Schrödinger Strikes $150M Deal With Novartis, Potential for $2.3B in Future Payments

In a significant stride within the pharmaceutical industry, Midtown’s own Schrödinger has clinched a deal with healthcare behemoth Novartis. This collaboration involves an up-front payment of $150 million made by Novartis to Schrödinger, with the potential for future payments that could accumulate to approximately $2.3 billion, encompassing milestone and royalty payments as drugs hit the market, as reported by

Crain’s New York

.

The agreement entails Schrödinger’s commitment to advancing several drug discovery programs, marking an expanded role from its computational groundwork in predicting drug interactions. With the hope of identifying prospective clinical trial candidates, Novartis has also increased its license to utilize Schrödinger’s predictive drug discovery software. Schrödinger’s CEO Dr. Ramy Farid mentioned in a statement obtained by

Crain’s New York

that “among Schrödinger’s largest software customers,” Novartis is one.

The finer details of the deal reveal Schrödinger’s eligibility for up to $892 million in research, development, and regulatory milestone payments. Additionally, they may receive roughly $1.4 billion in commercial milestones and royalties, as

Crain’s New York

lays out. This expansive agreement does not encroach upon Schrödinger’s expertise in cancer drug discovery, a field where the Manhattan firm has established a significant foothold.

The transaction correlates with a broader strategy by Novartis, which has overtly increased its investment in oncology treatments. Karen Akinsanya, Ph.D., president of R&D at Schrödinger, conveyed in a

FierceBiotech

interview that the partnership mirrors a shared vision where Novartis’ “deep therapeutic area and clinical expertise will amplify and accelerate” development opportunities.

Behind the headlines, Schrödinger stands out with a track record stretching back three decades, contributing to the drug discovery landscape mechanically, before expanding into the pharmaceutical domain through spinoffs and in-house development. Despite a downward trend in their stock this year, Schrödinger’s assets were deemed promising enough by Novartis to enter into this multi-target collaboration, as per information presented in

FierceBiotech

.

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