Schrodinger, Inc.

Safer standby. Welcome to Schrodinger's conference call to review first quarter 2022 financial results. My name is Charlie and I'll be your operator for today's call. At this time, all participants are in a listen on the moon. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. Please be advised that this call is being recorded at the company's request. Now, I would like to introduce your host for today's conference, Ms. Jaron Madden, Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to today's call, during which we will provide an update on the company and review our first quarter 2022 financial results. 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 on our call today are Rami Fareed, Chief Executive Officer, Jenny Herman, Senior Vice President of Finance and Corporate Controller, and Karen Akinsanya, President of R&D Therapeutics. Following our prepared remarks, we'll open the call for Q&A. I'd like to 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 2022 and for the quarter ending June 30, 2022, our strategic plans to accelerate the growth of our software business and advance our collaborative and wholly-owned drug discovery programs, the timing of potential IND submissions and initiation of clinical trials for our wholly-owned 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 views about our plans, intentions, expectations, strategies, and prospects, which are based on the information 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 important factors, that are beyond our control, including the demand for our software solutions, our ability to 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's filings and reports. Except as required by law, we undertake no duty or obligation to provide any update on our 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 are continuing to see a shift in how our software customers are incorporating digital chemistry into their research, and we're excited about our leadership role in advancing a new discovery paradigm. We are very pleased with the strong start we've had to the year. We reported first quarter software revenue of 33.1 million, a 26% increase over the prior year. We are also seeing nice progress across our collaborative programs. We recognized multiple milestones during the first quarter, which helped drive drug discovery revenue of $15.6 million. The strong revenues across both aspects of our business led to total revenue of $48.7 million for the first quarter. We believe this momentum positions us for continued success this year. We've built a highly differentiated company that we believe enables us to continue to innovate while providing a solid foundation of growing revenue. We ended the quarter with approximately $529 million in cash, and we believe we have sufficient runway to fund our operations for the foreseeable future, including advancing our wholly-owned programs into clinical studies. As you'll hear from Karen, we are also continuing to make progress across our wholly-owned pipeline. Our MALT1 inhibitor, SGR1505, is expected to enter the clinic later this year. We are also pleased to see continued progress across our collaborative programs, including the initiation of a Phase IIa study for one of Morphic Therapeutics' programs, which further demonstrates the impact of our platform. Today, we are announcing that we recently entered into a three-year collaboration with to accelerate the discovery and design of materials for safer and energy-dense lithium-ion batteries. As part of the agreement, we received an equity stake in Eonix. This is our first equity-based collaboration within our material science business, and we're excited to work with the Eonics team. We see several parallels between this collaboration and our collaboration with Nimbus, which is a clinical stage company founded in 2009. Nimbus has since progressed a deep pipeline and played a key role in validating our drug discovery platform. Before we review our first quarter financial results, I would like to introduce Jenny Herman, our Senior Vice President of Finance and Corporate Controller. Jenny joined Schrodinger in 2002, the same year I joined the company. She has played a key role in executing our financings, including our 2020 IPO and in building our global finance team. I will now turn the call over to Jenny.