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.

Ven­ture Cap­i­tal as a Strate­gic Part­ner: Fu­el­ing In­no­va­tion be­yond Fi­nance

The average level of investment required for a biotech start-up to succeed is increasing every year, elevating the pressure even further on venture capital to make smart financial investments. Financial investment alone, however, does not always guarantee that exciting innovations can be transformed into real businesses that make a meaningful difference to patients.

Beyond just capital

At Astellas Venture Management (AVM) – a wholly-owned venture capital organization within Astellas, headquartered in the San Francisco Bay Area – capital is just one of the ingredients we offer to add value to our biotechnology investments and partnerships. We generally take a strategic investor approach for companies in our invested portfolio, providing access to expertise, technology and/or resources in addition to the injection of finance. An equity investment from AVM can include access to Astellas’ research and development (R&D) capabilities and expertise, and a global network of partner academic institutions and biotechnology companies, to help advance and accelerate the start-up’s innovation.

UP­DAT­ED: Ver­tex joins Mer­ck, Pfiz­er — re­vamp­ing multi­bil­lion-dol­lar tri­al strat­e­gy as biotech R&D crum­bles

You can add Pfizer, Merck and — as we found out Friday morning — Vertex to the growing list of pharma giants hitting the pause button on a range of clinical trials. But not everyone in R&D is getting a red light.

Vertex says that it’s doing its best to keep working its pipeline strategy, coming up with a plan “to enable virtual clinic visits and home delivery of study drug to ensure study continuity and medical monitoring, and to facilitate study procedures.”

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Covid-19 roundup: In­ter­cept, blue­bird and a grow­ing list of biotechs feel the pain as pan­dem­ic man­gles FDA, R&D sched­ules

Around 100 staffers at Boston area hospitals have now tested positive for Covid-19, spotlighting the growing risk that the pandemic will sideline many of the most essential workers in healthcare as caseloads peak in the US and around the globe. With more than 3,400 deaths, Spain has become the latest country to surpass the official death count attributed to the new coronavirus in China, where the outbreak originated. As of Thursday morning, confirmed global cases had crossed 470,000 and the death count eclipsed 21,000.

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Af­ter crit­ics lam­bast­ed Gilead for grab­bing the FDA's spe­cial rare drug sta­tus on remde­sivir, they're giv­ing it back

Two days after Gilead won orphan drug status for remdesivir as a potential treatment for Covid-19, they’re handing it back.

The company was slammed from several sides after Gilead reported that the FDA had come through with the special status, which comes with 7 years of market exclusivity, the waiver of FDA fees and some tax credits as well. Typically, everyone who can get orphan status lands it without much of a fuss, but Democratic presidential candidate Bernie Sanders, Public Citizen and other consumer groups were outraged.

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Mod­er­na CEO Stéphane Ban­cel out­lines a short path for emer­gency use of a coro­n­avirus vac­cine

NIAID director Anthony Fauci has left no doubts that it takes 12 to 18 months to get a new vaccine tested and in commercial use, in the best of circumstances. But in times of a global emergency — like these — maybe there’s another, faster route to follow.

In an SEC filing on Tuesday, Moderna $MRNA staked out a record-setting pathway to getting their mRNA vaccine into the frontline of the healthcare response as early as this fall. The SEC filing notes that CEO Stéphane Bancel told Goldman Sachs that an emergency use approval could allow the vaccine to go to healthcare workers and certain individuals in a matter of months — presumably provided the NIH sees the safety and efficacy data they would need from the Phase I.

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Caught in a Covid-19 mael­strom, Eli Lil­ly locks down clin­i­cal tri­als as multi­bil­lion-dol­lar R&D ops de­rail

The Covid-19 pandemic has derailed Eli Lilly’s $6 billion R&D operations.

The pharma giant reported Monday morning that it has decided to hit the brakes on most new study starts and pause enrollment for most ongoing studies. Lilly adds that it is continuing dosing for ongoing studies, “but with study-by-study consideration.”

The pandemic has severely disrupted healthcare systems around the globe, says Lilly, making it difficult or impossible to conduct studies at many research sites. And there’s no timeline for when it expects to get back on track.

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As share buy­backs come un­der scruti­ny, what's in store for the bio­phar­ma in­dus­try?

Stock buybacks are not to be permitted for companies that will be bailed out in the coronavirus stimulus package, Congressional leaders have signaled. To what degree the biopharma industry has relied on buybacks for earnings growth in recent years, and if the trend continues, are the big questions as scrutiny into the practice heightens and balance sheets weaken with the coronavirus pandemic wreaking havoc on global economies.

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A Sin­ga­pore VC rais­es $200M for a new round, but will Covid-19 pre­vent it from rais­ing the rest?

A top Singaporean biotech venture fund is nearly halfway toward its largest ever fund, but in a sign of what could be in store for VCs amid a global economic freeze, said they could face headwinds raising the other half.

Vickers Venture Partners has secured $200 million out of a targeted $500 million for its 6th fund, first announced in early 2018. They’ve given themselves 13 months to complete the financing, Vickers founder Finian Tan told Deal Street Asia, but the financial frost settling amid the Covid-19 pandemic could slow efforts.

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Strug­gling Unum ex­ecs are ready to con­sid­er a sale, merg­er or any deal that comes its way

Unum $UMRX is working its way through a survival plan of sorts.

After getting hit with a trio of FDA holds in its brief public history and triggering its second pivot to a new lead drug program while laying off 60% of the staff, the troubled penny stock biotech Unum Therapeutics has hatched new plans to secure financial backing while lining up a go-forward strategy for the company.

First, Lincoln Park Capital Fund has agreed to buy up to $25 million of the long-suffering stock, as Unum directs. And the executive team — led by CEO Chuck Wilson — has put everything on the table for consideration: a sale, acquisition, merger, licensing deal, you name it. The ACTR707 program, meanwhile, is being formally wrapped up — their second failed lead program.