Recursion Pharmaceuticals (RXRX, Financial) reported first-quarter revenue of $15 million, falling short of analysts' expectations of $18.08 million. The company is actively refining its operations and strategic focus following its merger with Exscientia. This effort involves concentrating resources on programs with strong scientific foundations and significant potential impacts.
With the support of the integrated Recursion OS platform, the company is advancing a select array of distinct internal and collaborative initiatives. This streamlined approach is driven by rigorous scientific methods and has led to the consistent achievement of critical milestones alongside top pharmaceutical and technology partners.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Recursion Pharmaceuticals Inc (RXRX, Financial) is $8.50 with a high estimate of $11.00 and a low estimate of $6.00. The average target implies an upside of 49.12% from the current price of $5.70. More detailed estimate data can be found on the Recursion Pharmaceuticals Inc (RXRX) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Recursion Pharmaceuticals Inc's (RXRX, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Recursion Pharmaceuticals Inc (RXRX, Financial) in one year is $13.21, suggesting a upside of 131.75% from the current price of $5.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Recursion Pharmaceuticals Inc (RXRX) Summary page.
RXRX Key Business Developments
Release Date: February 28, 2025
- Revenue: $83 million in 2024 on a pro forma basis.
- Cash Balance: Over $600 million, providing runway into 2027.
- Milestone Payments: $45 million from Sanofi and Roche for achieving technical goals.
- Synergies: Expected up to $100 million in synergies from the merger, with a majority anticipated to be achieved in the current year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Recursion Pharmaceuticals Inc (RXRX, Financial) reported early signals of efficacy in their clinical programs REC 617 and REC 994, with REC 617 showing tumor reduction in a patient for over six months.
- The company launched multiple additional trials, including REC 1,245 and REC 4,881, and initiated IND studies in their IPF program, showcasing a robust pipeline.
- Recursion Pharmaceuticals Inc (RXRX) achieved significant milestones with partners Roche and Sanofi, generating $45 million in cash payments for technical achievements.
- The company continues to lead in data capabilities, generating over 6.2 million multi-time point bright field images weekly and producing more than 1.6 million transcriptomes since 2023.
- Recursion Pharmaceuticals Inc (RXRX) has a strong financial position with $600 million in cash, providing a runway into 2027 and achieving expected synergies from their merger.
Negative Points
- The Q4 2024 revenue drop compared to 2023 caused confusion due to the nature of revenue recognition from partnerships, which may not reflect immediate cash inflows.
- The primary endpoint of efficacy for REC 994 was not met, raising questions about the program's advancement and the need for further validation.
- Concerns were raised about the potential inaccuracies in virtual trials, particularly in rare disease spaces where data might be limited.
- The company faces challenges in maintaining a competitive edge as compute costs decrease, questioning the long-term advantage of owning a supercomputer.
- Potential impacts from changes in NIH funding could affect the broader biotech environment, posing risks to future talent and innovation.
