UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 23, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (Zip code)
(385 ) 269 - 0203
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
240.14d-2(b))
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On March 23, 2022, Recursion Pharmaceuticals, Inc. issued a press release announcing its results of operations and financial condition for the fourth quarter and fiscal year ended December 31, 2021. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On March 23, 2022, Recursion Pharmaceuticals, Inc. released an updated investor presentation. The investor presentation will be used from time to time in meetings with investors. A copy of the presentation is attached hereto as Exhibit 99.2.
The information furnished pursuant to Item 2.02 (including Exhibit 99.1) and 7.01 (including Exhibit 99.2) on this Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | ||||
| 99.1 | |||||
| 99.2 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on March 23, 2022.
| RECURSION PHARMACEUTICALS, INC. | ||||||||
| By: | /s/ Michael Secora | |||||||
Michael Secora | ||||||||
Chief Financial Officer | ||||||||
Exhibit 99.1
Recursion Provides Business Updates and Reports Fourth Quarter and Fiscal Year 2021 Financial Results
•Announced a transformational collaboration with Roche and Genentech to build and navigate maps of biology in neuroscience and an indication in gastrointestinal oncology and to advance up to 40 novel potential medicines
•Expanded our collaboration with Bayer to include the use of Recursion’s OS to map and navigate biology and increased the number of potential programs in fibrosis to more than a dozen
•Enrolled the first patient in our Phase 2 clinical trial for CCM
•Advanced our internal pipeline of potential oncology therapeutics, including programs related to CDK12, target alpha, STK11, MYC, and multiple new programs
SALT LAKE CITY, March 23, 2022 — Recursion (Nasdaq : RXRX), the clinical-stage biotechnology company industrializing drug discovery by decoding biology, today reported business updates and financial results for its fourth quarter and fiscal year ended December 31, 2021.
“2021 was an exciting year for Recursion, in which we closed one of the largest biotechnology initial public offerings in history; expanded our partnership with Bayer; entered into a transformational partnership with Roche and Genentech; received Fast Track and Orphan Drug Designations from the FDA for our NF2 and FAP programs, respectively; readied several programs to initiate clinical trials; expanded our therapeutics pipeline with numerous programs in oncology; and built and began to utilize our supercomputer, BioHive1,” said Recursion Co-Founder & CEO Chris Gibson, Ph.D. “As we applied our mapping and navigating capabilities to explore complex biology, we discovered and advanced many new scientific and business opportunities. We are excited for 2022 as we work to transition more biology and chemistry from maps to medicines.”
Summary of Business Highlights
•Clinical Programs
◦Cerebral cavernous malformation (CCM) (REC-994): In March 2022, we enrolled the first patient in 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 subjects with CCM.
◦Neurofibromatosis type 2 (NF2) (REC-2282): We plan to initiate our Phase 2/3 POPLAR-NF2 clinical trial, which is a parallel group, two stage, randomized, multicenter study of this drug candidate in the second quarter of 2022.
◦Familial adenomatous polyposis (FAP) (REC-4881): We plan to initiate a Phase 2, randomized, double-blind, placebo-controlled study to evaluate safety, pharmacokinetics and efficacy of this drug candidate in the third quarter of 2022.
•Preclinical and Discovery Programs
◦Clostridium difficile colitis (REC-3964): We made progress in IND-enabling studies for REC-3964 and plan to initiate a Phase 1 study in the second half of 2022.
◦Small molecule inhibitor of a target with a novel link to CDK12 biology: A small molecule inhibitor of a novel target not otherwise known to be related to CDK12, discovered using our next generation mapping and navigating technology, has demonstrated robust single-agent and combination activity with olaparib in an HRD-negative ovarian cancer PDX model, achieving 100% complete and durable response.
◦Cancer immunotherapy target 'alpha': We expanded the in vivo dataset of target alpha, where a small molecule inhibitor of target alpha, discovered using our next generation mapping and navigating technology, demonstrated robust
combination activity with an anti-PD1 therapy in an EMT6 mouse model and achieved 80% complete response.
◦Oncology pipeline: We continued to make progress expanding and advancing numerous oncology programs, discovered using our next generation mapping and navigating technology, through scientific milestones including the programs mentioned above as well as programs related to immune checkpoint resistance in STK11-mutant non-small cell lung cancer, small molecule MYC inhibition, cancer immunotherapy target ‘beta,’ hepatocellular carcinoma, ovarian cancer, and other indications.
•Roche-Genentech Collaboration: In December 2021, we announced a transformational collaboration with Roche and Genentech to advance novel potential medicines in neuroscience and an indication in gastrointestinal oncology by mapping complex biology using the Recursion OS. In this collaboration, Recursion received an upfront payment of $150 million in January 2022, is eligible for milestones for map-building and data-sharing that could exceed $500 million, as well as research and development, commercialization and net sales milestones on up to 40 programs that could exceed $300 million per program and mid- to high-single digit tiered royalties on net sales for products commercialized from this work together.
•Bayer AG Collaboration: In December 2021, we announced the expansion of our collaboration with Bayer to include the use of Recursion’s biological mapping and navigating capabilities to discover small molecule drug candidates with the potential to treat fibrotic diseases. In this expanded collaboration, Recursion and Bayer may now work on more than a dozen programs of relevance to fibrotic diseases.
•Recursion OS
◦Closed Loop Automated Synthesis Suite (CLASS): We began designing CLASS, our automated chemical microsynthesis system, which will further enable novel chemical formulation and profiling across our maps of biology and chemistry.
◦Total Observations: In the fourth quarter of 2021, we surpassed the milestone of executing 100 million total phenotypic experiments and producing 1 billion proprietary biological images.
Fourth Quarter and Fiscal Year 2021 Financial Results
•Cash Position: Cash, cash equivalents and investments were $516.6 million as of December 31, 2021, compared to $262.1 million as of December 31, 2020. This cash balance does not include the upfront payment of $150.0 million from entering into the Roche-Genentech collaboration in December 2021, which was received in January 2022.
•Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $2.5 million for the fourth quarter of 2021, compared to $2.7 million for the fourth quarter of 2020. Total revenue, consisting primarily of revenue from collaboration agreements, was $10.2 million for the year ended December 31, 2021, compared to $4.0 million for the year ended December 31, 2020. The increase in 2021 was due to revenue recognized from our collaboration with Bayer.
•Research and Development Expenses: Research and development expenses were $48.3 million for the fourth quarter of 2021, compared to $20.7 million for the fourth quarter of 2020. Research and development expenses were $135.3 million for the year ended December 31, 2021, compared to $63.3 million for the year ended December 31,
2020. The increases in both periods in 2021 were primarily due to an increased number of experiments run on the Recursion OS, an increased number of assets being validated and increased clinical costs of studies to progress our drug candidates.
•General and Administrative Expenses: General and administrative expenses were $19.2 million for the fourth quarter of 2021, compared to $7.6 million for the fourth quarter of 2020. General and administrative expenses were $57.7 million for the year ended December 31, 2021, compared to $25.3 million for the year ended December 31, 2020. The increases in both periods in 2021 were due to the growth in size of the company's operations, including an increase in salaries and wages of $16.4 million during the year ended December 31, 2021, equipment costs, human resources-related costs, facilities costs and other administrative costs associated with operating as a high-growth company.
•Net Loss: Net loss was $64.9 million for the fourth quarter of 2021, compared to a net loss of $25.8 million for the fourth quarter of 2020. Net loss was $186.5 million for the year ended December 31, 2021, compared to a net loss of $87.0 million for the year ended December 31, 2020.
Additional Corporate Updates
•Letter to Shareholders: Recursion Co-Founder & CEO Chris Gibson, Ph.D. wrote an annual letter to shareholders which may be found in our 10-K report filed with the SEC.
•Environmental, Social, and Governance (ESG) Report: Recursion has prepared a report which describes our operations in relation to a number of ESG metrics. A copy of this report may be found on the Recursion website at www.Recursion.com.
•Neuroscience: Tim Ahfeldt, Ph.D. joined Recursion as Fellow, Neuroscience; Irit Rappley, Ph.D. joined Recursion as Vice President, Neuroscience and Translational Research; and Glenn Morrison, Ph.D. joined Recursion as Vice President, Clinical Development.
•Clinical Development: Rogelio Mosqueda-Garcia, M.D., Ph.D. joined Recursion as Vice President, Clinical Development & Head of Human Pharmacology and Translational Medicine and Lisa Boyette, M.D., Ph.D. was promoted to Vice President, Medical Affairs.
•Chemical Technology & Manufacturing: David Northrup joined Recursion as Vice President, Manufacturing & Supply Chain and Thierry Masquelin, Ph.D. joined Recursion as Senior Director, Chemical Technology.
•Intellectual Property: Rich Person, J.D. joined Recursion as Vice President, Intellectual Property.
•Annual Shareholder Meeting: The Recursion Annual Meeting of Shareholders will be held on June 14, 2022.
About Recursion
Recursion is the clinical-stage biotechnology company industrializing drug discovery by decoding biology. Enabling its mission is the Recursion Operating System, a platform built across diverse technologies that continuously expands one of the world’s largest proprietary biological and chemical datasets, the Recursion Data Universe. Recursion leverages sophisticated machine-learning algorithms to distill from its dataset the Recursion Map, a collection of hundreds of billions of searchable relationships across biology and chemistry unconstrained by human bias. By commanding massive experimental scale — up to millions of wet lab experiments weekly — and massive computational scale — owning and operating one
of the most powerful supercomputers in the world, Recursion is uniting technology, biology and chemistry to advance the future of medicine.
Recursion is proudly headquartered in Salt Lake City, where it is a founding member of BioHive, the Utah life sciences industry collective. Recursion also has offices in Toronto, Montreal and the San Francisco Bay Area. Learn more at www.Recursion.com, or connect on Twitter and LinkedIn.
Media Contact
Media@Recursion.com
Investor Contact
Investor@Recursion.com
Consolidated Statements of Operations
Recursion Pharmaceuticals, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Three months ended | Years ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Revenue | |||||||||||||||||
| Grant revenue | 33 | 140 | $ | 178 | $ | 549 | |||||||||||
| Operating revenue | 2,500 | 2,551 | 10,000 | 3,413 | |||||||||||||
| Total revenue | 2,533 | 2,691 | 10,178 | 3,962 | |||||||||||||
| Operating expenses | |||||||||||||||||
| Research and development | 48,291 | 20,698 | 135,271 | 63,319 | |||||||||||||
| General and administrative | 19,202 | 7,574 | 57,682 | 25,258 | |||||||||||||
| Total operating expenses | 67,493 | 28,272 | 192,953 | 88,577 | |||||||||||||
| Loss from operations | (64,960) | (25,581) | (182,775) | (84,615) | |||||||||||||
| Other gain (loss), net | 27 | (185) | (3,704) | (2,391) | |||||||||||||
| Net loss | $ | (64,933) | $ | (25,766) | $ | (186,479) | $ | (87,006) | |||||||||
| Per share data | |||||||||||||||||
| Net loss per share of Class A and B common stock, basic and diluted | $ | (0.38) | $ | (1.17) | $ | (1.49) | $ | (3.99) | |||||||||
| Weighted-average shares (Class A and B) outstanding, basic and diluted | 169,368,999 | 22,010,989 | 125,348,110 | 21,781,386 | |||||||||||||
Consolidated Balance Sheets
Recursion Pharmaceuticals, Inc.
Consolidated Balance Sheets
(in thousands)
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 285,116 | $ | 262,126 | ||||
| Restricted cash | 1,552 | 2,000 | ||||||
| Accounts receivable | 34 | 156 | ||||||
| Other receivables | 9,056 | — | ||||||
| Investments | 231,446 | — | ||||||
| Other current assets | 7,514 | 2,155 | ||||||
| Total current assets | 534,718 | 266,437 | ||||||
| Restricted cash, non-current | 8,681 | 3,041 | ||||||
| Property and equipment, net | 64,725 | 25,967 | ||||||
| Intangible assets, net | 1,385 | 1,689 | ||||||
| Goodwill | 801 | 801 | ||||||
| Other non-current assets | 35 | 650 | ||||||
| Total assets | $ | 610,345 | $ | 298,585 | ||||
| Liabilities, convertible preferred stock and stockholders’ equity (deficit) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 2,819 | $ | 1,074 | ||||
| Accrued expenses and other liabilities | 32,333 | 10,485 | ||||||
| Current portion of unearned revenue | 10,000 | 10,000 | ||||||
| Current portion of notes payable | 90 | 1,073 | ||||||
| Current portion of lease incentive obligation | 1,416 | 467 | ||||||
| Total current liabilities | 46,658 | 23,099 | ||||||
| Deferred rent | 4,110 | 2,674 | ||||||
| Unearned revenue, net of current portion | 6,667 | 16,667 | ||||||
| Notes payable, net of current portion | 633 | 11,414 | ||||||
| Lease incentive obligation, net of current portion | 9,339 | 2,708 | ||||||
| Total liabilities | 67,407 | 56,562 | ||||||
| Commitments and contingencies | ||||||||
Convertible preferred stock | — | 448,312 | ||||||
| Stockholders’ equity (deficit) | ||||||||
Common stock (Class A and B) | 2 | — | ||||||
| Additional paid-in capital | 943,142 | 7,312 | ||||||
| Accumulated deficit | (400,080) | (213,601) | ||||||
| Accumulated other comprehensive loss | (126) | — | ||||||
| Total stockholders’ equity (deficit) | 542,938 | (206,289) | ||||||
| Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ | 610,345 | $ | 298,585 | ||||
Forward-Looking Statements
This document contains information that includes or is based upon "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, including, without limitation, those regarding; early and late stage discovery, preclinical, and clinical programs; licenses and collaborations; prospective products and their potential future indications and market opportunities; Recursion OS and other technologies; expansion of facilities and expected uses; workforce growth; business and financial plans and performance; and all other statements that are not historical facts. Forward-looking statements may or may not include identifying words such as “plan,” “will,” “expect,” “anticipate,” “intend,” “believe,” “potential,” “continue,” and similar terms. These statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements, including but not limited to: challenges inherent in pharmaceutical research and development, including the timing and results of preclinical and clinical programs, where the risk of failure is high and failure can occur at any stage prior to regulatory approval due to lack of sufficient efficacy, safety considerations, or other factors; our ability to leverage and enhance our drug discovery platform; our ability to obtain financing for development activities and other corporate purposes; the success of our collaboration activities; our ability to obtain regulatory approval of, and ultimately commercialize, drug candidates; the impact of the COVID-19 pandemic and force majeure events; our ability to obtain, maintain, and enforce intellectual property protections; cyberattacks or other disruptions to our technology systems; our ability to attract, motivate, and retain key employees and manage our growth; and other risks and uncertainties such as those described under the heading “Risk Factors” in our filings with the U.S. Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q and our Annual Report on Form 10-K to be filed later this month. All forward-looking statements are based on management’s current estimates, projections, and assumptions, and Recursion undertakes no obligation to correct or update any such statements, whether as a result of new information, future developments, or otherwise, except to the extent required by applicable law.
End of Q4 2021
This presentation and any accompanying discussion or documents may contain information that includes or is based upon "forward- looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs and certain assumptions we have made. They are neither historical facts nor assurances of future performance, are subject to significant risks and uncertainties, and may turn out to be wrong. For a discussion of factors that could affect our business, please refer to the "Risk Factors" sections in our Prospectus filed with the SEC on April 16, 2021 and in our periodic filings with the SEC. This presentation does not purport to contain all the information that may be required to make a full analysis of the subject matter. We undertake no obligation to correct or update any forward-looking statements. 2
Recursion is a clinical stage Pharmatech company Mapping and Navigating biology designed to bring better medicines to patients faster and at lower cost via an Internal Pipeline and Partnerships 3 The Leading Pharmatech >150+ Biologists, chemists and drug developers >150+ Data scientists, software programmers, and engineers Mapping & Navigating 13 Petabytes of proprietary biological and chemical data generated in-house >200B inferred biological relationships to mine using our maps of biology Internal Pipeline 3 Programs entering Ph2 or Ph2/3 and 1 program entering Ph1 in 2022 >10 programs in late discovery or preclinical Dozens of programs in early discovery Partnerships >$230M in upfront payments and investment to date from partners >$500M in performance/data-sharing milestones possible in intermediate term >$13B in project milestones across up to 50+ programs possible Royalties on all partnered programs 3
4 Political sentiment the world over, and increasingly in the U.S., against high drug prices will create additional pressure 1Deloitte, "Measuring the Return from Pharmaceutical innovation" (2020 and 2015 editions). 2Mullard, A. Nature Reviews Drug Discovery 2021. 3Biopharma Dive, 2018 (leerink) and Brown, D and Wobst H J Med Chem 2021 (FIC) 60% of sales growth of the top selling drugs is accounted for by price increases3 The number of new drug approvals is up only 47% over the last 25 years and first in class drug approvals have fallen 17% over the past decade2 $2.4B of R&D per new drug is 2.1 times more than a decade ago1
Well-known primary relationships found by the Recursion OS between key members of five pathways: JAK/STAT | SWI/SNF | TGFβ | RAS | Proteasome All primary relationships found by the Recursion OS between key members of five pathways: JAK/STAT | SWI/SNF | TGFβ | RAS | Proteasome 5
6
1 3 Real (atoms) Digital (bits) 1 Profile real systems Capture high-dimensional data to create a digital record of reality (things, places, behaviors, preferences, etc) Aggregate and analyze Aggregate data to create digital maps of reality Algorithmic Inference Navigate digital maps to predict or suggest novel relationships and routes - then try them in reality 3 2 2 7
8
How we build maps of biology 9 Enables quality, reliability, repeatability and scale Novel Efficacy and Insights At Scale Human cell types Small Molecules Arrayed CRISPR guides Cytokines & soluble factors Biological and Chemical Diversity Automated Execution at Scale Experiments per week Up to Digitization of Complex Biology Proprietary High-Dimensional Biological Data ML/AI-Based Analysis Supercomputer on Earth (TOP500 List - Nov 2021) ML-enabled hypotheses ML/AI-Based ExplorationHigh-Dimensional Validation Near whole exomes per week Proteomics panels in 2021 Up to
10
To the left is a whole-genome arrayed CRISPR KO Map generated in primary human endothelial cells Recursion visualizes its Maps in different ways. Below is a Map of thousands of new chemical entities, clustered by chemical similarity and colored by potency, which demonstrated a strong anti-inflammatory response on the Recursion OS 11
Many known mitochondrial-related genes cluster together along with a few less well-known genes 12
JAK1 Many known JAK / STAT genes cluster together along with a few less well-known genes 13
JAK1 JAK1 The JAK / STAT pathway now clustered by strength of interaction, including both similar genes (red) and ‘opposite’ genes (blue) – note that both expected and less well-known genes can serve as novel hypotheses 14
20S Subunit 26S Subunit The 20S and 26S proteosomes are another of hundreds of expected clusters that give confidence in this Map, one of many we have built – however, the most exciting elements of each map are the tens of thousands of unknown and unexplored high-confidence relationships 15
World’s literature reviewed People generate hypotheses Hypotheses validated in low dimensional assays 1. Millions of disparate journal articles and publications 2. Many data cannot be independently replicated 3. Human-selected low dimensional assays prone to confirmation bias 4. Humans prone to confirmation bias MAP OF BIOLOGY >200B predicted relationships from >100M highly reproducible experiments People navigate machine-generated hypotheses with unmet need and scientific intuition in mind Chosen hypotheses automatically validated using orthogonal high- dimensional assays 1. Massive, relatable proprietary map of searchable biology 2. Data highly replicable and scalable 3. High-dimensional orthogonal validation minimizes ‘leak’ of poor hypotheses to later stages 4. Minimization of human bias 5. Maximization of biological systems relevance This approach is designed to achieve higher clinical success rates Traditional Approach LIMITATIONS BENEFITS <10% clinical success rate Increased efficiency of translation: more scale, more speed, less costTranslation Recursion Approach 16
Data shown are the averages of all our programs from 2017 through 2021. All industry data adapted from Paul, et al. Nature Reviews Drug Discovery. (2010) 9, 203–214 17
18 All populations are US and EU5 incidence unless otherwise noted. EU5 is defined as France, Germany, Italy, Spain and UK. (1) Prevalence for hereditary and sporadic symptomatic population. (2) Annual US and EU5 incidence for all NF2-driven meningiomas. (3) Worldwide prevalence; conducting dose optimization study in animal model with a potential trial start in 2024 (4) US and EU5 prevalence (5) Our program has the potential to address a number of indications with systemic or neural inflammatory components We have not finalized a target product profile for a specific indication. (6) Our program has the potential to address a number of indications driven by MYC alterations, totalling 54,000 patients in the US and EU5 annually. We have not finalized a target product profile for a specific indication. (7) Our program has the potential to address a number of indications in this space.
Internal Pipeline - Rare Genetic Diseases Asset Sales / Licenses / Commercialization Partnership strategy • Partner in large, difficult and/or competitive therapeutic areas • Add knowledge to and improve our growing atlas of biology Internal Pipeline Discovery Partnerships Commercialization, licensing and asset sales Fibrosis Other large, intractable areas of biology Neuroscience *and a single oncology indication 19 • Exclusive multi-year discovery deal signed in ‘20 and expanded in ‘21 • $30M upfront and $50M equity investment • Up to or exceeding $1.2B in milestones for up to or exceeding 12 programs • Mid single-digit royalties on net sales • Exclusive multi-year discovery deal signed in ‘21 • $150M upfront and up to or exceeding $500M in performance-based research milestones and data usage options • Up to or exceeding $300M in possible milestones per program for up to 40 programs • Mid to high single-digit tiered royalties on net sales Pipeline strategy • Advance programs where we have a data arbitrage • Focus on capital efficient therapeutic areas Oncology Inflammation & Immunology Rare Diseases
The earliest iterations of the Recursion OS leveraged brute-force search (where small molecules were tested directly in the context of each disease model we built) and used a small molecule library restricted primarily to known chemical entities. Programs arising from this iteration of the Recursion OS are deemed First Generation Programs. As we developed our chemistry capabilities and new chemical entity library at Recursion, Second Generation Programs arose, though the throughput needed to screen large libraries of new chemical entities presents a powerful but relatively inefficient solution. Today, most of our new programs, as well as new partnerships or expansions of prior partnerships, are Next Generation Programs, whereby we use our maps of biology to navigate to novel or unexpected relationships between molecules (known or new chemical entities) and then validate those predictions in our wet labs 20
US + EU5 PREVALENCE CAUSE LOF mutations in genes CCM1, CCM2 & CCM3, key for maintaining the structural integrity of the vasculature due to unknown mechanisms PATHOPHYSIOLOGY Vascular malformations of the CNS leading to focal neurological deficits, hemorrhage and other symptoms OUR REASON TO BELIEVE Efficacy in Recursion OS as well as functional validation via scavenging of massive superoxide accumulation in cellular models; reduction in lesion number with chronic administration in mice KEY ELEMENTS • Targeting sporadic and familial symptomatic CCM • Patients with CCM1, CCM2, and CCM3 mutations • Once daily oral dosing • US and EU Orphan Drug Designation granted Julia – living with CCM High Dose Low Dose Placebo 1:1:1 52-Week Treatment Open Label Extension 1° - Safety and Tolerability 2° - Imaging, assessments and PROs CCM Confirmed with MRI 21
US + EU5 INCIDENCE CAUSE LOF mutations in NF2 tumor suppressor gene PATHOPHYSIOLOGY OUR REASON TO BELIEVE Efficacy in Recursion OS, cellular, & animal models; suppression of aberrant ERK, AKT, and S6 pathway activation in a Phase 1 PD Study in NF2 patient tumors KEY ELEMENTS • Targeting familial and sporadic NF2 meningioma patients • Adult and adolescent patient populations • Oral bioavailability and CNS exposure together are unique among clinical-stage HDAC inhibitors • Potentially reduced cardiac toxicity compared to class Inherited rare CNS tumor syndrome leading to loss of hearing and mobility, other focal neurologic deficits Ricki – living with NF2 REC-2282 40mg REC-2282 60mg 1:1 6 x 1 Month Cycles 1° - PFS 2° - TTR, DOR & ORR Interim Analysis 20 x 1 Month Cycles Phase 2 REC-2282 Placebo 2:1 26 x 1M Cycles Phase 3 Progressive NF2-mutated meningioma Progressive NF2-mutated meningioma 22
US + EU5 PREVALENCE CAUSE Inactivating mutations in the tumor suppressor gene APC PATHOPHYSIOLOGY Polyps throughout the GI tract with extremely high risk of malignant transformation OUR REASON TO BELIEVE Efficacy in the Recursion OS shows that specific MEK 1/2 inhibitors had a specific effect in context of APC LOF. Subsequent mouse model APCmin showed potent reduction in polyps and dysplastic adenomas KEY ELEMENTS • Targeting Classical FAP patients (w/ APC mutation) • Benign polyps and dysplastic adenomas • Oral Dosing & Gut-Biased • US Orphan Drug Designation granted High Dose Low Dose Placebo 2:2:1 Food Effect Open Label Extension 1° -Δ Polyp burden at 12M 2° - PL, Safety, polyp # and histological grade FAP with APC mutation confirmed 48 Week Treatment 23
US + EU5 INCIDENCE CAUSE Release of C. Difficile toxins by colonizing bacterium causes degradation of colon cell junction, toxin transit to bloodstream, and morbidity to host PATHOPHYSIOLOGY Highly recurrent infectious disease with severe diarrhea, colitis, and risk of toxic megacolon, sepsis, and death OUR REASON TO BELIEVE Efficacy on the Recursion OS identified a new chemical entity for prophylaxis and recurrent C. difficile infection via glycosyl transferase inhibition with potential to be both orally active and gut-biased KEY TPP ELEMENTS • Orally active small molecule toxin inhibitor • Non-antibiotic approach with potential for combination with SOC and other therapies for recurrent disease • Designed for gut-biased pharmacology to target infection in the GI tract while reducing systemic exposure and potential systemic effects • Not expected to negatively impact the gut microbiome 24 Colleen – overcame recurrent C diff.
Efficacy demonstrated in CT26 checkpoint resistance (left) mouse model; complete response (CR) mice show minimal tumor growth when rechallenged (middle left). Peripheral IL-6 remain unchanged (middle right) while intertumoral IFNg increases EMT6 Gene B Gene B REC- 648918 REC-648918 BIRC2 Gene A Gene A BIRC2 • Goal: Identify novel compounds capable of re-sensitizing tumors with tumor- intrinsic resistance factors to checkpoint therapy • Phenomap insight: Novel compound (REC-648918) identified with similarity to knockout of potential immunotherapy resistance gene targets (Gene A, Gene B) • Result: Reduction in tumor growth vs. anti-PD-1 alone in both CT26 checkpoint resistance and EMT6 models (including 40% and 80% complete response in combination in each model respectively) Efficacy demonstrated in EMT6 mouse model days CT26: mouse colon carcinoma. REC-648918 was dosed PO, QD for 5 weeks at 100mg/kg. Anti-PD-1 was dosed IP, BIW for 5 weeks at 10mg/kg. 10 mice per group, dosing initiated when tumors reached ~ 80 mm3; * p<0.05 ** p<0.01 **** p<0.0001; ^ Combination treatment in EMT6 resulted in 8 CR and 8 rejections on re-challenge 25 CT26 REC-648918 REC-648918 + aPD1 Vehicle Anti-PD-1 Tumor-intrinsic immune resistance STK11 Target Alpha Target Beta More... Similar Opposite 25 80% CR in combo CT26 rechallenge 40% CR in combo
Gene A CDK12 2.5μM 1.0μM REC-65029 0.1μM 0.25μM REC-65029 • Goal: Identify novel compounds capable of sensitizing HRD-negative ovarian cancer and other tumors to PARP inhibition • Phenomap insight: Inhibition of target Gene A (for example, with REC-65029) may mimic inhibition of CDK12 while mitigating toxicity due to CDK13 inhibition • Result: Single agent and combo activity with olaparib in an HRD-negative ovarian cancer CDX and PDX models with durable response Single agent activity in olaparib-resistant CDX mouse model Single agent and combination (with olaparib) in an HRD-negative ovarian cancer PDX model with durable response 26 OVCAR-3 CDX – animals dosed with REC-65029 for 5 days at 100 mg/kg BID, a holiday from days 6-9 (due to body weight loss) and dosing resumed at 85 mg/kg BID; OV0273 PDX – REC-65029 dosed at 85 mg/kg PO, BID, olalparib dosed at 90mg/kg PO QD; ** p<0.01 **** p<0.0001 Treatment stopped on Day 28 OV0273 PDX OV0273 PDX (Survival)OVCAR-3 CDX 80% CR by day 14 in combo 100% CR Tumor-targeted precision therapeutics Hepatocellular Carcinoma MYC CDK12 More... Similar Opposite 26
Life Sciences - biology, chemistry, development, etc. Tech - data science, software engineering, automation, etc. Strategic Operations Advanced degrees Employees today Team Credentials 400+ 44% All employees VP and above Gender: % Women 41% 41% 27
28 Enables quality, reliability, repeatability and scale Recursion OS Continued digital chemistry and predictive ADMET OS build Clinical Predictions Near-TermToday Intermediate-Term
29 Near-Term Milestones • Rec-994 for CCM Ph2a clinical start in Q1 • Rec-2282 for NF2 Ph2/3 clinical start in Q2 • Rec-4881 for FAP Ph2 clinical start in Q2 or Q3 • Rec-3964 for C diff. IND and Phase 1 start in 2H • Additional INDs and Clinical Starts • Option Exercises for Partnership Programs • $517M in cash, equivalents & investments with no substantial debt at end of Q4, 2021 • Does not include $150M upfront from Roche/Genentech collaboration Strong Financials C lin ic al P ro gr am s Medium-term milestones • Multiple POC readout(s) for AI-discovered programs • Potential additional partnership in large, intractable area of biology • Additional option exercises for partnership programs • Recursion OS Begins to move to Autonomous Map Building and Navigation with Automated Chemical Synthesis, Digital Chemistry and Predictive ADMET Tools • In-House Small Molecule Manufacturing Capabilities come On-Line
IMPACT
Board of Directors TINA LARSON President & COO MASON VICTORS Chief Product Officer Executive Team CHRIS GIBSON, PHD Co-Founder & CEO DEAN LI, MD/PHD Recursion Co-founder, President of Merck Research Labs ZAVAIN DAR Partner, Lux Capital ZACHARY BOGUE, JD Partner, Data Collective ROBERT HERSHBERG, MD/PHD Former EVP CSO & BD, Celgene BLAKE BORGESON, PHD Recursion Co-founder, Board member Machine Intelligence Research Institute SHAFIQUE VIRANI, MD FRCS Chief Corp Dev Officer MICHAEL SECORA, PHD Chief Financial Officer HEATHER KIRKBY Chief People Officer BEN MABEY Chief Technology Officer CHRIS GIBSON, PHD Co-founder & CEO TERRY-ANN BURRELL, MBA CFO & Treasurer Beam Therapeutics R. MARTIN CHAVEZ Vice-Chair of 6th Street Financial. Former CFO/CIO at GS RAMONA DOYLE, MD Chief Medical Officer LOUISA DANIELS, JD Chief Legal Officer & General Counsel Trademarks are the property of their respective owners and used for informational purposes only. 31
• Growth in capabilities, proprietary data, programs, and partnerships • Increasing business opportunities • Reducing binary risks We are a biotechnology company scaling more like a technology company, as demonstrated by our growth in inputs (experiments) and growth in outputs (data, biological and chemical relationships, programs, and partnerships). (1) Includes approximately 500,000 compounds from Bayer’s proprietary library. (2) ‘Predicted Relationships’ refers to the number of Unique Perturbations that have been predicted using our maps. (3) Announced a collaboration with Roche and Genentech in December 2021 and received an upfront payment of $150 million in January 2022. Year 2018 2019 2020 2021 Total Phenomic Experiments (Millions) 8 24 56 115 Data (PB) 1.8 4.3 6.8 12.9 Cell Types 12 25 36 38 Total Chemical Library1 (Thousands) 24 106 706 978 In Silico Chemistry Library (Billions) 0 0.02 3 12 Predicted Biological and Chemical Relationships2 (Billions) NA NA 13 203 IND-Enabling and Clinical Stage Programs 1 2 4 5 Cumulative Upfront and Investment Payments Committed by Partners3 $0 $0 $80M $230M Cumulative Potential Payments from Partners Excluding Royalties $0 $0 >$1B >$13B 32
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