Schrödinger: Regulatory Tailwinds Are Supportive Of Continued Strong Growth (Rating Upgrade)

  • Schrödinger delivered strong Q1 results, with robust software growth and improving margins, despite a tough macro environment. Regulatory changes, especially the FDA's move away from animal testing, could create a meaningful tailwind for Schrödinger's predictive toxicity software initiative. Schrödinger's Drug Discovery business also continues to progress, but this likely won't matter until the company generates positive later stage clinical data.