Biotechs Recursion, Exscientia Merge For $850M And 10 Trials

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The resultant biotech, which the businesses announced on Thursday, would have a pipeline that may produce 10 clinical readouts over the next 18 months, with a combined cash of $850 million.

According to a statement made on Thursday, the AI-enabled biotechs Recursion and Exscientia have merged to form a business with $850 million in capital and ten impending clinical readouts over the next 18 months.

When both businesses went public in 2021, they raised hundreds of millions of dollars thanks to technologies that addressed persistent problems in drug development. Nonetheless, since their initial public offerings, the share values of both businesses have decreased by almost 80%. Recursion and Exscientia have now decided that pooling their resources is the best course of action.

Ten clinical readouts might be delivered by the resultant biotech, which would adopt Recursion’s name, over the next 18 months thanks to its pipeline. With its first-in-class oncology, rare disease, and infectious disease therapeutic prospects covering different terrain than Exscientia’s emphasis on best-in-class cancer medicines, Recursion sees no competitive overlap between the pipelines.

By the conclusion of the second quarter of 2024, Recursion and Exscientia had combined cash and cash equivalents of over $850 million. Recursion estimates that by achieving expected yearly efficiencies of around $100 million, the funds can sustain operations until 2027.

Both businesses have agreements that might bring in more money, such as $200 million that is contingent upon reaching certain goals over the course of the next two years. Roche and Bayer are partners with Recursion. Merck KGaA and Sanofi are partners of Exscientia.

Recursion claims that the technical platforms supporting the agreements are complimentary. Exscientia specializes in chemistry, but Recursion is primarily focused on biology, even though both businesses employ AI and other technologies to enhance R&D.

Recursion CEO Chris Gibson said during a Thursday earnings call that Exscientia synthesizes many fewer molecules than the industry average—many of which are best-in-class. Exscientia, however, spends a lot of money contracting out early-stage biology and successful discovery work. In contrast, Gibson said that recursion finds hits for new biology quite well, but once it reaches chemistry, its efficiency approaches that of the industry average.

They think they can deliver the most effective technology-enabled approach to the whole process of finding and translating these medications by merging our platforms. And that, to be honest, is going to make us a really efficient company as well as one that is strong, according to Gibson.

Among Exscientia’s capabilities is a UK-based automated synthesis facility. This facility is now up and running, we believe it should stay up and running, they should build it out from here, Gibson said. He also raised the possibility of using the knowledge and skills acquired from establishing the platform to the addition of comparable features at its Salt Lake City, Utah, location.

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