A bad combination compounding for biotech So not only were these stocks slammed by the risk-off mentality in the markets ahead of tariffs coming on April 2, but a key resignation at the Federal Drug Administration (FDA) over the weekend raised questions about the speed and willingness of the agency to approve new drug technologies going forward. The double whammy sent these stocks down much more than the market today. Key FDA regulator Marks abruptly leaves Over the weekend, Dr. Peter Marks, who headed the ...

Artificial intelligence (AI) is changing the world. Corporations are racing to establish themselves as leaders in the field, while investors want to cash in by putting their hard-earned money into the most promising AI companies. However, prominent names in this fast-growing space have seen their shares soar in the past two years, and the valuations of some have become quite expensive. Two AI healthcare stocks -- Recursion Pharmaceuticals (RXRX -2.76%) and Teladoc Health (TDOC -5.20%) -- have lagged the mar ...

Company Performance - Recursion Pharmaceuticals (RXRX) closed at $6.48, down 1.52% from the previous trading session, underperforming the S&P 500 which lost 0.22% [1] - The stock has decreased by 39.47% over the past month, significantly lagging behind the Medical sector's loss of 0.63% and the S&P 500's loss of 7.48% [1] Upcoming Financial Results - The upcoming EPS for Recursion Pharmaceuticals is projected at -$0.44, indicating a 12.82% decline compared to the same quarter last year [2] - Revenue is expected to be $20.15 million, reflecting a 46.12% increase from the equivalent quarter last year [2] Full-Year Estimates - Zacks Consensus Estimates forecast earnings of -$1.41 per share and revenue of $88.55 million for the full year, representing year-over-year changes of +16.57% and +50.5%, respectively [3] Analyst Estimates - Recent changes to analyst estimates for Recursion Pharmaceuticals indicate a positive outlook on the company's business operations and profit generation capabilities [4] - The Zacks Rank system, which reflects these estimate changes, provides a rating system that can help investors make informed decisions [5] Zacks Rank and Industry Performance - Recursion Pharmaceuticals currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having increased by 0.18% over the past month [6] - The Medical - Drugs industry, part of the Medical sector, has a Zacks Industry Rank of 85, placing it in the top 34% of over 250 industries [7]

Core Viewpoint - Recursion Pharma (RXRX) has experienced a significant stock decline of 37.1% over the past month, underperforming compared to the industry and the S&P 500, which saw a decline of only 1.4% [1][2]. Group 1: Stock Performance and Market Conditions - The stock is currently trading below its 50-day and 200-day moving averages, indicating a bearish trend [1]. - The decline in RXRX's stock price is attributed to macroeconomic conditions and company-specific challenges, including skepticism regarding new U.S. government policies affecting the medical market [4]. - The company's reliance on collaboration revenues introduces financial uncertainty, as disruptions in partnerships could jeopardize future payments [4]. Group 2: Pipeline and Development Challenges - Investors are concerned about the company's pipeline potential, as investigational candidates are still in early development stages, with no products expected to reach the market for at least three to four years [5]. - The regulatory environment has become more challenging, making it difficult for pipeline candidates to gain approval, which could lead to significant disappointments for the company [5]. - RXRX faces intense competition from biotech firms and tech-driven drug discovery companies, which may hinder its ability to maintain a competitive edge [6]. Group 3: Strengths and Opportunities - Despite challenges, RXRX has solid fundamentals and the potential of its AI-driven drug discovery platform, Recursion OS, which could lead to significant returns in the future [7]. - The company aims to revolutionize drug development by leveraging AI to identify promising candidates, potentially reducing research costs and improving efficiency [8][9]. - RXRX is developing its lead candidate, REC-994, for treating cerebral cavernous malformation (CCM), which represents a significant market opportunity [10]. Group 4: Financial Metrics and Valuation - RXRX is trading at a premium valuation compared to the industry, with a price/book value ratio of 2.62, higher than the industry average of 1.25 [13]. - Loss estimates for 2025 have narrowed from $1.42 to $1.41 per share, and for 2026, from $1.35 to $1.25 [15]. - The consensus estimate trend shows a slight improvement in loss estimates over the past 60 days, indicating a potential stabilization in financial outlook [16]. Group 5: Strategic Collaborations - RXRX has ongoing collaborations with major pharmaceutical companies like Roche, Bayer, Merck, and Sanofi, focusing on developing candidates for various oncology indications [12]. - The successful development and approval of pipeline candidates would validate RXRX's AI platform and enhance shareholder value [19].

Dr. Bumpus brings deep experience in scientific innovation and regulatory strategy, while Elaine Sun adds extensive leadership in life sciences finance and corporate strategy.Salt Lake City, UT, March 18, 2025 (GLOBE NEWSWIRE) -- Recursion (NASDAQ: RXRX), a leading clinical stage TechBio company decoding biology to radically improve lives, today announced that Namandjé Bumpus, Ph.D, and Elaine Sun have been appointed to Recursion’s Board of Directors, effective as of March 15th.“I am delighted to welcome El ...

Shares of Recursion Pharmaceuticals (RXRX -6.22%) were sinking 8.2% lower as of 10:57 a.m. ET on Monday. The clinical-stage biotech company, which is a pioneer in using artificial intelligence (AI) in drug discovery, didn't announce any news that would cause its stock to fall, though.Part of the reason Recursion's shares tumbled is that the overall stock market has retreated as investors worried that the Trump administration's tariffs could cause an economic recession. However, the stock was also likely neg ...

Core Insights - The artificial intelligence (AI) industry is experiencing significant growth, with expectations for continued sales increases in the coming years, attracting investor interest in companies positioned to benefit from AI [1] Company Overview - Recursion Pharmaceuticals is an AI-focused biotech company that has underperformed in the market over the past year but has the potential for substantial returns if its ambitions are realized [2] - The drug development process is lengthy, costly, and risky, often taking over 10 years and becoming more expensive over time, a trend referred to as Eroom's Law [2][4] Business Model and Technology - Recursion aims to reduce the drug development timeline by utilizing an AI-powered operating system that tests clinical compounds against a vast library of human genes to predict effectiveness against diseases [4] - The company reportedly spends about $10 million before submitting an Investigational New Drug (IND) Application, significantly lower than the industry average of over $25 million [4] Market Potential - If Recursion can maintain its technological lead and successfully launch breakthrough medicines, it stands to gain not only from its therapies but also from licensing its operating system to other drug developers, which could yield higher profit margins [5] Challenges and Competition - Recursion has not yet launched any medicines, which poses a risk to its stock performance, as success depends on the commercial viability of its therapies [7] - Competition exists from other companies, such as Novo Nordisk, which is developing an AI supercomputer for healthcare research, potentially undermining Recursion's licensing strategy [8] Pipeline and Partnerships - Recursion has a robust pipeline with several candidates in phase 2 studies, some of which have shown promising results [9] - The company has established partnerships with major pharmaceutical firms like Roche, Bayer, Merck, and Sanofi, indicating industry validation of its approach and reducing funding risks [10] Investment Considerations - While Recursion Pharmaceuticals presents a high-risk investment, there is optimism surrounding its potential to revolutionize drug development, making it a candidate for investors willing to accept volatility [11]

Investors looking for an exciting clinical-stage biotech start-up with enormous potential should be paying close attention to Recursion Pharmaceuticals (RXRX -5.17%).The company has emerged as a leader in drug discovery, enabled by artificial intelligence (AI) and a unique platform that it believes could revolutionize medicine. However, Recursion has yet to bring a drug to the market, and its uncertain outlook has resulted in an extremely volatile stock price -- down about 53% in the past year.Here are four ...

Company Overview - Recursion Pharmaceuticals is a biotech company with a market cap of $3 billion and reported $58 million in revenue last year, while still incurring significant losses [3] - The company focuses on developing therapies for complex and expensive ailments, with candidates like REC-617 for solid tumors and REC-994 for cerebral cavernous malformation [4] Unique Selling Proposition - Recursion Pharmaceuticals utilizes its proprietary AI platform, Recursion OS, to design and pretest drugs, significantly reducing the time and cost associated with drug development [5][9] - The company is sharing access to Recursion OS with major pharmaceutical companies, creating substantial growth opportunities [6][7] Industry Context - The pharmaceutical industry is increasingly adopting AI solutions to mitigate the high costs and lengthy timelines of drug development, which can average between $1 billion and $2 billion and take about a decade [8] - The AI-powered drug discovery market is projected to grow at nearly 30% annually through 2032, indicating a strong demand for innovative solutions like Recursion OS [10][11] Financial Outlook - Analysts expect Recursion Pharmaceuticals to achieve a 75% increase in top-line growth this year, followed by over 37% growth next year, although profitability may not be reached for several years [12][13] - The current consensus one-year price target for Recursion's stock is $8.60 per share, representing a potential upside of more than 30% from its current price [14]

Core Insights - The drug development industry is expected to benefit significantly from advancements in machine learning and artificial intelligence, which can streamline the process of discovering new drug candidates [1][2]. Company Overview - Recursion Pharmaceuticals has gained attention for its AI-powered drug discovery platform aimed at reducing trial and error in drug development [3]. - The company reported successful phase 2 results for its lead candidate, REC-994, which was selected using a machine-learning approach [6]. Recent Developments - Following the announcement of phase 2 results, Recursion's stock initially surged but then fell by 40.5% within a few weeks, leading investors to consider it a potential bargain [4][5]. - The phase 2 study for REC-994 met primary safety endpoints but failed to show significant benefits in reducing cerebral lesions, leading to questions about the program's future [7][8]. Challenges and Concerns - Despite the AI capabilities, Recursion has not advanced any of its discovered candidates into late-stage clinical trials, raising concerns about the effectiveness of its platform [10]. - The company’s current lead candidate, REC-617, was acquired from Exscientia rather than developed internally, indicating potential shortcomings in its drug discovery process [11]. - Recursion's acquisition of Exscientia for $688 million involved issuing new shares, which has led to significant dilution of existing shares, complicating long-term investment returns [12]. Market Position - Recursion currently has a market cap of $2.6 billion, which is considered high given the lackluster performance of its new lead candidate [14].