What happened? Schrodinger (NASDAQ:SDGR) is starting the week on a strong note. The company's shares are up by 12.6% as of 11:44 a.m. EST on Monday. Investors are bidding up Schrodinger's stock today following the company's announcement that it has entered into a collaboration agreement with pharma giant Bristol Myers Squibb (NYSE:BMY). So what Schrodinger uses physics-based software to discover molecules for drug development. Today, the company announced that it has penned an agreement to discover and develop medicines across several disease areas in collaboration with Bristol Myers. Schrodinger will handle the discovery part; Bristol Myers will develop, manufacture, and commercialize the drug candidates. Image source: Getty Images. This agreement includes two of Schrodinger's existing pipeline candidates. As part of the deal, Schrodinger will receive an upfront payment of $55 million, and the company will be eligible for up to $2.7 billion based on development and regulatory milestones. While Bristol Myers will hold the rights to market the drugs worldwide, Schrodinger will also be entitled to receive royalty payments. Now what Schrodinger became a publicly traded company earlier this year, and although it has several programs in its pipeline, it currently has no drugs on the market. This multi-year collaboration agreement with Bristol Myers -- one of the largest pharmaceutical companies in the world -- will help Schrodinger bolster its financial position. And given Bristol Myers' proven expertise as a drugmaker, particularly in the field of oncology, this partnership could lead to the development of blockbuster drugs. 10 stocks we like better than Schrödinger, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Schrödinger, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bristol Myers Squibb. The Motley Fool owns shares of Schrödinger, Inc. The Motley Fool has a disclosure policy.Source