Schrodinger, Inc.

Thank you for standing by, and welcome to the Schrodinger conference call to review the company's second quarter financial results. My name is Kevin, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. Please be advised that this call is being recorded at the company's request. Now I'd like to introduce your host for today's conference, Tracy Lesser, Executive Director of Corporate Communications. Please go ahead.

Thank you, and good morning, everyone. Welcome to today's call, during which we'll provide an update on the company and review our financial results for the second quarter of 2021. Earlier this morning, we issued a press release summarizing our financial results and progress across the company, which is available on our website at www.schrodinger.com. Here with me today are Rami Farid, President and Chief Executive Officer, Karen Atkinsania, Executive Vice President, Chief Biomedical Scientist, and Head of Discovery R&D, and Joel Lebowitz, Executive Vice President and Chief Financial Officer. Following our prepared remarks, we'll open the call for Q&A. I remind you that during today's call, management will make statements related to our business that are forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including without limitation statements related to our future financial performance, including our outlook for the full year 2021, the potential advantages of our platform, our strategic plans to accelerate the growth of our software business and advance our collaborative and internal drug discovery programs, risks relating to the COVID-19 pandemic, our expectations related to the use of our cash, cash equivalents, and marketable securities, as well as our future operating expenses. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies, and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks, and factors that are beyond our control, including the demand for our software solutions, our ability to further develop our computational platform, our reliance upon our drug discovery collaborators, and other risks detailed under the caption risk factors, and elsewhere in our most recent Securities and Exchange Commission filings and reports. Except as required by law, we undertake no duty or obligation to update any forward-looking statements discussed in this call as a result of new information, future events, changes in expectations, or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. With that, I'd like to turn the call over to Rami.

Thanks, Tracy, and thank you, everyone, for joining us today. At Schrodinger, we have developed a computational platform that is transforming the way therapeutics and materials are discovered. The platform is enabling our customers and our internal teams to discover high-quality molecules for drug development and materials application faster, at lower cost, and with, we believe, a higher probability of success compared to traditional methods. We license our platform to pharmaceutical, biotech, and materials companies and universities and government labs worldwide. As Karen will review shortly, we are also advancing an internal drug discovery pipeline and leveraging our platform in a number of drug discovery programs in collaboration with pharmaceutical and biotech companies. We announced a new drug discovery collaboration this month with Xylab. The collaboration marks the first time we have the opportunity to co-develop and co-commercialize a therapeutic. XyLab has a deep pipeline in oncology with multiple approved products, and we are excited to be working with them. The collaboration with Xy will focus on a target in the area of DNA damage response, an important therapeutic strategy for a broad range of cancers, and builds on the knowledge we have gained working on our own programs in this area. Under the terms of the agreement, Xy will make an upfront payment to help fund our share of research costs. We have co-development and co-commercialization rights that will allow us to share equally in the profits of a future marketed product in the U.S. if we choose to co-fund U.S. development. We are also eligible to receive up to approximately $338 million in preclinical development, regulatory, and sales-based milestone payments, as well as royalties on net sales outside the U.S. This collaboration provides us with the opportunity to gain expertise in late-stage clinical development and commercialization, as well as the ability to participate more significantly in the downstream value of a program. As you will hear shortly from Joel, we reported a strong second quarter with 29% revenue growth compared to the same period last year, and we ended the quarter with cash resources of $617 million. Our financial strength allows us to continue to invest in advancing our science and invest in growing our software business, advance our internal pipeline, and add new talent to support our strategic initiatives. We are excited by the progress we've made as we continue to transform the way therapeutics and materials are discovered. I'll now turn the call over to Karen for an update on our drug discovery programs.