SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2022
RECURSION PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
|(State or other jurisdiction of incorporation)||(Commission File Number)||(I.R.S. Employer Identification No.)|
41 S Rio Grande Street
Salt Lake City, UT 84101
(Address of principal executive offices) (Zip code)
(385) 269 - 0203
(Registrant’s telephone number, including area code)
(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:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading symbol(s)||Name of each exchange on which registered|
|Class A Common Stock, par value $0.00001 per share||RXRX|
Nasdaq Global Select Market
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 November 8, 2022, Recursion Pharmaceuticals, Inc. issued a press release announcing its results of operations and financial condition for the third quarter September 30, 2022. 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 November 8, 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.
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 hereunto duly authorized on November 8, 2022.
|RECURSION PHARMACEUTICALS, INC.|
/s/ Michael Secora
Chief Financial Officer
Recursion Provides Business Updates and Reports Third Quarter 2022 Financial Results
•Initiated our Phase 2 clinical trial for the potential treatment of familial adenomatous polyposis (FAP)
•Initiated our Phase 1 clinical trial for the potential treatment of Clostridium difficile colitis
•Nominated a new clinical program in AXIN1/APC mutant cancers with an initial focus on hepatocellular carcinoma and ovarian cancer, for which a Phase 2 clinical trial is being planned
•Raised gross proceeds of approximately $150 million in a private placement offering
SALT LAKE CITY, November 8, 2022 — Recursion (Nasdaq: RXRX), the clinical-stage biotechnology company industrializing drug discovery by decoding biology, today reported business updates and financial results for its third quarter ending September 30, 2022.
“We are excited to have initiated four clinical trials in the past three quarters,” said Chris Gibson, Ph.D., Co-Founder & CEO at Recursion. “In addition, our first clinical stage program discovered using our mapping and navigating approach to biology was nominated as a clinical stage program, with a Phase 2 clinical trial being planned now. We believe that our consistency in advancing our internal pipeline and transformational partnerships coupled with our willingness to continuously evolve our platform to more completely map and navigate biology and chemistry highlight Recursion as a leader within technology-enabled drug discovery.”
Summary of Business Highlights
◦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, 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): In September 2022, we announced the initiation of our Phase 2 TUPELO clinical trial, which is a multicenter, randomized, double-blind, placebo-controlled two-part clinical trial to evaluate efficacy, safety and pharmacokinetics of REC-4881 in patients with FAP.
◦AXIN1/APC Mutant Cancers (REC-4881): In October 2022, we announced the nomination of REC-4881 for the potential treatment of AXIN1/APC mutant cancers with an initial focus on hepatocellular carcinoma and ovarian cancer. We have prioritized resources to accelerate planning to initiate a Phase 2 trial. The advancement of this program highlights our intent to focus our internal pipeline on oncology and oncology-like opportunities.
◦Clostridium difficile Colitis (REC-3964): In September 2022, we announced the initiation of our Phase 1 clinical trial, which is a first-in-human protocol evaluating single and multiple doses of REC-3964 in healthy volunteers and will assess the safety, tolerability and pharmacokinetic profile of REC-3964.
◦GM2 Gangliosidosis (REC-3599): Due to the advancement of our program in AXIN1/APC mutant cancers and the increasing number of oncology programs moving towards the clinic, we deprioritized our GM2 gangliosidosis program and redirected resources. We will make efforts to work with patient foundations to transfer relevant scientific knowledge.
We continue to advance efforts to potentially discover new 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).
◦Transcriptomics and Industrialized Validation: We continue to build out our scaled transcriptomics platform which has now been adopted into the research operating plans of the majority of Recursion’s active programs in order to drive validation, lead selection, and optimization. We are developing an end-to-end industrialized validation process in order to translate phenomic and transcriptomic insights from our maps of biology and chemistry.
◦InVivomics and Digital Tolerability: Digital tolerability is a novel in vivo method for analytical dose selection and interpretation prior to initiating efficacy studies. By the end of the year, we are planning to have 100% of new chemical entities evaluated using digital tolerability before starting any long-term efficacy studies in animals. Furthermore, we continue to increase the dimensionality of digital biomarker signals measured in our preclinical in vivo studies.
◦Chemical Technology and Machine Learning: We have completed the design of the remaining core component modules of our automated chemical microsynthesis platform. We envision advanced machine learning approaches as guiding experiment design and drug candidate selection while exploring new ways of building maps of biology and chemistry in order to improve our ability to predict treatments and understand causal mechanisms. Likewise, in the third
quarter, we began an initiative in molecular modeling to use predictive and generative methods to drive chemistry optimization.
•Additional Corporate Updates
◦Private Placement Offering: On October 27, 2022, we completed a Private Placement of common stock, raising gross proceeds of approximately $150.3 million, before deducting placement agent fees and other expenses.
◦ESG Reporting: In August 2022, we announced receiving a Prime Rating for ESG performance from the industry-renowned Institutional Shareholder Services (ISS). A Prime Rating is awarded to companies with ESG performance above a sector-specific threshold and is assessed by ISS using an "absolute best in class" methodology.
Third Quarter 2022 Financial Results
•Cash Position: Cash and cash equivalents were $454.6 million as of September 30, 2022, which excludes proceeds from the above private placement offering.
•Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $13.2 million for the third quarter of 2022, compared to $2.5 million for the third quarter of 2021. The increase was due to revenue recognized from our Roche-Genentech collaboration.
•Research and Development Expenses: Research and development expenses were $40.8 million for the third quarter of 2022, compared to $33.2 million for the third quarter of 2021. The increase in research and development expenses was due to increased clinical costs as studies progressed.
•General and Administrative Expenses: General and administrative expenses were $19.5 million for the third quarter of 2022, compared to $15.7 million for the third 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 $4.0 million and other administrative costs associated with operating a public company.
•Net Loss: Net loss was $60.4 million for the third quarter of 2022, compared to a net loss of $47.4 million for the third quarter of 2021.
Recursion is the clinical-stage biotechnology company industrializing drug discovery by decoding biology. Enabling its mission is the Recursion OS, a platform built across diverse technologies that continuously expands one of the world’s largest proprietary biological and chemical datasets. Recursion leverages sophisticated machine-learning algorithms to distill from its dataset, a collection of trillions
of searchable relationships across biology and chemistry unconstrained by human bias. By commanding massive experimental scale — up to millions of wet lab experiments weekly — and massive computational scale — owning and operating one of the most powerful supercomputers in the world, Recursion is uniting technology, biology and chemistry to advance the future of medicine.
Recursion is headquartered in Salt Lake City, where it is a founding member of BioHive, the Utah life sciences industry collective. Recursion also has offices in Toronto, Montreal and the San Francisco Bay Area. Learn more at www.Recursion.com, or connect on Twitter and LinkedIn.
Recursion Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share amounts)
|Three months ended September 30,||Nine months ended September 30,|
|Operating revenue||$||13,053 ||$||2,500 ||$||26,005 ||$||7,500 |
|Grant revenue||107 ||34 ||162 ||145 |
|Total revenue||13,160 ||2,534 ||26,167 ||7,645 |
|Operating costs and expenses|
|Cost of revenue||15,409 ||— ||37,435 ||— |
|Research and development||40,836 ||33,246 ||111,716 ||86,979 |
|General and administrative||19,488 ||15,690 ||61,761 ||38,481 |
|Total operating expenses||75,733 ||48,936 ||210,912 ||125,460 |
|Loss from operations||(62,573)||(46,402)||(184,745)||(117,815)|
|Other income (loss), net||2,128 ||(1,026)||2,761 ||(3,731)|
|Per share data|
|Net loss per share of Class A and B common stock, basic and diluted||$||(0.35)||$||(0.28)||$||(1.06)||$||(1.10)|
|Weighted-average shares (Class A and B) outstanding, basic and diluted||173,435,970 ||168,533,550 ||172,122,974 ||110,513,231 |
Recursion Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets (unaudited)
| ||September 30,||December 31,|
|Assets|| || |
|Current assets|| || |
|Cash and cash equivalents||$||454,646 ||$||285,116 |
|Restricted cash||2,090 ||1,552 |
|Accounts receivable||— ||34 |
|Other receivables||11,635 ||9,056 |
|Investments||— ||231,446 |
|Other current assets||13,247 ||7,514 |
|Total current assets||481,618 ||534,718 |
|Restricted cash, non-current||8,154 ||8,681 |
|Property and equipment, net||85,777 ||64,725 |
|Operating lease right-of-use assets||33,726 ||— |
|Intangible assets, net||1,457 ||1,385 |
|Goodwill||801 ||801 |
|Other non-current assets||— ||35 |
|Total assets||$||611,533 ||$||610,345 |
|Liabilities and stockholders’ equity|
|Accounts payable||$||3,890 ||$||2,819 |
|Accrued expenses and other liabilities||26,757 ||32,333 |
|Unearned revenue||46,753 ||10,000 |
|Notes payable||95 ||90 |
|Operating lease liabilities||5,541 ||— |
|Lease incentive obligation||— ||1,416 |
|Total current liabilities||83,036 ||46,658 |
|Deferred rent||— ||4,110 |
|Unearned revenue, non-current||93,909 ||6,667 |
|Notes payable, non-current||561 ||633 |
|Operating lease liabilities, non-current||45,993 ||— |
|Lease incentive obligation, non-current||— ||9,339 |
|Total liabilities||223,499 ||67,407 |
|Commitments and contingencies|
Common stock (Class A and B)
|2 ||2 |
|Additional paid-in capital||970,096 ||943,142 |
|Accumulated other comprehensive loss||— ||(126)|
|Total stockholders’ equity||388,034 ||542,938 |
|Total liabilities and stockholders’ equity ||$||611,533 ||$||610,345 |
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; 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 or after 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; 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; inflation and other macroeconomic issues; 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. 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 Q3 2022
This presentation and any accompanying discussion or documents contains 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 and our company, management's beliefs and certain assumptions we have made. The words “plan,” “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Forward-looking statements made in this presentation include statements about Recursion's use of the proceeds from its private placement, the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical and clinical studies, the potential size of the market opportunity for our drug candidates, our ability to identify viable new drug candidates for clinical development and the accelerating rate at which we expect to identify such candidates, our expectation that the assets that will drive the most value for us are those that we will identify in the future using our datasets and tools, and many others. Forward-looking statements made in this presentation are neither historical facts nor assurances of future performance, are subject to significant risks and uncertainties, and may not occur as actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. For a discussion of factors that could affect our business, please refer to the "Risk Factors" sections 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. 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, whether as a result of new information, future events or otherwise. Certain information contained in this presentation relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the Company’s own internal estimates and research. While the Company believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy or completeness of, any information obtained from third-party sources. In addition, all of the market data included in this presentation involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while the Company believes its own internal research is reliable, such research has not been verified by any independent source. Any non-Recursion logos or trademarks included herein are the property of the owners thereof and are used for reference purposes only. 2
3 Opportunity 0.1 1 10 1960 1970 1980 1990 2000 2010 2020 50B 100M 500K 1K 100 Compute Power (Transistors per Microprocessor)NME’s per $B spent (inflation adjusted) Moore’s Law: Computing power becomes faster and less expensive over time Eroom’s Law: Drug discovery is becoming slower and more expensive over time Adapted from Scannell et al and Our World in Data
Real (atoms) Digital (bits) 1 Profile Systems Capture high-dimensional data to create a digital record of reality (things, places, preferences, etc.) Data Aggregate and organize data to create digital maps of reality Algorithms Navigate digital maps to predict novel relationships, then try them in reality 3 2 1 2 4 3 Trademarks are the property of their respective owners and used for informational purposes only.
Enables quality, reliability, repeatability and scale Novel Insights at Scale different human cell types small molecule library, we believe this scale is on par with some large pharma companies arrayed CRISPR guides cytokines and soluble factors Diverse Biological and Chemical Inputs Robotic Automation at Scale Up to 2.2 Million wet-lab experiments per week profiling genes and compounds, we believe we are one of the largest phenomics (human cellular image-based) data producers Digitization of Biology and Chemistry ~19 Petabytes of proprietary high-dimensional data, we believe this is one of the largest relatable in vitro biological and chemical dataset ML-Based Analysis Top 500 supercomputer across any industry (TOP500 List, Jun 2022), we leverage vast neural networks and multiomics approaches to extract features and drive insights 2.9 Trillion relatable hypotheses across multiple biological and chemical contexts ML-Based Relationships High-Dimensional Validation near whole exomes per week, we believe we are one of the largest transcriptomics data producers proteomics panels in 2021 Up to 6 Top 500 ~19 Petabytes2.2 Million / Week
Well-known primary relationships 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 7
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 Screen — Hit ID — Validated Lead — Advanced Candidate — Development Candidate — Industry Recursion Failing faster and earlier to › › spend less › C o st t o IN D ( $ M ) 25 — 20 — 15 — 10 — 5 — 0 — Industry 40 — 30 — 20 — 10 — 0 — › and go faster 100 80 60 51 80% 75% 85% 100 64 33 64% 52% 73% 20 61% St ag e Ti m e t o V al id at e d L e ad ( m o ) Recursion Industry Recursion 15 Industry Recursion 8
PreclinicalLate Discovery Oncology Rare & Other All populations defined above are US and EU5 incidence unless otherwise noted. EU5 is defined as France, Germany, Italy, Spain and UK. (1) 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. (2) Our program has the potential to address a number of indications in this space. (3) Prevalence for hereditary and sporadic symptomatic population. (4) Annual US and EU5 incidence for all NF2-driven meningiomas. Therapeutic Area Indication AXIN1/APC MUTANT CANCERS WITH AN INITIAL FOCUS IN HCC AND OVARIAN (AXIN1/APC mutant cancers including HCC and ovarian; est. 7K) CANCER IMMUNOTHERAPY TARGET BETA (Multiple; 15K2) MYC-DRIVEN ONCOLOGY (MYC; est. 54K1) HRD-NEGATIVE OVARIAN CANCER TARGET GAMMA (HRD-negative ovarian cancer; 13K) FAMILIAL ADENOMATOUS POLYPOSIS (APC; est. 50K) KRAS/STK11-DRIVEN CHECKPOINT RESISTANCE (KRAS/STK11; est. 11K) CEREBRAL CAVERNOUS MALFORMATION (CCM; est. 360K3) NEUROFIBROMATOSIS TYPE 2 (NF2; est. 33K4) CLOSTRIDIUM DIFFICILE COLITIS (est. 730K) More than a dozen early discovery and research programs in oncology, neuroscience, inflammation & immunology, and rare disease CANCER IMMUNOTHERAPY TARGET ALPHA (Multiple; 72K2) Phase 1 Phase 2 Phase 3 Partnership Programs MULTIPLE PROGRAMS ADVANCING SIMULTANEOUSLY 9
Internal Pipeline - Rare Genetic Diseases Partnership strategy Inter al Pipeline Discovery Partnerships • Build wholly-owned pipeline in indications with potential for accelerated path to approval Pipeline strategy • Partner in complex therapeutic areas requiring large financial commitment and competitive market dynamics • Leverage partner knowledge and clinical development capabilities 10 Fibrosis Other large, intractable areas of biology Neuroscience *and a single oncology indication Oncology Rare Disease
Fibrosis Neuroscience *and a single oncology indication • $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 • Recursion owns all algorithmic improvements • $150M upfront and up to or exceeding $500M in 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 • Recursion owns or co-owns all algorithmic improvements (Announced Sep 2020; Expanded Dec 2021) (Announced Dec 2021) Trademarks are the property of their respective owners and used for informational purposes only. 11
Novel efficacy and insights at scale Near-Term Today Medium-Term Automated molecular microsynthesis at scale Recursion OS enables quality, reliability, repeatability and scale Continued digital chemistry, SAR and predictive ADMET OS build Leverage new datasets and technology to improve translation, clinical predictions, and trial efficiencies Past Industrialization of drug discovery and development Brute force search Long-Term 12
This is a whole-genome arrayed CRISPR knock-out Map generated in primary human endothelial cells Every gene is represented in a pairwise way (each is present in columns and rows) Dark Red indicates phenotypic similarity according to our neural networks while Dark Blue indicates phenotypic anti- similarity (which in our experience often suggests negative regulation) We can add the phenotypes of hundreds of thousands of small molecules at multiple doses and query and interact with these maps using a web application 14 All Human Genes with Significant Effects in this Cellular Context → A ll H u m an G en es w ith Sign ifican t Effects in th is C ellu lar C o n te xt →
Many known mitochondrial-related genes cluster together along with a few less well-known genes 15
JAK1 JAK1 The JAK / STAT pathway 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 16
20S Subunit 26S Subunit The 20S and 26S proteosomes form 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 17
Gene A CDK12 2.5μM 1.0μM 0.1μM 0.25μM REC-65029 • Goal: Identify potential first-in-class tumor-targeted precision therapeutic NCE with novel MOA capable of potentially treating HRD-negative ovarian cancer • 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 in combination with olaparib in HRD-negative ovarian cancer CDX and PDX models showed durable efficacy – including 100% complete response OV0273 PDX – REC-65029 dosed at 85 mg/kg PO, BID, olalparib dosed at 90mg/kg PO QD; ** p<0.01 **** p<0.0001 Single agent and combination (with olaparib) in an HRD-negative ovarian cancer PDX model with durable response Treatment stopped on Day 28 OV0273 PDX OV0273 PDX (Survival) 80% CR by day 14 in combo 100% CR Similar Opposite 18
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 • Phase 2 clinical trial initiated in Q1 2022 • Once daily oral dosing • US & EU Orphan Drug Designation Julia – living with CCM Phase 2a Study Design: High Dose Low Dose Placebo 1:1:1 52-Week Treatment Open Label Extension 1° - Safety and Tolerability 2° - Imaging, neuro assessments and PROs CCM Confirmed with MRI 20 Endpoints
US + EU5 PREVALENCE CAUSE LOF mutations in NF2 tumor suppressor gene PATHOPHYSIOLOGY Inherited rare CNS tumor syndrome leading to loss of hearing and mobility, other focal neurologic deficits OUR REASON TO BELIEVE Efficacy in Recursion OS, cellular, and animal models; suppression of aberrant ERK, AKT, and S6 pathway activation in a Phase 1 PD Study in NF2 patient tumors Adaptive Phase 2/3 Study Design 21 Ricki – living with NF2 REC-2282 40mg REC-2282 60mg 1:1 6 x 1 Mo. Cycles 1° - PFS 2° - TTR, DOR & ORR Interim Analysis 20 x 1 Mo. Cycles REC-2282 Placebo 2:1 26 x 1 Mo. Cycles Progressive NF2- mutated meningioma Progressive NF2- mutated meningioma Phase 2 Phase 3 KEY ELEMENTS • Targeting familial and sporadic NF2 meningioma patients • Phase 2/3 clinical trial initiated in Q2 2022 • Oral bioavailability and CNS exposure together are unique among clinical-stage HDAC inhibitors • Fast-Track and US Orphan Drug Designation Endpoints
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 an 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) • Phase 2 clinical trial initiated in Q3 2022 • Oral Dosing & Gut-Biased • Fast-Track and US & EU Orphan Drug Designation Phase 2 Study Design: 22 Endpoints High Dose Low Dose Placebo 2:2:1 Open Label Extension 1° - Δ Polyp burden at 12M 2° - PL, Safety, polyp # and histological grade FAP with APC mutation confirmed 48 Week Treatment
US + EU5 PREVALENCE 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 Recursion OS identified a new chemical entity for recurrent C. difficile infection and potentially prophylaxis via glycosyl transferase inhibition with potential to be orally active KEY ELEMENTS • Orally active small molecule toxin effect inhibitor • Non-antibiotic approach with potential for combination with SOC and other therapies for recurrent disease • Designed for selective antitoxin pharmacology to target infection with minimal off-target systemic effects • Phase 1 clinical trial initiated in Q3 2022 Phase 1 Study Design: 23 Endpoints Colleen – overcame recurrent C diff. Multiple Ascending Dose – randomized, double-blind, placebo-controlled (5 dose levels) Safety, tolerability, and PK Healthy subjects Single Ascending Dose – randomized, double-blind, placebo-controlled (6 dose levels) Part A Part B
PREVALENCE CAUSE LOF mutations in AXIN1/APC tumor suppressor genes PATHOPHYSIOLOGY Alterations in the WNT pathway are found in a wide variety of tumors, in particular HCC and Ovarian cancers, and confer poor prognosis and resistance to standard of care OUR REASON TO BELIEVE Efficacy in the Recursion OS and favorable results in PDX models harboring AXIN1/APC mutations vs. wild- type leading to a significant PFS benefit in HCC and Ovarian tumors 24 Gross morphology of HCC US + EU5 REC-4881 dosed at 3 mg/kg QD for up to 21 days. 3 mice per treatment per model (3 x 3 x 3) design; REC-4881 dosed at 3 mg/kg QD for up to 21 days. 3 mice per treatment per model (3 x 3 x 3) design. Combined HCC + Ovarian PDX mouse models Mutant Wildtype Tu m o r G ro w th I n h ib it io n ( % ) Average TGI: ~71% mutant vs ~48% wildtype Median TGI: ~72% mutant vs ~47% wildtype 60% TGI is considered a benchmark for clinical efficacy Significant association between AXIN/APC mutation & response in combined HCC + Ovarian PDX models (p=0.001) Single agent REC-4881 leads to a significant PFS benefit in HCC and Ovarian PDX models harboring AXIN1/APC mutations AXIN1/APC WildtypeAXIN1/APC Mutant p = 0.23p = 0.0009
Advanced degreesEmployees Team Members ~500 43% ESG Highlights Data shown reflective of Q3 2022 and Recursion’s 2022 ESG report ✓ Inaugural ESG report in 2022 – reporting on Healthcare and Technology Metrics ✓ 100% of electricity powering our Biohive-1 supercomputer comes from renewable sources 44% Female Male 54% 1% Non-Binary Parity Pledge Signer -gender parity and people of color parity Life Sciences –biology, chemistry, development, etc. Technology –data science, software engineering, automation, etc. Strategic Operations 2030 Goals -Achieve net-zero GHG emissions -Achieve equal gender representation Community Impact Committed to ESG Excellence Founding Partner, Life Science Accelerator Founding Member, Life Science Collective 25
Board of Directors TINA LARSON President & COO Executive Team DEAN LI, MD/PHD RXRX Co-Founder, President of Merck Research Labs ROB HERSHBERG, MD/PHD Co-Founder/CEO/Chair of HilleVax, Former EVP, CSO & CBO at Celgene BLAKE BORGESON, PHD RXRX Co-Founder, Board Member Machine Intelligence Research Institute SHAFIQUE VIRANI, MD FRCS Chief Business Officer & Interim CMO MICHAEL SECORA, PHD Chief Financial Officer HEATHER KIRKBY, MBA Chief People Officer BEN MABEY Chief Technology Officer CHRIS GIBSON, PHD Co-Founder & CEO, RXRX TERRY-ANN BURRELL, MBA CFO & Treasurer, Beam Therapeutics LOUISA DANIELS, JD MBA Chief Legal Officer & General Counsel Trademarks are the property of their respective owners and used for informational purposes only. 26 ZAVAIN DAR Co-Founder & Partner, Dimension KRISTEN RUSHTON, MBA SVP of Business Operations CHRIS GIBSON, PHD Co-Founder & CEO R. MARTIN CHAVEZ, PHD Chairman, RXRX Board Member of Alphabet, Vice-Chair of 6th Street, Former CFO/CIO of GS ZACHARY BOGUE, JD Co-Founder & Partner, Data Collective
Strong Financials ~$455M in cash and cash equivalents at the end of Q3 2022 (excludes recent equity offering) • Expanded Bayer collaboration to use mapping and navigating techniques to explore fibrotic diseases • Announced transformational collaboration with Roche-Genentech focused on neuroscience • Initiated 4 clinical trials in 3 quarters • Phase 2 clinical trial evaluating REC-994 for the potential treatment of CCM • Phase 2/3 clinical trial evaluating REC-2282 for the potential treatment of NF2 • Phase 2 clinical trial evaluating REC-4881 for the potential treatment of FAP • Phase 1 clinical trial evaluating REC-3964 for the potential treatment of Clostridium difficile Colitis • Nominated REC-4881 as a clinical program for the potential treatment of AXIN1/APC mutant cancers with an initial focus in HCC and Ovarian; Phase 2 trial in planning Near-Term • Potential for additional INDs and clinical starts • Potential for additional partnership(s) in large, intractable areas of biology • Potential option exercises for partnership programs • Potential option exercises for map building initiatives or data sharing • Potential for consolidation of technologies, talent and assets to accelerate the Recursion OS Medium-Term • Multiple POC readout(s) for AI-discovered programs • Potential additional partnership(s) in large, intractable areas of biology • Potential additional option exercises for partnership programs • Potential significant option exercises for map building or data sharing • Recursion OS begins to move to Autonomous Map Building and Navigation with automated chemical synthesis, digital chemistry and predictive ADMET tools Recent Milestones Achieved Upcoming Potential Milestones 27
• Immunotherapy-induced markers of inflammation are reduced in the periphery • IFN-ɣ increased in plasma under immunotherapy but was suppressed in combination with REC-648918 • Higher relative levels of IFN-ɣ were maintained under combination treatment 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 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 Tumor-intrinsic immune resistance Similar Opposite 30 30 CT26 REC-648918 REC-648918 + aPD1 Vehicle Anti-PD-1 40% CR in comboTu m o r V o lu m e (m m 3 ) CT26 • Efficacy demonstrated in CT26 checkpoint resistance mouse model • Complete response (CR) in 4 of 10 mice was observed, with resistance to re-challenge in 3 of 4 mice • Similar results were observed in the EMT-6 syngeneic model where 8 of 10 mice achieved CR and resisted rechallenge
• Goal: Identify novel compounds capable of re-sensitizing tumors to checkpoint therapy in STK11 mutant cancers • Phenomap insight: Novel class of compounds (REC-64151) inferred to rescue loss of STK11 • Result: REC-64151 restores anti-PD1 (aPD1) response of STK11 mutant CT26 tumors (Fig. A, B) and demonstrated enrichment of CD8+ T-cells (Fig. C) STK11 0.25 µM STK11 2.5 µM 2.5 µM0.25 µM REC-64151 REC-64151 CT26 STK11 KO days CT26 WT days Anti-PD-1 dosed at 10mg/kg; REC-64151 dosed at 100mg/kg; ** p<0.01 **** p<0.0001 REC-64151 restores anti-PD1 response of STK11 mutant CT26 tumors REC-64151 combination with anti-PD1 enriches CD8 T-cells REC-64151 + aPD1 CD8+ T cells REC-64151 aPD1Vehicle (A) (B) (C) Tumor-intrinsic immune resistance 31 Similar Opposite Tu m o r V o lu m e ( m m 3 ) Tu m o r V o lu m e ( m m 3 )
-2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-12 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-12 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-12 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-12 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 1 0 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-12 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 MYC-MAX Inhibitor (Benchmark) Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n PC-12 MSTO-211H MV-4-11 HL-60 REC-142221 Conc. (Log, uM) -2 -1 0 1 2 0 50 100 % P ro li fe ra ti o n I n h ib it io n REC-136467 Conc. (Log, uM) PC-1 MSTO-211H MV-4-11 HL-60c-Myc Independent Cell Line: c-Myc Dependent Cell Lines: MYC: Platform to identify small molecule inhibitors of MYC • Goal: Use the map-based inference platform to: • Identify novel small molecules that inhibit MYC activity for the treatment of diverse cancers characterized by aberrant activation of MYC pathway • Identify multiple hit series that mimic the functional consequence of MYC knockout by multiple mechanisms of action (MYC degradation, inhibition, molecular glues) • Phenomap insight: Complex MYC biology is represented in the map with MYC inhibitors identified due to their inferred relationship to the MYC gene knockout • Result: Identified hits selectively induce cell death in c-MYC dependent cell lines, while not affecting cell viability in c-MYC independent cells Selective effect on c-MYC amplified and c-MYC dependent cell line proliferation for two hit molecules identified using Recursion’s Platform Tumor-targeted precision therapeutics 32 Similar Opposite
Recursion is a clinical stage TechBio company Mapping and Navigating biology and chemistry with the goal of bringing better medicines to patients faster and at lower cost via an Internal Pipeline and Partnerships The Leading TechBio Mission is to decode biology to radically improve lives >150 biologists, chemists and drug developers >150 data scientists, software programmers, and engineers Mapping & Navigating 1st novel biological insights identified with AI-enabled mapping ~19 petabytes of proprietary biological & chemical data generated in-house 2.9 trillion predicted biological and chemical relationships to mine for compelling novel programs Internal Pipeline 3 programs initiated Ph2 or Ph2/3 clinical trials 1 program preparing to initiate a Ph2 clinical trial 1 program initiated Ph1 clinical trial Dozens of preclinical, discovery, and research programs Transformational Partnerships >$230M in upfront payments and investment to date from partners >$500M in potential research milestones and data usage options >$13B in potential project milestones across 50+ possible programs in addition to royalties 34
Images adapted from Jayatunga, M., et al. Nature Reviews Drug Discovery 2022. 35 Top-20 Pharma Companies AI-Native Drug Discovery Companies 705 768 708 602 575 641 686 709 519 439 393 333 0 500 1,000 1,500 2,000 2,500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Discovery / Preclinical Phase I Phase II Phase III 6 2 4 6 10 18 23 28 56 121 119 158 0 50 100 150 200 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 N u m b er o f C lin ic al a n d P re cl in ic al A ss e ts N u m b e r o f C lin ic al a n d P re cl in ic al A ss e ts
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 AND CHEMISTRY 2.9 trillion predicted relationships from >150M reproducible experiments Scientists navigate machine-generated hypotheses with unmet need and data arbitrage in mind Chosen hypotheses automatically validated using orthogonal high-dimensional assays 1. Massive, relatable proprietary map of searchable biology and chemistry 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 Approach is designed with the goal of achieving higher clinical success rates Traditional Drug Discovery LIMITATIONS BENEFITS <10% clinical success rate Increased efficiency of translation: more scale, more speed, less cost Translation Recursion Approach 36
Program 1 Program 1 Program 1 Program 1 Program 1 Program 1 Program 1 Illustrative example of potential value inflection points Upfront Fee Programs 2 through N Programs 2 through N Programs 2 through N Programs 2 through N Programs 2 through N Collaboration Timeline Programs 2 through N Programs 2 through N Programs 2 through N Value Program 1 Program 1 Program 1 Program 1 Program 1 Program 1 Program 1 Programs 2 through N Programs 2 through N Technical and Map-Based Milestones Programs 2 through N Programs 2 through N Pre-Clinical Milestones Clinical and Approval Milestones Royalties & Commercial Milestones 37
Drug Prediction Correct? Hydroxychloroquine x ✓ Lopinavir x ✓ Ritonavir x ✓ Remdesivir ✓ ✓ Baricitinib ✓ ✓ Tofacitinib ✓ ✓ Ivermectin x ✓ Fluvoxamine x ✓ Dexamethasone x x • Recursion conducted several AI-enabled experiments in April 2020 to investigate therapeutic potential for COVID-19 - Drugs investigated included FDA-approved drugs, EMA-approved drugs or compounds in late-stage clinical trials for modulation of the effect of SARS- CoV-2 on human cells • The resulting experiments were then compiled into the RxRx19 dataset, which comprised of 860+ GB of data from our screens - Data was made available to the community to accelerate the development of methods and pandemic treatments. • The Recursion OS predicted 8 of 9 randomized clinical trials correctly, in both early and late-stage COVID-19 38https://www.biorxiv.org/content/10.1101/2020.04.21.054387v1
• 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 40