Pharmaceutical giant Novartis has entered a strategic partnership with Schrödinger, paying $150 million for access to the company’s innovative drug discovery programs. The collaboration will focus on advancing Schrödinger’s non-cancer programs and identifying potential drug candidates targeting various diseases, utilizing Schrödinger’s advanced computational research and development tools.
Schrödinger, originally known for developing R&D software in the 1990s, has increasingly shifted its focus to drug development through initiatives such as the creation of Nimbus Therapeutics. Despite a decline in its stock value, Schrödinger’s collaboration with Novartis signals confidence in its emerging drug candidates, especially in areas beyond cancer.
Under the terms of the multiyear agreement, Schrödinger will receive the $150 million upfront, along with the possibility of earning up to $892 million in research and regulatory milestone payments. In addition, the deal could lead to commercial payouts and royalties totaling up to $1.38 billion for each successfully marketed drug.
While Schrödinger’s cancer-related programs dominate its public pipeline, the company has also made progress in developing drugs for immunology and neurology, with promising targets such as NLRP3 and LRRK2. These areas have seen interest from major pharmaceutical companies, including Bristol Myers Squibb, Novartis, and Roche.
The deal also includes a significant software arrangement, giving Novartis expanded access to Schrödinger’s full suite of drug discovery technologies. Schrödinger’s CEO, Ramy Farid, highlighted the increasing demand for integrated drug discovery software as the partnership progresses. The two companies will jointly explore early-stage drug candidates before Novartis takes over for clinical development.
