The process of discovering new drugs that alleviate some of the world’s most pressing medical issues is no simple feat.
In order to identify a new drug candidate, scientists have to synthesize thousands of molecules over an average period of four to six years.
That’s quite a long waiting period when people with illnesses all around the world are desperately waiting for a cure.
However, one IPO that I have on my radar today is a software company that helps drug developers synthesize billions of molecules and identify new drugs two to three years faster.
This company is Schrödinger, and it has some impressive developments in the pipeline that I think could successfully woo investors when it goes public on February 6, just one week from now.
Schrödinger currently has a hand in some really extensive cancer cure research, and the application of its software even extends well beyond drug discovery.
The applications of the molecules that the company designs could address challenges in energy, aerospace, semiconductors, and electronic displays.
Today, I want to take a look at Schrödinger’s most impressive features, it’s financials, and how we could potentially profit starting late next week.
So far, Schrödinger has raised $192.6 in total — thanks in part to some of the companies most influential shareholders, including a 5% stake controlled by the Bill & Melinda Gates Foundation Trust and David E. Shaw and affiliates.
I don’t know about you, but when big names like Bill Gates are involved, I’m interested.
Bill Gates’ interest is really unsurprising, however.
Schrödinger said that all of the top 20 pharmaceutical companies have implemented their software, resulting in $22 million in sales revenue.
And while Schrödinger has mostly provided software solutions that help other companies discover and develop drugs since 1990, it founded some of its own internal drug discovery programs starting in 2018.
They have 5 discovery-stage programs in total, and all of them are focused on cancer.
Schrödinger apparently plans to direct a large amount of the recent investments in the company to hire new staff to support these internal drug development programs.
The company has yet to turn any profits, although I’m impressed with it’s growing revenue and increasing number of partnerships in the pharmaceutical industry.
In 2018, the company generated $66.6 million in revenues, a nearly 20% increase from the year before. And the nine-month revenues concluding on September 30 were $59.7 million, a 21% increase from that period in 2018.
With all these features and financials in mind, I want to provide a little more information on what we can expect when the Schrödinger IPO takes place next week…
Could Schrödinger Be The Next Hot IPO?
On February 5, Schrödinger (expected to be listed under SDGR) will be pricing its IPO, and the following day will be the first trade date. As of now, SDGR is expected to price between $14-$16 with a 10M share offering.
The IPO is being led by Morgan Stanley, and the first three-month return, on average, was 28%. Not only that, but the healthcare sector has been really hot. Over the last year, health care IPOs in the past year returned 55%. Now, since the healthcare sector has been hot, SDGR could be a prime IPO to get into for the pop.
With such strong growth, the outlook of the industry, and SDGR’s unique positioning, I’ll definitely keep an eye out on this one. For the most part, I’ll wait until the day of the IPO to provide my clients with a trade plan.
If you’re interested in hearing my thoughts on hot IPOs coming up next week, make sure to check out this training lesson… and you could be well-equipped to start profiting off IPOs very soon.