Draft:Recursion Pharmaceuticals

Recursion (Nasdaq: RXRX) is a clinical-stage biotechnology company based in Salt Lake City, Utah that is mapping and decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering. By identifying relationships between biological contexts and chemical entities, Recursion believes that it can improve the lives of patients, and industrialize drug discovery.

History
Recursion Pharmaceuticals was founded on November 5, 2013 in Salt Lake City, Utah. Co-founder Chris Gibson, a PhD/MD student at the University of Utah under the guidance of Professor Dean Y. Li, PhD, MD, was studying a method of applying machine learning to microscopy images of human cells. Drawing from his research, Gibson and his co-founders, Li and colleague Blake Borgeson, PhD, created the company to evaluate how to use this methodology to quickly and efficiently explore and discover treatments for a range of human diseases.

Within the first 2 years, Recursion closed its Series A round of funding and signed a research agreement with Sanofi Genzyme. In January 2014, the company moved its operations from Li’s lab at the University of Utah to Recursion’s first facility, and later into a 15,000-square-foot space at the University of Utah Research Park. In 2018 Recursion moved into its current location, a 100,000-square-foot facility at the Gateway (Salt Lake City) downtown. Recursion currently maintains this facility as well as a satellite office within Mila (research institute), the Quebec Artificial Intelligence Institute, in Montreal, Canada, and has cited plans to open a major multidisciplinary location in Toronto.

From 2018 to 2020, Recursion identified and licensed several clinical stage drug candidates, including REC-2282 for Neurofibromatosis type II , REC-3599 for GM2 gangliosidosis and REC-4881 for solid tumors (known as neoplasms). In 2020, it also acquired a developer of digitally equipped vivariums for preclinical in vivo research called Vium and announced a partnership with global pharmaceutical company Bayer to support its drug pipeline for fibrotic diseases (see: fibrosis) that impact the lungs, heart, and kidneys, among other organs. The same year the company established Altitude Lab, the region’s largest life sciences incubator, in collaboration with the University of Utah’s PIVOT Center, to “build the economic backbone” for the state of Utah’s health care sector by investing in a “new, diverse generation of founders.”

The company listed on the Nasdaq Stock Exchange on April 20, 2021 under the ticker symbol RXRX. Following this Initial Public Offering, Recursion announced its first internally-developed Novel Chemical Entity (NCE) to Investigational New Drug (IND)-enabling studies focused on searching for treatments for Clostridium difficile Colitis, announced its Canadian office expansions, and opened an on-site child care center for its employees with Bright Horizons, a global provider of early education and child care, back-up care, and workplace education services. In November 2021, Recursion signed a $12B partnership deal with Roche and its subsidiary Genentech to advance therapies in neuroscience and an undisclosed oncology indication.

In May 2023, Recursion acquired two companies in the AI-enabled drug discovery space, Toronto-headquartered Cyclica and Montreal-based Valence. The acquisitions added digital chemistry, machine learning and artificial intelligence to Recursion’s operating system capabilities. In June 2023, Recursion opened its headquarters for Recursion Canada at a 28,000-square-foot office site in Toronto. In July 2023, Recursion announced a collaboration and $50M investment from NVIDIA to accelerate the development of its AI foundation models for biology and chemistry, and potentially leverage NVIDIA cloud services as its means of distribution.

In May 2023, Recursion acquired two companies in the AI-enabled drug discovery space, Toronto-headquartered Cyclica and Montreal-based Valence. The acquisitions added digital chemistry, machine learning and artificial intelligence to Recursion’s operating system capabilities. In June 2023, Recursion opened its headquarters for Recursion Canada at a 28,000-square-foot office site in Toronto. In July 2023, Recursion announced a collaboration and $50M investment from NVIDIA to accelerate the development of its AI foundation models for biology and chemistry, and potentially leverage NVIDIA cloud services as its means of distribution.

Technology
Recursion states that it has developed an integrated operating system combining proprietary in-house data generation and advanced computational tools to generate novel insights to initiate or accelerate therapeutic programs. To do so, the company describes using a proprietary collection of “highly relatable, high-dimensional biological and chemical datasets” built in their own laboratories and spanning multiple data modalities. Recursion states that it iterates on this approach to create maps of biology that it believes contain more robust and systematic relationships, to help them identify targets or hit compounds which may not have been obvious to choose, based on public data or the field of medicine’s current limited understanding of a disease. Recursion purports that this closed-loop system enables them to reimagine the drug discovery funnel, by expanding it to include therapeutic starting points beyond hypothesized and human-biased targets, and then allowing them to narrow the funnel by identifying failures earlier in the research cycle when they are relatively inexpensive.

Pipeline
Recursion’s pipeline programs target diseases spanning several therapeutic areas across rare diseases and oncology. The company states that it selects diseases where they believe the cause of the disease is well-defined, there is high unmet need, there are no approved therapies, or where there are significant shortcomings with existing treatments. Its current pipeline includes drug candidates ranging from clinical stage trials to early discovery.

Financials
Series A - On September 2, 2016, Recursion raised a total of $15.05 million in Series A funding, led by Lux Capital, with participation from Obvious Ventures, Epic Ventures, Data Collective, AME Cloud Ventures, Felicis Ventures and several individual investors.

Series B - September 25, 2017, Recursion raised $60 million in Series B funding, led by Data Collective (DCVC), with participation from previous investors Lux Capital, Obvious Ventures, Advantage Capital, Felicis, Epic, and AME. New investors included Mubadala, Menlo Ventures, CRV, Two Sigma and several angel investors.

Series C - On February 12, 2019, Recursion closed $121 million in Series C funding with new lead investor Baillie Gifford. New institutional investors included Intermountain Ventures, Regents of the University of Minnesota, Texas Tech University System. Prior institutional investors that participated included Lux Capital, Data Collective, Mubadala Ventures, Two Sigma Ventures, Obvious Ventures, Felicis Ventures, Epic Ventures, Menlo Ventures, AME Cloud Ventures, and CRV, and several angel investors.

Series D - On ​​September 9, 2020, Recursion raised $239 million in Series D funding, which was reported by Endpoints News to be more than any US or European biotech had raised in a round that year in 2020. A significant Series D investor was Bayer, which contributed a $50 million equity investment.

IPO - Recursion closed its initial public offering on the Nasdaq under the ticker RXRX on April 20, 2021, raising $436M.

Partners
Bayer

On September 9, 2020, Recursion and Bayer announced the companies had entered into a strategic collaboration agreement to discover and develop treatments for fibrotic diseases of the lung, kidney, heart and more. Their joint announcement stated the partnership would leverage Recursion’s purpose-built artificial intelligence-guided drug discovery platform and Bayer’s small molecule compound library and scientific expertise. This announcement coincided with Recursion’s Series D fundraising in which Leaps by Bayer, the impact investment arm of Bayer AG, led the series with an equity investment of $50 million.

The companies later expanded the collaboration in fibrosis to include Recursion's inferential search capabilities based on its maps of human cellular biology. The technology is said to allow Bayer the ability to accelerate their partnership work in the area of novel fibrotic hypotheses. It is estimated by the companies that each program could generate more than $100 million in commercial milestone payments plus royalties on future sales.

Roche

On December 7, 2021, Roche and its subsidiary, Genentech, committed up to $12 billion to Recursion in exchange for using Recursion’s Operating System (OS) for its therapy discovery in up to 40 programs in areas including neuroscience and a currently undisclosed oncology indication.

NVIDIA

On July 12, 2023, Recursion announced a $50M investment from NVIDIA. The investment was executed as a private investment in public equity (PIPE). Under the agreement, Recursion will utilize its proprietary biological and chemical dataset, which exceeds 23 petabytes and 3 trillion searchable gene and compound relationships, to accelerate the training of foundation models on NVIDIA DGX™ Cloud for possible commercial license/release on BioNeMo, NVIDIA’s cloud service for generative AI in drug discovery.

Governance
Executive Leadership


 * Chris Gibson, Co-founder, Chief Executive Officer and Board Member
 * Tina Larson, Chief Operating Officer and President
 * Michael Secora, Chief Financial Officer
 * Shafique Virani, Chief Corporate Development Officer
 * Louisa Daniels, Chief Legal Officer and General Counsel
 * Heather Kirkby, Chief People Officer
 * Ben Mabey, Chief Technology Officer

Notable Board members/Board of Directors


 * Chris Gibson, Co-founder, Chief Executive Officer and Board Member
 * Co-Founder Dean Li, PhD, MD
 * Co- Founder Blake Borgeson, PhD
 * R. Martin Chavez, Chairman
 * Terry-Ann Burrell, Board Member
 * Zachary Bogue, Board Member
 * Zavain Dar, Board Member
 * Robert Hershberg, Board Member

Research
Recursion has released several open source datasets, including for cells treated with siRNA, a panel of immune perturbations, SARS-CoV-2 virus and a simulation of COVID-19 cytokine storm.

Notable literature and publications associated with Recursion’s research include:


 * Circulation, Strategy for Identifying Repurposed Drugs for the Treatment of Cerebral Cavernous Malformation, December 8, 2014 – Founder Chris Gibson's dissertation and building block of Recursion’s scientific platform, preceding Recursion’s clinical stage treatment for CCM, REC-994.
 * Nature Protocol, Cell Painting, a High-Content Image-Based Assay for Morphological Profiling Using Multiplexed Fluorescent Dyes, August 25, 2016 – This protocol describes the design and execution of experiments using Cell Painting, which is a morphological profiling assay that multiplexes six fluorescent dyes, imaged in five channels, to reveal eight broadly relevant cellular components or organelles.
 * NF Conference, POPLAR-NF2: A Parallel-Group, Two-Staged, Phase 2/3, Randomized, Multicenter Study to Evaluate the Efficacy and Safety of REC-2282 in Participants With Progressive NF2-Mutated Meningiomas, Presented June 18-21, 2022 – Designed to investigate the efficacy and safety of REC-2282, representing a potential new pharmacological treatments for patients with progressive NF2-mutated meningiomas.
 * AACR Annual Meeting, Identification and Optimization of Novel Small Molecule Modulators of Immune Checkpoint Resistance with a Unified Representation Space for Genomic and Chemical Perturbations, Presented April 8-12, 2022 – Recursion highlights multiple discovery programs driven by inferred relationships between small molecules and gene knockout with translation from inference to in vivo efficacy. Specifically, prioritizing molecules with activity in STK11-deficient tumors and additional immune checkpoint sensitizers.
 * LMRL 2021, Mapping Biology with a Unified Representation Space for Genomic and Chemical Perturbations to Enable Accelerated Drug Discovery
 * Proceedings of Machine Learning Research, WILDS: A Benchmark of in-the-Wild Distribution Shifts, Proceedings of the 38th International Conference on Machine Learning, 2021 – Berton Earnshaw and Imran Haque of Recursion contributed a subset of the RxRx1 database for WILDS, a curated benchmark of 10 datasets reflecting a diverse range of distribution shifts that naturally arise in real-world applications, such as shifts across hospitals for tumor identification; across camera traps for wildlife monitoring; and across time and location in satellite imaging and poverty mapping.
 * bioRxiv, Functional Immune Mapping with Deep-Learning Enabled Phenomics Applied to Immunomodulatory and COVID-19 Drug Discovery, August 14, 2020 – “Results demonstrate that systems-level modeling and drug discovery is achievable using a single phenomics platform.”
 * bioRxiv, Identification of Potential Treatments for COVID-19 through Artificial Intelligence-Enabled Phenomic Analysis of Human Cells Infected with SARS-CoV-2 – Research released on possible COVID-19 therapeutics before any trials completed
 * bioRxiv, Biological Cartography: Building and Benchmarking Representations of Life, December 9, 2022 – The continued scaling of genetic perturbation technologies combined with high-dimensional assays (microscopy and RNA-sequencing) has enabled genome-scale reverse-genetics experiments that go beyond single-endpoint measurements of growth or lethality.
 * bioRxiv, High-Resolution Genome-Wide Mapping of Chromosome-Arm-Scale Truncations Induced by CRISPR-Cas9 Editing, April 15, 2023 – Demonstrates that CRISPR-Cas9 induces chromosome arm-scale truncations called “Proximity Bias” across the genome.
 * arXiv, Masked autoencoders are scalable learners of cellular morphology, September 27, 2023 – This work explores how weakly supervised and self-supervised deep learning approaches scale when training larger models on larger datasets.