RECURSION PHARMACEUTICALS, INC. Q4 FY2024 earnings call

• Clinical data: REC-617 showed early efficacy signals in monotherapy with reasonable safety; REC-994 demonstrated robust chronic safety and encouraging efficacy in lesion size and functional improvement.
• Trials launched: REC-1245, familial adenomatous polyposis trial, C. difficile trial, etc.
• Pipeline advancements: IND clearances, CTA filings, and IND studies for various programs.
• Partnerships: Roche partnership generated $30M milestone, Sanofi partnership generated $15M aggregate payments.
• Platform: BioHive-2 supercomputer, expanded data capabilities (Phenomics, transcriptomes), start of ClinTech work.
• Merger with Exscientia: Combined data sets, built new models with 60% reduction in human time to hit to lead, 2.5-fold increase in detecting bioactive compounds, etc.

No detailed product segment financial performance with absolute terms and revenue contribution % provided in the transcript.

• 2025 expected pipeline readouts supporting ongoing programs, continuation of partnership milestones.
• Long-term vision: Build a virtual cell by integrating data across atoms, proteins, pathways, and patients to transform drug discovery.

• Uncertainty on compute cost reductions and supercomputer moat.
• Concerns over NIH funding cuts impacting biotech ecosystem and access to grad students/postdocs.
• Hallucinations in LLMs and potential inaccuracies in virtual trials.

Q: Alec Stranahan asks about scale vs. new models like DeepSeek.

A: Chris Gibson says biology is complex, scale will continue to matter.

Q: Vikram asks about partnership with NVIDIA.

A: Chris Gibson says NVIDIA helps with deploying models on supercomputers.

Q: Gil asks about compute cost and moat of owning supercomputers.

A: Ben Taylor says data and compute are necessary, and scale is a competitive moat.

Q: Melissa asks about Q4 revenue drop.

A: Ben Taylor explains GAAP accounting and milestone payments not immediately recognized as revenue.

Q: Dennis Ding asks about cash burn.

A: Ben Taylor says cash burn will be managed, more detail in May.

Q: Joe Philips and Jeff ask about REC-994.

A: Chris Gibson explains signal-finding study and plans for future trials.

Q: S. Jane asks about revenue diversification and confidence in clinical trials.

A: Ben Taylor and Chris Gibson discuss revenue streams and platform's potential to reduce bimodal risk.

Q: Gil asks about 2025 milestones.

A: Ben Taylor says no guidance, but continuing with program advancements.

Q: Marcel asks about virtual cells and LLM hallucinations.

A: Lina Nilsson and Chris Gibson discuss validation through experiments and benchmarking.

Q: Laura asks about NIH funding.

A: Chris Gibson says short-term no impact, but concerns about long-term funding and Altitude Lab initiative.