ClearBridge Investments, an investment management company, released its “ClearBridge Select Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities strongly rebounded in the second quarter. The S&P 500 Index returned 10.9%, and the benchmark Russell 3000 Index advanced 11.0%, as risk-on sentiment took hold following the pause in tariff implementation. The strategy outperformed the benchmark in the quarter, driven by the strength in portfolio construction acr ...

Core Insights - Recursion reported a $7 million milestone achievement with Sanofi, reflecting progress in their partnered discovery programs and overall business momentum [3][4][11] - The company is advancing multiple clinical programs, including REC-1245 and REC-617, targeting various cancer indications and leveraging advanced AI models for drug discovery [3][4][5] Business Highlights - **Partnerships**: Recursion has established collaborations with major pharmaceutical companies such as Sanofi, Roche, Genentech, Bayer, and Merck KGaA, focusing on oncology and immunology [4][10][13] - **Clinical Programs**: The company is actively developing several programs, including REC-1245 (RBM39) and REC-617 (CDK7), with ongoing trials aimed at identifying responsive patient populations [5][8][20] - **Financial Performance**: Total revenue for Q2 2025 was $19.2 million, up from $14.4 million in Q2 2024, while R&D expenses increased significantly to $128.6 million due to new collaborations and operational expansions [20][21] Pipeline Updates - **REC-1245 (RBM39)**: This potential first-in-class oral degrader is currently in a Phase 1/2 trial, targeting tumors with replication stress and DNA repair vulnerabilities [5][8] - **REC-617 (CDK7)**: The company initiated a combination dose escalation trial in platinum-resistant ovarian cancer, showing promising early safety and efficacy signals [8][20] - **Other Programs**: Additional programs like REC-102 for hypophosphatasia and REC-4881 for familial adenomatous polyposis are also in development, with various milestones expected in the coming years [8][20] Financial Position - As of June 30, 2025, Recursion had cash and cash equivalents of $533.8 million, down from $603.0 million at the end of 2024, indicating a strong cash runway into Q4 2027 [11][15] - The net loss for Q2 2025 was $171.9 million, compared to a net loss of $97.5 million in Q2 2024, primarily driven by increased R&D and G&A expenses [20][21]

Company Overview - Recursion is a clinical stage TechBio company focused on decoding biology to improve lives, utilizing a platform called Recursion OS that generates extensive biological and chemical datasets [3][4] - The company employs advanced machine-learning algorithms to analyze trillions of relationships in biology and chemistry, aiming to enhance drug discovery and development [3] Upcoming Earnings Call - Recursion will host a public earnings call on August 5, 2025, at 8:00 am ET, where it will provide business updates and report its second quarter 2025 financial results [1][2] - The earnings call will be accessible via live stream on Recursion's social media platforms, including X (formerly Twitter), LinkedIn, and YouTube, allowing investors and the public to submit questions [2]

Portfolio and Pipeline - Recursion has a streamlined, integrated portfolio strategy focused on near and long-term impact, leveraging the Recursion OS 2.0 platform to prioritize opportunities and exit underperforming efforts[21] - The company is advancing REC-617 (CDK7 inhibitor) into combination studies in 1H25 and expects additional Phase 1 data from ELUCIDATE in 2H25[33, 144] - REC-7735 (PI3Kα H1047R inhibitor) is expected to have a development candidate nomination in 2H25, with preclinical data showing superior in vivo efficacy compared to Alpelisib and Capivasertib[33, 87, 88, 144] - REV102 (ENPP1 inhibitor) is expected to initiate Phase 1 in 2H26, developed in partnership with Rallybio, with preclinical data showing restored bone density to wildtype levels in treated mice[33, 111, 114, 144] - Three clinical programs (REC-994, REC-2282, REC-3964) and one preclinical program (REC-4209) have been deprioritized as part of strategic portfolio prioritization[22, 27] Partnerships and Financials - Recursion has several partnerships, including an oncology and immunology collaboration with >$5 billion total value and a neuroscience and oncology partnership with up to $300 million per program for 40 programs[23] - As of March 31, 2025, Recursion had $5092 million in cash, with an expected cash runway until mid-2027[147] - The company anticipates ≤$450 million expected cash burn for FY2025, excluding potential partnership and financing inflows, achieved through pipeline prioritization and streamlined operations[150] Technology and Innovation - Recursion OS is central to the company's strategy, driving a data-led portfolio approach and enabling rapid validation of opportunities[9, 21, 31] - The company is focused on developing first-in-class and best-in-class molecules, leveraging its integrated, end-to-end tech stack and multimodal biology, design, and ClinTech capabilities[32] - Recursion's approach aims to reduce the time to candidate ID and cost to IND compared to industry legacy programs[18] REC-4881 (MEK1/2 Inhibitor) for FAP - REC-4881 is being developed as a chemoprevention for Familial Adenomatous Polyposis (FAP), targeting approximately 50000 addressable patients[28, 39] - Preliminary Phase 1b/2 data shows a 43% median reduction in total polyp burden at week 13 in efficacy evaluable patients on the 4 mg dose[68] - The program is currently enrolling, with additional efficacy and safety data expected in 2H25[38, 78]