Deal Watch: Gates bets $10M on Schrödinger

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Articles - June 2010
Thursday, May 13, 2010
Though it's true that Microsoft chairman Bill Gates met Richard Friesner, co-founder of the Portland-based scientific firm Schrödinger, while playing bridge, there's much more to Gates' recent $10 million investment in Schrödinger than a card game.

"That's something we can all smile about," says Shi-Yi Liu, vice president of marketing for Schrödinger, "but I think it's more fair to say that, as people get to know each other, there's a meeting of the minds and shared views about science and technology."

Founded in California in 1990 and relocated to Portland in 1995, Schrödinger specializes in pharmaceutical software that helps researchers simulate testing of drug compounds. The company, which tops the $20 million revenue mark, employs 140 people, including 40 in Portland.

Liu says the infusion, made through Gates' investment arm, Cascade Investment, will primarily help Schrödinger beef up its research and development staff. The end result: more accurate and better-performing software for new drug development.

Though some of the company's scientists are in Portland — along with the accounting, technical and scientific support and quality assurance departments — most research is done in Schrödinger's New York office, closer to scientific advisers and large commercial customers. That's likely to remain unchanged even with Gates' investment.

Because the drug development process can take more than 10 years and sometimes billions of dollars, Liu says there's not a specific drug that can yet be tied directly to Schrödinger. However, various companies have reached milestones in their drug development processes with Schrödinger's technology. Among its more well-known customers: Bayer HealthCare AG.

The Gates investment, Liu says, comes at an opportune time for Schrödinger and will ultimately provide researchers with more powerful tools in their search for new drugs. One such researcher: David Dawson, who is pursuing a cure for cystic fibrosis at Oregon Health & Science University.

"We're really making an investment in scientific research," Liu says. "We have many ambitious goals and we know where additional basic and advanced research efforts are needed. This investment will enable us to start to execute on that."

MERGERS AND ACQUISITIONS
PRICE EXP. CLOSE BUYER / PARENT (HQ) SELLER / PARENT (HQ) ANNOUNCED
$1.4M Q2 LTC Global (Medford) 7% stake in First Mariner Bancorp (MD) 4/20
ND Q2 Ad Systems Communications (Salem) NanoAsia Ltd of China (China) 4/14
ND Q2 Alpha Ecological (Vancouver) Cascade Pest Control (McMinnville), Ideal Pest Control (AZ) and Bug Busters (AZ) 4/6
ND Q2 Dachis Group (TX) XPLANE (Portland) 4/26
ND Q2 EthicsPoint (Lake Oswego) ember ec3 (Canada) 4/28
ND Q2 The Portland Clinic (Portland) Columbia Family Medical Associates (Portland) 4/12
ND Q2 Tektronix/Danaher (Wash., D.C.) SyntheSys Research (CA) 4/29
ND Q2 Ticor Title (CA) Lawyers Title (Salem) 4/13
ND Q2 SSI Big Sky/Schnitzer Steel Industries (Portland) Golden Recycling & Salvage (MT) 4/19
CAPITAL RAISING AND CONTRACTS
PRICE (TYPE) COMPANY (HQ) / LEADERSHIP INVESTOR (HQ) ANNOUNCED
$785M (debt financing) Integra Telecom Holdings (Portland)/Dudley Slater J.P Morgan (NY), et al. 4/26
$61M (Dept. of Homeland Security design contract) ZGF Architects (Portland)/Robert Frasca General Services Administration 4/1
$10M (investment) Schrödinger (Portland)/Ramy Farid Cascade Investment (WA) 4/29
$8.3M (Roadwork contract) Oregon Mainline Paving (McMinnville)/Michael Flanigan ODOT and Federal Highway Administration 4/12
$5.8M (IT stimulus funds) OHSU (Portland)/Joe Robertson Federal government 4/2
$5M (federal grant for Portland facility) ReVolt (Switzerland)/James McDougall U.S. Dept of Energy 4/29
$2.8M (venture capital) EMME (Beaverton)/David Alles Pivotal Investments (Portland) 4/8
$2.8M (stimulus funds for research) Providence Cancer Center (Portland)/Greg Van Pelt Federal government 4/21
$2.4M (streetcar research grant) Oregon Iron Works (Clackamas)/Robert Beal U.S. Transportation Dept. 4/17
$1M (endowment gift) Oregon State University (Corvallis)/Edward Ray Anonymous 4/29
$499,000 (bridge contract) M.J. Hughes Construction (Gresham)/Michael Hughes ODOT 4/1
$118,000 (floating restroom contract) Western Fabrication (Astoria)/Richard North U.S. Dept. of Agriculture 4/1
$100,000 (angel investment) 4-Tell (Stevenson, WA)/Ken Levy Gorge Angel Conference (Hood River) 4/26
REAL ESTATE TRANSACTIONS
PRICE BUYER / PARENT (HQ) REAL ESTATE (LOCATION) / SELLER (HQ) ANNOUNCED
$11.6M Henry Ohebshalom (CA) Commercial building (Eugene)/ unnamed family trust 4/24
$6.8M ND 35,800 sq. ft. retail (Vancouver)/ND 4/6
$1.4M Pediatric Properties (Hillsboro) 7,800 sq. ft. office space (Hillsboro)/Ellinwood Investments (Hillsboro) 4/21
ND Douglas O’Brien (Tigard) 2,800 sq. ft. office (Tigard)/Carl Sweet (Tigard) 4/20
 

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