Schrödinger: AI-Based Life Sciences Company Shows Promise

Author: Aditi Somayajula

For decades, drug discovery has been known to be an immense investment with low odds of success.  The costs of research and development (R&D) alone are notably high, averaging out to be $1.3 billion per drug in the United States. And yet, despite this funding, out of the tens of thousands of drug candidates that seek approval by the FDA each year, generally only 40 to 50 are successful. Each of these potential candidates is the product of an average of 12 years of research — a considerable timeline, particularly for a candidate that does not qualify for approval.  

This timeframe is mostly due to the steep learning curve of understanding malfunction in the body at a micro-level. Once researchers identify a molecular target for the disease of interest, such as a specific protein or cellular receptor, their next step is to discover molecules or compounds that act on the target and hinder the disease from further propagating. But finding even one promising candidate is a considerable feat that entails testing millions of combinations against a realistic biological environment — one that is similar to the human body and mimics traditional in vitro testing. 

A Case for Schrödinger

Based in New York, life sciences company Schrödinger is attempting to expedite this process. The focus of the company is a computational platform that utilizes physics-based modeling and artificial intelligence to evaluate billions of therapeutic candidates in silico — experiments conducted via computer simulation. Effectively, this allows researchers to identify which molecular combinations are worth synthesizing in a laboratory. Computationally predicted arrangements are also more likely to pass clinical trials due to rigorous testing across various metrics. 

By embracing a model that reduces discovery time and costs while accelerating development, Schrödinger is at the center of a digital transformation of biotechnology and big pharma. The company’s platform is currently utilized by over 1,250 academic institutions and the top 20 pharmaceutical companies, measured by sales. Technology giants have taken notice as well; in the last few years, Schrödinger secured partnerships with Google Cloud, NVIDIA, and Novartis

An Untapped Industry

The biotechnology industry is a competitive market. But for those that can tolerate some uncertainty, Schrödinger appears to be one worth watching. The science behind the company’s product has already been demonstrated; what remains to be seen is the profitability of the business model. Regarding the big picture, the American pharmaceutical industry earns roughly $425 billion in revenue each year — of this, Schrödinger holds a small sliver, reporting $46.2 million in revenue for the financial quarter ending in December 2021. But if the growing shift toward AI-based medicine is any indication of the potential of the industry, the future of Schrödinger looks promising. And although the full impact of the company’s platform may not be fully understood, what remains clear is that Schrödinger will be at the forefront of this trend for years to come.

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