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Recursion (RXRX) Inks Neuroscience and Oncology Deal With Roche

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Recursion Pharmaceuticals, Inc. RXRX announced that it has entered into a new collaboration with Genentech, a wholly-owned subsidiary of Swiss pharma giant Roche RHHBY, to advance novel medicines in areas of neuroscience and oncology indication. The deal is worth several billion dollars.

Per the agreement, Recursion is entitled to receive an upfront payment of $150 million and additional performance-based milestone payments. The company will work with R&D units of both Roche and Genentech in order to leverage technology-enabled drug discovery through the recursion operating system for identifying novel targets and advance medicines in neuroscience and oncology indications.

Under the terms of the agreement, Roche and Genentech together may start up to 40 programs. Upon successful development and commercialization, each of these programs might yield more than $300 million for Recursion as sales-based milestone payments as well as tiered royalties on net sales.

With this collaboration, the companies are looking to build a model of technology-driven drug discovery, and develop medicines against novel targets in neuroscience and oncology indications.

Shares of Recursion were up 12.1% on Tuesday following the announcement of the news. The stock has plunged 31.4% in the past six months compared with the industry’s decrease of 12.5%.

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We remind investors that Recursion started trading on the NASDAQ stock exchange following its initial public offering on April 16, 2021.

The company’s clinical pipeline currently consists of several pipeline candidates being developed in early to mid-stage studies for treating different types of indications.

Recursion plans to initiate a parallel-group, two-stage, phase II/III study evaluating REC-2282 for the potential treatment of NF2 meningiomas in early 2022. The company also plans to initiate a phase II study on another candidate, REC-994, for treating cerebral cavernous malformation early next year.

The company is looking to start two separate phase II study on REC-4881 and REC-3599 for the treatment of familial adenomatous polyposis and GM2 gangliosidosis, respectively, in the first half of 2022.

Please note that Recursion has collaboration with Bayer AG BAYRY to discover small-molecule drug candidates with the potential to treat fibrotic diseases.

Earlier this month, Recursion expanded its existing strategic collaboration with Bayer to include the former’s inferential search capabilities, enabling Bayer to accelerate the work on fibrotic diseases.

Zacks Rank & Stock to Consider

Recursion currently carries a Zacks Rank #3 (Hold). A top-ranked stock in the same sector is Endo International plc ENDP, which has a Zacks Rank #1 (Strong Buy) at present.You can see the complete list of today’s Zacks #1 Rank stocks here.

Endo International’s earnings estimates have been revised 24% upward for 2021 and 10.3% upward for 2022 over the past 60 days.

Endo International’s earnings have surpassed estimates in each of the trailing four quarters.

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Roche Holding AG (RHHBY) : Free Stock Analysis Report

Endo International plc (ENDP) : Free Stock Analysis Report

Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report

Recursion Pharmaceuticals, Inc. (RXRX) : Free Stock Analysis Report

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