Alexa

Alexa, on behalf of Eric Schmidt, asked about the R&D spend, noting a $10 million reduction from the previous quarter, and inquired if the Q4 2025 run rate is indicative of future R&D expenses.

Answer

Jose Carmona, CFO, stated that R&D expenses are expected to generally decrease in 2026 and 2027, assuming the current number of trials and pipeline are maintained, as LOTIS-5 winds down and LOTIS-7 peaks before declining. Ameet Mallik, CEO, added that the current cash runway guidance includes all planned activities.

Alexa, on behalf of Eric Schmidt from Cantor Fitzgerald, asked if the Q4 R&D spend, which was down approximately $10 million from the prior quarter, represents the expected run rate for future periods.

Answer

CFO Jose Carmona stated that R&D expenses are anticipated to decrease in 2026 and 2027, with quarter-over-quarter fluctuations, as the LOTIS-5 trial winds down and LOTIS-7 reaches its peak before declining.

Alexa asked about the increasing role of AI in R&D processes, specifically if Schrödinger has observed changes in conversations with pharma customers and if they are leveraging Schrödinger's solutions. She questioned if Schrödinger is an AI winner or if pharma is shifting focus to new solutions from companies like Anthropic or OpenAI. She also inquired about the impact of two largest customers being acquired, asking if usage would disappear or if it could lead to broader adoption within major pharma acquirers.

Answer

Ramy Farid, CEO, views agentic AI as a tailwind, increasing demand for Schrödinger's software due to its throughput-based licensing model and ability to address the know-how barrier for platform adoption. He mentioned working with Anthropic to integrate agentic AI. Richie Jain, CFO, considered the customer acquisitions a positive development, reflecting the impact of Schrödinger's predict-first approach, noting that throughput and relationships were largely retained with the acquiring companies.