Chris Gibson, Recursion CEO (Vaughn Ridley/Sportsfile for Web Summit via Getty Images)

Re­cur­sion nabs $239M and an up to $1B part­ner­ship with Bay­er as AI race heats up

Some biotechs strug­gle for cash. Re­cur­sion, late­ly, seems to be swim­ming in it.

To­day, hav­ing al­ready raised over $180 mil­lion in the last two years, the Salt Lake City-based AI drug de­vel­op­er an­nounced a $239 mil­lion Se­ries D. That’s more than any US or Eu­ro­pean biotech has raised in a round this year and more than all but two biotechs raised last year. (Mab­well, a Shang­hai-based an­ti­body de­vel­op­er, raised $278 mil­lion in a Se­ries A in April.)

The round came with an im­por­tant point of val­i­da­tion for Re­cur­sion and a po­ten­tial long-term source of rev­enue: a new part­ner­ship with Bay­er. That deal, cen­tered on fi­brot­ic dis­eases, will pay Re­cur­sion $30 mil­lion up­front for the part­ner­ship, along with $100 mil­lion in mile­stones for each of up to 10 pro­grams the com­pa­nies could pur­sue. So it’s an up to $1 bil­lion deal, even if it’s van­ish­ing­ly un­like­ly to reach that. Leaps by Bay­er, the Ger­man phar­ma’s ven­ture arm, al­so led the Se­ries D, con­tribut­ing a $50 mil­lion eq­ui­ty in­vest­ment.

The in­vest­ment-part­ner­ship rep­re­sents one of the largest rounds, if not the sin­gle largest round, for an ar­ti­fi­cial-in­tel­li­gence fo­cused biotech and ce­ments Re­cur­sion as one of the ma­jor play­ers in a nascent field that has pro­duced many small star­tups but few heavy­weights. It al­so points to where Big Phar­ma and ma­jor VCs may spread their fo­cus as ma­chine learn­ing ap­proach­es ad­vance. The first small com­pa­nies to make head­lines and sign deals used ma­chine learn­ing to screen vast li­braries of mol­e­cules in search of ones that can hit tar­gets that drug com­pa­nies have long tried to hit. More re­cent­ly, though, a cou­ple up­starts have raised sig­nif­i­cant cash and scored promi­nent part­ner­ships us­ing ad­vanced com­pu­ta­tion­al tools to study cells more close­ly and come up with new tar­gets them­selves.

“What Re­cur­sion does is re­al­ly hard so I wouldn’t say there is go­ing to be a del­uge of com­pa­nies,” Zachary Bogue, founder of ear­ly Re­cur­sion backer DCVC, told End­points News. “But this idea of bi­ol­o­gy as a plat­form and us­ing AI as a drug dis­cov­ery is the new fron­tier in biotech.”

Rough­ly, that’s what Re­cur­sion does. In a 100,000 square-foot ware­house in down­town Salt Lake City, ro­bots take petri dish­es of dif­fer­ent cell types and knock out dif­fer­ent genes, tak­ing con­stant pic­tures in the process. Hu­mans can’t eas­i­ly tell the dif­fer­ence be­tween most of those pic­tures, but com­put­ers can, and with enough im­ages and hun­dreds of dif­fer­ent mea­sure­ments on each, they can pick up pat­terns to in­di­cate what can make a cell sick and which genes, when tar­get­ed, can make them healthy.  They can then iden­ti­fy and tweak mol­e­cules or com­pounds that hit those tar­gets.

So far, they’ve used that ap­proach to iden­ti­fy mol­e­cules to bring in­to clin­i­cal de­vel­op­ment for sev­er­al rare neu­ro­log­i­cal con­di­tions and hered­i­tary can­cer syn­drome, pulling com­pounds from Ohio State, Take­da, and co-founder Dean Li’s labs. But the com­pa­ny lists a bevy of pre­clin­i­cal dis­ease ar­eas on its pipeline, and Re­cur­sion CEO Chris Gib­son said that, with the Bay­er deal, they would be­gin to look to part­ner with big com­pa­nies where clin­i­cal de­vel­op­ment is more com­plex, such as in neu­rol­o­gy and on­col­o­gy.

“We’ve been talk­ing about this in­ter­nal­ly as the be­gin­ning of a sec­ond act for the com­pa­ny,” he said in an in­ter­view with End­points.

Oth­er com­pa­nies have scored large amounts of cap­i­tal with sim­i­lar ap­proach­es. Most no­tably, Daphne Koller’s start­up In­sitro has nabbed two $100 mil­lion-plus rounds in a span of 13 months, plus a Gilead col­lab­o­ra­tion on NASH. In Jan­u­ary, star Cana­di­an re­searcher Bren­dan Frey’s Deep Ge­nomics raised $40 mil­lion in­to the clin­ic. Mean­while, the rhetoric from the hand­ful of drug phar­ma ex­ec­u­tives who talk open­ly about ma­chine learn­ing, such as Glax­o­SmithK­line’s Hal Bar­ron, has cen­tered on ap­proach­es that help un­cov­er not just new mol­e­cules but al­so new tar­gets.

Un­der the deal with Bay­er, Re­cur­sion will use their sys­tem to build mod­els for dif­fer­ent fi­brot­ic dis­eases, fol­low­ing guid­ance from Bay­er fi­bro­sis ex­perts at the phar­ma. They will then use Bay­er’s li­brary of small mol­e­cules and their own in­ter­nal abil­i­ty to screen and de­vel­op mol­e­cules to come up with pre­clin­i­cal can­di­dates. Around that point, Gib­son said, they’ll hand things off to Ger­many.

Al­though Leaps by Bay­er de­scribed their $50 mil­lion con­tri­bu­tion to the Se­ries D as “our big bet in terms of dig­i­tal drug dis­cov­ery,” Bay­er it­self has al­so in­vest­ed in the mol­e­cule-screen­ing side of the AI biotech world, as have oth­er ma­jor com­pa­nies. In Jan­u­ary, Bay­er and the UK-based Ex­sci­en­tia signed a dis­cov­ery col­lab­o­ra­tion for up to €240 mil­lion. Ex­sci­en­tia has al­so teamed with Sum­it­o­mo, Sanofi and Cel­gene, the last of which in­clud­ed a $25 mil­lion up­front pay­ment. Atom­wise and In­sil­i­co have al­so signed mul­ti­ple big-name part­ner­ships, al­though they have been large­ly mile­stone-heavy, with lit­tle up­front dis­closed.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Andy Plump, Takeda R&D chief (Jeff Rumans for Endpoints News)

What kind of PhI­Ib da­ta is worth $4B cash? Take­da’s Andy Plump has some thoughts on that

A few months back, when Takeda caused jaws to drop with its eye-watering $4 billion cash upfront for a mid-stage TYK2 drug from Nimbus, it had already taken a deep dive on the solid Phase IIb data Nimbus had assembled from its dose-ranging study in psoriasis.

Now, it’s rolling that data out, eager to demonstrate what inspired the global biopharma to go long in a neighboring, but new, disease arena for the pipeline. And the most avid students of the numbers will likely be at Bristol Myers Squibb, who will have a multi-year head start on pioneering the TYK2 space with Sotyktu (deucravacitinib) as Takeda makes its lunge for best-in-class status.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

No­vo Nordisk re­mains un­der UK scruti­ny as MHRA con­ducts its own re­view in 'in­cred­i­bly rare' case

The UK’s Medicines and Healthcare products Regulatory Agency is now reviewing Novo Nordisk’s marketing violation that resulted in its loss of UK trade group membership last week. Novo Nordisk was suspended on Thursday from the Association of the British Pharmaceutical Industry (ABPI) for two years after an investigation by its regulatory arm found the pharma broke its conduct rules.

MHRA said on Tuesday that its review of the Prescription Medicines Code of Practice Authority (PMCPA) investigation is standard practice. An MHRA spokesperson emphasized in an email to Endpoints News that the situation with Novo Nordisk is “incredibly rare” while also noting ABPI took “swift and proportionate action.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,200+ biopharma pros reading Endpoints daily — and it's free.

Chat­G­PT with phar­ma da­ta de­buts for med­ical meet­ings, be­gin­ning with AACR

What do you get when you combine ChatGPT generative AI technology with specific pharma and clinical datasets? A time-saving tool that can answer questions about medical conference abstracts and clinical findings in seconds in one new application from ZoomRx called FermaGPT.

ZoomRx is debuting a public version of its generative AI product specifically for medical conferences beginning this week for the upcoming American Association for Cancer Research (AACR) annual meeting that runs April 14-19.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,200+ biopharma pros reading Endpoints daily — and it's free.

FDA in­di­cates will­ing­ness to ap­prove Bio­gen ALS drug de­spite failed PhI­II study

Ahead of Wednesday’s advisory committee hearing to discuss Biogen’s ALS drug tofersen, the FDA appeared open to approving the drug, newly released briefing documents show.

Citing the need for flexibility in a devastating disease like ALS, regulators signaled a willingness to consider greenlighting tofersen based on its effect on a certain protein associated with ALS despite a failed pivotal trial. The documents come after regulatory flexibility was part of the same rationale the agency expressed when approving an ALS drug last September from Amylyx Pharmaceuticals, indicating the FDA’s openness to approving new treatments for the disease.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,200+ biopharma pros reading Endpoints daily — and it's free.

FDA warns Proc­ter & Gam­ble over NyQuil la­bel's in­gre­di­ent list­ings

The FDA on Tuesday released a warning letter sent earlier this month to the Mason, OH-based site of Procter & Gamble Manufactura, raising questions about the list of ingredients on the label and in the electronic filing.

The warning says that for P&G’s over-the-counter Vicks Nyquil Severe Hot Remedy Cold and Flu Plus Congestion, there’s a “mismatched” list of active ingredients between the labeling and the electronic listing file. The listing file for the active ingredients did not match the active ingredients in the electronic file.

FTC says patent bat­tle over Parkin­son's drug could have 'sig­nif­i­cant im­pli­ca­tion­s' for pa­tients

The Federal Trade Commission has gotten involved in a patent feud over Supernus’ Parkinson’s drug Apokyn, a case the agency said may have ‘‘significant implications” for patients who rely on the drug.

Sage Chemical won the first generic approval for its Apokyn formulation (also known as apomorphine hydrochloride injection) back in 2022. The non-ergoline dopamine agonist is approved to treat Parkinson’s symptoms during “off episodes,” such as difficulty moving, tremors and intense cramping. However, regulators specified that the approval pertained to the generic drug cartridges only, not the injector pen required for administration.

Mar­ket­ingRx roundup: What could a US Tik­Tok ban mean for phar­ma? Pfiz­er, Lil­ly lead phar­ma March Mad­ness ad­ver­tis­ers

Just as pharma marketers finally make moves into TikTok, the threat of a US ban on the social media channel is now looming. Already banned on federal employee phones by an initial Congressional act, more bills and maybe bans are on the way. With rare bipartisan agreement, lawmakers have introduced legislation that would give the US president the power to ban TikTok (although not mentioned by name) and other foreign-owned technology platforms that represent a security threat to the US.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,200+ biopharma pros reading Endpoints daily — and it's free.

Vipin Garg, Altimmune CEO

Al­tim­mune’s shares halved af­ter in­ter­im look at PhII weight loss drug da­ta

Altimmune’s attempt to catch up to Novo Nordisk and Eli Lilly’s GLP-1 drugs hit an investor snag Tuesday after the biotech shared interim Phase II weight loss data.

The Maryland biotech’s pemvidutide is a GLP-1/glucagon dual receptor agonist meant to activate GLP-1 receptors to squash appetite and glucagon to ramp up energy use. The 2.4 mg dose showed a placebo-adjusted weight loss of 9.7% at week 24 of 48, which Jefferies analysts said would be comparable to Novo Nordisk’s semaglutide (Wegovy) and Eli Lilly’s tirzepatide (Mounjaro).

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,200+ biopharma pros reading Endpoints daily — and it's free.