Recursion Pharmaceuticals Q1 Earnings Call Highlights

Key Points

• Recursion reported clinical proof-of-concept with REC-4881 showing significant, durable reductions in precancerous polyps in familial adenomatous polyposis and has initiated FDA engagement; REC-1245 Phase 1 shows no dose-limiting toxicities so far with predictable PK and target engagement, and REC-4539 has dosed its first patient.
• The company says its AI-driven platform and partnerships are producing efficiency and cash milestones — partner programs have generated over $500 million and 10 milestones to date, while chemistry/discovery metrics show ~90% fewer compounds synthesized and faster progression to development candidates; Recursion also published transcriptomics models (TxPert, TxFM).
• Recursion cut cash operating expenses by ~30% year-over-year, ended the quarter with $665 million in cash providing runway through early 2028, and is guiding 2026 cash OpEx at under $390 million.

Recursion Pharmaceuticals NASDAQ: RXRX leadership used its latest earnings call to emphasize a sharper focus on translating artificial intelligence-enabled discovery into clinical and partnership “proof points,” while maintaining what it described as tighter financial discipline. CEO and President Najat Khan said her priorities since stepping into the role have centered on “signal over noise,” building a “repeatable AI-driven product engine,” and “thoughtful capital allocation.”

Khan highlighted what she characterized as early clinical proof-of-concept in familial adenomatous polyposis (FAP) with REC-4881, early Phase 1 safety and pharmacokinetic readouts for REC-1245, and the initiation of a Phase 1 study for REC-4539. She also pointed to partner milestones and platform metrics intended to show improving efficiency and a longer cash runway.

Pipeline updates: REC-4881, REC-1245, and REC-4539

Khan said Recursion’s first clinical proof of concept came from REC-4881, an allosteric MEK1/2 inhibitor in FAP. She described “significant reduction in the precancerous polyps” and “durability” in data the company has shared, calling the condition “serious” and noting patients “have no medical or therapeutic options to date.” Khan also said Recursion has already “initiated FDA engagement to define a potential registrational path forward” and expects to share more updates in the second half of the year.

During Q&A, Khan framed key areas of regulatory discussion with the FDA for REC-4881 as typical for a “first-in disease” setting, including “patient population, endpoint that has clinically meaningful benefit, and then, of course, dose and dose escalation.” Chief Medical Officer Vicki Goodman added that Recursion has initiated engagement within the oncology review division, requested input from the GI division, and is considering a “rare disease framework” while aligning on “clinically meaningful endpoints” for a pivotal study design.

Goodman presented the clinical update for REC-1245, an RBM39 degrader in the ongoing DAHLIA Phase 1 study in solid tumors and lymphomas. She said RBM39 “plays a central role in splicing fidelity” and that tumors under stress—such as those with DNA damage repair deficiencies, genomic instability, or replication stress—may be particularly sensitive when RBM39 is degraded. Goodman said the “relevant patient population is estimated to be over 100,000 patients in the U.S. and EU5.”

Goodman described RBM39 as a platform-derived target identified through genome-scale phenomic mapping, where RBM39 “emerged as a functional analog of CDK12,” a relationship she said was not obvious from traditional approaches. She added that Recursion progressed from target identification to IND-enabling studies with “roughly 200 compounds synthesized in 18 months.”

For the DAHLIA Phase 1 data, Goodman said the company is reporting preliminary safety and pharmacokinetics from 16 patients across the first four dose levels, all with advanced solid tumors; seven of the 16 had MSI-high or mismatch repair-deficient tumors. “Across the dose levels evaluated to date, there have been no dose-limiting toxicities reported,” she said. The most common treatment-related adverse events were GI-related—constipation, nausea, and vomiting—generally low grade, with “one grade three event of nausea and vomiting reported,” and “no treatment-related serious adverse events.” She said dose escalation is ongoing and recruitment is on track.

Goodman also said early PK results show “predictable dose-dependent exposure” supportive of daily dosing, and that initial PD data confirm target engagement. She added that as the study advances through the next two dose levels, the company expects to reach exposures correlated with tumor regressions observed in mice.

In Q&A, Khan said Recursion has seen “no grade 3 heme tox” so far and called that “encouraging,” while noting the program remains in dose escalation. On target engagement, Khan said preclinically “about 70%-80% was sufficient at efficacious doses,” and Goodman said the company is approaching the exposure levels tied to tumor regressions in mouse models.

Recursion also discussed REC-4539, its LSD1 inhibitor program. Khan announced the company has “dosed the first patient” in a Phase 1 clinical trial. She said LSD1 remains a “promising oncology target,” but prior inhibitors have been limited by “on-target and dose-limiting thrombocytopenia.” Khan said Recursion used its chemistry AI platform to identify a new scaffold and reached REC-4539 in “approximately 20 months” with “just over 400 synthesized compounds.” She said the company designed for “reversibility and a shorter predicted human half-life” to potentially reduce cytopenia risk, and described preclinical small cell lung cancer data indicating “more minimal impact on platelets” while maintaining efficacy (which she said was not shown on the slide but had been observed). Khan also said REC-4539 is brain penetrant, which she noted may be relevant given that up to 50% of small cell lung cancer patients develop brain metastases. Recursion expects to share initial PK and safety data in the second half of 2027, according to Khan.

Partnership progress and milestone deliveries

Khan said Recursion’s partner portfolio has generated “over $500 million in inflows” and delivered “10 milestones to date.” The company also noted during the prepared financial remarks that it received its “fifth milestone from Sanofi,” which was described as advancing a potential first-in-class program for a novel biological target.

Discussing partner “unlocks,” Khan said the collaboration with Sanofi has emphasized AI-enabled chemistry design against historically difficult targets in immunology and oncology, with programs progressing toward inflection points over the next 12 months, including a “potential for development candidate.” For Roche Genentech, Khan said the focus is on biology—translating large-scale multimodal maps into validated targets and potential first-in-class programs—adding that the company has “a potential first on track in the next 12 months.”

On opt-in timing, Recursion said it expects some of the partnered programs that have reached early discovery milestones to move into opt-in discussions, and that the company is working closely with Sanofi “to make that happen as quickly as possible.” Leadership also reiterated that partnerships are intended to create a “risk-diversified model,” balancing upfront payments with downstream economics.

Platform metrics and recent model publications

Khan provided several platform statistics aimed at showing efficiency improvements across discovery and development. She said Recursion has generated “more than 10 high-dimensional maps of disease biology,” with “more than half” created in partnership with Roche Genentech. On chemistry, she said Recursion is “synthesizing 90% fewer compounds” than industry benchmarks—“about 330 compounds on average versus 2,500-5,000”—while advancing programs to development candidates “roughly two times as fast.”

On clinical development technology, Khan said deployments have resulted in “about 30%-60% faster trial enrollment” and increased eligible patient populations for certain programs from “10%-40%.” She also said the platform is supported by “more than 50 petabytes of proprietary multi-modal data.”

Khan also highlighted two transcriptomics foundation models Recursion recently published. She said TxPert, published in Nature Biotechnology, is designed to predict gene expression changes in response to perturbations, and that its ability to generalize beyond training data is an important step toward predicting responses to “new perturbations, new combinations, and even new cell types.” She also discussed TxFM, which she described as connecting lab biology to patient biology using curated proprietary and public data, with aims including noise reduction and interpretability such as revealing gene networks and patient subtypes from RNA data.

Financial discipline and runway

On the financial front, the company said it achieved a “30% year-over-year reduction in cash operating expenses,” while continuing to advance its pipeline, partnerships, and platform. Recursion closed the quarter with $665 million in cash equivalents, which it said provides operating runway through early 2028 “without additional financing.” For 2026, the company said it is maintaining cash OpEx guidance of less than $390 million.

Looking ahead, Khan said Recursion expects “multiple clinical readouts over the next 12-18 months for every single one of our clinical stage programs,” alongside continued progress across partner programs and development-candidate decisions in collaborations over the next 12 to 18 months.

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.

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