Shares closed at a four-month low before edging slightly higher after hours as investors digested the pipeline setback and cautious outlook.
Schrodinger shares came under pressure after Citi pulled back its bullish call, cutting the stock to ‘Neutral’ from ‘Buy’ and slashing its price target to $20 from $35.
The firm said recent stumbles in Schrodinger’s homegrown drug programs, along with persistent headwinds across biotech and pharma, have dimmed its outlook.
Shares of Schrodinger fell 2% to $19.45 on Thursday, marking its lowest close in four months, before edging up 0.2% to $19.5 in after-hours trading.
The downgrade by the brokerage firm came just after Schrodinger disclosed that it will discontinue the development of SGR-2921, an early-stage CDC7 inhibitor, for the treatment of patients with relapsed or refractory acute myeloid leukemia or high-risk myelodysplastic syndromes.
Chief Medical Officer Margaret Dugan said patient safety was the company’s top priority, noting that the drug’s potential as a combination therapy would be challenging to pursue under the circumstances. “While disappointing given the early clinical activity observed, we believe this is the right decision for patients,” she said.
Citi said its earlier bullish stance had hinged on three early-stage Phase 1 assets that could validate Schrodinger’s drug discovery platform and attract biopharma partners.
The brokerage firm noted that updates so far have “fallen short,” fueling concerns about the future of the company’s internal drug portfolio.
SGR-2921 was designed to block CDC7 kinase, a protein overexpressed in many cancers and involved in DNA replication and cell cycle progression.
Preclinical data had suggested the drug could work in combination with standard-of-care agents, but Schrodinger said the safety risks outweighed the potential benefits.
On Stocktwits, retail sentiment for Schrodinger was ‘bearish’ amid ‘extremely high’ message volume.
One user questioned the timing of Schrodinger’s disclosure, noting that the company reported Q2 earnings just eight days ago, and wondered if both patient deaths occurred since then or if the information had been withheld.
Another user speculated that there was “more to the news” than disclosed, pointing to the stock’s quick price recovery as a sign that “something fishy” might be going on.
Schrodinger’s stock has risen 0.8% so far in 2025.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<