Why Shares of Schrödinger Rose This Week

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.

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.

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.

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Source Fool.com