What Recursion Pharmaceuticals (RXRX) Said on Its Q3 Earnings Call

Key Points

• REC-4881 showed encouraging Phase II FAP data: 87% of evaluable patients had reduced polyp burden after 12 weeks, with some reductions persisting after treatment ended. Recursion is discussing a registrational study with the FDA and targets starting it in the second half of 2027.
• REC-1245 demonstrated early solid-tumor activity: The drug produced three partial responses among 12 evaluable patients at doses of 45 milligrams or higher, while the 45-milligram dose was selected for expansion based on its tolerability profile.
• Partnership proceeds and a $200 million financing extended Recursion’s cash runway into 2029. The company reported $749 million in pro forma cash as of Sept. 30, reduced 2026 cash operating expense guidance to below $375 million, and highlighted new milestones with Sanofi and Genentech.

Recursion Pharmaceuticals NASDAQ: RXRX reported updated clinical data for its investigational treatment for familial adenomatous polyposis, or FAP, along with early activity in its solid-tumor program REC-1245, partnership progress and an extension of its expected cash runway into 2029.

The company also announced that its board unanimously appointed Fred Hassan as non-executive chair. Hassan previously served as chairman and chief executive officer of Schering-Plough and Pharmacia and has held board roles at companies including Amgen, BridgeBio and Prometheus. Rob Hershberg will remain on Recursion’s board.

Updated FAP data show reductions in polyp burden

Recursion presented updated Phase II TUPELO data for REC-4881, an investigational oral MEK1/2 inhibitor for FAP, at the CGA-IGC Annual Meeting in Denver. FAP is a hereditary condition associated with development of large numbers of precancerous polyps throughout the gastrointestinal tract. Recursion said there are currently no approved drug treatments for the disease.

After 12 weeks of treatment, 13 of 15 evaluable patients, or 87%, had reductions in total polyp burden. About one-third of patients had reductions of at least 65%, according to the company. Among patients evaluated roughly 12 weeks after stopping treatment, about 85% remained below their baseline total polyp burden.

The data also showed activity in both upper and lower portions of the gastrointestinal tract. Recursion reported median reductions of about 55% in upper-GI polyp burden and 50% in lower-GI burden. In the upper GI tract, 92% of evaluable patients had reductions after 13 weeks, while approximately half achieved reductions of at least 65%.

Among eight patients with polyps larger than 5 millimeters at baseline, six had fewer of those higher-risk polyps at week 13 and four experienced reductions of at least 80%. The company also said six of 12 evaluable patients experienced an improvement in their Spigelman stage, a measure of duodenal polyp severity.

Safety findings at the 4-milligram once-daily dose showed that 21 of 26 safety-evaluable patients, or 81%, experienced Grade 1 or Grade 2 treatment-related adverse events. The most common was acneiform dermatitis. Four patients had Grade 3 treatment-related events, including skin reactions and elevations in creatine phosphokinase. Recursion reported no Grade 4 or Grade 5 treatment-related adverse events and no additional discontinuations in the latest update.

Vicki Goodman, Recursion’s chief medical officer, said the company is discussing the design of a registrational study with the FDA and is targeting a study start in the second half of 2027, subject to regulatory alignment.

Dr. Bryson Katona, director of the GI Cancer Genetics Program at the University of Pennsylvania Perelman School of Medicine and a TUPELO investigator, said reductions in polyp burden can be clinically significant because surveillance and surgery decisions in FAP are often based on the extent of polyps observed during examinations. He said durable reductions following treatment could be important for a disease requiring lifelong management.

REC-1245 produces early responses in dose escalation

Recursion also provided an update on REC-1245, an investigational oral molecular glue degrader of RBM39 for patients with advanced solid tumors. The company said its platform identified RBM39 degradation as a potential approach to capture biology associated with CDK12 loss while avoiding CDK13-related liabilities.

In the Phase I dose-escalation study, Recursion reported three partial responses among 12 response-evaluable patients treated at doses of 45 milligrams or higher. Two were confirmed responses in endometrial cancer, while one was an unconfirmed response in hepatocellular carcinoma. The disease control rate at eight weeks was 91.7%, or 11 of 12 patients, at the 45-milligram and 65-milligram dose levels.

The company selected 45 milligrams once daily for expansion cohorts. At that dose, Recursion reported no dose-limiting toxicities, no serious treatment-related adverse events and no dose reductions. The most common treatment-related events were Grade 1 or Grade 2 fatigue, anemia and nausea. Two Grade 3 events at the dose were elevated creatinine and hypokalemia.

The 65-milligram daily dose exceeded the maximum tolerated dose, with three of four patients experiencing dose-limiting toxicities, including stomatitis, neutropenia, febrile neutropenia and anemia.

Recursion is enrolling an endometrial cancer expansion cohort for patients whose disease has progressed following available therapies. Goodman said the company expects preliminary data from that cohort in the second half of 2027 and is also evaluating additional tumor types in dose expansion.

Partnership milestones and financial outlook

Recursion highlighted recent progress with Sanofi and Roche Genentech. Sanofi exercised an option on a potential first-in-class oral small-molecule candidate designed to inhibit two targets involved in inflammatory disease. Sanofi will lead and fund further development, with Phase I expected to begin in 2027.

The Sanofi option triggered a $10 million payment, bringing total upfront and milestone payments from Sanofi to $144 million, Recursion said. Under the collaboration, each program could generate up to $343 million in potential milestone payments, plus double-digit royalties on net sales.

Separately, Genentech optioned the first neuroscience target emerging from Recursion’s proprietary biology maps, with small-molecule discovery underway. Recursion said its partnerships have generated more than $535 million in cash inflows to date, including more than $100 million across nine progress-based milestones since 2024.

Chief Financial Officer Ben Taylor said Recursion completed an oversubscribed follow-on offering that generated $200 million in gross proceeds. The company had $749 million in pro forma cash and equivalents as of Sept. 30, excluding the recent $10 million Sanofi milestone, according to Taylor.

Recursion expects the financing and cost controls to extend its cash runway into 2029. It reduced 2026 cash operating expense guidance to less than $375 million, excluding partnership inflows and one-time expenses, and expects 2027 cash operating expenses to be below $360 million.

The company said it intends to concentrate spending on its wholly owned clinical programs, partner collaborations and AI-enabled drug-discovery platform, which it said draws on more than 50 petabytes of proprietary biological data.

About Recursion Pharmaceuticals (NASDAQ:RXRX)

Recursion Pharmaceuticals, Inc is a biotechnology company that uses advanced computing, artificial intelligence and automated biology to discover and develop new medicines. The company's platform, known as the Recursion Operating System, combines large-scale biological experimentation with machine learning and data analysis to identify potential drug candidates and characterize how diseases respond to treatments.

Recursion applies its technology to a range of therapeutic areas, including oncology, rare diseases, neuroscience and infectious diseases.

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