On August 9, 2022 Recursion (Nasdaq: RXRX), the clinical-stage biotechnology company industrializing drug discovery by decoding biology, reported business updates and financial results for its second quarter ending June 30, 2022 (Press release, Recursion Pharmaceuticals, AUG 9, 2022, View Source [SID1234617923]).
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Visualization frames how additional datasets and capabilities compound cycles of discovery to potentially translate novel insights into clinical candidates
Visualization frames how additional datasets and capabilities compound cycles of discovery to potentially translate novel insights into clinical candidates
"Recursion continues to make progress in advancing its clinical programs, including initiating a Phase 2 trial for NF2-mutated meningiomas and receiving U.S. FDA Fast Track and European Commission Orphan Drug designations for REC-4881 for the potential treatment of FAP," said Chris Gibson, Ph.D., Co-Founder & CEO at Recursion. "In the context of continued capital markets friction we are increasingly focusing our pipeline around rapidly deliverable oncology programs. We also continue to lead the digital transformation of drug discovery by building additional capabilities into our Recursion OS platform, including scaling our transcriptomics hit validation platform to up to 13,000 near-whole exomes per week and advancing our ChemOS systems by preparing to install our scalable and automated drug metabolism and pharmacokinetics platform. Across our diverse platform that spans target and hit discovery through optimization and translation, we have now generated and control over 16 petabytes of proprietary biological and chemical data and 2.4 trillion predicted biological and chemical relationships, helping us turn the bespoke, artisanal, and serial process of drug discovery into a search and validation problem."
Summary of Business Highlights
Internal Pipeline
Cerebral cavernous malformation (CCM) (REC-994): In March 2022, we announced the initiation of our Phase 2 SYCAMORE clinical trial, which is a double-blind, placebo-controlled safety, tolerability and exploratory efficacy study of this drug candidate in 60 participants with CCM. At this time, we continue to actively enroll participants.
Neurofibromatosis type 2 (NF2) (REC-2282): In June 2022 at the Children’s Tumor Foundation NF Conference, we announced the initiation of our Phase 2/3 POPLAR clinical trial, which is a parallel group, two stage, randomized, multicenter study of this drug candidate in approximately 90 participants with progressive NF2-mutated meningiomas. At this time, we continue to actively enroll participants.
Familial adenomatous polyposis (FAP) (REC-4881): We are on track to initiate a Phase 2, randomized, double-blind, placebo-controlled study to evaluate safety, pharmacokinetics and exploratory efficacy of this drug candidate in FAP in the third quarter of 2022. Recently, the U.S. Food and Drug Administration (FDA) granted Recursion Fast Track designation and the European Commission granted Recursion Orphan Drug Designation for REC-4881 for the potential treatment of FAP.
Clostridium difficile colitis (REC-3964): We made progress in IND-enabling studies for REC-3964 and are on track to initiate a Phase 1 study in the second half of 2022.
Oncology pipeline: We continue to focus our pipeline on oncology and oncology-like programs while advancing numerous programs discovered using our next generation mapping and navigating technology, including programs focused on novel targets and polypharmacology.
Transformational Collaborations
We continue to advance efforts to discover new potential therapeutics with our strategic partners in the areas of fibrotic disease (Bayer) as well as neuroscience and a single indication in gastrointestinal oncology (Roche and Genentech).
Recursion OS
ChemOS: We are preparing to install our automated and scalable drug metabolism and pharmacokinetics (DMPK) platform which will allow for the processing and evaluation of compounds for protein plasma binding, microsomal stability, and cell permeability. Such continuous chemical data generation will help enable us to build machine learning approaches that predict properties for our and our partners’ growing libraries of chemical compounds. Furthermore, we are implementing a unified workflow for medicinal and computational chemists to seamlessly access assay data, design molecules, and perform predictive analyses to support our internal and partnership programs.
Machine Learning: We continue to improve the ease, scale, and biological relevance of our machine learning models and added new benchmarking flows to evaluate how well our models recapitulate known biological relationships associated with protein complexes and pathways. We improved our machine learning models to achieve state-of-the-art results in 9 of 22 absorption, distribution, metabolism, excretion, and toxicity (ADMET) benchmark tasks from Therapeutic Data Commons and we are leveraging them for our oncology programs.
Transcriptomics: We continued building out our scaled transcriptomics platform, with infrastructure, automation, and operational processes that will enable the robust validation of inferences from our maps of biology and chemistry. We have now been able to carry out and analyze up to 13,000 near-whole exomes per week, creating another growing relatable dataset that we can integrate in our Recursion OS for continued improvement of our inferences across compounds and biology at scale.
Compounding Cycles of Discovery: The visualization below frames how additional datasets and capabilities compound cycles of discovery to potentially translate novel insights into clinical candidates. In this technology stack graphic, bold text signifies capabilities that have been built to some meaningful scale already, italic text signifies capabilities that are in the process of being built, and standard text signifies capabilities that Recursion intends to incorporate in the future.
Second Quarter 2022 Financial Results
Cash Position: Cash, cash equivalents, and investments were $515.4 million as of June 30, 2022.
Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $7.7 million for the second quarter of 2022, compared to $2.5 million for the second quarter of 2021. The increase was due to revenue recognized from our Roche-Genentech collaboration.
Research and Development Expenses: Research and development expenses were $38.4 million for the second quarter of 2022, compared to $29.6 million for the second quarter of 2021. The increase in research and development expenses was primarily due to an increased number of pre-clinical assets being validated and increased clinical costs as studies progressed.
General and Administrative Expenses: General and administrative expenses were $21.2 million for the second quarter of 2022, compared to $13.9 million for the second quarter of 2021. The increase in general and administrative expenses was due to the growth in size of the company’s operations, including an increase in salaries and wages of $1.8 million, a fixed asset write-down of $2.8 million, increased rent expense of $1.0 million, and other administrative costs associated with operating a public company.
Net Loss: Net loss was $65.6 million for the second quarter of 2022, compared to a net loss of $43.4 million for the second quarter of 2021.