Analyst Conference Summary

biotechnology

conference date: August 6, 2026
for quarter ending: June 30, 2026 (second quarter, Q2)

Bought initial position on 12/1/2025
Forward-looking statements

Overview: Mainly early clinical stage pipeline designed by AI continues to progress.

Basic data (GAAP):

Revenue was $7.7 million, up sequentially from $6.5 million, and down from $19.2 million year-earlier.

Net Income was negative $131 million, down sequentially from negative $118 million, and up from negative $172 million year-earlier.

EPS (Earnings per Share), diluted, was negative $0.25, down sequentially from negative $0.22, and up from negative $0.41 year-earlier.

Guidance:

Cash runway to Q1 2028.

Conference Highlights:

Najat Khan, Ph.D., CEO and President said ""The advancement of the first unexplored neuroscience target from our collaboration with Roche and Genentech into an early discovery program is an important proof point. Finding new targets in neuroscience has historically been challenging, and this milestone highlights our ability to uncover novel biology in areas where conventional approaches have struggled. We believe that combining disease-relevant data at scale, foundation models, an end-to-end learning system, and deep scientific collaboration can uncover new biology in ways that were not previously possible." Continued to emphasize the upgrading of AI capabilities for drug discovery.

In Q2 2026 Genentech (Roche) exercised its first Validated Target Option in its Recursion collaboration. It advanced a small molecule with a neurology target into early (pre-clinical) discovery.

Recursion believes it could reach late-stage discovery milestones with Sanofi in about 6 to 12 months.

REC-7735, Recursion’s AI-designed PI3Ka H1047R inhibitor, to initiate a Phase 1/2 trial before the end of 2026. For patients with select PIK3CA H1047R-mutant solid tumors.

REC-617 (CDK7) early Phase 1 safety and PK combination data is expected in 1H27

REC-3565 (MALT1) early Phase 1 safety and PK combination data is expected in 1H27

Recursion is in discovery partnerships with Roche, Sanofi, Bayer, and Merck KGaA. In February 2026, Recursion received a $4M payment from Sanofi for the Onc 2 program. The first-in-class Sanofi-partnered oncology program is against a historically difficult and novel biological space. More milestones are expected in 2H 2026 and into 2027.

In Q1 2026 REC-4881 for FAP / MEK1/2 Phase 2 trial showed strong efficacy signals. Engaging with FDA to define a registrational pathway. Update due in 2H2026. Showed a median 43% reduction in polyp burden at Week 13, deepening to 53% at Week 25 (following a treatment break). 40% of patients demonstrated improvement in Spigelman stage, supporting a differentiated and durable profile in FAP (Familial adenomatous polyposis). Will provide more detailed data at CGA-IGC on November 2, 2026.

In Q1 2026 REC-4539, a LSD1 inhibitor for solid tumors like SCLC, and AML, dosed its first patient. Data expected in 2H 2027.

REC-7735 targetting Pl3Ka H1047R is now in IND enabling studies for breast and other solid tumors with the mutations. Could initiate Phase 1 in 2H 2026. Could expand to breast cancer. Selectivity should allow for enhanced safety profile.

REC-1245 in Q1 2026 reported early clinical data showing safety and dose-dependent pharmaokinetics. More data expected in 2H 2026. It is a first-in-class RBM39 degrader, identified using phenomap-derived insight, which mimics CDK12 loss to induce replication stress and suppress DDR pathways without CDK12 related toxicities. Earlier data showed activity in tumors with replication stress and DNA repair vulnerabilities. The trial is now enrolling select tumor types to identify responsive populations.

Recursion maps of the genome gives insight into gene interactions and novel pathways, including in the immune cells of the brain. Compleated a microglial cell map. Working on two new transcriptonomics models, TxPert and TxFM.

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

Cash ended the quarter at $546 million, down sequentially from $665 million. Cash used in operating activities was $106 million.

Total expenses were $143 million, consisting of: cost of revenue $11 million, R&D $89 million, G&A $42 million. Loss from operations $135 million. Other income $4 million.

Q&A selective summary:

Genentech collaboration as a template for others? The way we develop novel targets, we use that internally and with partners. We can continue to scale that and use as a template for partners.

Update on FDA discussions on 4881? Updated oral data presentation for FAP-treating physicians in November.FDA discussions ongoing. Little precedent in FAP. We want to de-risk the study design. FDA discussions have been productive. More details on that later this year.

Expense reductions? We have not changed full year guidance for outcomes. Doing more with less. We are getting answers more cheaply. We continue to try to do things better and faster. This year we changed our budget to an outcomes-based budget.

Your durable competitive AI advantage? We have a data factory. 80% to 90% of biology is unknown, so you need to generate data before you can use AI to analyse. We have validated AI capability and data that competitors lack. The only way to validate predictions is in the lab. That takes a lot of technical expertise. We are looking for drugs that are highly differentiated from competition.

Go/No Go process for 7735? Room for improvement in the P13 Kinase space. Several important cancer types. We did a rigorous evaluation, including for selectivity, in the preclinical process, to reach the Go decision. We are also looking for the right patients for the clinical trial. The compound was designed in 10 months. 130x activity over wild type.

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