• Thu. Jan 23rd, 2025

Recursion Provides Business Updates and Reports Third Quarter 2024 Financial Results

Recursion Provides Business Updates and Reports Third Quarter 2024 Financial Results

SALT LAKE CITY, Nov. 06, 2024 (GLOBE NEWSWIRE) — 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, 2024.

“We are excited to continue to drive rapidly towards the closure of our proposed business combination with Exscientia in a matter of weeks, ahead of the original guidance,” said Chris Gibson, Ph.D., Co-founder and CEO of Recursion. “We believe the combination with Exscientia will help to build a robust and diverse portfolio of tech-enabled clinical and near-clinical programs, significant value-creation opportunities through multiple transformational partnerships with both biopharma and technology companies, and the industry’s first full-stack technology-enabled small molecule discovery platform. Ultimately, we have never been more confident in our ability to translate our work into potential medicines for patients. These developments will drive additional value beyond the clinical trial catalysts we’ve seen in the last few months, including encouraging data from our Phase 2 trial in CCM, the first patient dosed in our Phase 2 trial in C. difficile infection, and our IND clearance for a Phase 1/2 trial in biomarker-enriched solid tumors and lymphoma (Target RBM39).”

Additional Corporate Updates

  • Combination with Exscientia: A special shareholder meeting will be held on Nov 12, 2024 at 5:00 pm Eastern Time / 3:00 pm Mountain Time in order to vote on Recursion’s proposed combination with Exscientia. Shareholders may vote in advance of this meeting by telephone, mail, or online at www.virtualshareholdermeeting.com/​RXRX2024SM. Following this shareholder meeting, we expect the date of the scheme of arrangement to be Nov 20, 2024.

  • L(earnings) Call: We will not host a L(earnings) Call in relation to the business updates and financials for the third quarter. Instead, we expect to host an Update Call around the date of the scheme of arrangement which is expected to be Nov 20, 2024. We 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 People & Impact Officer: In October, Erica Fox joined Recursion as its Chief People & Impact Officer. Ms. Fox has over 20 years experience as a people and systems strategist having previously led various human resource functions at technology companies Primer.ai and Google.

Third Quarter 2024 Financial Results

  • Cash Position: Cash and cash equivalents were $427.6 million as of September 30, 2024.

  • Revenue: Total revenue was $26.1 million for the third quarter of 2024, compared to $10.5 million for the third quarter of 2023. The increase was due to revenue recognized from our partnership with Roche & Genentech and the $30.0 million acceptance fee for the completion of a neuroscience phenomap.

  • Research and Development Expenses: Research and development expenses were $74.6 million for the third quarter of 2024, compared to $70.0 million for the third quarter of 2023. The increase in research and development expenses was driven by our platform and personnel costs as we continue to expand and upgrade our platform, including our chemical technology, machine learning, and transcriptomics platform.

  • General and Administrative Expenses: General and administrative expenses were $37.8 million for the third quarter of 2024, compared to $29.2 million for the third quarter of 2023. The increase in general and administrative expenses compared to prior period was primarily driven by an increase in software and lease expense.

  • Net Loss: Net loss was $95.8 million for the third quarter of 2024, compared to a net loss of $93.0 million for the third quarter of 2023.

  • Net Cash: Net cash used in operating activities was $59.2 million for the third quarter of 2024, compared to $72.9 million for the third quarter of 2023. The change in net cash used in operating activities compared to the same period last year was the net result of the $30.0 million acceptance fee received during the third quarter of 2024, partially offset by the higher operating costs incurred for research and development and general and administrative activities.

About Recursion
Recursion 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, the San Francisco Bay Area, and London, UK. Learn more at www.Recursion.com, or connect on X (formerly Twitter) and LinkedIn.

Media Contact
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Investor Contact
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Recursion Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three months ended

 

Nine months ended

 

 

September 30,

 

September 30,

Revenue

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

 

Operating revenue

$

26,082

 

$

10,102

 

 

$

53,977

 

$

33,252

 

 

Grant revenue

 

 

 

431

 

 

 

316

 

 

432

 

Total revenue

 

26,082

 

 

10,533

 

 

 

54,293

 

 

33,684

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

Cost of revenue

 

12,079

 

 

10,877

 

 

 

32,444

 

 

32,706

 

 

Research and development

 

74,600

 

 

70,007

 

 

 

216,087

 

 

171,744

 

 

General and administrative

 

37,757

 

 

29,199

 

 

 

100,998

 

 

80,364

 

Total operating costs and expenses

 

124,436

 

 

110,083

 

 

 

349,529

 

 

284,814

 

 

 

 

 

 

 

 

Loss from operations

 

(98,354

)

 

(99,550

)

 

 

(295,236

)

 

(251,130

)

 

Other income, net

 

2,679

 

 

6,533

 

 

 

9,347

 

 

16,060

 

Loss before income tax benefit

 

(95,675

)

 

(93,017

)

 

 

(285,889

)

 

(235,070

)

 

Income tax benefit

 

(167

)

 

 

 

 

1,134

 

 

 

Net loss and comprehensive loss

$

(95,842

)

$

(93,017

)

 

$

(284,755

)

$

(235,070

)

 

 

 

 

 

 

 

Per share data

 

 

 

 

 

Net loss per share of Class A, B and Exchangeable common stock, basic and diluted

$

(0.34

)

$

(0.43

)

 

$

(1.12

)

$

(1.16

)

Weighted-average shares (Class A, B and Exchangeable) outstanding, basic and diluted

 

282,583,048

 

 

214,327,186

 

 

 

253,447,099

 

 

203,090,637

 

 

 

 

 

 

 

 

Recursion Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands)

 

 

 

 

 

 

September 30,

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

427,647

 

$

391,565

 

 

Restricted cash

 

1,555

 

 

3,231

 

 

Other receivables

 

2,255

 

 

3,094

 

 

Other current assets

 

42,715

 

 

40,247

 

 

Total current assets

 

474,172

 

 

438,137

 

 

 

 

 

 

Restricted cash, non-current

 

6,629

 

 

6,629

 

 

Property and equipment, net

 

84,410

 

 

86,510

 

 

Operating lease right-of-use assets

 

47,882

 

 

33,663

 

 

Financing lease right-of-use assets

 

26,897

 

 

 

 

Intangible assets, net

 

34,093

 

 

36,443

 

 

Goodwill

 

52,056

 

 

52,056

 

 

Other assets, non-current

 

360

 

 

261

 

 

Total assets

$

726,499

 

$

653,699

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

2,260

 

$

3,953

 

 

Accrued expenses and other liabilities

 

40,597

 

 

46,635

 

 

Unearned revenue

 

49,579

 

 

36,426

 

 

Operating lease liabilities

 

8,233

 

 

6,116

 

 

Notes payable and financing lease liabilities

 

8,219

 

 

41

 

 

Total current liabilities

 

108,888

 

 

93,171

 

 

 

 

 

 

Unearned revenue, non-current

 

15,712

 

 

51,238

 

 

Operating lease liabilities, non-current

 

53,663

 

 

43,414

 

 

Notes payable and financing lease liabilities, non-current

 

20,510

 

 

1,101

 

 

Deferred tax liabilities

 

168

 

 

1,339

 

 

Other liabilities, non-current

 

2,999

 

 

 

 

Total liabilities

 

201,940

 

 

190,263

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

Common stock (Class A, B and Exchangeable)

 

3

 

 

2

 

 

Additional paid-in capital

 

1,776,933

 

 

1,431,056

 

 

Accumulated deficit

 

(1,252,377

)

 

(967,622

)

 

Total stockholder’s equity

 

524,559

 

 

463,436

 

 

 

 

 

 

Total liabilities and stockholders’ equity

$

726,499

 

$

653,699

 

 

 

 

 

Forward-Looking Statements
This 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; the timing and likelihood of completing the proposed business transaction with Exscientia plc; the impact of the Google Cloud agreement on our drug discovery platform; the option exercise by Roche-Genentech and the potential future revenue related to the potential creation, delivery, and option of future maps; the completion and uses of additional maps being built; our anticipated meeting with the FDA regarding REC-994; plans to present SYCAMORE trial data at a medical conference and submit the data for publication; 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; prospective products and their potential future indications and market opportunities; expectations for business and financial plans and performance, including cash runway; Recursion’s plan to maintain a leadership position in data generation and aggregation and advancing the future of medicine; 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 (the “SEC”), including in the definitive joint proxy statement related to the proposed business combination filed with the SEC on October 10, 2024, our most recent Annual Report on Form 10-K, and our subsequent Quarterly Reports on Form 10-Q. 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.

Additional Information and Where to Find It
This communication relates to the proposed business combination by and between Recursion and Exscientia plc. Recursion and Exscientia have delivered a definitive joint proxy statement related to the proposed business combination to Recursion’s stockholders and Exscientia’s shareholders, which was also filed with the SEC on October 10, 2024. The definitive joint proxy statement provides full details of the proposed business combination and the attendant benefits and risks, including the terms and conditions of the Scheme of Arrangement and the other information required to be provided to Exscientia’s shareholders under the applicable provisions of the United Kingdom Companies Act 2006. This communication is not a substitute for the definitive joint proxy statement or any other document that Recursion or Exscientia may file with the SEC or send to their respective security holders in connection with the proposed business combination. Security holders are urged to read the definitive joint proxy statement and all other relevant documents filed with the SEC or sent to Recursion’s stockholders or Exscientia’s shareholders as they become available because they will contain important information about the proposed business combination. All documents, when filed, will be available free of charge at the SEC’s website (www.sec.gov). You may also obtain these documents by contacting Recursion’s Investor Relations department at [email protected]; or by contacting Exscientia’s Investor Relations department at [email protected]. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (WHICH INCLUDES AN EXPLANATORY STATEMENT IN RESPECT OF THE SCHEME OF ARRANGEMENT OF EXSCIENTIA, IN ACCORDANCE WITH THE REQUIREMENTS OF THE UNITED KINGDOM COMPANIES ACT 2006) AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Participants in the Solicitation
The Company, Exscientia and their respective directors and executive officers may be deemed to be participants in any solicitation of proxies in connection with the proposed business combination. Information about Recursion’s directors and executive officers is available in Recursion’s proxy statement dated April 23, 2024 for its 2024 Annual Meeting of Stockholders. Information about Exscientia’s directors and executive officers is available in Exscientia’s Annual Report on Form 20-F dated March 21, 2024. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the definitive joint proxy statement. Investors are urged to read the definitive joint proxy statement and any other relevant materials to be filed with the SEC regarding the proposed business combination when they become available, carefully before making any voting or investment decisions.

No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Company securities issued in the proposed business combination are anticipated to be issued in reliance upon an available exemption from such registration requirements pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended.

A photo accompanying this announcement is available at

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