Thank you for standing by. Welcome to Schrödinger, Inc.'s conference call to review first quarter 2026 financial results. My name is Rob, and I will be your operator for today's call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. Please be advised that this call is being recorded at the company's request. Now I would like to introduce your host for today's conference, Ms. Jaren Madden, Chief Corporate Affairs Officer and Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to today's call during which we will provide an update on the company and review our first quarter 2026 financial results. Earlier today, we issued a press release summarizing these results and progress across the company, which is available on our website at schrodinger.com. During today's call, management will make statements that are forward looking and may relate to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to our outlook for the full year 2026, our plans to accelerate the growth of our software business and advance our therapeutics portfolio, the clinical potential and properties of our and our collaborators' compounds, use of our cash resources, as well as our future expenses. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies, and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially due to a number of important factors, including the considerations described in the Risk Factors and elsewhere in the filings we make with the SEC, including our Form 10-Q for the quarter ended 03/31/2026. These forward-looking statements represent our views only as of today. We caution you that, except as required by law, we may not update them in the future whether as a result of new information, future events, or otherwise. Also included in today's call are certain non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and should be considered only in addition to and not as a substitute for or superior to GAAP measures. Please refer to the tables at the end of our press release, which is available on our website, for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. This afternoon, Ramy Farid, our CEO, will review our recent progress. Then Richie Jain, Chief Financial Officer, will discuss our financial results and 2026 guidance. Karen Akinsanya, President, Head of Therapeutics R&D and Chief Strategy Officer, Partnerships, will review our therapeutics portfolio. Pat Lorton, our Chief Technology and Chief Operating Officer, will join us for the Q&A. With that, I will turn the call over to Ramy.

Thanks, Jaren, and thank you, everyone, for joining us today. We are off to a strong start this year, delivering $28.4 million in ACV, a 12% increase compared to Q1 last year. Our growth was broad based, reflecting usage scale-ups, new customers, and growth from new products. Drug discovery revenue of $23 million was also a significant contributor in the quarter. Lilly's announced $2.3 billion acquisition of Ajax Therapeutics, a company we co-founded and in which we have an approximately 6% equity stake, is the latest example of a multibillion-dollar deal for a Schrödinger, Inc. co-developed molecule and speaks to the power of our platform. We are pleased with our momentum transitioning customers to hosted licensing. We are seeing positive conversion dynamics upon contract renewals and with new products that are hosted. In limited cases, we are also seeing the early conversion of multiyear on-premise deals to hosted ahead of the scheduled renewal date. We are encouraged by the improving biopharmaceutical funding environment. While macroeconomic uncertainty remains, it is clear to us that there is a growing recognition of the critical importance of our computational platform as R&D organizations embrace the predict-first computational paradigm that offers a demonstrated path toward improving probability of success and reducing the time and cost of molecular discovery. We remain poised to benefit from the evolving regulatory environment, with our predictive toxicology initiatives set to address a key element of the FDA's focus on reducing animal testing and broadening the use of computational methods. Our market-leading position is built on the inherent accuracy and scalability of our physics-based approach and is further reinforced by our unmatched track record. While standard AI models are limited by the scarcity of training data, our platform generates the ground-truth simulations, accuracy, and scale required for AI to precisely navigate the vastness of chemical space. By combining the accuracy of physics with the speed and scalability of AI, we are able to evaluate key properties of billions, even approaching trillions, of molecules with a level of accuracy impossible to achieve through models trained solely on experimental data. This capability enables our customers to integrate computation more deeply into their workflows, driving the consistent demand that underpins our long-term growth trajectory. We are committed to technology leadership and evolving our platform to meet customer needs. We are very excited about the upcoming release this summer of an early access version of Bunsen, our new agentic AI co-scientist. Designed to autonomously execute complex molecular discovery workflows, Bunsen enhances productivity and accelerates the design–predict–make–test–analyze cycle that drives modern molecular discovery. Our materials science and therapeutics teams have been successfully using Bunsen internally, and we are excited to offer this capability to our customers. Our throughput-based licensing model is well positioned to capture the value of this expanding utilization. The repeated success of our co-invented molecules and the continued progress of our therapeutics portfolio place us at the forefront of a digital transformation moving materials science and life science industries toward a more efficient predict-first, computationally driven model of discovery. We continue to deliver the technology that transforms the way molecules are discovered, and we look forward to updating you on our progress throughout the year. I will now turn the call over to Richie.

Thank you, Ramy, and good afternoon. ACV in the first quarter was $28.4 million, which represents 12% growth compared to $25.4 million in Q1 2025. On a trailing twelve-month basis, ACV reached a higher level. As a reminder, we believe ACV provides important visibility into the performance of our business during a period where we expect recognized revenue to be highly variable due to the accelerated transition to hosted. ACV growth was primarily driven by our top 20 pharma customers, as these customers broaden their platform access, onboard new products, and integrate our platform more deeply into their R&D organizations. Starting this quarter, we are breaking out contribution revenue as a separate line item to provide better visibility into our software and drug discovery performance. To facilitate year-over-year comparisons, we have reclassified our historical results to reflect this change as contribution was previously included in software and drug discovery revenue. Total revenue for the quarter was $58.6 million. Software revenue was $35.6 million, of which hosted revenue contributed $12.1 million, or 34% of the software total, compared to 24% in 2025. On a trailing four-quarter basis, hosted revenue increased to 27% of the software total. As we have discussed, the year-over-year software revenue comparison reflects our planned accelerated transition to hosted licenses, for which revenue is recognized ratably over the life of the contract rather than upfront. While this dynamic creates a near-term headwind on recognized revenue, over the long term it will better align revenue with operational growth, resulting in a more predictable financial profile. Software gross margin was 69% for the quarter, compared to 80% in Q1 2025, reflecting our planned accelerated transition to hosted software licensing. Contribution revenue was $0.1 million for the period, compared to $4.3 million in Q1 2025. The decline is driven by completion of the initial funding by the Gates Foundation in support of our predictive toxicology initiative. Drug discovery revenue was $22.9 million, compared to $10.2 million in the same period last year. The increase is due to the accelerated recognition of deferred revenue associated with the continued progress of the company's collaboration portfolio and the discontinuation of one collaboration program. Total operating expenses for Q1 were $78 million, a decrease of 4% compared to $82 million in Q1 2025. This reflects the impact of our efficiency measures and disciplined expense management across R&D and G&A; we continue to invest in sales and marketing to drive long-term growth. Total other expenses were $11 million, primarily due to changes in fair value of equity investments and interest income/expense. Net loss for the quarter was $60 million. We ended the quarter with a strong balance sheet of $406 million in cash and marketable securities. We anticipate receiving our portion of the upfront cash payment from the Ajax–Lilly transaction when the deal closes. The fully diluted share count was 74 million. Today, we are maintaining our full-year 2026 guidance. For the full year, we continue to expect ACV to be in the range of $218 million to $228 million, representing 10% to 15% growth. We anticipate drug discovery revenue between $55 million and $65 million for the year. As a reminder, drug discovery revenue has quarterly variability due to the collaboration- and milestone-driven nature of the business. Our operating expenses are expected to be less than 2025, as we maintain overall expense discipline and make select investments in sales and marketing to support growth and the release of new products. We anticipate our clinical activities will be largely complete by 2026, and to incur approximately $10 million to $15 million of R&D for full year 2026 as we wind down these activities and seek partners for mid- and late-stage clinical programs. Our $19 million to $23 million guidance range for Q2 2026 ACV excludes contribution ACV, compared to $23.3 million from Q2 2025 that included $5 million of contribution ACV. Now I would like to hand the call over to Karen.

Thank you, Richie. Our therapeutics business continues to create significant value, most recently highlighted by Lilly's planned acquisition of Ajax Therapeutics for $2.3 billion. By combining Ajax's deep expertise in blood cancer and JAK family structural biology with our industry-leading track record in computational drug design, we discovered AJ1-1095, a first-in-class type 2 JAK inhibitor which is the primary driver of the announced deal. Over a ten-year span, Schrödinger, Inc. has co-founded multiple companies including Ajax. There have been seven major transactions and liquidity events related to molecules we co-discovered across our biotech collaboration portfolio, including Lilly's acquisitions of Morphic, Petra, and Ajax, the sale of Nimbus' ACC and TYK2 inhibitors, and the successful IPOs of Relay and Structure. The success of these companies and multibillion-dollar exits establishes unquestionable validation of the impact of computation-based design and our biotech and pharma collaboration business model. The emerging results from our maturing therapeutic portfolio span internal discovery programs licensed to pharma through to co-invented molecules with late-stage clinical readouts like Takeda's Zasacitinib, which completed Phase III trials earlier this year. To date, our equity and business development activities have resulted in close to $700 million of cash as well as potential future preclinical, clinical, and commercial milestones of up to $5 billion and royalties on 15 programs. Our wholly owned programs also represent future value capture opportunities. As Ramy mentioned, the therapeutics team has integrated our new agentic solution Bunsen across the combined portfolio. Bunsen's ability to execute our powerful predictive models and orchestrate multi-step, multi-scale drug discovery workflows enables us to accelerate the design–predict–make–test–analyze cycle. This is an exciting development that we expect to have a major impact on the productivity of our team and teams across biopharma once they get access. Turning to our wholly owned portfolio, in April we presented initial clinical data for SGR3515, our WE1 inhibitor, at the AACR Annual Meeting. As a reminder, this is an ongoing Phase 1 dose-escalation study with primary objectives of safety, tolerability, and pharmacokinetics. The data presented demonstrate that SGR3515 was generally well tolerated on an intermittent dosing schedule of three days on and eleven days off. Importantly, the initial clinical biomarker data validated our hypothesis that dual inhibition can overcome compensatory resistance mechanisms. We observed encouraging early anti-tumor activity with a 65% disease control rate among evaluable patients treated at doses of 100 mg or higher. We also remain encouraged by the progress of SGR1505, our MORT1 inhibitor. We continue to see a 100% response rate and durable responses in patients with Waldenstrom's macroglobulinemia, where the drug has both FDA Fast Track and Orphan Drug Designations. As we complete these Phase 1 studies, we are actively exploring partnership opportunities to continue the mid- and late-stage development of SGR1505 and SGR3515. Our track record of generating differentiated discovery-stage breakthroughs, clinic-ready molecules, and valuable data packages is well established. We believe our drug discovery expertise, coupled with the use of our computational platform at scale, will enable us to continue unlocking high-potential target product profiles and drive the next wave of successful collaborations and transactions. I will now turn the call back to Ramy.

Thank you, Karen. As you have heard, we are off to a strong start in 2026. I want to thank our employees for their hard work and commitment to our mission. We are pleased with the momentum across the company and look forward to updating you on our progress throughout the year. At this time, we are happy to take your questions.

We will now open the call for questions. Your first question comes from the line of Scott Schoenhaus from KeyBanc Capital Markets. Your line is open.

Hey, guys. This is Steve on for Scott. Could you talk more about how agentic AI is driving higher utilization of high-compute calculations and how this is impacting your business? What is the upside potential as adoption increases? And then how would this show up in your customer contracts? Thanks.

Absolutely. I assume you are referring to the announcement we just made about the release this summer of Bunsen, an agentic AI system for automating complex workflows. We have already been using Bunsen internally for a number of months. The impact that it has had on productivity of both our expert modelers and computational chemists, as well as non-experts, has been extraordinary. We are very excited about it. What it is doing is eliminating barriers to large-scale deployment of the technology. It is very much, as we describe it, a co-scientist, a companion that improves efficiency and productivity for both experts and non-experts. The impact of this improved efficiency and our ability to actually use the technology on a larger scale and in a more effective way is significant. As we said, we will be releasing it this summer. Feedback that we have been getting as we start to talk about the imminent release of Bunsen has been very positive. I think there is a lot of excitement about the potential. The last thing I will say is, and we mentioned this again today, that our throughput-based licensing, that is not seat-based licensing but throughput-based licensing, of course benefits from solutions like this where an agentic AI has the potential to increase the demand for the technology and the need for our customers to license that technology on a larger scale. Pat, is there anything you wanted to add? Did I cover it?

I think you pretty much covered it. The one thing I would add is that we are seeing customers using more general agentic AI, and they are already having access to higher throughput of our technology using other large language model providers. That said, the reason we have built Bunsen is because our tools are such expert tools that we feel that the LLM has to be trained specifically on how to use our tools to optimize it and to run in the most efficient way. We think the solution we are putting together will be best for that.

Yeah.

Great. And then just one follow-up. You mentioned you are working with them for a bit last quarter. Just any update on that partnership or collaboration, however you refer to it?

Sure. Pat, do you want to give an update?

Sure. Yeah. We regularly work with and talk with Anthropic as we are building out Bunsen. It is one of the top LLM providers. We are not tied to a single LLM. We are open to using whatever our customers prefer or whatever we think would work best. We are building an agentic layer on top of LLMs, but Anthropic is obviously a fantastic provider in the space, and we have learned a lot from them. We are really excited to continue to work with them.

Great. Thank you. Your next question comes from the line of Mani Foroohar from Leerink Partners. Your line is open.

Hey, guys. A quick question. When you think about the percentage of customers or percentage of contract value that were previously on-prem that are renewing in 1Q, recognizing that we are off and we are recycled for many, can you give us a sense of what percentage you were able to convert over to hosted? So you can give us a little bit of real-time quantitative feedback on how that transition is going.

Thanks, Mani, for the question. For the quarter, we were pleased with the progress. Hosted revenue was 34% of the software revenue in the quarter, and 27% on a trailing four-quarter basis. That compares to 23% just a quarter ago. So we are pleased with the early progress. Anecdotally, we are aiming to transition from on-prem to hosted upon the contract renewal date. That is what we achieved in the quarter, as well as all new customers were deploying hosted in the first instance. So overall, we are pleased with the first quarter, and we still have our same expectations for the year and the three-year outlook getting to 75% by the three-year period.

I think it is also worth mentioning that in a few cases, which I think is quite encouraging, we were able to transition some customers to hosted before their renewal dates.

Yes. While the primary emphasis has been on transitioning at renewal, in a few instances for larger multiyear contracts that were on-premise, we were able to work with those customers and transition over to hosted well in advance of the renewal date. There was a modest impact of that in Q1, but you will start to see more impact from that in Q2 onwards.

Great. And a quick follow-up. We are seeing a substantial pickup in M&A activity in private biotech markets—Ajax is actually one example. How much velocity would you have to see in that space to start tinkering with how you think about guidance for drug discovery revenue, given the broad portfolio of co-founded, partnered companies, and your equity exposure there?

First of all, on the software side, we are also quite encouraged. Things look a lot better this quarter so far compared to last year, where we saw lots of biotech companies shutting down or very significantly reducing their discovery budgets. We are not seeing that. We are even seeing a pickup in new customers. So that is very encouraging, and the dynamic that you mentioned is certainly impacting the software business. As far as the drug discovery business, Karen?

Sure. Happy to share. As you know, we have always had a lot of interest in partnerships, both with the companies we have co-founded—you mentioned Ajax—and prior companies we have co-founded. Your comment about the private market and companies who are still in stealth, as well as public companies, are still reaching out very actively to Schrödinger, Inc. with respect to collaboration on programs that are in their pipelines, but also on new programs. We remain very enthusiastic about the potential for new collaborations. Obviously, we are not guiding to any specific BD event, but the momentum and the interactions remain very robust both with biotech and with pharma.

Your next question comes from the line of Brendan Smith from TD Cowen. Your line is open.

Great. Thanks for taking the questions, and congrats on all the progress here. First, I wanted to quickly ask about the predictive tox launch. If you can maybe just give us a sense—if not relative revenue breakdown between the legacy business and predictive tox—at least how new customer adds there are tracking. And then quickly on the upcoming Bunsen launch: should we think about the go-to-market strategy for the agent as an add-in with existing customers, or is there a whole separate base you could potentially reach with this? Any color on go-to-market strategy would be helpful.

We can cover both of those. Thanks for the questions. With regard to predictive tox, feedback continues to be very positive for the results of evaluations now being kicked off. It is very clear that there is significant interest in the technology, and prospective testing of it in our customers' hands is validating the kind of results that we were seeing when we were developing the technology and using it prospectively internally. That is gratifying to see, and it continues to go well. With regard to Bunsen and the go-to-market strategy, that is a really good question because this, in some sense, democratizes access to very sophisticated technology. You can appreciate what kind of impact that can have on the business. Previously, systems like this may have been inaccessible and would take years of training. You might use the technology but not quite right and not get very good results. That is not good for anybody. This directly addresses that. This is similar to image processing that used to be available only to expert users. Now you just circle the area and say remove the background, and it is done. It is the same basic idea. Very sophisticated capabilities are available to non-experts in research.

I think that sums it up well. The other thing I would highlight, on top of adding additional customers, is one limiting factor we have discussed in the past: the amount of computational chemists we have per project at Schrödinger, Inc. is a lot higher than the industry average, which is part of the reason behind our very high success rate. One thing that is very limiting for our customers is they simply do not have enough people who can run this, even if they have experts. Getting this in the hands of those experts and allowing them to get a multiple of their work done—similar to how agentic coding tools have allowed developers to work much faster—means even those experts will be able to run much faster and consume a lot more of our throughput-based licensing before we even broaden to a wider user base.

Exactly.

Got it. Sounds good. Thank you.

Your next question comes from the line of Michael Ryskin from Bank of America. Your line is open.

Hey. Thanks for taking the question. First, I want to dig into the new way you are guiding ACV. On the contribution ACV, you called out for the second quarter your guide is $19 million to $23 million, and that is excluding any contribution. Is that just your way of saying you do not know what the contribution ACV will be, or are you actually expecting it to be zero because it was relatively modest in the first quarter? And the same question for the full year—anything you could tell us in terms of how much of the full-year ACV is made up of that, or how much there was in all of 2025?

Richie?

The guidance for Q2 is $19 million to $23 million, as you noted. The reason we explicitly called out the comparison to last year—2025 was $23.3 million, of which $5 million was contribution ACV related to our grant with the Gates Foundation—was to highlight that, on a commercial business basis (excluding contribution), we are still projecting growth for this quarter. For the full-year range of $218 million to $228 million of ACV, we do expect potentially some contribution ACV in there. That is a component of the full-year number.

But you do not want to break that out or quantify that?

Correct.

Okay. Fair enough. And then in terms of Ajax, how should we think about that flowing through the P&L and in terms of use of proceeds? Is that in your guide for the year? I do not believe it is. Just timing and pacing of that.

Just to remind everyone, our equity stake is around 6%.

The Ajax sale was not contemplated in our guidance framework. Obviously, it is a private company sale that we could not have included, but its impact for our financials will mostly be to cash. Our cash position at the end of the quarter was $406 million. As Ramy noted, we own about a 6% equity stake in Ajax. When the upfront portion is received by Ajax, we will receive our approximately 6% of that. So the impact to us will be cash. The upfront amount was not disclosed in the Ajax–Lilly announcement, but as we receive the cash flow, we will reflect it in our balance sheet. There are also milestones—near-term and downstream—in which we would continue to have that 6% participation.

Does that change how you think about investment priorities in the second half, given the balance sheet will be a little bit stronger? Any early thoughts on that, or just wait and see?

I would say more of the latter. Our path to profitability—between growth in software and drug discovery as well as expense management over the three-year window—was based on our cash position at the time. This is just upside to that. Once we receive the cash, we will revisit if anything changes, but I would expect our three-year outlook to be unchanged.

Thanks.

Your next question comes from the line of Michael Yee from UBS Securities. Your line is open.

Great, thanks. We had two questions. First, maybe for Ramy: thinking about your overall P&L, you have attractive 70% gross margins, but overall, as an entity, you are EBITDA-negative and running operating losses. Given the general shift to reduce focus on moving things to later preclinical or clinical and looking to partner things, how would we expect the overall operating expense structure to potentially change? In other words, what percent of your R&D do you estimate is going toward those types of programs, and if I back that out, could we think about a more appropriate run rate of where you think your R&D could be? I think you have guided to be EBITDA-profitable in 2028, so that is helpful—wanted to know what percent of R&D is related to drugs. And second, I estimate that Ajax could be a roughly $1 billion upfront. So is the 6%—I think you said it is not in your current cash—something we should apply as upside to the cash? And does that book in the income statement and flow through as well? Thank you.

Richie, do you want to cover the second?

We cannot comment on the size of the upfront, but the 6% equity stake we have is not in our cash guidance. I would expect it to run through our P&L as a nonoperating gain.

With regard to the question about R&D and drug discovery, the drug discovery part of our business, which has been in existence for a long time—since around the founding of Nimbus over fifteen years ago—has been an incredibly important part of our business and is highly synergistic with our software business. We have shown that the extraordinary success of these drug discovery partnerships—Nimbus, Morphic, Relay, Structure, Ajax—has had a huge impact on validating our platform. They have also had a huge impact on helping us understand what we should be working on and how we should be advancing to have the maximum impact on projects. That will continue. There is still a huge amount of work to be done in advancing the field. We are incredibly excited about our accomplishments, which have been transformative. Our mission was to transform the way molecules are discovered, and I think we have been accomplishing that. Through initiatives like predictive tox and many others, there is more work to be done and we can continue to improve the way molecules are discovered in both materials science and life science. These businesses are highly synergistic and will continue to be an incredibly important part of our overall business model. Karen, anything to add?

Yes. As we have shared in the past, the vast majority of our portfolio—the combined portfolio of collaborations with our co-founded companies, with biotechs, and with large pharma—are an important part of the business, as Ramy described, both from a scientific point of view and, as you saw this quarter, in generating revenue. The vast majority of our activities in the R&D space are those collaborations. It is a small portion of the overall effort that is allocated to wholly owned research. As you have heard previously, we will not be taking programs into the clinic, and we are partnering programs earlier—as you saw with the Novartis deal, partnering a program that had not even reached lead optimization yet. Our investment in R&D is partly on the science side, but it is also to create value. We have 15 programs with royalties on sales and revenue coming from these programs, and across the whole portfolio we have generated close to $700 million from our collaborative R&D and drug discovery efforts.

That is helpful on positive EBITDA guidance for 2028. Thank you.

Next question comes from the line of Evan Seigerman from BMO Capital Markets. Your line is open.

Hi there. This is Conor on for Evan. Thanks for taking our question. Just a follow-up on how we should think about the rollout of Bunsen—maybe the phasing over the next couple of years. You have the upcoming early access launch this summer. Which types of accounts will you be sharing access with in the early launch? And longer term, given the throughput-based licensing, will Bunsen be a premium add-on or come included as part of your standard software?

We are still working out the details, as we typically do with early versions of our technology. We work with our close partners, and we will do the same here—working together on integrating it into their workflows and, importantly, checking on the science. Everyone has had mixed experiences with LLMs—sometimes extraordinary, sometimes pretty crazy. There is a lot of work to optimize and maximize the former and minimize the latter. That requires working with close partners, of which we have a large number. As far as the future, our expectation is that this will be ubiquitous, and this technology will be available to all of our customers. Exactly how we price it is still to be worked out and will depend on the feedback we get as we roll out this early access version.

That covered it.

Thanks.

Your next question comes from the line of Matthew Hewitt from Craig-Hallum. Your line is open.

First, given that Q4 is such a big renewal period for you and you noted earlier that you are starting to see some earlier conversions, is it your hope that you can get through some of that before you get to Q4 just to ease the rush at year-end? How should we think about the conversion over the next couple of quarters before you get to Q4?

Thanks for the question. The examples we gave were more anecdotal and not the base case, but they were large contracts and we had a dedicated effort to convert those in advance. More broadly, the natural time for us to address a transition is on the contract renewal date. I still expect Q4 to be our largest quarter of the year for ACV. That said, where there are opportunities, we will pull them forward ahead of the renewal date—sometimes related to a new product, sometimes a new offering. On the margin, you may see us pull forward ahead of Q4, but I would still expect Q4 to be our largest quarter of the year.

Yeah.

Got it. And then separately, with the strategic shift where you are not going to be taking internally discovered molecules into the clinic besides the ones already there, will you provide an update on how that is progressing? How will we monitor progress on the internal molecule discovery side?

We have, in the past, kept our pre-LO pipeline relatively quiet for a number of reasons. You want to be progressing the program before you start announcing the identity or the progress. What we have been announcing are the deals we have been doing. We do not plan to expand and expand the size of this portfolio without transacting some of these programs as they move through discovery. As you saw with Novartis, we felt those programs were well positioned to partner with that particular company because of their capabilities and synergy with those programs. You will see us do more of that. I do not think you should expect an ever-growing early-stage portfolio, but you should expect updates as we identify partners for them.

I am showing no further questions at this time. That concludes today's call. You may now disconnect.