Recursion Provides Business Updates and Reports First Quarter 2023 Financial Results
08 Maio 2023 - 9:14AM
Recursion (Nasdaq: RXRX), a clinical stage TechBio company leading
the space by decoding biology to industrialize drug discovery,
today reported business updates and financial results for its first
quarter ending March 31, 2023.
“Recursion has pioneered the massive, parallel generation of
-omics data with machine learning in order to map and navigate
biology to discover new medicines faster. The strategic
acquisitions of Cyclica and Valence add industry-leading
capabilities in digital chemistry, as well as machine-learning and
artificial intelligence, which combined with our large-scale
automated wet-laboratories and supercomputing capabilities, enables
us to deploy what I believe is the most complete,
technology-enabled drug discovery solution in the biopharma
industry. We look forward to showing the world proof of the
compounding benefit of this full-stack approach through the rapid
acceleration of our pipeline and partnerships. Amidst a rapidly
accelerating global race for technology talent, these acquisitions
cement Recursion as the center of gravity for the best and
brightest in ML and AI who want to reimagine how drugs are
discovered,” said Chris Gibson, Ph.D., Co-Founder and CEO of
Recursion. “I am so excited to welcome the Cyclica and Valence
teams to Recursion, especially at such a dynamic moment in history
when machine learning and artificial intelligence are creating so
much rapid change across every industry.”
Summary of Business Highlights
- Digital Chemistry and Generative AI
Acquisitions
- Cyclica: Cyclica has built an industry-leading
digital chemistry software suite which enables mechanism of action
deconvolution, generative chemistry, and molecular optimization
tools. Recursion completed a prospective, blinded evaluation of
their software against challenging internal programs, where we
gained deep confidence in the power of their tools and reinforced
our belief that this team could accelerate Recursion’s work across
its pipeline and partnerships by rapidly advancing the discovery of
new chemical entities. We believe that Cyclica’s tools will enhance
the optimization of our compounds for efficacy while minimizing
liabilities through generative machine learning approaches. The
company is located in Toronto, where Recursion maintains its
biggest hub outside of its headquarters, and the teams at Cyclica
will be fully integrated into Recursion.
- Valence: Valence is a ML/AI-native digital
chemistry company which has pioneered the development of novel
hybrid graph neural networks and transformers for state-of-the-art
chemical property prediction. The small team at Valence has led a
massive open-science movement with a network of academic
collaborators at the pinnacle of machine learning, chemistry and
other fields. Based in Montréal, where Recursion also maintains a
ML research team, Valence will work on cutting-edge applied ML
research across chemistry and biology. We believe that the
technology they have built and will build will enable acceleration
of our work at Recursion across many fields, beginning with
generative design of new molecules, DMPK predictions, and more.
Combined with Recursion’s wet-lab data generation capabilities and
one of the largest relatable datasets in the industry, the team
will also accelerate ongoing internal work to build foundation
models, large-language models and other approaches leveraging
active learning.
- Financial Impact of Acquisitions: Recursion
has entered into agreements to acquire Cyclica for a purchase price
of $40 million and Valence for a purchase price of $47.5 million,
in each case subject to customary closing and post-closing purchase
price adjustments. The purchase price in the acquisitions will be
payable in the form of shares of Recursion Class A common stock,
shares of a subsidiary of Recursion exchangeable for shares of
Recursion’s Class A common stock and the assumption of certain
outstanding Valence and Cyclica options. In certain circumstances,
Recursion may pay cash consideration to Valence and Cyclica
shareholders in lieu of such exchangeable shares or Recursion Class
A common stock. Recursion expects no material change to its cash
runway as a result of these acquisitions. Recursion expects both
acquisitions to be completed in the second quarter of 2023, subject
to applicable closing conditions.
- Internal Pipeline
- Cerebral Cavernous Malformation (CCM)
(REC-994): Our Phase 2 SYCAMORE clinical trial is a
double-blind, placebo-controlled safety, tolerability and
exploratory efficacy study of this drug candidate in 60
participants with CCM. We have enrolled the majority of
participants associated with this study, and most participants who
have finished their first year of treatment have now enrolled in
the long-term extension study. We expect to share top-line data in
H2 2024.
- Neurofibromatosis Type 2 (NF2) (REC-2282): Our
Phase 2/3 POPLAR clinical trial is a parallel group, two stage,
randomized, multicenter study of this drug candidate in
approximately 90 participants with progressive NF2-mutated
meningiomas. Enrollment is ongoing and we expect to share a Phase 2
interim safety analysis in 2024.
- Familial Adenomatous Polyposis (FAP)
(REC-4881): Our Phase 2 TUPELO clinical trial is a
multicenter, randomized, double-blind, placebo-controlled two-part
clinical trial to evaluate efficacy, safety, and pharmacokinetics
of this drug candidate in patients with FAP. We continue to advance
this study.
- AXIN1 or APC
Mutant Cancers (REC-4881): REC-4881 is being
studied for the potential treatment of AXIN1 or APC mutant cancers
with an initial focus on solid tumors harboring these mutations. We
are developing a Phase 2 open-label study for REC-4881 in
participants with unresectable, locally advanced or metastatic
cancer with AXIN1 or APC mutations. We expect to initiate a Phase 2
biomarker enriched study across select AXIN1 or APC mutant solid
tumors in early 2024.
- Clostridioides difficile Colitis
(REC-3964): Our Phase 1 clinical trial is a first-in-human
protocol evaluating single and multiple doses of REC-3964 in
healthy volunteers and will assess the safety, tolerability and
pharmacokinetic profile of REC-3964. We have enrolled the majority
of participants associated with this study, and REC-3964 has been
well tolerated to date. We expect to share safety and PK data in H2
2023.
- RBM39 HR-Proficient Ovarian Cancer: In January
2023, we disclosed that RBM39 (previously identified as Target
Gamma) is the novel CDK12-adjacent target identified by the
Recursion OS. We believe that we can modulate this target to
produce a potentially therapeutic effect in HR-proficient ovarian
cancer. We have advanced this program to the preclinical stage and
have initiated IND-enabling studies.
- Transformational Collaborations
- We continue to advance efforts to discover potential new
therapeutics with our strategic partners in the areas of
neuroscience and a single indication in gastrointestinal oncology
(Roche-Genentech) as well as fibrotic disease (Bayer). In the
near-term, there is the potential for option exercises associated
with partnership programs, option exercises associated with map
building initiatives or data sharing, and additional partnerships
in large, intractable areas of biology or technological
innovation.
- Recursion OS
- Industrialized Program Generation: This
end-to-end process validates map-based insights without human
intervention. Following the proposal of disease model starting
points, Industrialized Program Generation carries out the
programmatic selection of compound hits, compound ordering
coordination, and validation through phenomic and transcriptomic
profiling. Given the large number of proto-programs that are
expected from this process, we look forward to leveraging the
digital chemistry technology and expertise of the Cyclica and
Valence teams to design and optimize chemical structures for novel
biological targets.
Additional Corporate Updates
- ESG Reporting: In March 2023, Recursion
released its second annual ESG report. Materials from this report
can be found at www.Recursion.com/esg.
- Annual Shareholder Meeting: The Recursion
Annual Shareholder Meeting will be held on June 16, 2023 at 12:00
pm Mountain Time. In preparation for this meeting, Recursion
released its annual Proxy Statement in April 2023.
First Quarter 2023 Financial Results
- Cash Position: Cash and cash equivalents were
$473.1 million as of March 31, 2023.
- Revenue: Total revenue was $12.1 million for
the first quarter of 2023, compared to $5.3 million for the first
quarter of 2022. The increase was due to progress made in our
Roche-Genentech collaboration.
- Research and Development Expenses: Research
and development expenses were $46.7 million for the first quarter
of 2023, compared to $32.4 million for the first quarter of 2022.
The increase in research and development expenses was due to
increased platform costs as we have expanded and upgraded our
capabilities.
- General and Administrative Expenses: General
and administrative expenses were $22.9 million for the first
quarter of 2023, compared to $21.1 million for the first quarter of
2022. The increase in general and administrative expenses was due
to an increase in salaries and wages of $1.2 million and increases
in other administrative costs associated with growth in the size of
the Company’s operations.
- Net Loss: Net loss
was $65.3 million for the first quarter of 2023, compared to a net
loss of $56.0 million for the first quarter of 2022.
About RecursionRecursion is a clinical stage
TechBio company leading the space by decoding biology to
industrialize drug discovery. Enabling its mission is the Recursion
OS, a platform built across diverse technologies that continuously
expands one of the world’s largest proprietary biological and
chemical datasets. Recursion leverages sophisticated
machine-learning algorithms to distill from its dataset a
collection of trillions of searchable relationships across biology
and chemistry unconstrained by human bias. By commanding massive
experimental scale — up to millions of wet lab experiments weekly —
and massive computational scale — owning and operating one of the
most powerful supercomputers in the world, Recursion is uniting
technology, biology and chemistry to advance the future of
medicine.
Recursion is headquartered in Salt Lake City, where it is a
founding member of BioHive, the Utah life sciences industry
collective. Recursion also has offices in Toronto, Montréal and the
San Francisco Bay Area. Learn more at www.Recursion.com, or connect
on Twitter and LinkedIn.
Media ContactMedia@Recursion.com
Investor ContactInvestor@Recursion.com
Consolidated Statements of Operations
Recursion Pharmaceuticals, Inc. |
Condensed Consolidated Statements of Operations
(unaudited) |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
Three months ended March 31, |
Revenue |
|
2023 |
|
2022 |
Operating revenue |
|
$ |
12,134 |
|
|
$ |
5,299 |
|
Grant revenue |
|
|
— |
|
|
|
34 |
|
Total
revenue |
|
|
12,134 |
|
|
|
5,333 |
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses |
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
12,448 |
|
|
|
7,799 |
|
Research and development |
|
|
46,677 |
|
|
|
32,441 |
|
General and administrative |
|
|
22,874 |
|
|
|
21,074 |
|
Total operating costs
and expenses |
|
|
81,999 |
|
|
|
61,314 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(69,865 |
) |
|
|
(55,981 |
) |
Other income, net |
|
|
4,538 |
|
|
|
2 |
|
Net loss |
|
$ |
(65,327 |
) |
|
$ |
(55,979 |
) |
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
|
Net loss per share of Class A and B common stock, basic and
diluted |
|
$ |
(0.34 |
) |
|
$ |
(0.33 |
) |
Weighted-average shares (Class A and B) outstanding, basic
and diluted |
|
|
191,618,238 |
|
|
|
170,690,392 |
|
Consolidated Balance Sheets
Recursion Pharmaceuticals, Inc. |
Condensed Consolidated Balance Sheets
(unaudited) |
(in thousands) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2023 |
|
2022 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
473,145 |
|
|
$ |
549,912 |
|
Restricted cash |
|
|
1,311 |
|
|
|
1,280 |
|
Other receivables |
|
|
2,057 |
|
|
|
2,753 |
|
Other current assets |
|
|
15,612 |
|
|
|
15,869 |
|
Total current assets |
|
|
492,125 |
|
|
|
569,814 |
|
|
|
|
|
|
|
|
|
|
Restricted cash, non-current |
|
|
7,920 |
|
|
|
7,920 |
|
Property and equipment, net |
|
|
90,004 |
|
|
|
88,192 |
|
Operating lease right-of-use assets |
|
|
35,116 |
|
|
|
33,255 |
|
Intangible assets, net |
|
|
1,318 |
|
|
|
1,306 |
|
Goodwill |
|
|
801 |
|
|
|
801 |
|
Other assets, non-current |
|
|
82 |
|
|
|
— |
|
Total assets |
|
$ |
627,366 |
|
|
$ |
701,288 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,247 |
|
|
$ |
4,586 |
|
Accrued expenses and other liabilities |
|
|
25,041 |
|
|
|
32,904 |
|
Unearned revenue |
|
|
57,761 |
|
|
|
56,726 |
|
Notes payable |
|
|
661 |
|
|
|
97 |
|
Operating lease liabilities |
|
|
4,440 |
|
|
|
5,952 |
|
Total current liabilities |
|
|
92,150 |
|
|
|
100,265 |
|
|
|
|
|
|
|
|
|
|
Unearned revenue, non-current |
|
|
57,091 |
|
|
|
70,261 |
|
Notes payable, non-current |
|
|
1,179 |
|
|
|
536 |
|
Operating lease liabilities, non-current |
|
|
46,771 |
|
|
|
44,420 |
|
Total liabilities |
|
|
197,191 |
|
|
|
215,482 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock (Class A and B) |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
1,135,056 |
|
|
|
1,125,360 |
|
Accumulated deficit |
|
|
(704,883 |
) |
|
|
(639,556 |
) |
Total stockholder's equity |
|
|
430,175 |
|
|
|
485,806 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
627,366 |
|
|
$ |
701,288 |
|
Forward-Looking StatementsThis document
contains information that includes or is based upon
"forward-looking statements" within the meaning of the Securities
Litigation Reform Act of 1995, including, without limitation, those
regarding the timing and completion of the Cyclica and Valence
acquisitions and the outcomes and benefits expected from such
acquisitions; early and late stage discovery, preclinical, and
clinical programs; licenses and collaborations, including option
exercises by partners and additional partnerships; prospective
products and their potential future indications and market
opportunities; Recursion OS and other technologies; business and
financial plans and performance, including cash runway; and all
other statements that are not historical facts. Forward-looking
statements may or may not include identifying words such as “plan,”
“will,” “expect,” “anticipate,” “intend,” “believe,” “potential,”
“could,” “continue,” and similar terms. These statements are
subject to known or unknown risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in such statements, including but not limited to:
challenges inherent in pharmaceutical research and development,
including the timing and results of preclinical and clinical
programs, where the risk of failure is high and failure can occur
at any stage prior to or after regulatory approval due to lack of
sufficient efficacy, safety considerations, or other factors; our
ability to leverage and enhance our drug discovery platform; our
ability to obtain financing for development activities and other
corporate purposes; the success of our collaboration activities;
our ability to obtain regulatory approval of, and ultimately
commercialize, drug candidates; our ability to obtain, maintain,
and enforce intellectual property protections; cyberattacks or
other disruptions to our technology systems; our ability to
attract, motivate, and retain key employees and manage our growth;
inflation and other macroeconomic issues; and other risks and
uncertainties such as those described under the heading “Risk
Factors” in our filings with the U.S. Securities and Exchange
Commission, including our most recent Quarterly Report on Form 10-Q
and our Annual Report on Form 10-K. All forward-looking statements
are based on management’s current estimates, projections, and
assumptions, and Recursion undertakes no obligation to correct or
update any such statements, whether as a result of new information,
future developments, or otherwise, except to the extent required by
applicable law.
An infographic accompanying this announcement is available
at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c3df3bc8-8590-4790-b374-5e114fc452a1
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