Schrödinger (SDGR) - Get Report shares were higher Monday after the software platform said it had reached a $2.7 billion multiyear agreement with health-care giant Bristol-Myers Squibb (BMY) - Get Report to discover, develop and commercialize therapeutics.
Shares of Schrödinger at last check were up 9.4% to $66.32, while Bristol-Myers Squibb was unchanged at $61.61. Both companies are based in New York.
Under the terms, Bristol-Myers Squibb will pay Schrödinger $55 million up front. Schrödinger will also be eligible to receive up to $2.7 billion in preclinical, development, regulatory and sales-based milestone payments.
In addition, Schrödinger will be entitled to receive royalties on net sales of each product commercialized by Bristol-Myers Squibb.
The collaboration aims to combine Schrödinger’s physics-based software platform and drug-discovery capabilities with Bristol-Myers Squibb's expertise in development and commercialization to advance small molecule therapeutics for targets in oncology, immunology and neurological disorders.
The collaboration includes two of Schrödinger’s early-stage programs and additional targets that weren't disclosed.
Schrödinger will be responsible for discovering development candidates for each of the targets under the collaboration. Bristol-Myers Squibb will then be responsible for developing, manufacturing and commercializing the candidates.
Schrödinger has agreed to grant Bristol-Myers Squibb exclusive worldwide rights to develop and commercialize the development candidates generated by the collaboration.
"We see tremendous potential in bringing together our drug-discovery expertise with Bristol-Myers Squibb's depth of experience in development and commercialization," Karen Akinsanya, executive vice president at Schrödinger, said in a statement.
Earlier this month, Bristol-Myers Squibb reported positive results from a late-stage trial of a key psoriasis treatment.