Schrodinger, Inc.

Thank you for standing by. Welcome to Schrodinger's conference call to review the company's third quarter financial results. My name is Liz, and I'll be your operator for today's call. At this time, all participants are in listen-only mode, so if you require operator assistance during the call, please press star, then zero. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star, then one on your telephone keypad. Please be advised this call is being recorded at the company's request. Now I would like to introduce your host for today's conference call, Jaron Madden, Senior Vice President, Investor Relations and Corporate Communications.

Please go ahead. Welcome to today's call during which we will provide an update on the company and review our financial results for the third quarter of 2021. Earlier today, 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 Fareed, President and Chief Executive Officer, Joel Lebowitz, Executive Vice President and Chief Financial Officer, and Karen Atansanya, Executive Vice President, Chief Biomedical Scientist, and Head of Discovery R&D. Following our prepared remarks, we'll open up the call for Q&A. I'll 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 related 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 our 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 develop our computational platform further, our reliance upon our drug discovery collaborators and other risks detailed under the 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 on 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. And with that, I'd like to turn the call over to Rami.

Thanks, Jaron, 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. We license our platform to biopharma and materials companies, as well as government and academic institutions around the world. We also collaborate with companies to advance drug discovery programs by leveraging our broad expertise and the full potential of our computational platform. We are seeing a shift in how our software customers and collaborators are incorporating digital chemistry into their research, and we're excited about our leadership role in advancing a new discovery paradigm. We are also applying our fully integrated computational approach at scale to rapidly advance a pipeline of internal drug discovery programs from target selection and in vivo testing through declaration of development candidates with plans to initiate our first clinical study next year. Today we reported 16% total revenue growth compared to the same period last year, and we ended the quarter with cash resources of $600 million. We are very pleased with the progress we have made so far this year. Our customer base continues to grow, and we are on track to deliver double-digit revenue growth for the full year. Our financial strength also enables us to continue to invest in our scientific platform to drive our software business, advance our internal pipeline, and add new talent to support our strategic initiatives. We have over 20 active collaborative drug discovery programs, as well as additional programs in preclinical or clinical development for which we are still eligible for milestones, underscoring the impact and breadth of our platform. As we have established collaborations with biotech and pharma companies over the years, we have found many different ways to structure agreements. Our flexibility provides us with the opportunity to work with innovative companies, gain access to expertise, and create opportunities for long-term growth. Last month, we announced a collaboration with Eurexia, a Sintesa company, that is focused on the discovery of novel therapeutics targeting the Eurexin-2 receptor, which is known to play a role in a broad spectrum of sleep disorders, including narcolepsy. Under the agreement, Eurexia is responsible for preclinical research activities, selection of development candidates, clinical development, and commercialization. We will provide our expertise and access to our computational platform at an ultra-large scale. We received an upfront software access payment. We will also be eligible to receive preclinical development, regulatory, and sales-based milestones, as well as single-digit royalties on net sales. The EREXIA collaboration is illustrative of a new approach to help support discovery efforts at biotech companies, where we apply our technology at scale on behalf of collaborators. We're also very excited by the progress within our internal pipeline. We are on track to submit an IND to the FDA for our MALT1 inhibitor program in the first half of next year, and we're looking forward to presenting additional preclinical data from this program at ASH. We also recently selected development candidate for our CDC7 inhibitor and added a new oncology target, our fifth internal program, to our pipeline. We recently opened up our new headquarters in New York City. and it's gratifying to see colleagues together after more than 18 months of working remotely. Other offices around the globe are open in accordance with local guidelines. Our sales teams are also beginning to resume in-person visits as permitted by customers. In summary, we are very pleased with the progress we've made in the first nine months of the year, and we expect to finish the year with a strong fourth quarter. I'll now turn the call over to Joel to review our third quarter financial results.