significant cutbacks in R&D spending among large pharmaceutical companies despite macroeconomic challenges [60] - Retention rates among large customers are exceptionally high at 99.9% [61] Competitive Landscape - Schrödinger differentiates itself through its unique combination of physics-based methods and machine learning, with limited direct competition in this niche [72][74] - The company views the current AI boom in drug discovery as beneficial, as it may lead to increased use of structure-based drug design, which aligns with Schrödinger's platform [73][74] Conclusion - Schrödinger is well-positioned for growth with a robust business model, strong financial performance, and strategic collaborations, while also adapting to industry trends and regulatory changes in drug discovery and development.