Recursion and Exscientia Enter Definitive Agreement to Create a Global Technology-Enabled Drug Discovery Leader with End-to-End Capabilities

Core Viewpoint - The merger between Recursion and Exscientia aims to create a leading technology-first, end-to-end drug discovery platform that leverages advances 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 through advanced biological decoding [12]. - Exscientia is a technology-driven drug design and development company that utilizes precision design and integrated experimentation to create effective medicines [14]. Strategic Rationale - The combination is expected to yield a diverse portfolio of clinical and near-clinical programs, with approximately 10 clinical readouts anticipated in the next 18 months, potentially leading to annual peak sales opportunities exceeding $1 billion for successful programs [5][6]. - The merger will enhance operational synergies, with an estimated annual synergy of over $100 million [8]. Pipeline and Clinical Programs - The combined pipeline includes 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]. Partnerships and Financials - The merger will strengthen existing partnerships 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]. - The combined companies have a well-capitalized balance sheet with approximately $850 million in cash and cash equivalents as of Q2 2024 [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 entity [8][9]. - The transaction is expected to close by early 2025, subject to customary closing conditions and regulatory approvals [9][10]. Management and Governance - The combined company will retain the name Recursion, headquartered in Salt Lake City, Utah, with Chris Gibson serving as CEO and David Hallett as Chief Scientific Officer [10].