Recursion Provides Business Updates and Reports Second Quarter 2023 Financial Results
08 Agosto 2023 - 8:58AM
Recursion (Nasdaq: RXRX), a leading clinical stage TechBio company
decoding biology to industrialize drug discovery, today reported
business updates and financial results for its second quarter
ending June 30, 2023.
"As the world continues to undergo a revolution in artificial
intelligence and computation, Recursion is leading the TechBio
sector with one of the most advanced technology-enabled drug
discovery platforms in the industry," said Chris Gibson, Ph.D.,
Co-Founder and CEO of Recursion. "Our recent acquisitions of
Cyclica and Valence and our new partnership with NVIDIA bring
industry-leading capabilities to our platform that have already
delivered significant value across our pipeline and partnerships.
With multiple clinical catalysts in the coming quarters, the
extraordinary progress in our technology, and the commitment of our
teams, Recursion is making its vision of industrialized drug
discovery real day by day."
Summary of Business Highlights
- 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 participants
with CCM. This study was fully enrolled as of June 2023 with 62
participants and all participants who have thus far finished their
first year of treatment have enrolled in the long-term extension
study. We expect to share Phase 2 proof-of-concept data in H2
2024.
- Neurofibromatosis Type 2 (NF2) (REC-2282): Our
Phase 2/3 POPLAR clinical trial is a two part study of REC-2282 in
participants with progressive NF2-mutated meningiomas. Part A of
the study is ongoing and is exploring two doses of REC-2282 in
approximately 23 adults and 9 adolescents. We expect to share Phase
2 safety, tolerability, pharmacokinetics, and preliminary efficacy
in H2 2024.
- Familial Adenomatous Polyposis (FAP)
(REC-4881): We have enrolled multiple participants in our
TUPELO clinical trial which evaluates REC-4881 in patients with
FAP. We are now providing guidance on a data readout and expect to
share Phase 2 safety, tolerability, pharmacokinetics, and
preliminary efficacy in H1 2025.
- AXIN1 or APC Mutant Cancers (REC-4881): We
will evaluate REC-4881 in a Phase 2 biomarker enriched study in
patients with unresectable, locally advanced or metastatic cancer
with AXIN1 or APC mutations. The IND was accepted by the FDA and we
expect to initiate this Phase 2 study in Q4 2023.
- Clostridioides difficile Infection
(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. Single ascending dose and
multiple ascending dose studies are now complete. REC-3964 has been
well tolerated and no safety issues have been identified to date.
We expect to share Phase 1 safety and pharmacokinetics data in Q3
2023.
- RBM39 HR-Proficient Ovarian Cancer: RBM39
(previously identified as Target Gamma) is a novel CDK12-adjacent
target identified by the Recursion OS. We believe we can modulate
this target to produce a therapeutic effect in HR-proficient
ovarian cancer and potentially in other tumor types. This program
is in the preclinical stage and IND-enabling studies are
progressing.
- Partnerships
- NVIDIA: In July 2023, we announced a $50
million investment and collaboration with NVIDIA. We will continue
to build our own foundation models for biology and chemistry and
NVIDIA will assist in optimizing these models, provide priority
access to computational resources on NVIDIA’s cloud service DGX
Cloud, and potentially host commercially-licensable machine
learning and foundation models developed by Recursion on BioNeMo,
NVIDIA’s marketplace for generative AI in drug discovery. In this
partnership, we will maintain control of our proprietary data and
models as well as how and where we could host our technology tools
as we expand our business strategy of data as a value driver. Since
the announcement in July, we have already deployed our digital
chemistry technology together with NVIDIA’s computational resources
to predict the ligand-protein interactions for approximately 36
billion compounds in the Enamine REAL Space, reported to be the
world’s largest searchable chemical library, where we evaluated 2.8
quadrillion target-compound pairs.
- Roche-Genentech and Bayer: We continue to
advance our collaborations to discover potential new therapeutics
with our strategic partners Roche-Genentech and Bayer. In the
near-term, there is the potential for option exercises associated
with partnership programs or option exercises associated with map
building initiatives or data sharing.
- Platform
- Digital Chemistry and Generative AI
Capabilities: In May 2023, we acquired Cyclica and Valence
Discovery to bolster our digital chemistry and generative AI
capabilities and drive value across our pipeline, partnerships, and
platform. Shortly after closing these acquisitions, we used
Cyclica’s digital chemistry tools to predict the protein-ligand
interactions for the over 1 million compounds in our internal,
non-partnered chemical library. Now, less than one quarter after
the closing of these acquisitions, we worked with our partners at
NVIDIA to predict the protein-ligand interactions of approximately
36 billion compounds in the Enamine REAL Space, reported to be the
world’s largest searchable chemical library.
- Accelerating Pipeline and Partnership Value:
For our internal pipeline, we have used our digital chemistry tools
to deconvolve proteome-wide biological targets to confirm that
certain compounds operate through a novel mechanism of action which
was previously predicted by our functional phenomics maps. Such
proteomic mapping capabilities provide an additional data layer to
efficiently identify the most promising novel chemical series.
- Foundation Model Construction: We continue to
use our supercomputer, BioHive-1, to train a proprietary phenomics
foundation model. As we have trained on larger quantities of our
proprietary data, emergent properties have arisen out of the models
and we have seen significant improvements over previous deep
learning production models. We are also in the early stages of
exploring more powerful and broadly useful foundation models based
on our large-scale proprietary multi-omics data, which includes
phenomics across 50 human cell types and approximately 1.7 million
compounds, multi-timepoint live-cell microscopy, transcriptomics,
proteomics, inVivomics, multi-target compound interactions,
physicochemical properties, as well predicted protein-ligand
relationships. We may explore commercial licensing of some of our
models in collaboration with NVIDIA and their BioNeMo platform in
the coming year, though our state-of-the-art models will only be
available to our team and close partners.
- Large Language Models: One year ago, more than
40 employees were dedicated to exploring our maps of biology and
chemistry to initiate programs at Recursion. Today, those same
employees have been redeployed and our newest internal programs are
being initiated autonomously. This efficiency and scale is through
the deployment of large language models to map scientific
literature in conjunction with our internally derived proprietary
maps to identify opportunities for scientific arbitrage in areas of
unmet need. These opportunities are then automatically prioritized
for confirmation and validation in our highly-automated wetlabs.
This is a significant step towards our vision of autonomous drug
discovery and biological exploration.
- Valence Labs - Powered by Recursion: In July
2023 at the International Conference for Machine Learning, we
launched Valence Labs, Recursion’s cutting-edge machine learning
research center for biology and chemistry in Montréal that aims to
promote open-science and academic research. Recursion’s commitment
to open-science helps us recruit and retain the best talent in the
field of generative AI, allows us to design and set the standards
by which ML and AI are deployed in drug discovery, and may drive
additional biopharma companies to consider partnering with
Recursion to get access to our proprietary state-of-the-art tools,
technology, datasets and programs.
Additional Corporate Updates
- Chief Medical Officer: In May 2023, David
Mauro, M.D., Ph.D. joined Recursion as its Chief Medical Officer.
Dr. Mauro has over 20 years experience in oncology drug development
and has guided more than 25 Investigational New Drug candidates
through the translational, preliminary, and later stages of
development at various companies.
- Chief Legal Officer: In July 2023, Recursion
named Nathan Hatfield, J.D., M.B.A. as Chief Legal Officer. Mr.
Hatfield has worked at Recursion for over 6 years, previously
serving as SVP and Head of Legal. Prior to Recursion, Mr. Hatfield
was a securities attorney at the law firm Wilson Sonsini Goodrich
& Rosati.
- Toronto Office: In June 2023, we celebrated
the opening of our Canadian Headquarters in Toronto with government
officials as well as members of the technology and biotechnology
communities.
- ESG Reporting: In June 2023, Recursion
received a favorable ESG Risk Rating from Morningstar
Sustainalytics which ranked Recursion as the #1 biotechnology
company out of approximately 400 companies and the #14
pharmaceuticals company out of approximately 900 companies.
Second Quarter 2023 Financial Results
- Cash Position: Cash and cash equivalents were
$405.9 million as of June 30, 2023. This cash position does not
include the recent $50 million investment from NVIDIA.
- Revenue: Total revenue was $11.0 million for
the second quarter of 2023, compared to $7.7 million for the second
quarter of 2022. The increase was due to progress made in our
Roche-Genentech collaboration.
- Research and Development Expenses: Research
and development expenses were $55.1 million for the second quarter
of 2023, compared to $38.4 million for the second 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 $28.3 million for the second
quarter of 2023, compared to $21.2 million for the second quarter
of 2022. The increase in general and administrative expenses was
due to an increase in salaries and wages of $3.0 million and
increases in software and depreciation expense.
- Net Loss: Net loss
was $76.7 million for the second quarter of 2023, compared to a net
loss of $65.6 million for the second 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 |
|
Six months
ended |
|
|
June 30, |
|
June 30, |
Revenue |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Operating revenue |
$ |
11,016 |
|
$ |
7,653 |
|
|
$ |
23,150 |
|
$ |
12,952 |
|
|
Grant revenue |
|
1 |
|
|
21 |
|
|
|
1 |
|
|
55 |
|
Total revenue |
|
11,017 |
|
|
7,674 |
|
|
|
23,151 |
|
|
13,007 |
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
Cost of
revenue |
|
9,382 |
|
|
14,227 |
|
|
|
21,829 |
|
|
22,026 |
|
|
Research and
development |
|
55,060 |
|
|
38,439 |
|
|
|
101,737 |
|
|
70,880 |
|
|
General and administrative |
|
28,290 |
|
|
21,199 |
|
|
|
51,165 |
|
|
42,273 |
|
Total operating costs and expenses |
|
92,732 |
|
|
73,865 |
|
|
|
174,731 |
|
|
135,179 |
|
|
|
|
|
|
|
|
Loss from operations |
|
(81,715 |
) |
|
(66,191 |
) |
|
|
(151,580 |
) |
|
(122,172 |
) |
|
Other
income, net |
|
4,989 |
|
|
631 |
|
|
|
9,527 |
|
|
633 |
|
Net loss |
$ |
(76,726 |
) |
$ |
(65,560 |
) |
|
$ |
(142,053 |
) |
$ |
(121,539 |
) |
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
Net loss per share of Class A, B and Exchangeable common
stock, basic and diluted |
$ |
(0.38 |
) |
$ |
(0.38 |
) |
|
$ |
(0.71 |
) |
$ |
(0.71 |
) |
Weighted-average shares (Class A, B and Exchangeable)
outstanding, basic and diluted |
|
201,415,475 |
|
|
172,212,390 |
|
|
|
198,957,804 |
|
|
171,455,595 |
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
Recursion
Pharmaceuticals, Inc. |
Condensed
Consolidated Balance Sheets (unaudited) |
(in
thousands) |
|
|
|
|
|
|
June 30, |
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
405,870 |
|
$ |
549,912 |
|
|
Restricted
cash |
|
3,325 |
|
|
1,280 |
|
|
Other
receivables |
|
3,051 |
|
|
2,753 |
|
|
Other current assets |
|
18,774 |
|
|
15,869 |
|
|
Total current assets |
|
431,020 |
|
|
569,814 |
|
|
|
|
|
|
Restricted
cash, non-current |
|
7,629 |
|
|
7,920 |
|
|
Property and
equipment, net |
|
89,768 |
|
|
88,192 |
|
|
Operating
lease right-of-use assets |
|
34,899 |
|
|
33,255 |
|
|
Intangible
assets, net |
|
42,757 |
|
|
1,306 |
|
|
Goodwill |
|
60,516 |
|
|
801 |
|
|
Other
assets, non-current |
|
110 |
|
|
- |
|
|
Total assets |
$ |
666,699 |
|
$ |
701,288 |
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities |
|
|
|
Accounts
payable |
$ |
2,086 |
|
$ |
4,586 |
|
|
Accrued
expenses and other liabilities |
|
32,873 |
|
|
32,904 |
|
|
Unearned
revenue |
|
73,105 |
|
|
56,726 |
|
|
Notes
payable |
|
676 |
|
|
97 |
|
|
Operating lease liabilities |
|
5,219 |
|
|
5,952 |
|
|
Total current liabilities |
|
113,959 |
|
|
100,265 |
|
|
|
|
|
|
Unearned
revenue, non-current |
|
32,436 |
|
|
70,261 |
|
|
Notes
payable, non-current |
|
1,155 |
|
|
536 |
|
|
Operating
lease liabilities, non-current |
|
45,850 |
|
|
44,420 |
|
|
Deferred tax liabilities |
|
4,336 |
|
|
- |
|
|
Total liabilities |
|
197,736 |
|
|
215,482 |
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
Common stock
(Class A, B and Exchangeable) |
|
2 |
|
|
2 |
|
|
Additional
paid-in capital |
|
1,250,570 |
|
|
1,125,360 |
|
|
Accumulated
deficit |
|
(781,609 |
) |
|
(639,556 |
) |
|
Total stockholder's equity |
|
468,963 |
|
|
485,806 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
666,699 |
|
$ |
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 outcomes and benefits expected from the NVIDIA
partnership and Cyclica and Valence Discovery acquisitions and the
launch of Valence Labs; early and late stage discovery,
preclinical, and clinical programs, including timelines for data
readouts; 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/15ed092e-475b-4dc2-92c2-db6c77c31275
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