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Recursion and Exscientia Enter Definitive Agreement to Create a Global Technology-Enabled Drug Discovery Leader with End-to-End Capabilities
Exscientia plcExscientia plc(US:EXAI) Newsfilterยท2024-08-08 11:39

Core Viewpoint - The merger between Recursion and Exscientia aims to create a leading technology-first, end-to-end drug discovery platform that leverages advancements in life sciences and technology to deliver novel treatments more efficiently and cost-effectively [1][2][3] Company Overview - Recursion is a clinical stage technology-enabled biotech company focused on industrializing drug discovery, while Exscientia is a technology-driven drug design and development company committed to creating effective medicines faster [12][14] - The combined entity will maintain the name Recursion and will be headquartered in Salt Lake City, Utah, while also having a significant presence in the U.K. [10] Strategic Rationale - The merger is expected to create a diverse portfolio of clinical and near-clinical programs, with approximately 10 clinical readouts anticipated over the next 18 months, potentially leading to annual peak sales opportunities exceeding $1 billion for successful programs [5][6] - The combination will enhance operational synergies, with expected annual savings exceeding $100 million [1][8] Pipeline and Clinical Programs - The combined pipeline will include a variety of programs across oncology, rare diseases, and infectious diseases, with no competitive overlap between the two companies [5][6] - Key clinical programs include REC-994 for Cerebral Cavernous Malformation, REC-2282 for Neurofibromatosis Type 2, and several oncology-focused programs from Exscientia [4][5] Partnerships - The merger will advance collaborations with major biopharma companies such as Roche-Genentech, Sanofi, Bayer, and Merck KGaA, with potential milestone payments of approximately $200 million over the next two years and over $20 billion in revenue before royalties [3][6] Financial Position - The combined companies will have approximately $850 million in cash and cash equivalents as of the end of Q2 2024, providing a strong financial foundation for future growth [1][8] Transaction Details - Under the terms of the agreement, Exscientia shareholders will receive 0.7729 shares of Recursion Class A common stock for each Exscientia share, resulting in Recursion shareholders owning approximately 74% of the combined company [8][9] - The transaction is expected to close by early 2025, subject to customary closing conditions and regulatory approvals [9][10]