Recursion Pharmaceuticals Highlights AI Drug Platform, FAP Progress at Morgan Stanley Conference

Key Points

• Recursion is positioning itself as an end-to-end, AI-enabled drug discovery platform, expanding into chemistry and clinical development while cutting its pro forma cost base by about 40% after integrating Exscientia.
• REC-4881, its oral MEK1/2 inhibitor for familial adenomatous polyposis (FAP), showed rapid and durable reductions in gastrointestinal polyp burden in Phase II trials. The company plans to present additional data in November and is discussing a potential registrational pathway with the FDA.
• Partnerships with Roche/Genentech and Sanofi have generated more than $525 million in upfront payments and milestones, including over $250 million from Roche, while Recursion continues advancing programs in oncology, immunology and other disease areas.

Recursion Pharmaceuticals NASDAQ: RXRX outlined its strategy, clinical pipeline and partnership progress at Morgan Stanley’s Global Healthcare Conference, with CEO and President Najat Khan emphasizing the company’s shift toward an end-to-end, AI-enabled drug discovery and development platform.

Khan said the company has changed materially over the past 12 to 18 months, expanding its platform beyond biology into chemistry and clinical development. She said Recursion has also reduced its cost base by about 40% on a pro forma basis following the integration with Exscientia, citing greater use of AI agents, automation and capital prioritization.

“The company has really transformed to a company with differentiated assets powered by an end-to-end AI engine with repeatability,” Khan said.

Focus on novel biology and clinical programs

Khan said the growth of China-originated drug innovation reinforces Recursion’s emphasis on discovering novel biology and first-in-class targets. She characterized China’s capabilities as particularly strong in optimizing known biology, while arguing that the next frontier lies in identifying new targets and connecting them to appropriate disease indications.

The company highlighted REC-4881, an oral MEK1/2 inhibitor being developed for familial adenomatous polyposis, or FAP. Khan said the program resulted from Recursion’s biology platform, which screened compounds in cells with APC gene loss, a driver of FAP. The company’s models identified the MEK1/2 inhibitor without beginning with that mechanism as a prior hypothesis, she said.

According to Khan, Phase II data showed rapid and durable reductions in polyp burden, including reductions after patients had been off treatment for three months. She said the company observed reductions in both upper and lower gastrointestinal polyps. There are no approved drugs for FAP, and current care involves surveillance and surgery, she said.

Recursion plans to present additional Phase II data at the CGA-IGC meeting in early November. Khan said the company is also in active discussions with the FDA regarding a registrational pathway. Its base case centers on progression-free survival-type measures involving clinically meaningful events such as surgery and dysplasia.

On safety, Khan said more than 85% of treatment-related adverse events observed to date have been Grade 1 or 2. Dermatitis has been the primary event, along with transient creatine phosphokinase changes. She said Recursion is managing dermatitis proactively and is evaluating intermittent dosing, in addition to its once-daily regimen, given the durability observed off treatment.

REC-1245 and broader pipeline

Recursion also discussed REC-1245, a program targeting RBM39. Khan said the target emerged from the company’s genetic mapping work while it was studying CDK12-related biology. The company subsequently designed a novel degrader and moved it into clinical development within about 18 months, she said.

Khan described potential applications in genomically unstable solid tumors and pediatric transcriptionally driven tumors, including Ewing sarcoma. She said the company expects additional data later in the year and will allow the data to determine whether the program may be suited for monotherapy, combination treatment or both.

Other pipeline activity includes a Phase I program targeting PI3K-alpha H1047R, as well as IND-enabling programs in NPP1 and LSD. Khan said the company continually reviews its portfolio to concentrate resources on programs where it has the greatest conviction.

Partnership economics and platform validation

Chief Financial Officer Ben Taylor said Recursion has received more than $525 million in upfront payments and milestones from partnerships, including more than a dozen achieved milestones. He said approximately $125 million of that total represents milestones.

The company’s collaboration with Roche and Genentech includes a 10-year exclusive neuroscience partnership. Khan said Genentech has opted two biology maps under the arrangement for about $30 million each and recently advanced a previously unexplored neuroscience target into joint small-molecule discovery.

For each program under the arrangement, Khan said potential milestones total roughly $300 million, along with single-digit royalties. Taylor said Roche has paid Recursion more than $250 million so far under the partnership. While Roche has access to the work product, Taylor said Recursion retains ownership of the underlying data and in-house capabilities generated through the collaboration.

Recursion’s Sanofi collaboration is focused on small molecules for intractable immunology, inflammation and oncology targets. Khan said Recursion has achieved five milestones with Sanofi and has guided to a potential development-candidate milestone for a first-in-class oral small-molecule program. She said the agreement provides for more than $300 million in milestones per program and teen-level royalties.

AI productivity claims

Khan said the company is focused not only on faster drug discovery but also on improving molecule quality. She cited Recursion’s ability to move from target to development candidate in about one and a half years and said the company physically makes about 90% fewer molecules than traditional approaches because its predictions are intended to be closer to the desired endpoint.

Taylor said Recursion’s AI outputs can be tested physically in the laboratory against other compounds developed for the same targets. Khan said the company’s differentiator is the integration of proprietary data generation, computational models, laboratory validation and clinical feedback, rather than model architecture alone.

About Recursion Pharmaceuticals (NASDAQ:RXRX)

Recursion Pharmaceuticals, Inc NASDAQ: RXRX is a biotechnology company that uses artificial intelligence, automation, and large-scale biological experimentation to accelerate the discovery and development of medicines. Its technology platform, known as the Recursion Operating System, integrates data from biology, chemistry, imaging, and machine learning to identify potential drug candidates and better understand disease biology.

The company develops therapies for areas including oncology, rare diseases, and neurological disorders.

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