Recursion Provides Business Updates and Reports Third Quarter 2023 Financial Results
09 Novembro 2023 - 9:58AM
Recursion (Nasdaq: RXRX), a leading clinical stage TechBio company
decoding biology to industrialize drug discovery, today reported
business updates and financial results for its third quarter ending
September 30, 2023.
“Since our founding we have led TechBio with a belief that the
next generation of biopharma leaders would operate at the
intersection of scaled datasets and accelerated computing,” said
Chris Gibson, Ph.D., Co-founder and CEO of Recursion. “Today, we
are thrilled to share our plans to continue leading the field
forward at this nexus in order to advance a growing pipeline of
both wholly owned and partnered programs towards impact for
patients. First, on the data front, we are excited to announce a
collaboration with Tempus, giving us access to over 20 PB of
proprietary data in precision oncology. I believe these
forward-genetic data, combined with Recursion’s multimodal
reverse-genetic data, will continue strengthening our
data-advantage. Second, on the compute front, we are pleased to
announce a significant commitment to expand our BioHive-1
supercomputer to advance the exploration and construction of large
AI models across our ever-growing proprietary biological data more
rapidly and reliably. And finally, the evolution of our
collaboration with Bayer and the recent exercise of our first
oncology program option from Roche and Genentech highlights the
growing appreciation of our Recursion OS by world-class teams in
biopharma. We could not be more inspired about the future and are
confident that the Recursion OS will continue to lead the
transformation of BioTech into TechBio.”
Recursion OS: Industrializing drug discovery to
transform BioTech into TechBio
Summary of Business Highlights
- Platform
- Tempus Collaboration
- Oncology-Focused, Precision Medicine Data:
Tempus has built one of the world’s largest oncology-focused
clinical and DNA/RNA molecular observational datasets. Our new
collaboration with Tempus gives Recursion preferred access to these
data. When combined with Recursion’s proprietary dataset of over 25
petabytes of interventional biological and chemical data, Recursion
will now have approximately 50 petabytes of proprietary data fit
for the purpose of machine learning at its disposal, enabling us to
improve the training of causal AI/ML models of biology. When
applied to our genome-wide reverse genetics platform, these data
could facilitate the discovery of novel associations and mechanisms
not otherwise identifiable in the clinical and forward genetics
data from Tempus. Additionally, this patient-linked data will be
used to support translating innovative therapeutics from
Recursion’s platform directly to patients using novel biomarker and
patient stratification strategies.
- Terms of the Tempus Collaboration: Recursion
entered into an agreement with Tempus to access its patient-centric
data as part of a 5-year licensing agreement. Recursion will make
annual payments to Tempus in cash or equity ranging between $22M
and $42M each year, up to $160M in aggregate, over the next 5 years
in exchange for continued and updated data access and use rights
for therapeutic development purposes.
- Supercomputer Expansion: We have committed to
working with NVIDIA to expand BioHive-1, our on-premise
supercomputer. After the expansion, which will be completed in the
first half of 2024, BioHive-1 computational capacity will increase
by over 4x (adding more than 500 NVIDIA H100 GPUs to the more than
300 NVIDIA A100s already in place). We project that upon completion
and benchmarking, BioHive-1 will be in the top 50 most powerful
supercomputers in the world across any industry (according to the
Top500 list) and will be the most powerful supercomputer owned and
operated by any biopharma company. These additional computational
resources will continue to support the construction of the largest
foundation models across biology and chemistry using Recursion’s
vast datasets and data generation capabilities as well as tools
based on interactive large language models and autonomous
agents.
- Foundation Models: Our supercomputer expansion
is meant to build on the deployment of our first Phenomics
Foundation Model, PHENOM-1, which is a vision transformer utilizing
hundreds of millions of parameters trained on billions of
biological images from our proprietary phenomics library. PHENOM-1
demonstrated the scaling hypothesis within a biological context,
namely that larger models trained on more diverse datasets lead to
increased performance and emergent properties. With our recent
acquisitions of digital chemistry company Cyclica and the
deep-learning research team at Valence Discovery (now Valence
Labs), the vast patient-centric data from Tempus and our own
growing proprietary multi-omic datasets, we anticipate the
construction and application of more foundation models and large
language models across biology, chemistry and translation.
Together, we believe these increasingly sophisticated models will
enable us to drive new, better programs into clinical development
both in our own pipeline and with our current and future partners
at scale.
- 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 the vast majority of 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 due either to
syndromic disease or initiating mutations in the meningiomas. Part
1 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): Our Phase 2 TUPELO clinical trial is a two
part study of REC-4881 in participants with FAP. Evaluation of
three dose levels is ongoing, thereafter a dose expansion phase
will commence evaluating the recommended Phase 2 dose in
approximately 30 participants. We expect to share Phase 2 safety,
tolerability, pharmacokinetics, and preliminary efficacy in H1
2025.
- AXIN1 or APC Mutant Cancers (REC-4881): Our
Phase 2 LILAC clinical trial is a biomarker enriched two part study
of REC-4881 in participants with unresectable, locally advanced or
metastatic cancer with AXIN1 or APC mutations. The study will
initiate in late Q4 2023 or early Q1 2024 and will explore the
safety and efficacy of REC-4881 across three dose levels in 30-40
participants.
- Clostridioides difficile Infection
(REC-3964): In early September 2023, we announced
completion of our Phase 1 clinical trial and reported that REC-3964
had been well tolerated in healthy volunteers with no serious
adverse events. We expect to initiate a Phase 2 proof-of-concept
study in patients with recurrent Clostridioides difficile infection
in 2024.
- RBM39 HR-Proficient Ovarian Cancer: RBM39 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
- Bayer: Bayer and Recursion have signed an
update to their collaboration around a select set of oncology
programs. This decision allows Bayer to leverage Recursion’s
capabilities to identify novel targets and compounds applicable to
traditionally undruggable oncology indications as well as
Recursion’s access to expansive oncology-focused, patient-centric
data from Tempus for their closely partnered programs. Under the
amended and restated agreement, Bayer will pay Recursion increased
per program milestones which may be up to $1.5B for up to 7
oncology programs as well as royalties on net sales. In this
oncology-focused collaboration, Recursion will use many of the new
tools it has developed since the collaboration was first signed to
potentially identify and nominate programs rapidly.
- Roche-Genentech: In October 2023, Recursion
announced that Roche-Genentech optioned its first partnership
program in GI-oncology. This milestone represents a critical step
in our joint efforts to initiate and advance new therapeutic
programs using Recursion’s approach to map and navigate biology and
chemistry. In the near-term, there is the potential for option
exercises associated with map building or data sharing initiatives
as well as option exercises associated with additional partnership
programs.
Third Quarter 2023 Financial Results
- Cash Position: Cash and cash equivalents were
$387.3 million as of September 30, 2023. This cash position
excludes the $3 million to be paid by Roche-Genentech for optioning
its first partnership program in GI-oncology.
- Revenue: Total revenue was $10.5 million for
the third quarter of 2023, compared to $13.2 million for the third
quarter of 2022. The decrease was due to the timing of workflows
from our strategic partnership with Roche-Genentech..
- Research and Development Expenses: Research
and development expenses were $70.0 million for the third quarter
of 2023, compared to $40.8 million for the third 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 $29.2 million for the third
quarter of 2023, compared to $19.5 million for the third quarter of
2022. The increase in general and administrative expenses was due
to an increase in salaries and wages of $5.8 million and increases
in software and depreciation expenses.
- Net Loss: Net loss was $93.0 million for the
third quarter of 2023, compared to a net loss of $60.4 million for
the third quarter of 2022.
- Net Cash: Net cash
used in operating activities was $72.9 million for the third
quarter of 2023, compared to net cash used in operating activities
of $54.5 million for the third 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. |
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Condensed Consolidated Statements of Operations
(unaudited) |
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(in thousands, except share and per share
amounts) |
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Three months ended |
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Nine months ended |
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September 30 |
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September 30 |
Revenue |
|
2023 |
|
|
|
2022 |
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|
|
2023 |
|
|
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2022 |
|
|
Operating revenue |
$ |
10,102 |
|
|
$ |
13,053 |
|
|
$ |
33,252 |
|
|
$ |
26,005 |
|
|
Grant revenue |
|
431 |
|
|
|
107 |
|
|
|
432 |
|
|
|
162 |
|
Total revenue |
|
10,533 |
|
|
|
13,160 |
|
|
|
33,684 |
|
|
|
26,167 |
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
Cost of revenue |
|
10,877 |
|
|
|
15,409 |
|
|
|
32,706 |
|
|
|
37,435 |
|
|
Research and development |
|
70,007 |
|
|
|
40,836 |
|
|
|
171,744 |
|
|
|
111,716 |
|
|
General and administrative |
|
29,199 |
|
|
|
19,488 |
|
|
|
80,364 |
|
|
|
61,761 |
|
Total operating costs and expenses |
|
110,083 |
|
|
|
75,733 |
|
|
|
284,814 |
|
|
|
210,912 |
|
|
|
|
|
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Loss from operations |
|
(99,550 |
) |
|
|
(62,573 |
) |
|
|
(251,130 |
) |
|
|
(184,745 |
) |
|
Other income, net |
|
6,533 |
|
|
|
2,128 |
|
|
|
16,060 |
|
|
|
2,761 |
|
Net loss |
$ |
(93,017 |
) |
|
$ |
(60,445 |
) |
|
$ |
(235,070 |
) |
|
$ |
(181,984 |
) |
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|
|
|
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Per share data |
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Net loss per share of Class A, B and Exchangeable common
stock, basic and diluted |
$ |
(0.43 |
) |
|
$ |
(0.35 |
) |
|
$ |
(1.16 |
) |
|
$ |
(1.06 |
) |
Weighted-average shares (Class A, B and Exchangeable)
outstanding, basic and diluted |
|
214,327,186 |
|
|
|
173,435,970 |
|
|
|
203,090,637 |
|
|
|
172,122,974 |
|
|
|
|
|
|
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Consolidated Balance Sheets
Recursion Pharmaceuticals, Inc. |
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Condensed Consolidated Balance Sheets
(unaudited) |
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(in thousands) |
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September 30, |
December 31, |
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2023 |
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2022 |
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Assets |
|
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Current assets |
|
|
|
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Cash and cash equivalents |
$ |
387,322 |
|
$ |
549,912 |
|
|
|
Restricted cash |
|
2,256 |
|
|
1,280 |
|
|
|
Other receivables |
|
3,164 |
|
|
2,753 |
|
|
|
Other current assets |
|
17,780 |
|
|
15,869 |
|
|
|
Total current assets |
|
410,522 |
|
|
569,814 |
|
|
|
|
|
|
|
|
Restricted cash, non-current |
|
7,629 |
|
|
7,920 |
|
|
|
Property and equipment, net |
|
86,248 |
|
|
88,192 |
|
|
|
Operating lease right-of-use assets |
|
34,062 |
|
|
33,255 |
|
|
|
Intangible assets, net |
|
39,459 |
|
|
1,306 |
|
|
|
Goodwill |
|
52,750 |
|
|
801 |
|
|
|
Other assets, non-current |
|
155 |
|
|
- |
|
|
|
Total assets |
$ |
630,825 |
|
$ |
701,288 |
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
$ |
4,265 |
|
$ |
4,586 |
|
|
|
Accrued expenses and other liabilities |
|
39,806 |
|
|
32,904 |
|
|
|
Unearned revenue |
|
43,997 |
|
|
56,726 |
|
|
|
Notes payable |
|
695 |
|
|
97 |
|
|
|
Operating lease liabilities |
|
5,355 |
|
|
5,952 |
|
|
|
Total current liabilities |
|
94,118 |
|
|
100,265 |
|
|
|
|
|
|
|
|
Unearned revenue, non-current |
|
51,383 |
|
|
70,261 |
|
|
|
Notes payable, non-current |
|
1,126 |
|
|
536 |
|
|
|
Operating lease liabilities, non-current |
|
44,300 |
|
|
44,420 |
|
|
|
Deferred tax liabilities |
|
1,931 |
|
|
- |
|
|
|
Total liabilities |
|
192,858 |
|
|
215,482 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
Common stock (Class A, B and Exchangeable) |
|
2 |
|
|
2 |
|
|
|
Additional paid-in capital |
|
1,312,591 |
|
|
1,125,360 |
|
|
|
Accumulated deficit |
|
(874,626 |
) |
|
(639,556 |
) |
|
|
Total stockholder's equity |
|
437,967 |
|
|
485,806 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
630,825 |
|
$ |
701,288 |
|
|
|
|
|
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|
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 access to the
real-world multimodal data held at Tempus; outcomes and benefits of
deriving therapeutic hypotheses by linking molecular data and
outcomes data; outcomes and benefits of expanding our
supercomputer; 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.
Photos accompanying this announcement are available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/816be0b8-7538-44d3-ae77-526a0f0a4ae0https://www.globenewswire.com/NewsRoom/AttachmentNg/f6a98a74-af5f-4d00-84fd-99f6738146f3
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