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Recursion Pharmaceuticals, Inc (RXRX)
:RXRX
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Recursion Pharmaceuticals
(NASDAQ:RXRX)
48Neutral
Positive Factors
Financial Position
The company ended YE:24 with $603M in cash, providing runway into 2027.
Safety and Efficacy
The safety profile remains clean, with no SAEs related to drug and the majority of TEAEs Grade 1-2.
Strategic Integration
RXRX is integrating EXAI’s precision chemistry platform with its operating system, which could provide strategic advantages.
Negative Factors
Cash Management
The cash burn remains unsustainably high, putting pressure on deal execution and clinical development.
Clinical Validation
Investors remain unconvinced of the platform validation as the two readouts last year failed to move the needle.
Financial Performance
Q4 revenues of $4.5M missed expectations due to timing of projects related to the company's Roche/Genentech partnership.
Recursion Pharmaceuticals (RXRX) vs. S&P 500 (SPY)
Market Cap
$2.40B
Dividend YieldN/A
Average Volume (3M)27.22M
Price to Earnings (P/E)―
Beta (1Y)3.58
Revenue Growth32.00%
EPS Growth-6.86%
CountryUS
Employees500
SectorHealthcare
Sector Strength64
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.66
Shares Outstanding395,072,080
10 Day Avg. Volume15,137,939
30 Day Avg. Volume27,223,244
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)45.88
Price to Cash Flow (P/CF)-5.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.25Price Target Upside49.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Recursion Pharmaceuticals Business Overview & Revenue Model
Company DescriptionRecursion Pharmaceuticals (RXRX) is a biotechnology company that leverages advanced computational techniques and machine learning to accelerate drug discovery and development. The company operates at the intersection of technology and life sciences, utilizing its proprietary platform to identify novel therapeutics across various disease areas. By integrating biology, chemistry, and advanced data analytics, Recursion aims to transform the traditional drug discovery process, making it more efficient and effective.
How the Company Makes MoneyRecursion Pharmaceuticals generates revenue primarily through partnerships and collaborations with other pharmaceutical companies. By offering its advanced drug discovery platform, Recursion collaborates with partners to co-develop new therapeutics, often receiving milestone payments, research funding, and potential royalties on successfully commercialized drugs. Additionally, the company may engage in licensing agreements, where it licenses out its platform or specific discoveries to other entities, thus earning licensing fees. Strategic partnerships with larger pharmaceutical firms are a significant factor contributing to Recursion's revenue, allowing the company to leverage its technological advantages while sharing the risks and rewards of drug development.
Recursion Pharmaceuticals Financial Statement Overview
Summary
Recursion Pharmaceuticals is experiencing strong revenue growth but continues to face profitability challenges with negative net profit margins and operational losses. The balance sheet shows financial stability with robust cash reserves, low debt, and reliance on equity financing. Cash flow remains negative, indicating ongoing challenges in generating cash from operations.Income Statement
Recursion Pharmaceuticals showed significant revenue growth over the years, with a 32.0% increase from 2023 to 2024. However, the company is struggling with profitability, as indicated by a negative net profit margin of -78.8% in 2024. Gross profit margin improved but remains low at 23.1% for 2024. High EBIT and EBITDA losses further highlight operational challenges.35
Negative
Balance Sheet
The company's balance sheet reflects strong cash reserves with a cash position larger than its total debt, resulting in a negative net debt. The debt-to-equity ratio is relatively low at 0.10 in 2024, indicating low leverage. However, the return on equity is negative due to consistent net losses, and the equity ratio stands at 71.4%, showing reliance on equity financing.45
Neutral
Cash Flow
Operating cash flow is negative, indicating strained cash generation from operations. Free cash flow is also negative, though there was a slight improvement in free cash flow growth rate, which remains a concern. The operating cash flow to net income ratio is positive, reflecting some improvement in cash flow relative to net losses.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 58.84M | 44.58M | 39.68M | 10.00M | 3.41M | Gross Profit |
| 13.60M | 1.99M | -8.59M | 896.00K | -59.91M | EBIT |
| -479.00M | -350.06M | -245.73M | -182.78M | -84.61M | EBITDA |
| -426.72M | -299.57M | -227.66M | -174.42M | -81.70M | Net Income Common Stockholders |
| -463.66M | -328.07M | -239.42M | -178.07M | -87.88M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 594.35M | 391.56M | 549.91M | 516.56M | 262.13M | Total Assets |
| 1.45B | 653.70M | 701.29M | 610.35M | 298.58M | Total Debt |
| 108.49M | 50.67M | 51.01M | 11.48M | 15.66M | Net Debt |
| -485.86M | -340.89M | -498.91M | -273.64M | -246.46M | Total Liabilities |
| 413.82M | 190.26M | 215.48M | 67.41M | 504.87M | Stockholders Equity |
| 1.03B | 463.44M | 485.81M | 542.94M | -206.29M |
| Cash Flow | Free Cash Flow | |||
| -372.87M | -300.33M | -120.88M | -198.41M | -52.13M | Operating Cash Flow |
| -359.17M | -287.78M | -83.52M | -158.61M | -45.40M | Investing Cash Flow |
| 260.06M | -10.23M | 193.25M | -271.74M | -8.74M | Financing Cash Flow |
| 304.12M | 140.13M | 154.34M | 458.54M | 246.13M |
Recursion Pharmaceuticals Technical Analysis
Negative
6.17
Price Trends
7.37
Negative
7.14
Negative
7.20
Negative
Market Momentum
-0.36
Negative
39.18
Neutral
26.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXRX, the sentiment is Negative. The current price of 6.17 is below the 20-day moving average (MA) of 6.45, below the 50-day MA of 7.37, and below the 200-day MA of 7.20, indicating a bearish trend. The MACD of -0.36 indicates Negative momentum. The RSI at 39.18 is Neutral, neither overbought nor oversold. The STOCH value of 26.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXRX.
Recursion Pharmaceuticals Risk Analysis
Recursion Pharmaceuticals disclosed 105 risk factors in its most recent earnings report. Recursion Pharmaceuticals reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Recursion Pharmaceuticals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $129.05B | ― | -3.15% | ― | 11.64% | -114.72% | |
52 Neutral | $5.95B | ― | -31.26% | ― | 104.04% | 87.80% | |
50 Neutral | $2.22B | ― | -43.94% | ― | -83.18% | -144.95% | |
49 Neutral | $6.86B | 0.72 | -52.93% | 2.49% | 20.83% | 1.11% | |
48 Neutral | $2.40B | ― | -61.89% | ― | 32.00% | -6.86% | |
46 Neutral | $3.26B | ― | -19.20% | ― | -89.95% | -123.71% | |
39 Underperform | $107.87M | ― | -98.10% | ― | -58.64% | -40.05% |
* Healthcare Sector Average
Performance Comparison
RXRX
Recursion Pharmaceuticals
5.97
-4.00
-40.12%
VRTX
Vertex Pharmaceuticals
502.55
84.54
20.22%
BPMC
Blueprint Medicines
89.73
-5.13
-5.41%
EDIT
Editas Medicine
1.30
-6.12
-82.48%
CRSP
Crispr Therapeutics AG
38.04
-30.12
-44.19%
BEAM
Beam Therapeutics
22.19
-10.85
-32.84%
Recursion Pharmaceuticals Earnings Call Summary
Earnings Call Date: Feb 28, 2025 | % Change Since: -19.56% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong year for Recursion with significant advancements in clinical programs, partnerships, and technology infrastructure. Financially, the company is well-positioned with a strong cash balance, despite some revenue recognition challenges. The overall sentiment is positive due to the substantial achievements outweighing the noted challenges.Highlights
Early Clinical Successes
REC-617 showed early signals of efficacy in monotherapy during the dose escalation phase, with one patient having sustained tumor reduction for over six months. REC-994 demonstrated robust chronic safety and encouraging reduction in lesion size in Phase II study.
Strong Pipeline Expansion
Multiple trials were launched, including REC-1245 for RBM39 degradation in solid tumors, REK-4881 for familial adenomatous polyposis, and REC-3964 for C. difficile.
Significant Partnerships and Milestone Achievements
Partnerships with Roche and Sanofi led to $30 million and $15 million in milestone payments, respectively, with continued advancements in oncology and neuroscience.
Advanced Data and Compute Developments
Launched BioHive-2 with NVIDIA, the most powerful supercomputer wholly-owned by a biopharma company, and mapped over 1.4 million active ligands for drug discovery.
Strong Financial Position
Achieved $83 million in revenue with a cash balance of over $600 million, extending the runway into 2027.
Lowlights
Q4 Revenue Decline
There was a notable drop in Q4 2024 revenue compared to 2023 due to the nature of milestone payments being recognized over time rather than upfront.
Challenges in Efficacy Demonstration
Although REC-994 showed safety, there were challenges in demonstrating efficacy with the current study design, requiring further trials to confirm significant improvements.
Company Guidance
During the earnings call, Recursion's leadership provided extensive guidance on their achievements and future plans, highlighting numerous metrics. In 2024, Recursion reported $83 million in revenue on a pro forma basis and ended the year with over $600 million in cash, providing a runway extending into 2027. They achieved $45 million in cash payments from milestone achievements with partners Sanofi and Roche and generated $15 million in aggregate payments from advancing two programs with Sanofi. Their supercomputer, BioHive-2, has been fully operational, processing up to 6.2 million multi-timepoint brightfield images weekly and generating nearly one million transcriptomes in 2024. The company aims to achieve $100 million in synergies from their merger, with expectations of realizing a majority of these in the current year. Additionally, Recursion's long-term strategy includes developing virtual cells, leveraging multi-modal data, and refining their platform capabilities, which they claim will lead to faster and more efficient drug discovery and development processes.Recursion Pharmaceuticals Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Recursion Pharmaceuticals Strengthens Board with New Appointments
Positive
Mar 18, 2025
On March 18, 2025, Recursion Pharmaceuticals announced the appointment of Dr. Namandjé Bumpus and Elaine Sun to its Board of Directors, effective March 15, 2025. Dr. Bumpus, with her extensive experience in scientific innovation and regulatory strategy from her tenure at the FDA, and Ms. Sun, with her leadership in life sciences finance and corporate strategy, are expected to significantly contribute to Recursion’s growth and strategic direction. This move is seen as a strengthening of the company’s leadership as it continues to expand its clinical pipeline and enhance its platform, potentially impacting its operations and market position positively.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Recursion Pharmaceuticals Reports Strong 2024 Financial Results
Positive
Feb 28, 2025
On February 28, 2025, Recursion Pharmaceuticals released its fourth-quarter and fiscal year 2024 financial results, highlighting significant advancements in its clinical pipeline and strategic partnerships. The company reported promising data for its drug candidates REC-617 and REC-994, initiated new clinical studies, and achieved substantial milestones with partners like Roche, Genentech, and Sanofi, generating $45 million in cash inflows. Additionally, Recursion completed a business combination with Exscientia, enhancing its position as a leading TechBio company with a robust portfolio of clinical and preclinical programs.
Product-Related AnnouncementsBusiness Operations and Strategy
Recursion Pharmaceuticals Showcases Progress at JP Morgan Conference
Positive
Jan 13, 2025
Recursion Pharmaceuticals has released an updated investor presentation to be showcased at the JP Morgan Healthcare Conference. The presentation highlights the company’s progress in clinical and preclinical programs, including milestones expected over the next 18 months, and potential market opportunities for its drug candidates. The company emphasizes its strategic partnerships, with substantial milestone payments already earned, and further collaborations anticipated. This positions Recursion to create value through its evolving pipeline and partnerships, enhancing its market presence and offering significant opportunities for stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.