SALT LAKE CITY - Recursion, a clinical stage TechBio company, has received clearance from the U.S. Food and Drug Administration (FDA) for a Phase 1/2 clinical trial of its new chemical entity, REC-1245, intended for the treatment of solid tumors and lymphoma in a biomarker-enriched patient population. The trial is set to begin in Q4 2024.
Dr. Chris Gibson, Co-founder and CEO of Recursion, highlighted the rapid development of REC-1245, which progressed from target identification to a preclinical drug candidate in less than 18 months, attributing this speed to the company's AI-enabled active learning modules. The novel target, RBM39, was identified through Recursion's expansive platform, which is designed to industrialize drug discovery by decoding biology through a combination of experimental and computational approaches.
The potential therapeutic, which targets RBM39, a regulator associated with CDK12, could address a significant unmet medical need for over 100,000 patients in the US and EU5. Preclinical data suggests that RBM39 degradation could disrupt DNA Damage Response (DDR) networks and cell cycle checkpoints, offering a new avenue for treating solid tumors, especially those resistant to existing therapies.
Najat Khan, Ph.D., Chief R&D Officer and Chief Commercial Officer at Recursion, stated that independent research has validated the therapeutic potential of RBM39 degradation. The upcoming clinical trial will evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics, and potential efficacy of REC-1245 as a monotherapy.
Recursion, listed on NASDAQ: RXRX, operates on the Recursion OS platform, which leverages machine learning to analyze a vast proprietary dataset of biological and chemical relationships. The company is headquartered in Salt Lake City and is involved in the Utah life sciences industry collective, BioHive, with additional offices in Toronto, Montréal, London, and the San Francisco Bay Area.
This announcement is based on a press release statement and contains forward-looking statements regarding the potential efficacy and clinical trial plans for REC-1245. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
In other recent news, Recursion Pharmaceuticals has reported significant progress in the development of its CCM treatment, REC-994. The Phase 2 SYCAMORE trial met its primary safety endpoint and showed promising trends in MRI-based efficacy measures. However, improvements in patient or physician-reported outcomes were not observed at the 12-month mark. Needham has maintained a Buy rating but lowered the price target from $16 to $11 due to perceived development risks. Similarly, Jefferies has reduced its price target to $6.00 while maintaining a Hold rating. KeyBanc reaffirmed its Overweight rating and $12.00 price target, and TD Cowen also maintained a Hold rating on Recursion Pharmaceuticals.
Recursion Pharmaceuticals has also announced a $30 million deal with Genentech and plans for a public offering of $200 million worth of Class A common stock, led by Goldman Sachs (NYSE:GS) & Co. LLC and J.P. Morgan. The company has secured a commitment from Evotec SE to support its proposed acquisition of UK-based Exscientia plc, bringing total shareholder support for the transaction to approximately 53%.
Recent developments also include changes in leadership, with Dr. Robert Hershberg appointed as the new Chair of the Board, and Dr. Najat Khan joining the company as its new Chief R&D Officer and Chief Commercial Officer. These developments reflect Recursion Pharmaceuticals' ongoing efforts to advance its internal pipeline and expand its operations.
InvestingPro Insights
As Recursion (NASDAQ: RXRX) prepares to launch its Phase 1/2 clinical trial for REC-1245, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at $1.73 billion, reflecting investor expectations for its innovative AI-driven drug discovery platform.
InvestingPro Data reveals that Recursion's revenue for the last twelve months as of Q2 2023 was $49.63 million, with a quarterly revenue growth of 30.86% in Q2 2023. This growth aligns with the company's progress in advancing its pipeline, including the recently FDA-cleared REC-1245 trial.
However, it's important to note that Recursion is currently operating at a loss, with an adjusted operating income of -$396.42 million for the last twelve months. This is not uncommon for clinical-stage biotech companies investing heavily in research and development.
InvestingPro Tips highlight that Recursion is quickly burning through cash, which is consistent with its intensive R&D efforts and clinical trial preparations. On a positive note, the company holds more cash than debt on its balance sheet, providing some financial flexibility as it moves forward with its clinical programs.
The stock has experienced a significant decline recently, with a one-week price total return of -10.45% and a one-month return of -15.25%. This volatility may present opportunities for investors who believe in the long-term potential of Recursion's AI-enabled drug discovery platform.
For those interested in a deeper analysis, InvestingPro offers 10 additional tips for Recursion, providing a more comprehensive view of the company's financial health and market position.
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