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1. Company Snapshot

1.a. Company Description

Recursion Pharmaceuticals, Inc.operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery.The company develops REC-994, which is in Phase IIa clinical trial to treat cerebral cavernous malformation; REC-2282 for the treatment of neurofibromatosis type 2; REC-4881 to treat familial adenomatous polyposis; and REC-3599, which is in Phase I clinical trial to treat GM2 gangliosidosis.


Its preclinical stage product includes REC-3964 to treat Clostridium difficile colitis; REC-64917 for the treat of neural or systemic inflammation; REC-65029 to treat HRD-negative ovarian cancer; REC-648918 to enhance anti-tumor immune; REC-2029 for the treatment of wnt-mutant hepatocellular carcinoma; REC-14221 to treat solid and hematological malignancies; and REC-64151 for the treatment of immune checkpoint resistance in KRAS/STK11 mutant non-small cell lung cancer.The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Chromaderm, Inc.; and Takeda Pharmaceutical Company Limited.Recursion Pharmaceuticals, Inc.


was incorporated in 2013 and is headquartered in Salt Lake City, Utah.

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1.b. Last Insights on RXRX

Recent negative drivers behind Recursion Pharmaceuticals' performance include a Q3 loss of $0.34 per share, missing revenue estimates. The company's quarterly loss was $0.01 higher than expected, indicating a decline in its financial performance. Additionally, Recursion's stock price has been volatile, with a -0.89% move from its prior day's close on October 30, 2024. The company's recent presentation at the 43rd Annual JP Morgan Healthcare Conference may provide some insight into its future prospects, but the current earnings release suggests a decline in its financial performance.

1.c. Company Highlights

2. Recursion Pharmaceuticals' Earnings Report: A Deeper Dive into the Numbers and Strategic Pillars

Recursion Pharmaceuticals reported a loss per share of -$0.21, beating estimates of -$0.28. The company's financial performance was marked by a significant reduction in operating expenses, with a 35% year-over-year decrease from pro forma 2024 to 2025, and a 10% reduction below the guidance provided in May. The company ended the year with $754 million in cash and expects operating expenses to be under $390 million in 2026, extending its cash runway to early 2028. Analysts estimate next year's revenue growth at 66.5%.

Publication Date: Mar -06

📋 Highlights
  • Clinical Progress:: Achieved first positive proof of concept with FAP, a first-in-class therapy candidate.
  • Partnership Milestones:: Generated $34M in milestones with Sanofi via five joint programs targeting challenging targets.
  • Financial Runway:: Extended cash runway to early 2028 with $754M in cash and 35% YoY operating expense reduction.
  • Operational Efficiency:: Synthesizes 90% fewer compounds (330 vs. industry 2,500) in 17 months vs. 42 months industry average.
  • Data Infrastructure:: Built 50+ petabytes of high-quality multimodal data to power AI models across biology and chemistry.

Strategic Pillars: Tangible Proof Points, Platform Investment, and Momentum with Discipline

Recursion Pharmaceuticals is focused on three main strategic pillars: tangible proof points, platform investment, and momentum with discipline. The company has made progress across its clinical pipeline and partner programs, with a key example being its first positive proof of concept with FAP, a potential first-in-class therapy. The Sanofi collaboration is also a highlight, with Recursion tackling challenging targets in I&I and oncology, and having advanced five lead packages across five programs, totaling about $34 million in milestones to date.

Platform Investment: Enhancing Capabilities and Driving Innovation

Recursion is investing in its platform, identifying proof points where it can do things better and faster. The company is synthesizing 90% fewer compounds than industry standards, with two times faster synthesis and an average of 17 months compared to 42 months. The company is also generating first-in-industry maps of biology in partnership with Roche Genentech, fueling its discovery pipeline. As Najat Khan noted, "Our platform is about a suite of data, models, and assets used for specific problems, with the goal of achieving the best outcomes."

Valuation Metrics: Understanding What's Priced In

Recursion Pharmaceuticals' valuation metrics provide insight into what's priced in. The company's P/S Ratio is 19.03, EV/EBITDA is -1.35, and P/B Ratio is 1.65. The ROE is -63.98%, and ROIC is -48.06%. These metrics suggest that the market is pricing in significant growth expectations, which is consistent with the estimated 66.5% revenue growth next year.

Clinical Development Pipeline: Diversified and Promising

Recursion's wholly owned pipeline is diversified, categorized into three areas: novel biological insight, emerging biology, and validated biology with significant unmet need. The company's programs, such as FAP and RBM39, have shown promise, with FAP achieving a positive clinical proof of concept. The company is also advancing programs like CDK7 and ENPP1, with IND-enabling studies ongoing, and has a broad set of catalysts coming up over the next 18 to 24 months.

3. NewsRoom

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Recursion Pharmaceuticals (RXRX) Stock Drops Despite Market Gains: Important Facts to Note

Apr -16

Source:

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Recursion Pharmaceuticals (RXRX) Stock Declines While Market Improves: Some Information for Investors

Apr -09

Source: zacks.com

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Recursion to Participate in Upcoming Investor Conferences

Apr -07

Source: globenewswire.com

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Recursion Pharmaceuticals (RXRX) Beats Stock Market Upswing: What Investors Need to Know

Apr -02

Source:

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1 Beaten-Down AI Stock to Buy and 1 to Avoid

Apr -01

Source: fool.com

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Recursion Expands Strategic Partnership with Citeline to Advance Its AI-Enabled ClinTech Platform

Mar -31

Source: globenewswire.com

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2 AI Healthcare Stocks to Buy Right Now

Mar -31

Source: fool.com

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Here's Why Recursion Pharmaceuticals (RXRX) Fell More Than Broader Market

Mar -27

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (26.43%)

6. Segments

Drug Discovery

Expected Growth: 26.43%

Recursion Pharmaceuticals' 26.43% growth in Drug Discovery is driven by its AI-powered drug repurposing platform, increasing partnerships with pharma companies, and a strong pipeline of potential treatments for rare genetic diseases. The company's unique approach to identifying new uses for existing drugs is also fueling growth, as it reduces development costs and timelines.

7. Detailed Products

Recursion OS

A cloud-based platform that integrates and analyzes large amounts of biological data to identify potential therapeutic targets

Recursion Map

A comprehensive database of cellular biology that maps the behavior of cells in response to various perturbations

Recursion FX

A high-throughput, automated microscopy platform that enables the analysis of cellular phenotypes at scale

Recursion Discover

A suite of machine learning and computer vision tools that enable the analysis of large datasets and identification of patterns

8. Recursion Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Recursion Pharmaceuticals, Inc. is medium due to the presence of alternative treatments and therapies for genetic diseases.

Bargaining Power Of Customers

The bargaining power of customers for Recursion Pharmaceuticals, Inc. is low due to the lack of negotiating power of individual patients and the high demand for innovative treatments.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Recursion Pharmaceuticals, Inc. is medium due to the presence of multiple suppliers for raw materials and equipment, but the high cost of switching suppliers.

Threat Of New Entrants

The threat of new entrants for Recursion Pharmaceuticals, Inc. is high due to the increasing interest in genetic research and the potential for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for Recursion Pharmaceuticals, Inc. is high due to the presence of established companies in the genetic research and treatment market, and the high competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.54%
Debt Cost 3.95%
Equity Weight 98.46%
Equity Cost 8.17%
WACC 8.11%
Leverage 1.57%

11. Quality Control: Recursion Pharmaceuticals, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
aTyr Pharma

A-Score: 4.8/10

Value: 7.8

Growth: 6.6

Quality: 6.7

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

1-Year Total Return ->

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Taysha Gene Therapies

A-Score: 4.2/10

Value: 6.2

Growth: 5.0

Quality: 4.4

Yield: 0.0

Momentum: 9.0

Volatility: 0.7

1-Year Total Return ->

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Veracyte

A-Score: 3.9/10

Value: 0.9

Growth: 8.4

Quality: 6.4

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

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Verrica Pharmaceuticals

A-Score: 3.3/10

Value: 8.8

Growth: 3.7

Quality: 6.1

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Alector

A-Score: 2.7/10

Value: 7.9

Growth: 3.7

Quality: 3.4

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

View Full Report
Stock-Card
Recursion Pharmaceuticals

A-Score: 2.7/10

Value: 6.9

Growth: 3.9

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.6$

Current Price

3.6$

Potential

-0.00%

Expected Cash-Flows