SALT LAKE CITY - Recursion Pharmaceuticals (NASDAQ: RXRX), a clinical stage company specializing in drug discovery with a market capitalization of $2.28 billion, has received regulatory clearance to advance clinical trials for two of its cancer drug candidates, REC-3565 and REC-4539. According to InvestingPro data, the company maintains a strong financial position with a current ratio of 4.35, indicating ample liquidity to support its clinical programs. The UK Medicines and Healthcare Products Regulatory Agency (MHRA) has approved a Phase 1 trial for REC-3565, a MALT1 inhibitor targeting B-cell malignancies. Simultaneously, the U.S. Food and Drug Administration (FDA) has cleared a Phase 1/2 trial for REC-4539, an LSD1 inhibitor aimed at treating small-cell lung cancer (SCLC).
REC-3565 is designed to mitigate hyperbilirubinemia, a common side effect of MALT1 inhibitors, and is expected to begin dosing in the Phase 1 EXCELERIZE trial in Q1 2025. This trial will assess the safety and tolerability of the drug and recommend dosing for future combination studies. REC-3565 has demonstrated tumor growth inhibition in preclinical studies and offers a potentially safer alternative to current treatments due to its selectivity and reduced risk of off-target toxicity.
REC-4539, notable for its reversible mechanism and ability to penetrate the central nervous system (CNS), is set to enter the Phase 1/2 ENLYGHT trial in the first half of 2025. The trial will evaluate the drug as monotherapy and in combination with durvalumab for patients with SCLC, a condition where brain metastases are common. In preclinical studies, REC-4539 showed dose-dependent tumor inhibition and a favorable safety profile.
Chris Gibson, Ph.D., Co-Founder and CEO of Recursion, emphasized the potential of these drugs to be first- and best-in-class oncology medicines. The company’s Recursion OS platform, which employs advanced AI, has been instrumental in identifying and optimizing these molecules. Recursion aims to leverage data and AI models to advance precision medicine and ensure the right drug is matched with the right patient.
The addressable market for these drugs includes approximately 41,000 patients in the US and EU5 with chronic lymphocytic leukemia (CLL) and B-cell lymphomas for REC-3565, and roughly 45,000 patients with extensive stage SCLC for REC-4539. Three analysts have recently revised their earnings estimates upward for the upcoming period, as revealed by InvestingPro, suggesting growing confidence in the company's pipeline potential.
Recursion, listed on NASDAQ: RXRX, is at the forefront of combining technology and biology to accelerate drug discovery. The company's progress in these clinical trials represents a significant step in its mission to develop innovative treatments for cancer patients. Recent market performance has been notably strong, with the stock posting a 17.6% return over the past week. InvestingPro subscribers have access to over 10 additional key insights about Recursion's financial health and market position. This information is based on a press release statement from Recursion Pharmaceuticals and market data.
In other recent news, Recursion Pharmaceuticals has registered 3,498,393 shares of its Class A common stock for resale to Tempus Labs, Inc. This registration was part of an annual license fee agreement. In another development, the company's Chief Financial Officer, Ben Taylor, has transitioned to a role with Exscientia AI Ltd., a UK subsidiary of Recursion, following an acquisition. Taylor's new compensation package includes a base salary of £400,000 annually, potential bonuses, and a pending equity grant valued at $5 million.
Recursion has also completed its acquisition of Exscientia, enhancing its drug discovery and development capabilities. Analyst firm KeyBanc Capital Markets has maintained its Overweight rating on Recursion, with a price target of $12.00. Additionally, the company has launched a new model, OpenPhenom-S/16, to enhance drug discovery processes and received approval from the U.S. Food and Drug Administration for a Phase 1/2 clinical trial of REC-1245, a potential treatment for solid tumors and lymphoma.
The company has announced a $30 million deal with Genentech and plans for a $200 million public offering of Class A common stock. Recursion has also secured support from Evotec SE for its acquisition of Exscientia. Leadership changes include Dr. Robert Hershberg as the new Chair of the Board, and Dr. Najat Khan as the new Chief R&D Officer and Chief Commercial Officer. These are among the recent developments at Recursion Pharmaceuticals.
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