Recursion Pharmaceuticals, Inc. Q3 FY2025 earnings call

Executive Leadership Updates

• Chris Gibson steps down as CEO, with Najat Khan taking over as CEO, President, and Director effective January 1; Chris remains Chairman and Executive Adviser; Rob Hershberg continues as Vice Chairman and Lead Independent Director.

Roche and Genentech Collaboration

• Achieved a $30 million milestone for a whole genome microglial cell map; total partnership inflows exceed $0.5 billion; delivered whole genome maps in neuroscience and GI oncology, generating large datasets and novel targets.

Platform Details

• Recursion OS with AI components for biological understanding, molecule design, and ClinTech; scientific agents use AI to analyze data and generate hypotheses; automated ADMET platform combines experimental automation and machine learning.

Pipeline Updates

• CDK7 monotherapy dose escalation completed with MTD achieved; PI3K 1047R nomination; REC-4881 Phase 2 update upcoming; MALS-1 monotherapy initiated.

Financial Discipline

• Expense reduced by 35% from 2024, with cash balance of $785 million as of October 9; reaffirmed expense guidance of less than $450 million in 2025 and less than $390 million in 2026.

No traditional product segment financial performance detailed; focus on platform, partnerships, and pipeline aspects.

Partnership Inflows

• Over $500 million in partnership inflows to date; expects over $100 million in partnership inflows by year-end 2026.

Milestones

• Upcoming REC-4881 Phase 2 data in December; RBM39 early safety and PK data expected in 2026; ENPP1i and PI3K Phase 1 initiation pending GLP toxicology data.

Challenges

• Drug discovery and development complexity, which is inherently difficult with a high failure rate.
• Biotech financing market volatility, including increasing volatility, fewer open windows, and rising discounts.

Q: Review expectations for cash burn through 2026 and runway without additional financing; plan to use ATM financing?

A: Ben Taylor discussed utilizing the ATM to close runway, citing biotech market volatility and focus on achieving milestones without overshadowing fundamental events.

Q: Platform utilization and how it feeds into newer assets?

A: Najat Khan explained the iterative nature of the platform, with older programs leveraging parts of capabilities and newer assets utilizing the full stack.

Q: Maintain current partnerships or expand?

A: Najat Khan mentioned deep collaborative partnerships, with an open stance to new partnerships if they are win-win.

Q: Evolving AI drug development landscape?

A: Chris Gibson expressed excitement about AI adoption in biopharma, viewing Lilly's investment as positive for the field.

Q: Philosophy as new CEO and near-term priorities?

A: Najat Khan focused on translating platform to tangible proof points, investing where unique, and disciplined capital stewardship.