Schrödinger's three-pronged business includes software services, equity and milestone deals, and its own drug development. The company has seen significant revenue growth from software and partnerships, but its stock performance has been volatile. The integration of AI, particularly with advancements like AlphaFold, offers new opportunities for Schrödinger, but the market remains uncertain about its ability to capitalize on these innovations. The company faces challenges in balancing its diverse operations and convincing investors of its long-term potential, despite its strong position in computational drug discovery and materials science.
Key takeaways:
- Schrödinger's business model, which combines software licensing, drug discovery partnerships, and internal drug development, makes it challenging for investors to value the company.
- The company has cautiously embraced AI, leading to new partnerships and initiatives, including a significant deal with Novartis and a Gates Foundation-funded project using Nvidia's chips.
- Despite its unique positioning and technological advancements, Schrödinger's stock has struggled due to market skepticism about its multifaceted business approach and the complexity of its offerings.
- Schrödinger benefits from AI advancements, such as reduced GPU costs and protein structure prediction technologies like AlphaFold, which enhance its drug discovery capabilities.