Recursion Pharmaceuticals (NASDAQ:RXRX) used its latest earnings call to emphasize what management described as an inflection point for the company, highlighting a first positive clinical proof-of-concept in familial adenomatous polyposis (FAP), continued progress in partnerships—most notably a fifth milestone in its collaboration with Sanofi—and what it characterized as disciplined execution that has extended its cash runway into early 2028.
Management frames the “AI end-to-end” strategy
Chief Executive Officer Najat Khan said Recursion has spent the past decade building a platform that integrates large-scale biological data generation, machine learning, and compute. She noted the company has also strengthened its capabilities through acquisitions including Exscientia, Valence, and Cyclica, adding what she described as deeper chemistry and AI foundations.
Clinical pipeline: FAP proof-of-concept and upcoming readouts
The company’s most advanced discussion centered on REC-4881 in FAP, a disease Khan said has no approved therapies and is characterized by hundreds of precancerous polyps with a “100% risk” of colorectal cancer by age 40. She cited “more than 50,000 addressable patients in the U.S. and E.U.”
Recursion said it completed a Phase 2 study and previously shared positive clinical proof-of-concept data in December. Khan recapped results from three months of treatment with 4 mg once daily of its MEK1/2 inhibitor, reporting a median polyp burden reduction of about 43% and a 75% response rate. Adverse events were described as consistent with MEK1/2 inhibitors, mostly grade 1/2, including rash and CPK increases; she said there have been no grade 4/5 events “to date.”
Management also highlighted durability data after three months off treatment, saying it observed continued polyp burden reduction that in some cases deepened. Khan said Recursion is the first to examine an on/off treatment approach in FAP and that this dynamic is important given the chronic nature of the disease.
Next steps for REC-4881 include initiating FDA engagement on a registrational path in the first half of 2026. During Q&A, management reiterated that discussion with the FDA is expected to address study design, patient population, and endpoints, and said the company also has natural history data to support those conversations. Recursion said enrollment has begun for an “18 and over” cohort and that it is advancing dose optimization efforts. Additional clinical data is expected in the first half of 2027.
Beyond FAP, management outlined several other programs and timelines:
- RBM39: In Phase 1 monotherapy dose escalation; Recursion expects an early Phase 1 safety and PK update in the first half of 2026.
- CDK7: Phase 1 monotherapy dose escalation is complete and a combination study in second-line platinum-resistant ovarian cancer is ongoing; more data is expected in the first half of 2027.
- ENPP1: IND-enabling studies are ongoing, with a go/no-go decision expected in the second half of this year.
- MALT1: Phase 1 monotherapy dose escalation is ongoing; an early safety and PK update is expected in the first half of 2027.
- LSD1: Phase 1 monotherapy dose escalation is in startup; an early safety and PK update is expected in the second half of 2027.
- PI3K H1047R mutant-selective program: IND-enabling work is underway with a go/no-go decision for Phase 1 expected in the second half of this year.
PI3K program: preclinical efficacy and tolerability focus
Recursion provided a detailed preclinical discussion of its PI3K H1047R mutant-selective inhibitor, positioning it as an effort to improve on existing PI3K inhibitors that have been limited by hyperglycemia, metabolic toxicity, dose interruptions, and dose reductions. Khan said the company designed the molecule for “over 100x selectivity” versus wild-type PI3K, with the aim of reducing adverse effects.
She described a development process incorporating proprietary structural insight, molecular dynamics simulations that revealed a “novel pocket,” and generative 3D modeling to design novel scaffolds. Khan said the team designed 242 compounds across 13 cycles in 10 months, calling it an example of platform-driven speed.
On efficacy, management said the compound demonstrated dose-dependent tumor regression in preclinical models, and it presented comparisons against Piqray and a “Scorpion” compound. Khan said results were comparable to the Scorpion compound and better than Piqray, and also discussed synergy with standard-of-care combinations (SERDs and CDK4/6 inhibitors). On tolerability, she said animal studies in naïve wild-type mice and obese diabetic rats did not show hyperglycemia markers or metabolic liability for Recursion’s asset, including at “supra-efficacious” doses, while comparator compounds did.
Partnerships: Sanofi portfolio and milestone economics
Recursion said it has generated more than $500 million in total cash inflows from partnerships, including upfront payments and milestones. Khan emphasized that each program can include “over $300 million” in milestones and tiered royalties per small-molecule program, with some royalties “up to double-digit.”
The company also unveiled its joint portfolio with Sanofi for the first time on the call, describing five programs plus multiple early discovery efforts across immunology/inflammation and oncology. Recursion said it has delivered five lead packages across five programs that have been accepted by Sanofi, representing about $34 million in milestones in addition to $100 million in upfront payments, for $134 million total so far. Management said it expects later-stage discovery milestones over the next 18 months, while noting the probabilistic nature of discovery.
Financial update: lower spending and runway into early 2028
Chief Financial Officer Ben Taylor described 2025 as a “year of financial transformation,” saying the company rebuilt corporate systems during integration work to improve discipline in strategic decision-making. He said Recursion achieved a 35% year-over-year reduction in pro forma operating expenses, including a 35% reduction from pro forma R&D 2024 to 2025, and came in 10% below guidance originally provided in May of last year.
Recursion ended the year with $754 million in cash. Looking ahead, Taylor guided to 2026 cash operating expenses under $390 million, describing “cash operating expenses” as a non-GAAP measure derived from the cash flow statement and intended to reflect the company’s cash profile given meaningful non-cash P&L items. He also said Recursion includes probability-weighted assumptions for certain milestones in forward cash flow projections and noted the company hit “our first milestone earlier this month already.”
Management said the improved efficiency has extended the company’s cash runway to early 2028. In Q&A, Taylor added that the company does not expect major one-offs following the completion of integration and framed the effort as ongoing “efficiency” rather than cost cutting.
In additional Q&A, Khan addressed NVIDIA’s divestment, saying the technical collaboration with NVIDIA continues, including work tied to Recursion’s BioHive-2 supercomputer and an upcoming NVIDIA GTC “lightning round” mention. She characterized the divestment as part of a broader shift in NVIDIA’s investment portfolio toward larger, strategic investments, and noted Recursion also has a strategic partnership with Google for cloud compute.
About Recursion Pharmaceuticals (NASDAQ:RXRX)
Recursion Pharmaceuticals, Inc (NASDAQ: RXRX) is a biopharmaceutical company that combines advanced automation, artificial intelligence and high-throughput biology to discover and develop novel therapeutics. The company’s proprietary platform integrates deep-learning algorithms with large-scale cellular imaging and chemical biology, enabling the rapid identification of potential drug candidates across a range of indications. By automating complex laboratory workflows and leveraging computational models, Recursion aims to accelerate the drug discovery process and expand the scope of targets that can be addressed.
At the core of Recursion’s offering is its digital biology platform, which captures billions of cell images under varying chemical and genetic perturbations.
