Scientific software developer Schrödinger has entered into multi-target research collaboration and expanded licensing agreement worth up to $2.5bn with Novartis.
The partnership aims to advance multiple drug development candidates into Novartis’s portfolio for further development.
Additionally, the companies have expanded their software agreement for three years. This agreement increases Novartis’s access to Schrödinger’s computational modelling technology and informatics platform.
Novartis will now deploy Schrödinger’s full suite of drug discovery tools across its research sites on an industry-leading scale.
Schrödinger’s computational platform helps in the discovery of optimised molecules for both drug development and materials design.
The scientific software developer will support the integration and optimisation of this platform to accelerate Novartis’s drug discovery programmes.
However, neither party has revealed details of the programmes included in the deal.
Under this multi-year, multi-target research collaboration and licence agreement, both companies will focus on identifying and advancing therapeutics for undisclosed targets within Novartis’s core therapeutic areas.
Both companies will share responsibility for identifying these candidates, with the Swiss drug maker handling clinical development, manufacturing, and global commercialisation.
Schrödinger CEO Ramy Farid said: “Our commitment to working at the frontier of computation and advancing our drug discovery portfolio provides important synergies, and we are pleased to see innovative pharmaceutical companies like Novartis increase their depth of engagement with us through both expanded use of our technology and focused drug discovery collaborations.”
Under the agreement, Novartis will pay Nasdaq-listed Schrödinger $150m upfront. Schrödinger is also eligible for up to $892m in research, development, and regulatory milestone payments.
Additionally, the scientific software developer could receive up to $1.38bn in commercial milestones and tiered royalties ranging from mid-single digits to low double digits on net sales of each product commercialised by Novartis.
The agreement is subject to customary closing conditions, including regulatory clearance.
Novartis biomedical research president Fiona Marshall said: “We are excited to build on our long-standing relationship with Schrödinger, leveraging their discovery platform and physics-based computational methods to accelerate our drug discovery efforts.”
In a separate announcement, Schrödinger reported Q3 2024 revenue of $35.3m, with an operating expense of $86.2m, and a net loss of $38.1m.
The company’s software business contributed $31.9m, and drug discovery revenue was $3.4m.
In August, Lilly completed the acquisition of Morphic, co-founded by Schrödinger, for approximately $3.2bn.
