Schrödinger, Inc. reported a decline in revenue for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, total revenues were $35.3 million, a decrease of 17% from $42.6 million in the prior year. For the nine months ended September 30, 2024, revenues totaled $119.2 million, down 16% from $142.5 million in 2023. The decrease was primarily attributed to a significant drop in drug discovery revenue, which fell 75% to $3.4 million for the third quarter and 64% to $18.5 million for the nine months, largely due to Bristol-Myers Squibb (BMS) not proceeding with two programs that had previously generated revenue.

In contrast, revenue from software products and services increased by 10% to $31.9 million for the third quarter and by 11% to $100.7 million for the nine months. Hosted software revenue saw a notable rise, increasing 61% to $8.8 million for the third quarter and 68% to $24.1 million for the nine months. The company’s gross profit for the third quarter was $17.7 million, down 25% from $23.6 million in 2023, while gross profit for the nine months decreased 18% to $68.0 million.

Schrödinger reported a net loss of $38.1 million for the third quarter of 2024, an improvement from a net loss of $62.0 million in the same period in 2023. For the nine months ended September 30, 2024, the net loss was $146.9 million, a significant decline from net income of $71.4 million in the prior year. The company’s operating expenses increased to $86.2 million for the third quarter, up from $79.8 million in 2023, driven by higher research and development costs.

Strategically, Schrödinger entered a research collaboration and license agreement with Novartis Pharma AG on November 11, 2024, which includes an upfront payment of $150 million and potential total milestones of up to $2.272 billion. The company also continues to advance its proprietary drug discovery programs, with ongoing clinical trials for SGR-1505 and SGR-2921, both of which have received FDA designations aimed at expediting their development.

As of September 30, 2024, Schrödinger had cash, cash equivalents, restricted cash, and marketable securities totaling $398.4 million, which the company believes will be sufficient to fund operations for at least the next 24 months. The company has also filed a universal shelf registration statement to facilitate future capital raises.