In a significant move for the biopharmaceutical industry, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) received approval from its stockholders for the issuance of shares in connection with its acquisition of Exscientia plc. The decision was made at a special meeting held on Monday, which saw an overwhelming majority of votes in favor of the transaction.
The proposal, which was necessary to comply with Nasdaq Listing Rules, received 99.77% votes for and a mere 0.23% votes withheld. There were also 2,003,579 abstentions, but no broker non-votes were reported. The total number of votes cast in favor was 250,943,702, representing a significant portion of the total votes entitled to be cast by holders of Recursion's Class A and Class B Common Stock.
The record date for determining stockholders entitled to vote at the special meeting was October 2, 2024. As of that date, Recursion had 279,019,222 shares of Class A Common Stock and 7,058,575 shares of Class B Common Stock outstanding. The Class B shares are notably entitled to ten votes per share, amplifying their influence in the decision-making process.
The acquisition, initially agreed upon on August 8, 2024, is set to be executed through a scheme of arrangement under Part 26 of the United Kingdom (TADAWUL:4280) Companies Act 2006. With the stockholder approval now secured, the transaction is subject to the satisfaction of remaining terms and conditions outlined in the agreement between Recursion and Exscientia.
In other recent news, Recursion, a clinical stage TechBio company, has launched a new model named OpenPhenom-S/16 designed to enhance drug discovery processes. The model, trained on over three million images, surpasses traditional microscopy analysis methods and is now accessible in the Vertex (NASDAQ:VRTX) AI Model Garden on Google (NASDAQ:GOOGL) Cloud. Recursion has also received clearance from the U.S. Food and Drug Administration for a Phase 1/2 clinical trial of REC-1245, a potential treatment for solid tumors and lymphoma.
KeyBanc Capital Markets maintained its Overweight rating and $12.00 price target for Recursion following the FDA approval. Furthermore, Recursion has announced a $30 million deal with Genentech and plans for a $200 million public offering of Class A common stock. The company has also secured support from Evotec SE for its proposed acquisition of UK-based Exscientia plc, bringing total shareholder support for the transaction to approximately 53%.
Recursion has seen changes in leadership, with Dr. Robert Hershberg appointed as the new Chair of the Board, and Dr. Najat Khan stepping in as the new Chief R&D Officer and Chief Commercial Officer. These are among the recent developments at Recursion, as it continues to make strides in the medical field.
InvestingPro Insights
Recursion Pharmaceuticals' recent stockholder approval for its acquisition of Exscientia comes at a time of significant financial dynamics for the company. According to InvestingPro data, Recursion's market capitalization stands at $2.11 billion, with a notable revenue growth of 147.62% in the most recent quarter. This growth aligns with the company's strategic expansion through the Exscientia acquisition.
InvestingPro Tips highlight that Recursion holds more cash than debt on its balance sheet, which could be advantageous for funding the acquisition and future operations. Additionally, the company has seen a strong return over the last month and three months, with price total returns of 14.5% and 15.9% respectively, suggesting positive market sentiment surrounding the company's strategic moves.
However, it's important to note that Recursion is currently not profitable, with a negative gross profit margin and operating income. The company's quick cash burn rate, as indicated by another InvestingPro Tip, underscores the importance of the Exscientia acquisition in potentially improving Recursion's financial position and research capabilities.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Recursion Pharmaceuticals, providing deeper insights into the company's financial health and market position.
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