What happened
Shares of Schrödinger(NASDAQ: SDGR) were up by 28.6% for the week on Friday morning after rising as high as 30.8%, according to data provided by S&P Global Market Intelligence. The drug discovery company's stock closed last week at $36.64, then rose as high as $47.92 early on Friday. The healthcare stock is up more than 154% this year.
So what
Schrödinger provides chemical simulation software solutions to pharmaceutical companies and is developing its own therapies as well. The company's growth has been driven lately by the artificial intelligence (AI) it uses as part of its drug discovery computational platform. It also uses its platform for other industries, including energy, semiconductors, and aerospace. The company has a pipeline that includes nine programs in trials and two Food and Drug Administration–approved drugs that it collaborated with Agios Pharmaceuticals on: Tibsovo, a therapy to treat acute myeloid leukemia (AML) and bile duct cancer, and Idhifa, a relapsed/refractory treatment for AML patients with an isocitrate dehydrogenase-2 (IDH2) mutation.
Now what
Schrödinger presented at the Goldman Sachs Global Healthcare Conference this week in Dana Point, California, so that helped promote what is already a hot stock. AI isn't the only reason for the stock's rise this year. In the first quarter, the company reported revenue of $64.8 million, up 33% year over year. While software revenue was down slightly, that was more than made up for by drug discovery revenue of $32.6 million, up 108% over the same period last year. Schrödinger also reported net income of $129.1 million, compared to a net loss of $34.4 million in the first quarter of 2022. The company said it expects drug discovery revenue to rise to between $70 and $90 million this year, compared to $45.4 million in 2022.
10 stocks we like better than Schrödinger
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Schrödinger wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 12, 2023
Jim Halley has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2024 $75 calls on Schrödinger. The Motley Fool has a disclosure policy.
