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Recursion Reports First Quarter 2021 Financials and Provides Business Updates

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- Strengthened balance sheet with the completion of a successful IPO

- Purchased, built, and activated BioHive-1, reportedly the 58th most powerful supercomputer in the world, to accelerate our drug discovery process

- Continued development of internal pipeline and partnership programs remain on track

- Promoted Ron Alfa M.D., Ph.D. to Senior Vice President of Research, to assume the responsibilities of outgoing Chief Scientific Officer Sharath Hegde, Ph.D. and further strengthen our commitment to inferential search

SALT LAKE CITY, May 12, 2021 /PRNewswire/ -- Recursion Pharmaceuticals, Inc. (Nasdaq : RXRX), a clinical-stage biotechnology company decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering, today reported financial results for the first quarter of 2021 and provided business updates.

Recursion Logo (PRNewsfoto/Recursion)
Recursion Logo (PRNewsfoto/Recursion)

"We are thrilled to have led Recursion through a successful IPO process which garnered support from new and existing healthcare and technology investors and better capitalized the company's mission of decoding biology to radically improve lives," said Recursion Co-Founder and CEO Chris Gibson Ph.D. He continued, "We are excited about Recursion's continued foray into inferential search, how that approach has quickly added many new programs to our portfolio in a short time, and how our new supercomputer, BioHive-1, will enable faster training and iteration of our machine learning algorithms and the ability to train on the totality of our nearly 8 petabytes of relatable biological data. And finally, we continue to make strides expanding, advancing, and executing on our pipeline of potential new medicines, including our four clinical stage programs and our first new chemical entity now headed towards clinical development."

Recursion finished the first quarter of 2021 with a portfolio of 4 clinical stage programs, 4 preclinical programs, 4 late discovery programs, and 25 early discovery programs, for a total of 37 research and development programs. Additionally, Recursion continued scaling the total number of executed phenomic experiments to over 67 million, the size of its total dataset to nearly 8 petabytes, and the number of biological inferences to over 92 billion. We accomplished this by utilizing a cellular library of 36 cell types, an in-house chemical library of over 706 thousand compounds, an in silico library of over 12 billion chemical scaffolds, and a growing team of more than 200 Recursionauts that is balanced between life scientists and computational and technical experts.

Summary of Business Highlights

  • Clinical Programs

  • Notable Preclinical Programs

  • Notable Late Discovery Programs

  • Partnership : There has been continued progress in our collaboration with Bayer to discover small molecule drug candidates targeting novel biology for the treatment of fibrotic diseases. Bayer's library of approximately 500,000 compounds has been onboarded to Recursion and high throughput discovery screens have been initiated for two of the approximately 10 programs.

  • Inferential Search : In less than 9 months, Recursion's transition to inferential search, which leverages its massive dataset for drug discovery, has yielded 18 programs in the area of oncology. This work has been led by Ron Alfa M.D., Ph.D., as Senior Vice President of Translational Medicine at Recursion. As a result of this success, Recursion is expanding its inferential search capabilities into neuroscience as well as inflammation and immunology.

  • Platform

  • Facilities : We initiated two facility expansions in Salt Lake City. First, we are expanding our current headquarters to add laboratory space that will support our plans for additional technology and future partnerships. Second, we are establishing a nearby CMC site for work in process chemistry, analytical chemistry, and drug substance production.

First Quarter 2021 Financial Results

  • Cash Position : Cash, cash equivalents and marketable securities were $214.1 million as of March 31, 2021 and do not include net proceeds from the company's April 2021 IPO of $462.6 million.

  • Revenue : Total revenue, consisting primarily of revenue from collaborative agreements, was $2.6 million for the first quarter of 2021, compared to $60 thousand for the first quarter of 2020. The increase was primarily due to progress in our collaboration agreement with Bayer.

  • Research and Development Expenses : Research and development expenses were $24.1 million for the first quarter of 2021, compared to $12.8 million for the first quarter of 2020. The increase in research and development expenses over this period was primarily due to an increased number of experiments screened on the platform, an increased number of preclinical assets being validated, and the development of clinical-stage assets.

  • General and Administrative Expenses : General and administrative expenses were $8.9 million for the first quarter of 2021, compared to $5.6 million for the first quarter of 2020. The increase in general and administrative expenses was due to growth in size of the company's operations including an increase in salaries and wages of $1.2 million, human resources costs, facilities costs, finance costs and other administrative costs associated with operating a growth-stage company.

  • Net Loss : Net loss was $30.7 million for the first quarter of 2021, compared to a net loss of $18.4 million for the first quarter of 2020.

Other Corporate Updates

  • IPO : Recursion upsized and completed its initial public offering in April 2021, raising gross and net proceeds of $501.8 million and $462.6 million, respectively.

  • Company Management : Since the end of 2020, Recursion has made several executive and board appointments aimed at further supporting the advancement of its pipeline and expanding its business operations. These appointments include naming R. Martin Chavez, Ph.D. as Chairman of our Board of Directors, Ramona Doyle, M.D. as Chief Medical Officer, and Louisa Daniels, J.D. as Chief Legal Officer and General Counsel. Additionally, Ron Alfa M.D., Ph.D. has been promoted to Senior Vice President of Research to lead the rapid creation and advancement of new early discovery programs based on our inferential search platform, and Sharath Hegde Ph.D. has resigned from his role as the company's Chief Scientific Officer. Dr. Alfa will assume the responsibilities of Dr. Hegde. We thank Dr. Hegde for his substantial contributions to Recursion, which include accelerating our work with new chemical entities and curating our rapid repurposing library.

About Recursion
Recursion is a clinical-stage biotechnology company decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering. Our goal is to radically improve the lives of patients and industrialize drug discovery. Central to our mission is the Recursion Operating System, which combines an advanced infrastructure layer to generate what we believe is one of the world's largest and fastest-growing proprietary biological and chemical datasets. We combine that with the Recursion Map, a suite of custom software, algorithms, and machine learning tools that we use to explore foundational biology unconstrained by human bias and navigate to new biological insights. We are a biotechnology company scaling more like a technology company.

Contact
Elyse Freeman - Communications and Content Manager
investorrelations@recursion.com

Condensed Consolidated Statements of Operations

Recursion Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

(in thousands, except share and per share amounts)




Three months ended



March 31,

Revenue

2021

2020


Grant revenue

$

62

$

60


Operating revenue

2,500

-

Total revenue

2,562

60





Operating expenses




Research and development

24,109

12,842


General and administrative

8,937

5,561

Total operating expenses

33,046

18,403





Loss from operations

(30,484)

(18,343)


Other loss, net

(233)

(81)

Net loss and comprehensive loss

$

(30,717)

$

(18,424)





Per share data



Net loss per share, basic and diluted

$

(1.33)

$

(0.85)

Weighted average shares of common stock, basic and diluted

23,035,623

21,639,891

Condensed Consolidated Balance Sheets

Recursion Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands)







March 31,

December 31,



2021

2020

Assets




Current assets




Cash and cash equivalents

$

214,088

$

262,126


Restricted cash

5,042

5,041


Accounts receivable

71

156


Other current assets

2,621

2,155


Total current assets

221,822

269,478






Property and equipment, net

44,642

25,967


Intangible assets, net

2,414

2,490


Other non-current assets

3,065

650


Total assets

$

271,943

$

298,585





Liabilities, convertible preferred stock and stockholders' deficit




Current liabilities




Accounts payable

3,125

1,074


Accrued expenses and other liabilities

11,085

10,485


Current portion of unearned revenue

10,000

10,000


Current portion of notes payable

2,145

1,073


Current portion of lease incentive obligation

499

467


Total current liabilities

26,854

23,099






Deferred rent

2,750

2,674


Unearned revenue, net of current portion

14,167

16,667


Notes payable, net of current portion

10,339

11,414


Lease incentive obligation, net of current portion

2,552

2,708


Total liabilities

56,662

56,562


Commitments and contingencies








Convertible preferred stock

448,312

448,312


Stockholders' deficit




Common stock

-

-


Additional paid-in capital

11,287

7,312


Accumulated deficit

(244,318)

(213,601)


Total stockholder's deficit

(233,031)

(206,289)






Total liabilities, convertible preferred stock and stockholders' deficit

$

271,943

$

298,585

Forward Looking Statements
This press release contains information that includes or is based upon "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements provide our expectations or forecasts regarding future events. You can identify these statements by the fact they do not relate strictly to historical or current facts. They may use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, forward-looking statements include statements relating to intended future actions; plans with respect to clinical trials and preclinical activities; prospective products or product approvals; future performance or results of anticipated products or technology; expenses; our ability to obtain, maintain and enforce intellectual property protections and financial results; in addition to other topics. Any or all of our forward-looking statements here or elsewhere may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements and from expected or historical results. Many such factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. In particular, you should read the discussion in the "Risk Factors" section in our Prospectus filed with the U.S. Securities and Exchange Commission (SEC) on April 16, 2021 and in our periodic filings with the SEC. Other factors besides those listed could also adversely affect the company. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future developments or otherwise, except to the extent required by applicable law. These forward-looking statements (except as may be otherwise noted) speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. You are advised to consult any further disclosures we make on related subjects in our reports to the SEC.

Cision
Cision

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SOURCE Recursion Pharmaceuticals