Shoot­ing for $100M IPO, Schrödinger takes the wraps off its five in­ter­nal drugs and dis­clos­es deal de­tails

Just be­fore last year’s JP Mor­gan con­fab kicked off, Schrödinger un­veiled its first ven­ture round fea­tur­ing in­sti­tu­tion­al in­vestors be­fore lat­er clos­ing the Se­ries E at $110 mil­lion. This time around, the com­pu­ta­tion­al drug dis­cov­ery ex­perts are in­sert­ing them­selves in­to the queue at the Nas­daq, gun­ning for a $100 mil­lion IPO.

Ramy Farid Schrödinger

Hav­ing honed its soft­ware ex­per­tise and built out its client base over three decades, Schrödinger boasts of a rev­enue stream that to­taled $66.6 mil­lion in 2018. But as it de­votes more of its at­ten­tion to its in­ter­nal pipeline, the New York com­pa­ny said it want­ed to in­crease their cap­i­tal­iza­tion and fi­nan­cial flex­i­bil­i­ty by en­ter­ing the pub­lic mar­ket. There’s al­so a hint of M&A plans to come.

The S-1 fil­ing shines a bright light on its hith­er­to stealthy pipeline, as well as the col­lab­o­ra­tion deals that it’s inked with mul­ti­ple bio­phar­ma play­ers.

Schrödinger’s en­try in­to pop­u­lar biotech con­scious­ness had a lot to do with Nim­bus and Mor­phic, two high-pro­file star­tups it’s helped launch and still holds stakes in. Nim­bus, in par­tic­u­lar, snagged a $1.2 bil­lion deal to sell fir­so­co­stat, an in­hibitor of acetyl-CoA car­boxy­lase with po­ten­tial in NASH, to Gilead. Of the $601.3 mil­lion that Nim­bus has ac­crued, $46 mil­lion has gone to Schrödinger, the fil­ing re­vealed.

“As our col­lab­o­ra­tion strat­e­gy has evolved, we are seek­ing to take more di­rect con­trol and re­spon­si­bil­i­ty for all as­pects of a drug dis­cov­ery project and own a high­er per­cent­age of the val­ue gen­er­at­ed in the com­plet­ed pro­grams,” Schrödinger, led by CEO Ramy Farid, wrote.

Karen Akin­sanya Schrödinger

One ex­am­ple of that is the pact with Take­da, where Schrödinger is keep­ing all the IP rights un­til their Japan­ese phar­ma part­ner de­cides to ex­er­cise its op­tion to li­cense the pro­grams. While the duo ini­tial­ly start­ed with three pro­grams in schiz­o­phre­nia, on­col­o­gy, and neu­rode­gen­er­a­tive dis­ease — Take­da has washed its hands of the schiz­o­phre­nia pro­gram. Then there’s Fax­i­an Ther­a­peu­tics, Schrödinger’s 50/50 joint ven­ture with Chi­nese CRO pow­er­house WuXi, and Bright An­gel Ther­a­peu­tics, the Cana­di­an biotech it found­ed with MaRS In­no­va­tion to fight fun­gal in­fec­tions and kept 33% own­er­ship of.

But nowhere is the de­sire to chart their own ther­a­peu­tic path more ful­ly ful­filled than in their in­ter­nal drug dis­cov­ery group, which is flour­ish­ing un­der the guid­ance of chief bio­med­ical sci­en­tist Karen Akin­sanya with 70 staffers and five pro­grams. We knew that all of them are geared to­wards can­cer, but Schrödinger fi­nal­ly re­vealed the tar­gets for the IPO:

  • SD­GR1: CDC7 in­hibitor to dis­rupt DNA repli­ca­tion ini­ti­a­tion in can­cer cells for sol­id tu­mors;
  • SD­GR2: WEE1 in­hibitor to trig­ger DNA break­age and apop­to­sis in sol­id tu­mor cells;
  • SD­GR3: MALT1 in­hibitor to block onco­genic ac­ti­va­tion of NF-kB among pa­tients with non-Hodgkin’s lym­phoma and chron­ic lym­pho­cyt­ic leukemia who are re­sis­tant to or have re­lapsed on BTK drugs;
  • SD­GR4: HIF-2 al­pha in­hibitor to treat re­nal cell car­ci­no­ma;
  • and SD­GR5: SOS1/KRAS in­hibitor, its can­di­date for the hot KRAS field.
Cony D’Cruz Schrödinger

David E. Shaw and the Gates Foun­da­tion, which pro­vid­ed the first fi­nanc­ing round and the sub­se­quent three, re­spec­tive­ly, re­main the biggest stock­hold­ers, al­though their stakes aren’t spelled out.

CEO Farid took home a $633,101 pay pack­age in 2019, about half of his com­pen­sa­tion in 2018, which in­clud­ed an $80,000 bonus. Chief busi­ness of­fi­cer Cony D’Cruz was re­ward­ed $587,601 for his deal­mak­ing hus­tle while chief le­gal of­fi­cer Yvonne Tran re­ceived $547,618.

BiTE® Plat­form and the Evo­lu­tion To­ward Off-The-Shelf Im­muno-On­col­o­gy Ap­proach­es

Despite rapid advances in the field of immuno-oncology that have transformed the cancer treatment landscape, many cancer patients are still left behind.1,2 Not every person has access to innovative therapies designed specifically to treat his or her disease. Many currently available immuno-oncology-based approaches and chemotherapies have brought long-term benefits to some patients — but many patients still need other therapeutic options.3

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Ken Frazier, AP Images

Why Mer­ck wait­ed, and what they now bring to the Covid-19 fight

Nicholas Kartsonis had been running clinical infectious disease research at Merck for almost 2 years when, in mid-January, he got a new assignment: Searching the Pharma giant’s vast libraries for something that could treat the novel coronavirus.

The outbreak was barely two weeks old when Kartsonis and a few dozen others got to work, first in small teams and then in a larger task force that sucked in more and more parts of the sprawling company as Covid-19 infected more and more of the globe. By late February, the group began formally searching for vaccine and antiviral candidates to license. Still, while other companies jumped out to announce their programs and, eventually and sometimes controversially, early glimpses at human data, Merck remained silent. They made only a brief announcement about a data collection partnership in April and mentioned vaguely a vaccine and antiviral search in their April 28 earnings call.

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Mark Genovese (Stanford via Twitter)

Gilead woos fil­go­tinib clin­i­cal in­ves­ti­ga­tor from Stan­ford to lead the charge on NASH, in­flam­ma­to­ry dis­eases

With an FDA OK for the use of filgotinib in rheumatoid arthritis expected to drop any day now, Gilead has recruited a new leader from academia to lead its foray into inflammatory diseases.

Mark Genovese — a longtime Stanford professor and most recently the clinical chief in the division of immunology and rheumatology — was the principal investigator in FINCH 2, one of three studies that supported Gilead’s NDA filing. In his new role as SVP, inflammation, he will oversee the clinical development of the entire portfolio.

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Gilead re­leas­es an­oth­er round of murky remde­sivir re­sults

A month after the NIH declared the first trial on remdesivir in Covid-19 a success, Gilead is out with new results on their antiviral. But although the study met one of its primary endpoints, the data are likely to only add to a growing debate over how effective the drug actually is.

In a Phase III trial, patients given a 5-day dose of remdesivir were 65% more likely to show “clinical improvement” compared to an arm given standard-of-care. The trial, though, gave little indication for whether the drug had an impact on key endpoints such as survival or time-to-recovery. And in a surprising twist, a 10-day dosing arm of remdesivir didn’t lead to a statistically significant improvement over standard of care.

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Fangliang Zhang (Imaginechina via AP Images)

The big mon­ey: Poised to make drug R&D his­to­ry, a Chi­na biotech un­veils uni­corn rac­ing am­bi­tions in a bid to raise $350M-plus on Nas­daq

Almost exactly three years after Shanghai-based Legend came out of nowhere to steal the show at ASCO with jaw-dropping data on their BCMA-targeted CAR-T for multiple myeloma, the little player with Big Pharma connections is taking a giant step toward making it big on Wall Street. And this time they want to seal the deal on a global rep after staking out a unicorn valuation in what’s turned out to be a bull market for biotech IPOs — in the middle of a pandemic.

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Stephen Isaacs, Aduro president and CEO (Aduro)

Once a high fly­er, a stag­ger­ing Aduro is auc­tion­ing off most of the pipeline as CEO Stephen Isaacs hands off the shell to new own­ers

After a drumbeat of failure, setbacks and reorganizations over the last few years, Aduro CEO Stephen Isaacs is handing over his largely gutted-out shell of a public company to another biotech company and putting up some questionable assets in a going-out-of-business sale.

Isaacs —who forged a string of high-profile Big Pharma deals along the way — has wrapped a 13-year run at the biotech with one program for kidney disease going to the new owners at Chinook Therapeutics. A host of once-heralded assets like their STING agonist program partnered with Novartis (which dumped their work on ADU-S100 after looking over weak clinical results), the Lilly-allied cGAS-STING inhibitor program and the anti-CD27 program out-licensed to Merck will all be posted for auction under a strategic review process.

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Hill­house re­casts spot­light on Chi­na's biotech scene with $160M round for Shang­hai-based an­ti­body mak­er

Almost two years after first buying into Genor Biopharma’s pipeline of cancer and autoimmune therapies, Hillhouse Capital has led a $160 million cash injection to push the late-stage assets over the finish line while continuing to fund both internal R&D and dealmaking.

The Series B has landed right around the time Genor would have listed on the Hong Kong stock exchange, according to plans reported by Bloomberg late last year. Insiders had said that the company was looking to raise about $200 million.

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No­var­tis chips in $10M for IPO-bound part­ner Pli­ant; Tenax shares soar on heart drug da­ta

Novartis is coming in with $10 million to help support the looming IPO of a partner. Pliant Therapeutics posted a new filing with the SEC showing that Novartis is buying the shares at $15, the mid-point of the range. It’s adding several million shares to the offering, bringing the total to around $135 million. Biotech companies have been enjoying quite a run on virtual Wall Street, with investors boosting new offerings to some big hauls.