Analyst Conference Summary

biotechnology

conference date: May 5, 2025
for quarter ending: March 31, 2025 (first quarter, Q1)

Forward-looking statements

Overview: Continues to advance pipeline.

Basic data (GAAP):

Revenue was $14.7 million, up from $13.8 million year-earlier.

Net Income was negative $202 million, down from negative $91 million year-earlier.

EPS (Earnings per Share), diluted, was negative $0.50, down from negative $0.39 year-earlier.

Guidance:

For 2025 cash burn is expected to be under $450 million. Expects cash to last into mid 2027, based on projected lowering of expenses.

Conference Highlights:

Chris Gibson, CEO, said "Recursion's decade-long investment in AI is driving a decisive, data-led portfolio strategy. We are prioritizing high-potential programs to accelerate better treatments to patients, building on our platform's unique ability to learn and lead this transformative shift in drug discovery. Our deep appreciation goes to the patients and investigators whose participation is invaluable on this journey." Is combining business with Exscientia (acquired in August 2024), but streamlining the portfolio and cutting costs. Focus is on cancer and rare diseases.

REC-4881, a MEK1/2 inhibitor, is in a Phase 2 clinical trial for FAP (familial adenomatous polyposis). An oral presentation of May 4, 2025 showed the 4 mg QD does lead to a median 43% recution in polyp burden at 13 weeks. 5 of 6 patients showed decreases, but one patient had a sustantial increase. Safety was typical of a MEK inhitor.

REC-7735 targetting PI3Ka H1047R for breast cancer is preclinical, has shown activity in mice. H1047R mutation is present in about 14% of HR+/HER2- breast cancers.

REV102 targetting ENPP1 for hypophasphatasia has reached the IND-enabling stage, with preclinical data supporting first-in-class potential.

Other preclinical programs include REC-617; REC-1245; REC-3565; REC-4539.

Recursion has decided to ax three programs: REC-2282, which had been in Phase 2; REC-994, and REC-3964. All had shown some positive trends, but not enough to go forward.

Sanofi and Recursion now are in four partnered programs. A milestone achieved in Q1 resulted in a $7 million milestone payment, with program potential for $300 million more in milestone payemtns.

Recursion is also in collaborations with Roche and its subsidiary Genentech, building five phenomaps. for the project.

The platform collaboration with Enamine, leveraging Recursion's massive data layer of predicted protein-small molecule interactions, resulted in the generation of screening libraries to target 100 clinically relevant drug targets. Those libraries are now available for purchase from Enamine.

Recursion platform is now at Recursion 2.0 (earlier did 0.1 and 1.0).

Cash ended the quarter at $503 million. Cash used in operating activities was $132 million.

Total expenses were $206 million, consisting of: cost of revenue $22 million, R&D $130 million, G&A $55 million. Loss from operations $191 million. Other loss $11 million.

Q&A:

Burn rate in 2026, plan to raise capital? More detail as we move forward. We have an ATM facility we have used moderately in the past.

Expectation of more programs being optioned? We see progress on that in the future, could bet better deals for programs that are further along the pipeline.

General re-iteration on development, including increased clinical activity.

Believes oncology and rare diseases are the best areas for Recursion to pursue.

FAT readout, competition? Our molecule showed some efficacy with good safety. Off-label drugs do show some polyp reduction. We are encouraged by our early data. Non-responder? We are working to understand that. With larger trial may get more data on non-responders. There is a competitor starting Phase 3, but our data so far is data. We will have a conversation with the FDA about the path forward.

The products that are now discontinued are from the Recursion 0.1 platform. We designed the platform to learn with each iteration, so probability of success should be up for 1.0 and then 2.0.

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