Recursion Provides Business Updates and Reports First Quarter 2024 Financial Results
09 Mai 2024 - 10:01PM
Recursion (Nasdaq: RXRX), a leading clinical stage TechBio company
decoding biology to industrialize drug discovery, today reported
business updates and financial results for its first quarter ending
March 31, 2024.
“We are excited about the multiple upcoming value catalysts that
could potentially occur in the near-term, including clinical trial
readouts, partnership option exercises, new partnerships, and
interest in Recursion's data and technology solutions,” said Chris
Gibson, Ph.D., Co-founder and CEO of Recursion. "It is great to see
individuals from both the biopharma and technology industries
demonstrating an understanding and appetite for the power of
combining large-scale computing resources with the ability to
generate a proprietary source of large-scale data. To that end, we
are thrilled to welcome Dr. Najat Khan to Recursion who will help
lead our R&D and commercialization efforts.”
Summary of Business Highlights
- Pipeline
- Cerebral Cavernous Malformation (CCM)
(REC-994): Our Phase 2 SYCAMORE clinical trial is a
randomized, double-blind, placebo-controlled, study of two doses of
REC-994 in participants with CCM. The primary endpoint of the study
is safety and tolerability. Secondary and exploratory endpoints,
including clinician measured outcomes, imaging of CCM lesions,
patient reported outcomes, and selected biomarkers, will be
evaluated. This trial was fully enrolled in June 2023 with 62
participants, where the vast majority of participants who completed
12 months of treatment have entered the long-term extension study.
We expect to share Phase 2 data in Q3 2024.
- Neurofibromatosis Type 2 (NF2) (REC-2282): Our
adaptive Phase 2/3 POPLAR clinical trial is a randomized, two part
study of REC-2282 in participants with progressive NF2-mutated
meningiomas. Part 1 of the study is ongoing and is exploring two
doses of REC-2282 in approximately 23 adults and 9 adolescents,
with enrollment in adults expected to complete in Q2 2024. We
expect to share Phase 2 safety and preliminary efficacy data in Q4
2024.
- Familial Adenomatous Polyposis (FAP)
(REC-4881): Our Phase 1b/2 TUPELO clinical trial is an
open label, multicenter, two part study of REC-4881 in participants
with FAP. Part 1 is complete and enrollment in Part 2 has
commenced. We expect to share Phase 2 safety and preliminary
efficacy data in H1 2025.
- AXIN1 or APC Mutant Cancers (REC-4881): Our
Phase 2 LILAC clinical trial is an open label, multicenter study of
REC-4881 in participants with unresectable, locally advanced or
metastatic cancer with AXIN1 or APC mutations. This study was
initiated at the end of 2023 with the first participant dosed in Q1
2024. Since that time, multiple participants are now enrolled. We
expect to share Phase 2 safety and preliminary efficacy data in H1
2025.
- Clostridioides difficile Infection
(REC-3964): REC-3964 is a first-in-class C. difficile
toxin inhibitor and the first new chemical entity developed by
Recursion, with promising preclinical efficacy data seen in
relevant models (superiority versus bezlotoxumab). Full Phase 1
data from our healthy volunteers study will be presented at the
World Congress on Infectious Diseases in Paris in June 2024. We
expect to initiate a randomized Phase 2 study in patients at high
risk for C. difficile infection recurrence in 2024.
- Advanced HR-Proficient Cancers (RBM39): RBM39
is a novel CDK12-adjacent target identified by the Recursion OS. We
intend to position our lead candidate as a single agent for the
potential treatment of advanced HR-proficient cancers including
ovarian and other solid tumors. We expect to submit an IND in H2
2024 and anticipate initiating a Phase 1 open label study of our
lead candidate in participants with relapsed/refractory cancer. The
primary endpoint of the study will be safety and tolerability.
Secondary endpoints will explore pharmacokinetics and preliminary
signs of anti-tumor activity.
- Undisclosed Indication in Fibrosis (Target
Epsilon): This program originated under our initial
fibrosis collaboration with Bayer and we have since in-licensed
from Bayer all rights to this program. We are advancing our lead
candidate through IND-enabling studies with IND submission expected
in the near-term.
- Platform
- Supercomputer Expansion: We worked with our
partner NVIDIA to design and build BioHive-2, our next generation
supercomputer with over 500 H100 GPUs. We have nearly completed the
build out of BioHive-2 and began performance benchmarking tests. We
believe that the performance of our supercomputer may place
BioHive-2 in the top 50 of the next TOP500 list, making it one of
the most powerful supercomputers in the world across any industry
and the most powerful supercomputer owned and operated by any
biopharma company. These computational resources, paired with
Recursion’s vast datasets and data generation capabilities, enable
the construction of Recursion’s large foundation models for
biology, chemistry, and causal patient outcomes.
- Whole-Genome Transcriptomics Map: We continue
to focus on key technologies that enhance our ability to generate,
extract, and validate novel insights for therapeutic advancements.
Over the past year, we have scaled our transcriptomics technology
in order to validate phenotypic-insights and relate to
patient-derived RNA sequencing data. In April, we announced
sequencing our 1 millionth transcriptome. We believe that we are
one of the largest transcriptomics sequencers in the world and are
advancing the development of a whole-genome knockout
transcriptomics map, which we expect to complete in the coming
quarters. Such platform capabilities are important for curating
scaled datasets that are relatable and provide a more complete
understanding of biology, chemistry, and patient outcomes.
- Active Learning: We have been applying active
learning approaches to predict where our OS should generate and
enrich biological and chemical datasets via phenotypic and ADME
compound profiling across existing and new cellular contexts. These
capabilities enable Recursion to rapidly construct multiomics maps
that are enriched for areas of biology and chemistry that may be of
high value for translating insights into therapeutic programs. We
believe that such approaches enable Recursion to more rapidly
expand its data moat and see active learning capabilities as an
important step towards autonomous drug discovery.
- Partnerships
- Helix Collaboration: Recursion entered into a
multi-year agreement with Helix to access hundreds of thousands of
de-identified records including Helix’s Exome+(R) genomic data and
data from longitudinal health records. Recursion plans to use this
data to train causal AI models and design biomarker and patient
stratification strategies across broad disease areas. The Helix
dataset expands Recursion's integration of real-world patient data
and complements Recursion's access to Tempus' oncology data.
- Transformational Collaborations: We continue
to advance efforts to discover potential new therapeutics with our
strategic partners in the areas of undruggable oncology (Bayer) as
well as neuroscience and a single indication in gastrointestinal
oncology (Roche-Genentech). 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.
Additional Corporate Updates
- L(earnings) Call: Recursion will host a
L(earnings) Call on May 9, 2024 at 5:00 pm Eastern Time / 3:00 pm
Mountain Time. Recursion will broadcast the live stream from
Recursion’s X (formerly Twitter), LinkedIn, and YouTube accounts
and there will be opportunities to ask questions of the
company.
- Chief R&D Officer and Chief Commercialization
Officer: In April 2024, Recursion named Najat Khan, Ph.D.
as Chief R&D Officer and Chief Commercialization Officer.
Previous to joining Recursion, Dr. Khan worked at Johnson &
Johnson for over 6 years, serving most recently as Chief Data
Science Officer and Global Head of Strategy & Portfolio
Organization for Innovative Medicine R&D. Dr. Khan has also
been appointed to Recursion’s Board of Directors.
- London Office: In March 2024, Recursion
announced plans to open a new office in London in order to recruit
top TechBio talent within the areas of computational biology,
machine learning, and data science. Additionally, Recursion
announced that Prof. Michael Bronstein, DeepMind Professor of
Artificial Intelligence at Oxford University, will join Recursion
as a Scientific Advisor.
- Annual Shareholder Meeting: Recursion’s Annual
Shareholder Meeting will be held on June 3, 2024 at 10:00 am
Eastern Time / 8:00 am Mountain Time.
First Quarter 2024 Financial Results
- Cash Position: Cash and cash equivalents were
$296.3 million as of March 31, 2024.
- Revenue: Total revenue was $13.8 million for
the first quarter of 2024, compared to $12.1 million for the first
quarter of 2023. The increase was due to revenue recognized from
our partnership with Roche, as our mix of work on the three
performance obligations shifted towards higher cost processes
including the progression of work related to one of our
neuroscience performance obligations.
- Research and Development Expenses: Research
and development expenses were $67.6 million for the first quarter
of 2024, compared to $46.7 million for the first quarter of 2023.
The increase in research and development expenses was across all
development phases as we continue to expand and upgrade our
platform, including our chemical technology, machine learning, and
transcriptomics platform. Our discovery costs increased as we
advanced our preclinical pipeline including our work on Target
Epsilon. Our clinical costs grew as we continued to progress
through our various clinical trials.
- General and Administrative Expenses: General
and administrative expenses were $31.4 million for the first
quarter of 2024, compared to $22.9 million for the first quarter of
2023. The increase in general and administrative expenses was due
to an increase in salaries and wages of $3.9 million and increases
in software and depreciation expenses.
- Net Loss: Net loss was $91.4 million for the
first quarter of 2024, compared to a net loss of $65.3 million for
the first quarter of 2023.
- Net Cash: Net cash
used in operating activities was $102.3 million for the first
quarter of 2024, compared to net cash used in operating activities
of $73.3 million for the first quarter of 2023. The increase in net
cash used in operating activities compared to the same period last
year was due to higher operating costs incurred for research and
development and general and administrative due to Recursion’s
expansion and upgraded capabilities. Net cash used in operating
activities was $74.1 million for the fourth quarter of 2023. The
increase in net cash used compared to the fourth quarter of 2023
was due to paying our annual cash bonuses to employees of $18.0
million, timing of accrual payments of $6.4 million and a lease
deposit prepayment for our BioHive-2 supercomputer of $1.6
million.
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, chemical
and patient-centric 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, chemistry and patient-centric data 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, Montreal and the
San Francisco Bay Area. Learn more at www.Recursion.com, or connect
on X (formerly Twitter) and LinkedIn.
Media ContactMedia@Recursion.com
Investor ContactInvestor@Recursion.com
|
Recursion Pharmaceuticals, Inc. |
|
|
Condensed Consolidated Statements of Operations and
Comprehensive Loss (unaudited) |
|
|
(in thousands, except share and per share
amounts) |
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
|
|
Revenue |
|
2024 |
|
|
2023 |
|
|
|
|
Operating revenue |
$ |
13,491 |
|
$ |
12,134 |
|
|
|
|
Grant
revenue |
|
303 |
|
|
- |
|
|
|
Total
revenue |
|
13,794 |
|
|
12,134 |
|
|
|
|
|
|
|
|
|
Operating
costs and expenses |
|
|
|
|
|
Cost of revenue |
|
11,166 |
|
|
12,448 |
|
|
|
|
Research and development |
|
67,560 |
|
|
46,677 |
|
|
|
|
General
and administrative |
|
31,408 |
|
|
22,874 |
|
|
|
Total
operating costs and expenses |
|
110,134 |
|
|
81,999 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(96,340 |
) |
|
(69,865 |
) |
|
|
|
Other income (loss), net |
|
4,188 |
|
|
4,538 |
|
|
|
Loss before income tax benefit |
|
(92,152 |
) |
|
(65,327 |
) |
|
|
|
Income tax benefit |
|
779 |
|
|
- |
|
|
|
Net loss |
$ |
(91,373 |
) |
$ |
(65,327 |
) |
|
|
|
|
|
|
|
|
Per share
data |
|
|
|
|
Net loss per share of Class A, B and Exchangeable common
stock, basic and diluted |
$ |
(0.39 |
) |
$ |
(0.34 |
) |
|
|
Weighted-average shares (Class A, B and Exchangeable)
outstanding, basic and diluted |
|
236,019,349 |
|
|
191,618,238 |
|
|
|
Recursion Pharmaceuticals,
Inc. |
|
|
|
|
Condensed Consolidated Balance Sheets
(unaudited) |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
December 31, |
|
|
|
|
|
2024 |
|
|
2023 |
|
|
|
Assets |
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
296,326 |
|
$ |
391,565 |
|
|
|
|
Restricted cash |
|
3,195 |
|
|
3,231 |
|
|
|
|
Other receivables |
|
2,599 |
|
|
3,094 |
|
|
|
|
Other
current assets |
|
41,495 |
|
|
40,247 |
|
|
|
|
Total current
assets |
|
343,615 |
|
|
438,137 |
|
|
|
|
|
|
|
|
|
|
Restricted cash,
non-current |
|
6,629 |
|
|
6,629 |
|
|
|
|
Property and equipment,
net |
|
86,716 |
|
|
86,510 |
|
|
|
|
Operating lease right-of-use
assets |
|
35,501 |
|
|
33,663 |
|
|
|
|
Intangible assets, net |
|
33,076 |
|
|
36,443 |
|
|
|
|
Goodwill |
|
52,056 |
|
|
52,056 |
|
|
|
|
Other assets, non-current |
|
254 |
|
|
261 |
|
|
|
|
Total assets |
$ |
557,847 |
|
$ |
653,699 |
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable |
$ |
5,115 |
|
$ |
3,953 |
|
|
|
|
Accrued expenses and other
liabilities |
|
26,070 |
|
|
46,635 |
|
|
|
|
Unearned revenue |
|
36,618 |
|
|
36,426 |
|
|
|
|
Notes payable |
|
55 |
|
|
41 |
|
|
|
|
Operating lease
liabilities |
|
6,062 |
|
|
6,116 |
|
|
|
|
Total current liabilities |
|
73,920 |
|
|
93,171 |
|
|
|
|
|
|
|
|
|
|
Unearned revenue,
non-current |
|
37,391 |
|
|
51,238 |
|
|
|
|
Notes payable,
non-current |
|
1,071 |
|
|
1,101 |
|
|
|
|
Operating lease liabilities,
non-current |
|
43,786 |
|
|
43,414 |
|
|
|
|
Deferred tax liabilities |
|
528 |
|
|
1,339 |
|
|
|
|
Total
liabilities |
|
156,696 |
|
|
190,263 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 7) |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
Common stock (Class A, B and
Exchangeable) |
|
2 |
|
|
2 |
|
|
|
|
Additional paid-in
capital |
|
1,460,144 |
|
|
1,431,056 |
|
|
|
|
Accumulated deficit |
|
(1,058,995 |
) |
|
(967,622 |
) |
|
|
|
Total stockholder's equity |
|
401,151 |
|
|
463,436 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
557,847 |
|
$ |
653,699 |
|
|
Consolidated Balance Sheets
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 expectations related to early and late stage discovery,
preclinical, and clinical programs, including timelines for
enrollment in studies, data readouts, and progression toward
IND-enabling studies; developments with Recursion OS and other
technologies, including construction of foundation models and
augmentation of our dataset; developments of our transcriptomics
technology, including the timing of development of a whole-genome
knockout transcripts map; expectations and developments with
respect to licenses and collaborations, including option exercises
by partners and additional partnerships; expected ranking of our
BioHive supercomputer on the TOP500 list; prospective products and
their potential future indications and market opportunities;
expectations for business and financial plans and performance,
including cash runway; outcomes and benefits expected from the
Helix partnership, including the development of causal AI models
and biomarker and patient stratification strategies; Recursion’s
plan to maintain a leadership position in data generation and
aggregation; 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 for the Fiscal Year Ended
December 31, 2023. 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.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c8662c72-0941-4c55-9e22-8b190f954583
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