Recursion Pharmaceuticals Highlights AI Platform, Roche Progress and Pipeline Updates

Key Points

• AI platform and partnerships: Recursion has accumulated more than 50 petabytes of multimodal biological data to support AI-driven drug discovery. Its Roche collaboration has produced a novel neuroscience target and could support up to 40 design programs, while five Sanofi programs have reached initial discovery milestones.
• Pipeline progress: Lead FAP candidate REC-4881 delivered a reported reduction of more than 40% in polyp burden after three months, with longer-term data and FDA pivotal-trial discussions expected. The company also expects updates on oncology drug REC-1245 and a PI3K alpha inhibitor later this year.
• Financial outlook: Recursion has cut expenses by about 40% from its pre-merger level and ended the quarter with $556 million in cash, which it expects to fund operations into at least early 2028 without additional financing.

Recursion Pharmaceuticals NASDAQ: RXRX is using artificial intelligence to generate and analyze biological data in an effort to improve drug discovery, advance internal therapeutic programs and support collaborations with larger pharmaceutical companies, CFO and President of Recursion U.K. Ben Taylor said during a BofA Global Research virtual conference.

Taylor described AI not as a “magic wand,” but as a more capable analytical system that can help researchers produce and interpret data across multiple biological parameters. Recursion’s central objective, he said, is to improve the probability of success in drug development by identifying biological and chemical opportunities that conventional approaches may miss.

“The foundation of the company is actually around changing the probability of success and really trying to unlock new parts of biology and chemistry rather than efficiency,” Taylor said. He added that the company has also reported reductions in the time and cost required to advance differentiated drug-discovery programs.

Data strategy and AI platform

Taylor said Recursion has spent more than a decade generating data designed for machine-learning applications, rather than relying solely on fragmented, project-specific data typically created across the biopharma industry. The company has accumulated more than 50 petabytes of data, he said, including phenotypic cellular imaging, transcriptomics, proteomics and real-world patient data.

Recursion uses these data types together to improve the biological signals generated by its models. Taylor cited a recently published Nature Biotechnology paper in which Recursion said its models outperformed models trained on datasets up to 100 times larger because its data were more thoroughly annotated and incorporated multiple modalities.

The company’s platform is intended to help expand research beyond targets already widely studied by drug developers. Taylor said approved drugs address about 3.5% of the genome, while including drugs currently in development raises coverage to roughly 13%.

“The reality is we keep digging in the same holes,” Taylor said. “What we want to do is create new data, look at it in new ways, so that we can actually break outside of those holes.”

Roche and Sanofi collaborations

Recursion recently selected its first novel neuroscience target for further drug development under its collaboration with Roche. Taylor said Roche initially provided $150 million for Recursion to build biological maps in neuronal and microglial cells. Roche later opted into both maps through two $30 million payments, allowing it to query the maps without receiving the underlying data.

Following target selection and experimental validation, Recursion is now designing a molecule against the neuroscience target. Taylor said the findings from the partnership are wholly new and not derived from existing published programs.

The Roche agreement has an initial 10-year term, with Recursion about halfway through that period, according to Taylor. The partnership could support as many as 40 design programs, while Recursion also has work underway with Roche in gastrointestinal oncology.

Separately, Taylor said Recursion’s Sanofi collaboration, inherited through the company’s merger with Exscientia, focuses on designing candidates against targets of mutual interest. Five programs have reached their first discovery milestone, he said. Each program has potential milestones of up to $343 million, including $193 million in pre-commercial milestones, along with average low-double-digit royalties.

Taylor said Recursion’s partnership structure is designed so that partners fund expenses in advance, allowing the company to pursue collaborative programs at breakeven or a profit on a direct-cost basis.

Pipeline updates

Recursion’s lead internal program, REC-4881, is being developed for familial adenomatous polyposis, or FAP, a disease characterized by chronic growth of potentially cancerous polyps throughout the gastrointestinal tract. Taylor estimated that more than 50,000 patients are affected across the U.S. and EU5.

He said REC-4881 produced a reduction of more than 40% in polyp burden after three months of treatment in the company’s data, combining changes in polyp size and number. Taylor also said the company observed a continued response during three months off treatment. Recursion is discussing pivotal-trial design with the Food and Drug Administration and expects to provide an update later this year.

At an upcoming FAP-focused medical conference, Recursion plans to present longer-term follow-up data, including information on durability, management of known MEK1/2 inhibitor side effects, and effects in both upper and lower gastrointestinal disease, Taylor said.

In oncology, Taylor highlighted REC-1245, an RBM39 degrader being studied as a potential treatment for solid tumors. The company expects to provide a dose-escalation update in the second half of the year. Recursion also expects a second-half decision on advancing its PI3K alpha inhibitor, which was designed to increase selectivity and potentially reduce hyperglycemia associated with other drugs in the class.

Cash runway and outlook

Taylor said Recursion has reduced expenses by about 40% from its pro forma pre-merger level while discontinuing only programs that did not appear likely to have meaningful impact. The company ended the quarter with $556 million in cash and expects that balance to fund operations into at least early 2028 without additional financing.

Looking ahead, Taylor said investors will likely focus most heavily on clinical data from Recursion’s internal pipeline. While the company has published research and achieved partnership milestones supporting its technology, he said additional positive clinical results across multiple programs would provide the clearest evidence that its platform can generate differentiated medicines.

About Recursion Pharmaceuticals (NASDAQ:RXRX)

Recursion Pharmaceuticals, Inc NASDAQ: RXRX is a biopharmaceutical company that combines advanced automation, artificial intelligence and high-throughput biology to discover and develop novel therapeutics. The company's proprietary platform integrates deep-learning algorithms with large-scale cellular imaging and chemical biology, enabling the rapid identification of potential drug candidates across a range of indications. By automating complex laboratory workflows and leveraging computational models, Recursion aims to accelerate the drug discovery process and expand the scope of targets that can be addressed.

At the core of Recursion's offering is its digital biology platform, which captures billions of cell images under varying chemical and genetic perturbations.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source