Schrödinger to receive $150 million upfront plus up to $2.3 billion in milestone and royalty payments
Schrödinger Inc.'s stock soared 9% early Tuesday, after the company said it has entered a multi-year collaboration agreement with Swiss pharma Novartis AG.
Under the terms of the deal, Schrödinger (SDGR) will receive a $150 million upfront payment and be eligible for up to about $2.3 billion in milestone payments and royalties.
New York-based Schrödinger, which offers a physics-based software platform that can speed up drug development and lower costs, said it would advance multiple development candidates into Novartis's portfolio.
The companies also have an expanded three-year software agreement that will increase access for Novartis (NVS) (CH:NOVN) to Schrödinger's computational predictive modeling technology and enterprise informatics platform.
"This expanded access enables Novartis to deploy Schrödinger's full suite of drug discovery technologies at industry-leading scale across its research sites," the company said in a statement.
"We are very pleased to enable the further integration of our platform across Novartis's research teams to realize our shared vision for modernizing drug discovery through a computational 'predict first' approach," Ramy Farid, Ph.D., chief executive of Schrödinger, said in prepared remarks.
Schrödinger, which was founded in 1990, is working to develop molecules for drug development and is currently advancing three oncology programs through clinical studies.
The company's platform is licensed by biotech, pharma and industrial companies, as well as academic institutions around the world.
Novartis is not disclosing which of its core therapeutics areas it will target with the new collaboration. Novartis and Schrödinger will be responsible for discovery and development and Novartis will be responsible for clinical development manufacturing and global commercialization.
See also: Schrödinger in drug development agreement with Bristol Myers worth up to $2.7 billion in milestone and royalty payments
Separately, Schrödinger reported third-quarter earnings early Tuesday. The company had a net loss of $38.1 million, or 52 cents a share, for the quarter, narrower than the loss of $62.0 million, or 86 cents a share, posted in the year-earlier period. The FactSet consensus was for a loss per share of 63 cents.
Revenue fell to $35.3 million from $42.6 million, below the $41.3 million FactSet consensus.
Schrödinger's stock has fallen 45% in the year to date, while the S&P 500 has gained 25.8%.
-Ciara Linnane
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