What happened
Shares of Schrödinger (SDGR -2.61%) were down more than 22% on Thursday after the healthcare computational platform services company released second-quarter earnings. The healthcare stock is still up more than 108% so far this year.
So what
Schrödinger has two segments: drug discovery and software revenue. The company, after the markets closed on Wednesday, reported second-quarter revenue of $35.2 million, down 9% year over year, and net income of $4.3 million, compared to a loss of $47.7 million in the same period last year. The revenue drop was disappointing. In addition, the company changed its full-year guidance, raising its expected software revenue but dropping its revenue expectations for drug discovery.
Software revenue came in at $29.4 million in the quarter, down slightly from $30 million in the second quarter of 2022. However, drug discovery revenue slipped from $8.5 million a year ago to $5.8 million in the quarter.
Schrödinger said it now expects 2023 drug discovery revenue to be between $50 million and $70 million, down from earlier forecasts between $70 million and $90 million. Software revenue will rise between 15% and 18%, it said.
Now what
The earnings were a mixed bag, and the company had some good news besides improved net income. The Food and Drug Administration (FDA) recently cleared the company's individual new drug application for SGR-2921, and the company said it would begin a phase 1 trial for the drug to treat acute myeloid leukemia or myelodysplastic syndrome this year.
The company has also benefited from the growth in interest in artificial intelligence stocks. Schrödinger uses AI in its software platform to help discover new drugs.
