Schrodinger Inc. (SDGR) saw its stock plummet 5.77% in pre-market trading on Monday, despite announcing an expansion and acceleration of its initiative to predict toxicology risk early in drug discovery, backed by an additional $9.5 million grant from the Bill & Melinda Gates Foundation.

The computational platform company is broadening its efforts to develop a solution designed to improve the properties of novel drug candidates and reduce the risk of development failures associated with off-target protein binding, which can lead to serious side effects. With the additional funding from the Gates Foundation, following an initial $10 million grant earlier this year, Schrodinger can now access relevant experimental data faster and extend the initiative's timeline to April 2026.

Once developed, the toxicology prediction technology will be made available to the Gates Foundation's grantees around the world to help accelerate the development of new drugs targeting diseases that disproportionately affect low- and middle-income countries. The tools will also be accessible to Schrodinger's software customers and utilized in the company's proprietary drug discovery programs and collaborations. The majority of revenue from the additional funding is expected to be recognized in 2025.