SWITZERLAND – Novartis has entered a major research and licensing partnership with Schrödinger, investing US $150 million upfront to leverage Schrödinger’s cutting-edge computational drug discovery platform in multiple preclinical drug programs.
The agreement, announced on Tuesday, is set to enhance Novartis’s drug development efforts and accelerate its pursuit of new therapeutic solutions.
Founded in 1990, Schrödinger has approximately 900 employees in 15 locations worldwide, transforming molecular discovery through its advanced computational platform.
With over 30 years of research and development underpinning its software, Schrödinger’s platform enables the discovery of novel molecules for both drug development and materials design.
Beyond licensing its software to industry and academic institutions, Schrödinger uses its platform to develop its own portfolio, which includes three clinical-stage oncology programs.
Key terms of the agreement
This collaboration will advance multiple drug candidates across various disease areas within Novartis’s portfolio.
The collaboration is designed to leverage Schrödinger’s computational platform and Novartis’s clinical development expertise.
While Schrödinger will be involved in the discovery phase, Novartis will take on the clinical development, manufacturing, and commercialization responsibilities.
In addition to the initial US $150 million, Schrödinger could receive up to US $892 million in research, development, and regulatory milestone payments, as well as an additional US $1.38 billion in commercial milestones.
The agreement also includes royalties on net sales of any resulting commercialized products.
“We are delighted to work with Novartis and leverage their strong expertise to jointly advance several of Schrödinger’s existing non-oncology discovery programs,” said Karen Akinsanya, Ph.D., President of R&D, Therapeutics at Schrödinger.
She added, “This collaboration builds on more than a decade of productive partnerships in the pharmaceutical industry.”
Expanded access to computational platform
In addition to the research collaboration, Novartis and Schrödinger have agreed to expand their software partnership, granting Novartis deeper access to Schrödinger’s computational predictive modeling technology.
This increased access will allow Novartis to scale the use of Schrödinger’s platform across its research sites, fully integrating computational strategies into its drug discovery programs.
Ramy Farid, Ph.D., CEO of Schrödinger, expressed excitement over the expanded collaboration: “Our commitment to working at the frontier of computation and advancing our drug discovery portfolio provides important synergies.
“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.”
Novartis’s perspective on the partnership
Fiona Marshall, President of Biomedical Research at Novartis, emphasized the value of Schrödinger’s platform to Novartis’s mission: “We are excited to build on our long-standing relationship with Schrödinger, leveraging their discovery platform and physics-based computational methods to accelerate our drug discovery efforts.
“These agreements underscore our commitment to innovative computational technologies that enhance our research capabilities to help us bring new and impactful medicines forward faster.”
Financial and operational updates from Schrödinger
In related news, Schrödinger reported its third-quarter earnings, posting a net loss of US $38.1 million (52 cents per share), which was narrower than the previous year’s loss of US $62 million (86 cents per share).
However, revenue dropped to US $35.3 million, below the US $41.3 million expected by analysts.
Schrödinger’s stock has declined by 45% this year, compared to a 25.8% gain for the S&P 500 index.
Investors and analysts can gain further insights into the collaboration and financial performance during Schrödinger’s conference call on November 12 at 8:00 a.m. ET, available on Schrödinger’s website.
