On May 4, 2022 Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, reported financial results for the first quarter of 2022 (Press release, Schrodinger, MAY 4, 2022, View Source [SID1234613518]).
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"We began 2022 with a strong quarter, which included software revenue of $33.1 million, a 26 percent increase over the first quarter of 2021, driven primarily by continued adoption and scale up by existing customers," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "We are also seeing continued progress across our collaborative and internal drug discovery pipeline, further demonstrating the impact of our platform. Last month, we presented preclinical data from our Wee1 program, which highlighted our opportunity to advance a potential best-in-class Wee1 inhibitor into the clinic. We are working rapidly to progress our three most advanced internal programs into clinical development and are on track to submit an investigational new drug application for our MALT1 inhibitor, SGR-1505, to the FDA in the first half of 2022."
Strategic Objectives and Recent Business Highlights
In February 2022, Schrödinger laid out several strategic objectives for 2022-2023. Recent highlights include the following:
Internal Pipeline
Schrödinger is on track to submit an investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA) for SGR-1505, its MALT1 inhibitor, in the first half of 2022. The company continues to plan to initiate a Phase 1 clinical study of SGR-1505 in patients with relapsed and resistant lymphoma in the second half of 2022. MALT1 is considered a potential therapeutic target for several non-Hodgkin’s B-cell lymphomas.
In April, Schrödinger presented new preclinical data from its Wee1 inhibitor program at the American Association of Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting. These data underscore the therapeutic potential of Schrödinger’s Wee1 inhibitors for use as monotherapy and as part of combination therapy with other agents. Wee1 is emerging as a potentially important therapeutic target for a range of solid tumors, including ovarian and uterine cancer. Schrödinger continues to expect to select a Wee1 development candidate this year.
The company continues to advance its CDC7 development candidate through IND-enabling studies and expects to submit an IND to the FDA in early 2023. 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 also continues to advance multiple undisclosed research programs in the areas of oncology and immunology.
Collaborative Programs
In March 2022, Morphic Therapeutic announced the initiation of a Phase 2a clinical study of MORF-057 in patients with moderate to severe ulcerative colitis. MORF-057 is a potent and selective, oral small molecule inhibitor of the α4β7 integrin being studied in patients with gastrointestinal disorders, initially targeting inflammatory bowel disease.
Materials Science
Today, Schrödinger announced that it recently entered into a three-year collaboration with Eonix LLC to accelerate the discovery and design of materials for safer, energy dense lithium ion batteries. As part of the agreement, Schrödinger received an equity stake in Eonix.
Underlying Science
During the first quarter, Schrödinger scientists continued to make scientific advances and were authors on 11 publications in peer-reviewed life sciences and materials science journals. Recent publications include reporting a novel extension to our neural network interaction potentials to more accurately model charge-charge interactions. Schrödinger anticipates that these improvements may enable more predictive modeling of polarization effects, reactivity, and polymorph stability, among a number of other endpoints of high importance to drug discovery and materials design.
2022 Financial Outlook
As of May 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 second quarter of 2022, software revenue is expected to range from $28 to $30 million.
Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its first quarter 2022 financial results on Wednesday, May 4, 2022, at 4:30 p.m. ET. To participate in the live call, please dial (833) 727-9520 (domestic) or +1 (830) 213-7697 (international) and refer to conference ID 7896009. The webcast can also be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.