Recursion Provides Business Updates and Reports Fourth Quarter and Fiscal Year 2023 Financial Results
27 Februar 2024 - 10:05PM
Recursion (Nasdaq: RXRX), a leading clinical stage TechBio company
decoding biology to industrialize drug discovery, today reported
business updates and financial results for its fourth quarter and
fiscal year ending December 31, 2023.
“2023 was a year of remarkable progress for Recursion as we
continued to demonstrate how combining technology, biology,
chemistry, and patient data can industrialize drug discovery, and
we look forward to the milestones ahead of us in 2024,” said Chris
Gibson, Ph.D., Co-founder and CEO of Recursion. “As we have watched
the dynamics of our landscape, it appears that BioTech is
increasingly evolving into TechBio, where it is imperative for life
science companies to embrace digital nativity similar to how SaaS
companies 10+ years ago evolved to being cloud-native in order to
thrive. In this data-driven age, we believe the most important
differentiator will be connected data in order to increasingly
understand and treat the complexities of human disease. Recursion
plans to continue leading the field in terms of data generation and
aggregation.”
Summary of Business Highlights
- Platform
- Causal AI Modeling and Additional Datasets: We
have been training causal AI models leveraging over 20 petabytes of
multimodal precision oncology patient data from Tempus to support
the discovery of potential biomarker-enriched therapeutics at
scale. By combining the forward genetics approach of Tempus with
the reverse genetics approach at Recursion, we believe we have an
opportunity to improve the speed, precision, and scale of
therapeutic development in oncology. This work has already resulted
in a directed-oncology program against a novel gene/disease
relationship in a large oncology indication. Recursion intends to
operate both as a data generator and multimodal data aggregator. In
the future, we intend to augment our dataset and hone the Recursion
OS with germline genetic data, organoid technologies, and automated
nano-synthesis technologies.
- LOWE (Large Language Model-Orchestrated Workflow
Engine): LOWE is an LLM agent that represents the next
evolution of the Recursion OS. LOWE supports drug discovery
programs by orchestrating complex wet and dry-lab workflows via
natural language prompts. These workflows are the steps and tools
available in the Recursion OS, from finding significant
relationships across biology, chemistry, and patient-centric data
to generating novel compounds and scheduling them for synthesis and
experimentation. Through its natural language interface and
interactive graphics, LOWE can put state-of-the-art AI tools into
the hands of every drug discovery scientist.
- Pipeline
- Cerebral Cavernous Malformation (CCM)
(REC-994): Our Phase 2 SYCAMORE clinical trial is a
randomized, double-blind, placebo-controlled, safety, tolerability
and exploratory efficacy study of REC-994 in participants with CCM.
This trial was fully enrolled in June 2023 with 62 participants and
the vast majority of participants who completed 12 months of
treatment continue to elect to enter 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 H1 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 with FPI for Part 2 anticipated in H1
2024. 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 FPI anticipated in Q1 2024. We
expect to share Phase 2 safety and preliminary efficacy data in H1
2025.
- Clostridioides difficile Infection
(REC-3964): We conducted a Phase 1 healthy volunteer study
to evaluate the safety, tolerability, and PK of REC-3964 at
increasing oral doses in comparison with placebo. REC-3964 was safe
and well tolerated and there were no serious adverse events,
deaths, or TEAEs that led to discontinuation. 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). We expect to initiate a Phase 2 study in 2024.
- RBM39 HR-Proficient Ovarian Cancers and Other Solid
Tumors: 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 HR-proficient ovarian
cancers and other HR-proficient solid tumors. As a result of our
strategic collaboration with Tempus, we are leveraging genomic data
across all tumor types to identify clinical biomarkers for patient
expansion. We are advancing our lead candidate through IND-enabling
studies with IND submission expected in H2 2024.
- Undisclosed Indication in Fibrosis (Target
Epsilon): Phenotypic screening of human PBMCs identified
novel and structurally diverse small molecules that reverse the
phenotypic features of disease-state fibrocyte cells into those of
healthy-state cells. The most promising compounds were confirmed as
potent inhibitors of a novel target for fibrosis. This program
originated under our initial fibrosis collaboration with Bayer and
we have since in-licensed from Bayer all rights to this program
which is now entering IND-enabling studies.
- Partnerships
- 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.
- Enamine: In December 2023, we entered into a
collaboration with Enamine to generate and design enriched compound
libraries for the global drug discovery industry. By leveraging
MatchMaker, a Recursion AI model, to identify compounds in the
Enamine REAL Space (~36 billion chemical compounds) predicted to
bind to high-value targets, we believe we can generate more
powerful compound libraries for drug discovery purposes. Enamine
may offer the resulting libraries to customers for purchase and
will co-brand any libraries under both the Enamine and Recursion’s
trademarks. This collaboration is an example of how select data
layers can drive value in novel ways.
Additional Corporate Updates
- Letter to Shareholders: Recursion Co-Founder
& CEO Chris Gibson, Ph.D., wrote an annual letter to
shareholders which may be found in the 10-K report.
- L(earnings) Call: Recursion will host a
L(earnings) Call on February 27, 2024 at 5:00 pm Eastern Time /
3:00 pm Mountain Time. A L(earnings) Call is Recursion’s take on
interacting with a broad public audience around notable business
developments. Recursion will broadcast the live stream from
Recursion’s X (formerly Twitter), LinkedIn and YouTube accounts and
analysts, investors and the public will be able to ask questions of
the company.
- Chief Business Operations Officer: In February
2024, Recursion named Kristen Rushton, M.B.A. as Chief Business
Operations Officer. Ms. Rushton has worked at Recursion for over 6
years, previously serving as Senior Vice President of Business
Operations. Prior to Recursion, Ms. Rushton worked at Myriad
Genetics and Myrexis.
- 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.
Fourth Quarter and Fiscal Year 2023 Financial
Results
- Cash Position: Cash and cash equivalents were
$391.6 million as of December 31, 2023, compared to $549.9 million
as of December 31, 2022.
- Revenue: Total revenue, consisting primarily
of revenue from collaborative agreements, was $10.9 million for the
fourth quarter of 2023, compared to $13.7 million for the fourth
quarter of 2022. Total revenue, consisting primarily of revenue
from collaboration agreements, was $44.6 million for the year ended
December 31, 2023, compared to $39.8 million for the year ended
December 31, 2022. For the fourth quarter of 2023, the decrease
compared to the prior period was due to the timing of workflows
from our strategic partnership with Roche-Genentech. For the year
ended December 31, 2023 compared to the prior year, the increase
was due to revenue recognized from our Roche-Genentech
collaboration, which has progressed from primarily cell type
evaluation work to inference based Phenomap building and additional
cell type evaluation work.
- Research and Development Expenses: Research
and development expenses were $69.5 million for the fourth quarter
of 2023, compared to $44.0 million for the fourth quarter of 2022.
Research and development expenses were $241.2 million for the year
ended December 31, 2023, compared to $155.7 million for the year
ended December 31, 2022. The increase in 2023 research and
development expenses compared to the prior year was due to
increased platform costs as we have expanded and upgraded our
capabilities in platform including our chemical technology, machine
learning and transcriptomics platform.
- General and Administrative Expenses: General
and administrative expenses were $30.5 million for the fourth
quarter of 2023 compared to $19.8 million for the fourth quarter of
2022. General and administrative expenses were $110.8 million for
the year ended December 31, 2023, compared to $81.6 million for the
year ended December 31, 2022. The increase in 2023 general and
administrative expenses compared to the prior year was primarily
driven by an increase in salaries and wages of $12.4 million and
increases in legal, software and depreciation expense.
- Net Loss: Net loss was $93.0 million for the
fourth quarter of 2023, compared to a net loss of $57.5 million for
the fourth quarter of 2022. Net loss was $328.1 million for the
year ended December 31, 2023, compared to a net loss of $239.5
million for the year ended December 31, 2022.
- Net Cash: Net cash
used in operating activities was $74.1 million for the fourth
quarter of 2023, compared to net cash used in operating activities
of $44.7 million for the fourth quarter of 2022. Net cash used in
operating activities was $287.8 million for the year ended December
31, 2023, compared to net cash used in operating activities of
$83.5 million for the year ended December 31, 2022. The difference
was primarily driven by a $150.0 million upfront payment from
Roche-Genentech in early 2022 and an increase in operating expenses
in 2023.
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
Consolidated Statements of Operations
Recursion Pharmaceuticals, Inc. |
Consolidated Statements of Operations
(unaudited) |
(in thousands, except share and per share
amounts) |
|
|
|
Three months ended |
|
Years ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
10,624 |
|
|
13,676 |
|
|
$ |
43,876 |
|
$ |
39,681 |
|
|
Grant revenue |
|
267 |
|
|
— |
|
|
|
699 |
|
|
162 |
|
Total revenue |
|
10,891 |
|
|
13,676 |
|
|
|
44,575 |
|
|
39,843 |
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
Cost of revenue |
|
9,881 |
|
|
10,840 |
|
|
|
42,587 |
|
|
48,275 |
|
|
Research and development |
|
69,482 |
|
|
43,980 |
|
|
|
241,226 |
|
|
155,696 |
|
|
General and administrative |
|
30,458 |
|
|
19,838 |
|
|
|
110,822 |
|
|
81,599 |
|
Total operating costs and expenses |
|
109,821 |
|
|
74,658 |
|
|
|
394,635 |
|
|
285,570 |
|
|
|
|
|
|
|
|
Loss from operations |
|
(98,930 |
) |
|
(60,982 |
) |
|
|
(350,060 |
) |
|
(245,727 |
) |
|
Other income (loss), net |
|
4,306 |
|
|
3,490 |
|
|
|
17,932 |
|
|
6,251 |
|
Loss before income tax benefit |
|
(94,624 |
) |
|
(57,492 |
) |
|
|
(332,128 |
) |
|
(239,476 |
) |
|
Income tax benefit |
|
1,628 |
|
$ |
— |
|
|
|
4,062 |
|
$ |
— |
|
Net loss |
$ |
(92,996 |
) |
$ |
(57,492 |
) |
|
$ |
(328,066 |
) |
$ |
(239,476 |
) |
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
Net loss per share of Class A, B and Exchangeablecommon
stock, basic and diluted |
$ |
(0.42 |
) |
$ |
(0.31 |
) |
|
$ |
(1.58 |
) |
$ |
(1.36 |
) |
Weighted-average shares (Class A, B andExchangeable)
outstanding, basic and diluted |
|
233,158,161 |
|
|
185,669,683 |
|
|
|
207,853,702 |
|
|
175,537,487 |
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
Recursion Pharmaceuticals, Inc. |
Consolidated Balance Sheets (unaudited) |
(in thousands) |
|
|
|
|
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
391,565 |
|
$ |
549,912 |
|
|
Restricted cash |
|
3,231 |
|
|
1,280 |
|
|
Other receivables |
|
3,094 |
|
|
2,753 |
|
|
Other current assets |
|
40,247 |
|
|
15,869 |
|
|
Total current assets |
|
438,137 |
|
|
569,814 |
|
|
|
|
|
|
Restricted cash, non-current |
|
6,629 |
|
|
7,920 |
|
|
Property and equipment, net |
|
86,510 |
|
|
88,192 |
|
|
Operating lease right-of-use assets |
|
33,663 |
|
|
33,255 |
|
|
Intangible assets, net |
|
36,443 |
|
|
1,306 |
|
|
Goodwill |
|
52,056 |
|
|
801 |
|
|
Other assets, non-current |
|
261 |
|
|
— |
|
|
Total assets |
$ |
653,699 |
|
$ |
701,288 |
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
3,953 |
|
$ |
4,586 |
|
|
Accrued expenses and other liabilities |
|
46,635 |
|
|
32,904 |
|
|
Unearned revenue |
|
36,426 |
|
|
56,726 |
|
|
Notes payable |
|
41 |
|
|
97 |
|
|
Operating lease liabilities |
|
6,116 |
|
|
5,952 |
|
|
Total current liabilities |
|
93,171 |
|
|
100,265 |
|
|
|
|
|
|
Unearned revenue, non-current |
|
51,238 |
|
|
70,261 |
|
|
Notes payable, non-current |
|
1,101 |
|
|
536 |
|
|
Operating lease liabilities, non-current |
|
43,414 |
|
|
44,420 |
|
|
Deferred tax liabilities |
|
1,339 |
|
|
— |
|
|
Total liabilities |
|
190,263 |
|
|
215,482 |
|
|
|
|
|
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
Common stock (Class A, B and Exchangeable) |
|
2 |
|
|
2 |
|
|
Additional paid-in capital |
|
1,431,056 |
|
|
1,125,360 |
|
|
Accumulated deficit |
|
(967,622 |
) |
|
(639,556 |
) |
|
Total stockholder's equity |
|
463,436 |
|
|
485,806 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
653,699 |
|
$ |
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 Large
Language Model-Orchestrated Workflow Engine; outcomes and benefits
expected from training causal AI models utilizing multimodal data
held at Tempus; expectations regarding early and late stage
discovery, preclinical, and clinical programs, including timelines
for enrollment in studies, data readouts, and progression toward
IND-enabling studies; expectations and developments with respect to
licenses and collaborations, including option exercises by partners
and additional partnerships; prospective products and their
potential future indications and market opportunities; developments
with Recursion OS and other technologies, including augmentation of
our dataset; expectations for business and financial plans and
performance, including cash runway; Recursion’s plan to maintain a
leadership position in data generation and aggregation; the timing
of the filing of the Annual Report on Form 10-K for the fiscal year
ended December 31, 2023 and the inclusion of the CEO Letter; 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 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/9dc2dd54-c036-456c-a2d5-867064509f0d
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