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Recursion Pharmaceuticals Inc. (RXRX) reported its third-quarter 2025 earnings, revealing a mixed performance with an EPS of -$0.36, slightly surpassing the forecast of -$0.37. However, the company fell short on revenue, reporting $5.18 million against an expected $16.95 million, marking a significant miss. The stock responded with an 8.09% decline in the regular session but showed a modest 3% recovery in premarket trading.
Key Takeaways
- Recursion narrowly beat EPS expectations, signaling effective cost management.
- Revenue fell short by 69.44%, raising concerns about growth prospects.
- The company maintains a strong cash position with a runway through 2027.
- Developments in the CDK7 program show promise in oncology.
- Stock volatility reflects investor uncertainty in the competitive biotech sector.
Company Performance
Recursion Pharmaceuticals continues to navigate the challenging landscape of AI-driven drug discovery. While the company has managed to control its expenses, as evidenced by a slight EPS beat, it struggles with revenue generation. The biotech sector's increasing focus on AI and computational drug development adds pressure, but Recursion's unique platform combining wet and dry lab approaches remains a competitive advantage.
Financial Highlights
- Revenue: $5.18 million, significantly below the forecast of $16.95 million.
- Earnings per share: -$0.36, compared to a forecast of -$0.37.
- Cash balance: $785 million, providing a financial runway through 2027.
Earnings vs. Forecast
Recursion's EPS of -$0.36 slightly exceeded expectations by 2.7%, indicating effective cost management. However, the substantial revenue miss of 69.44% highlights challenges in scaling operations and securing partnerships.
Market Reaction
Following the earnings announcement, Recursion's stock fell by 8.09% but showed signs of recovery with a 3% increase in premarket trading. The stock's movement reflects investor concerns over revenue performance and broader market skepticism towards biotech firms heavily reliant on AI.
Outlook & Guidance
Recursion reaffirms its commitment to maintaining expenses below $450 million in 2025 and below $390 million in 2026. The company anticipates over $100 million in partnership inflows by the end of 2026, signaling confidence in its strategic partnerships and innovation pipeline.
Executive Commentary
"Our priority is gonna be how do we translate the data, the compute, our amazing people, our platform to tangible proof points that matter," stated Najat Khan, the incoming CEO. Chris Gibson, the current CEO, emphasized the company's mission: "We want to move the entire field forward ultimately to bring medicines to patients."
Risks and Challenges
- Revenue generation remains a significant challenge, as evidenced by the substantial miss.
- The competitive landscape in AI-driven drug discovery continues to intensify.
- Market volatility and stock trading near 52-week lows indicate investor caution.
- Dependence on successful partnerships for future inflows introduces uncertainty.
- Regulatory hurdles in drug development could impact timelines.
Q&A
During the earnings call, analysts focused on Recursion's cash burn rate and financing strategy. The company confirmed its openness to new partnerships and discussed the evolution of its platform and program development approach, highlighting its strategic focus on translating biological maps into therapeutic programs.
Full transcript - Recursion Pharmaceuticals Inc (RXRX) Q3 2025:
Chris Gibson, Co-Founder and Current CEO, Recursion: Hello everybody and welcome to Recursion's third quarter 2025 learnings call. My name is Chris Gibson. I'm the co-founder and current CEO of Recursion and I'm so delighted to have you all joining us today. I want to start off by talking about something that I'm really excited about, which is our executive leadership updates. It's my pleasure to share with all of you that beginning January 1, the amazing Najat Khan is going to take over the role of CEO, President and Director of Recursion. I've been working with Najat for the past 18 months in an incredible partnership to build our platform, to deliver on our pipeline and our partnerships. Everything that I have seen has convinced me that she is absolutely the right leader to take Recursion through its next chapter.
I am so delighted that she has agreed to take on that role. I am also incredibly excited that I am going to continue bringing my passionate, unapologetic founder energy to Recursion as the Chairman of the Board and as an executive advisor. Finally, I want to say a huge thank you to our entire board and especially to our Chairman, Rob Hirschberg. He has been an amazing chair and an incredible mentor to myself and Najat and I am delighted that he is going to continue on with us, I hope for a very long time as our Vice Chairman and Lead Independent Director. These are really exciting changes that I believe are going to position Recursion to affect our mission to lead the tech bio space. I am so, so thrilled to get to share them with you today.
Ben, Financial Executive, Recursion: Jatt.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Thank you, Chris. It is such an honor to step into the big role to be CEO and President of Recursion. I want to thank you, I want to thank the board and just our incredible team for the trust and partnership. Chris, first, for a few minutes, I want to say, look, your vision and the courage with which you have taken this from zero to what Recursion is today is unparalleled. You have not just been instrumental in building the company, of course, but also creating a new sector that never existed before. Really, truly blending the best of technology and science to make medicines and radically improve patient lives. There is so much to do.
I'm really, I'm deeply grateful, of course, for your leadership, but even more so for your friendship, which I'm looking forward to doubling down on as we work together in all of your many roles. I just want to say a few other words too. Look, when I joined Recursion 18 months ago, I was drawn to the bold ambition, but an ambition in action. And you know what an 18 months has been. Step one was the special combination with Exscientia to really, truly build that end-to-end tech stack, as we like to call it, engine. And also the data generation. We've talked a lot about models, but proprietary high-quality data is critical and a critical moat to what we do. Building out ClinTech platform. We're in the clinic.
This is going to be a critical part of what we do and also sharpening our portfolio, advancing multiple programs internally with our partners. Chris will share a little bit more of some of the latest updates there from Roche and doing so with a discipline and urgency that I think patients will be proud of. This is a pivotal chapter for Recursion, one that will require bold focus. The boldness will never go away. Also navigating the complexity that quite frankly is drug discovery and development. Having seen that for many years, and the relentless sense of urgency and good capital stewardship that's going to be critical for us to fully realize our mission.
My focus, you know, and I'll listen more and think more over the coming weeks, but really is going to be translating these platform insights into repeatable clinical proof, whether it's through our wholly owned programs or with partners scaling the platform that we have where we have a clear, clear advantage and building a company that delivers sustainable value. The foundation is strong, the vision is clear, the opportunity ahead is extraordinary. I couldn't be more excited. The work will be hard. I am clear eyed about that and there will be bumps in the road, but it should be because it's deeply worth it, because we're doing something that there's no blueprint for, it hasn't been done before. It's also deeply meaningful for the patients that we serve and for the future that we're building together. I'm so excited.
Couldn't be proud of the next phase. Looking forward to partnering with Chris and the rest of the broader team. Exceptional team, if I say so, to define that next phase and the next chapter for Recursion.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Najat. With that out of the way, I think we should get back to work. One of the things that I'm extremely excited about is that Recursion has a tremendous amount of potential catalysts coming in the next 18 months. From our pipeline to our partnerships to advancements of our platform, we are going to continue to deliver exciting updates, I hope on a really regular cadence to all of our shareholders, all of our stakeholders, and ultimately advancements and milestones that I think take us on a path towards really affecting patient lives. We're going to do all of that with a pro forma cash balance of almost $800 million as of a few weeks ago. What I'm excited about is that gives us runway through the end of 2027 without any additional financing.
This means we're in an incredibly robust position from a balance sheet perspective to deliver across all of these catalysts. Now let me talk a little bit about something that was really exciting that we got to share last week, which is how our platform is fueling all of our partners, but in particular our Roche and Genentech colleagues. We shared last week that we had earned a $30 million milestone payment. This is our second such milestone from Roche and Genentech for the delivery of a whole genome neuromap. I want to point out that this brings our total cash inflows from partnerships to more than $500,000,000. I think that is a milestone that few pre commercial biotech companies ever achieve and one that I think is a leading indicator of the value that we are going to continue to deliver here at Recursion.
Let's talk a little bit about the Roche and Genentech collaboration. This is a collaboration that's a decade long focus in neuroscience and GI oncology. We've already been able to deliver four whole genome phenomaps in our GI oncology space, generating over 100 billion GI oncology relevant cells. We already have a program that's been optioned out of that particular set of maps and heading toward lead series and I hope many more in the future as well. What we announced last week was that in addition to the whole genome arrayed CRISPR knockout map of iPSC-derived neurons that we delivered last year, where we became, we believe, one of, if not the world's largest producers of these iPSC-derived neuronal cells, we have now delivered a second whole genome map, this time in the incredibly challenging microglial cells, the immune cell of our brain.
What we are excited about is the number of incredibly novel potential targets that we have identified in both of these phenomaps that we believe have real potential not only to lead to novel target options in the future with our colleagues at Roche Genentech, but I hope really meaningful medicines for patients in the field of neuroscience where all of us agree there's a lot, a lot of work to do. I want to talk a little bit more about this work. I want to remind everybody what do I mean when I talk about a map of biology. We have knocked out nearly every gene in the genome in these microglial cells. We have leveraged machine learning and AI techniques to turn images of these cells into functional maps of the relationships between every single gene.
These digital maps allow us to move from this empirical sort of one at a time approach into really a search function where today our colleagues at Roche Genentech, our team can just type in any gene in the microglial map or the neuronal derived, or the iPSC-derived neuronal map, and they can see the relationships across the rest of the genome. This gives us incredible insight, novel pathways, novel targets. It is extraordinarily significant, I think, for our teams to now be able to do this not just in the neuron, but in the immune cell of the brain. Really, really excited about this. I know our colleagues at Roche and Genentech are too. To give you a sense of the road that we have taken to get here, this was something that I think many people did not think would be possible.
First, our team had to generate more than 100 billion microglial cells. Then we had to figure out how to get more than 100,000 different sgRNAs into these cells so we could knock out 17,000 plus genes with multiple guides per gene. We were able to do this, generating nearly 50 million microglial cell images. We used our supercomputer, BioHive-2, still, we believe, the fastest supercomputer wholly owned by any biopharma company, at least for a couple more weeks or months, until Lilly potentially overtakes us, to generate this first of its kind microglia map. From this map, we have already started mining for novel biological insights. We have the team and the equipment and the expertise to validate those insights, to deliver programs to our colleagues at Roche and Genentech. Our hope is that that will lead to potential new therapeutic approaches.
I'm so proud of the team for all the work they've done. I'm so proud of this particular map because I think it has extraordinary potential in the field of neuroscience. With that, I'm going to turn it over to Najat to talk a little bit about how our platform is fueling our pipeline.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Thank you, Chris. Just the example that you mentioned in terms of microglia is such a phenomenal example of how our platform and the combination of the wet lab and the depth of the wet lab approaches that we have at Recursion with, of course, our dry lab really creates something of unique value. If you go to the next slide, we shared this slide before and I just wanted to spend a little bit of time on it today and double click on a couple of areas. First of all, this represents the heart of how Recursion operates. You hear a lot about the Recursion OS and I love to pull the hood and really show what are the various components that we're focusing on here.
Step one, we're applying AI where it matters, where it can truly change either quality, speed, or the impact of our decision making. There are three specific modules here. The first is focused on deep biological understanding that's actually connected to patient outcomes. The second, how do we leverage AI to design better molecules that are more drug like? The third is a ClinTech approach on picking the right patients as well as recruitment, fast recruitment so we can get through our trials faster. All right, having said that, I wanted to double click on a couple of areas that we're really focusing on. Next slide, scientific agents. We've heard a lot about agentic agents. One of the most exciting parts of the OS is how we are using scientific agents, AI systems that actively participate in the entirety of the scientific process.
These agents are helping us. Thinking about the data that Chris just mentioned. Phenomics, transcriptomics, real world data with partners like Tempus and others, public data sets like PubMed, depth map. I mean so much, the list goes on and on, and we have early proof of concept agents that we're leveraging in order to really not just analyze and interpret the data real time, but to actually select the optimal tools, workflows, generate hypothesis, and design new experiment. This is going to supercharge our already extraordinary talent. The other reason I'd like to mention this is also around. It captures the decision making trail that's really important. The way you get these agents to be highly effective is to actually understand the logic behind the recommendations and iterate in real time with our scientists and our clinicians.
That is something that we're doing and having that inherent data, this platform helps us do it in action, not just theoretically. I often get the question in terms of how do we drive economies of scale. We are a tech bio company. This is going to be one of the very important levers for us as to how do we do more given a lot of the insights that we're generating with what we have today. Just keep an eye on this. I wanted to double click on a really important area of progress for us that is truly applied to what we need to do to create programs that are differentiated. The second area, if we go to the one more click I will do it, is really around automated ADMET.
Look, we talked a lot before around Boltz-2 and other programs that really help you understand binding affinity and so forth. As we all know, in order to actually design programs, a critical element of it is to ensure that they are drug-like. This is an area that is critical for us and what we are doing is this is the automated platform that we have in Salt Lake City combining high throughput experimental automation with advanced machine learning. It is a fully automated closed loop system that integrates ADMET property predictions directly into that middle module that we have, which is our AI-enabled precision design. It does a couple of things. Number one, we are generating proprietary data around ADMET. Not just what has been published, but all of the successes and failures that we see as we are generating our own data.
Failures are incredibly important to design better models. Second, the comprehensiveness of the ADMET properties, over 50 or so as just a starting point and that's only going to increase, is important in order to ensure the algorithms are actually generalizable. Third, you've heard about models such as MOL GPS and there are new models that are coming up all the time, but these data feed directly into the model which is actually iterating and helping our models to be retrained real time. Both examples of real time iteration are critical for us to not just have a platform that's useful, but a platform that stays ahead of the curve and learns from both our successes and our mistakes. With that, I want to walk to the next part, which is how is the platform being leveraged to actually generate programs?
This slide actually came to my mind during a flight post popular demand from analyst questions and investor questions. Here is what you have. I'll just walk you through it. On the rows, the three design components that I just mentioned, the biology, the chemistry, and the clinical development that you saw in the last slides, everything from phenomics, transcriptomics, etc. As I do the build for the columns, these are the various iterations, generations of our platform. Just to give you a clear view on which program is using what components of our platform. It is important to note, as you'll see, the earliest programs were built in our first generation platform, which I will call V01, and we've shared that before, the programs that are now in the clinic, tangible proof that we are generating programs and also learning fast, the flywheel.
With every turn of the crank, we're learning really, really fast as to how to improve on what we're doing well and what we need to do better. The first one here, MEK 12, more data coming in December. I'll share a little bit more of our plan there. This is a proof point around how are we leveraging phenomics, an unbiased approach to drug discovery, in order to really ascertain which compound, which mechanism, which we do not know going in, could actually help attenuate the hallmark of the disease, which is polyps. Hundreds to thousands of polyps. More to come on that in a second. Now, often I get the question that if this was part of platform point one is that the story never ends there.
As you will see with ClinTech if you go to the third row, we are actually leveraging recruitment solutions as well as patient selection and stratification. Even programs that are the early part of the platform, we are leveraging some of our recent components in ClinTech to add more value creation. The second iteration of our platform cloud is v1.0. We are beginning to combine phenomics and biology as well as chemistry design as well. Examples such as RBM39, CDK7, et cetera, and of course components of the ClinTech platform. One more click. These are programs in Discovery which I hope to be able to, we hope to be able to talk about soon. That, as you can see, is incorporating all of the various components of the platform from Discovery, Biology, Novel Insights, Chemistry, and ClinTech.
Not just for our wholly owned programs, but also for our partner programs. More to come on that. Where are we making progress? You've seen the slide before. I love to update it every time that we meet. First of all, CDK7 combination cohorts have been initiated. I'll speak a little bit more in a moment in terms of some of the analysis and some of the data that we have from the monotherapy dose escalation. PI3KαH1047R, the development candidate, has been nominated, which was again one of our milestones for this year. MEC 1, 2, we'll have a webinar in December in order to share some of the additional data from our 4 milligram cohort. As you also heard from Chris, the $30 million option milestone received for the Microglia map.
This is in addition to the six phenomaps and also some of the programs that we're generating and great traction across the other programs and partnerships including Sanofi. I just want to pause and take a moment to say both of our internal and our partner programs are critical. Critical to us delivering tangible proof as well as also learning fast to keep evolving our platform. All right, I'll take a moment to go through CDK7. Just as quick context, we've talked about this before. CDK7 is a really important master regulator transcriptional kinase that has generated significant interest in oncology for some time but has been plagued with historical challenges and one of the main reasons for those challenges is the narrow therapeutic window and just the molecular properties that have limited tolerability and efficacy. What are we doing? Leveraging our platform that's different.
Number one, leveraging our platform we set out to design a molecule that directly addresses one of these core limitations around therapeutic index, which is optimizing permeability and efflux so that we reduce the GI related toxin variability that others have seen before. That's number one. Number two, we are also leveraging preclinical data as well as multimodal real world data, causal AI, all of those components of our platform in order to hone in on patients that might most benefit. How do we steer a product into the right patients? Patient stratification, that's another area of differentiation that we're focused on. Of course, from preclinical models we've seen tumor regression in both ovarian and breast cancer. We also shared some early data last year, early clinical data from last year that showed manageable safety profile as well as some partial response as well.
What is our next focus in terms of our next focus? Next slide. We have completed our phase I dose escalation, so MTD has been achieved in advanced solid tumors. I'll get to that in a second. In addition to that, concurrently the team is also looking into alternate dosing schedule just to figure out ways to even further optimize the therapeutic index, especially for long term dosing. The other areas of near term focus for us, which is already well underway, is a phase II dose expansion in the cohort that we had mentioned, the platinum resistant ovarian cancer, as well as combination, which is going to be key in this space with a couple of combination standard of care that you can see on the slide. Recruitment ongoing across all of these cohorts.
The other thing that's important to note is a lot of the trial design is focused on rapid and efficient go, no go, and we'll share more in terms of the phase I dose escalation data at a medical congress next year. In addition to that, we should have some of the ovarian combination data in 2027. Safety PK PD, maybe early signs of efficacy, more to come in next year as we see the recruitment shaping up in terms of details around when in 2027. Stay tuned. All right, let's go into the monotherapy dose escalation. A couple of things to note. As of September 29, which is the cutoff date, we have 29 heavily pretreated patients with advanced solid tumors that have received 617 across six dose levels.
Just as context, these patients represent a rather challenging population, most with multiple prior lines of therapy and limited standard options. We have now established a 10 milligram once daily MTD, maximum tolerated dose, with a manageable safety profile. We'll talk about that in a second. Also, preliminary antitumor activity that's consistent with what we shared in the 2024 update. The most common dose limiting toxicities are nausea, which is to be expected, and some thrombocytopenia, which are both on-target effects for this target class. If you go into safety, the safety data is consistent with what we saw last year. First of all, we have about 30% of patients that experience grade 3 treatment-related adverse events and the majority were low grade one or two. There were no grade four or five treatment-related events and only two patients, about 7%, discontinued due to an AE.
One thing I want to note here, and again, this is early, we're learning more, of course, the GI related toxicities that we have seen, diarrhea, nausea, vomiting, were relatively manageable and in line with class expectations. To just put that in context a little bit more. In terms of diarrhea, we saw about 69%, nausea, 41%, vomiting, 28%. Of course, looking at some of our peers also in the space, the numbers for diarrhea are about 82%, 77% for nausea, and vomiting for 80%. It is trending in the right direction, but of course, much more work to be done, but trending to be slightly lower than what we have seen in other prior published data.
All right, in terms of efficacy, first of all, on the left hand side, this highlights the PK profile, highly selective inhibitor, potent, and also, you know, flexibility in terms of the, in terms of how we can dose it given the short half life, the relatively short half life of around five hours. One thing that's important to note, so going back to the established MTD, which is 10 milligram once daily dose, the exposures exceed, as you can see, the CDK7 IC80 while remaining below CDK2 IC80, supporting the selective inhibition that we wanted to see in preclinical models. What does that mean in preclinical models? 10 milligram equivalent QD showed robust tumor regressions with about 2-4 hours to target coverage.
The early PD data that we have indicates that this is about 80-90% of transient POLR2A engagement, which is one of the key PD markers that we are tracking in this space. Again, consistent with that hypothesis. From all of the data that we've seen so far, 10 milligram QD is a pharmacologically active dose. In addition to that, we're also looking into alternate intermittent schedules such as seven day on off to further maximize the dose intensity while maintaining tolerability for long term dosing. On the right hand side, you're also seeing some of the early clinical translation. Look at 10 milligram is where we see stable dose and also the patient that had the primary.
Of course in this patient cohort monotherapy is not an area that we were expecting outcomes and which is consistent with what we've seen with other CDK inhibitors, which is why our combination is going to be incredibly important. Stay tuned. More to come on that. Last thing, speaking about the combination, we've shared this data before, but ovarian cancer is the current area of focus, which is different from where others have gone, which has been much more primarily in breast cancer or a broad basket of solid tumors.
Pulling together everything that we have seen in cell lines on the left in terms of ovarian cancer models, the sensitivity to CDK inhibition, combining that with what we've seen in vivo at 10 mg dose, we saw complete tumor regression by day 27 as well as on the right leveraging our patient level data from over 30,000 ovarian cancer samples, integrating DNA, RNA and clinical outcomes to really showcase that CDK7 is a likely driver of poor survival. Some of the work we've done with our causal inference and AI works, but again, the proof is always in the pudding. Much more to be done and expect more on the full data set I just mentioned for the monotherapy dose escalation next year at a medical congress as well as combination data in 2027.
We'll give you narrow guidance or more specific guidance as we get full flow into our recruitment. All right. Just wanted to give a heads up on REC-4881, which is our other program that has an important readout coming out next month. Just as context, high and mid 50,000 patients diagnosed across U.S. EU5, rare inherited disorder, APC loss of function, and standard of care is quite challenging. Surgery is a standard of care, colectomies, et cetera, and no approved therapies to date. We also have orphan drug designation for this compound. Just a recap of some of the earlier data that we've seen in May that was shared in DDW, 43% median reduction in total polyburden. That is the hallmark standard of care today. Off-label use of celecoxib is usually 20% or so or 25%.
Again, there is a range from 30% to actually 83%. In the small cohort that we had seen in May, we've seen about six patients. We expect that to be double or close to double by the end of this year. What we're looking for, again as I mentioned before, is to see if these trends will hold and a significant benefit over the 20% that has been seen so far. In terms of what we're seeing from a, you know, treatment-related AEs, 19% grade 3, majority is rash, and the prophylactic approach has really made it much more manageable, and cardiac tox more grade 2 so far. December, we'll share more information in the coming weeks. Exactly, in December we'll have the phase 1b/2 update. This is going to be an important update as I mentioned.
We will also discuss some of the next steps for the program. If the trends hold, you know, one of the core next steps will be to actually have discussions with regulators on a pivotal study. I just want to say, you know, this is one of those, as I like to call, green shoots in terms of leveraging our platform to see color burden reduction both in vivo and then also starting to see in patients. Again, small data set, more to come. We are looking forward to the data cut in December. With that, I am going to hand it over to Ben for our financial update.
Ben, Financial Executive, Recursion: Terrific. Thank you, Najat. Another thing that we are very excited about is going into that FAP data as well as the milestones in 2026 in a really strong financial position. Over the course of the year, you have seen us do a number of things. In May, we laid out a strategic plan that allowed us not only to hit on multiple high value milestones, but also reduce our expense base by 35% from 2024. This was a really important step in us trying to put that discipline in place that Najat was talking about earlier. You started to see us hit those milestones. We have brought in almost $40 million from our partnership inflows over the course of this year so far. We expect more of that to come in the future.
With today, our announcement of having $785 million of cash in the bank as of October 9 is a really strong step in creating that foundation so we can look forward into the future milestones and say we do not have that financing need to be able to achieve our near term milestones and really deliver a lot of value to shareholders. When we look forward, we looked at how we can bring that financing together in a way that was going to minimize our dilution to all of the shareholders, as well as really continue to allow us to focus on the business and move it forward. We are also reaffirming our guidance for 2025 on an expense base of less than $450 million. That is excluding all of the partnership inflows. In 2026, we are also reaffirming less than $390 million over that time period.
One note on that 35% expense reduction that actually equates to over $200 million in expenses coming off of that 2024 base. We've done that by really focusing in on what is going to be the aspects of the business that deliver the highest value and efficiently bringing that together. We will continue to look at our expense base. We are completed with all of the restructuring that was associated with the transaction. We will continue to look at our operations and think about how can we do this better, how can we do this more efficiently, how can we get more out of every dollar that we spend and really focus in on the high value partnership or high value projects. From a partnership perspective, the $30 million in milestone from Microglia that we achieved with Roche Genentech was not included in the $785 million in cash.
Importantly, we do not give guidance on revenue, but I know a lot of the services track it. So we just want to be really clear. First of all, we do not consider the lumpiness in our revenue to be any indication of our business. What we do know is the timing of our milestones can impact how we recognize some of that revenue. For example, last year we had a milestone associated with a neuronal map. We had a larger piece of revenue that was recognized in that quarter last year, in the third quarter of last year. The Roche Microglia map milestone is going to be recognized partially in the fourth quarter and it is important that is partial, not full. You would see some of that lumpiness come into our fourth quarter numbers there as well.
Really importantly, the nearly $40 million that we've recognized this year from our partnership inflows actually brings us over $500 million in partnership inflows over the course of the company. That shows just what an important piece of non-dilutive capital that part of the business and platform has become to the overall company. We are also maintaining our guidance of over $100 million in partnership inflows by year end 2026 that we laid out in May of this year. We're making great progress along that and expect to continue to see a lot of that come through in the next year as well. With that I will turn it back over to Najat to talk about some of the upcoming milestones.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Great. Thank you so much, Ben. You know, we wanted to just capture both looking at this year as well as what's coming up next year. For this year, one big thing that as I look at the slide which is missing is really the successful integration of the two companies coming together. It's been an incredible amount of work and also the financial discipline that we've gone through internally to really extend our runway so that we can see through a lot of these catalysts. Look on the internal pipeline highlights. CDK7, I just mentioned the monotherapy update and the combo that's initiated. REC-401, you know, the phase two initial update, you know, potential first POC for our platform, MALT1 monotherapy initiation, and the PI3K DC nomination.
I will also talk a little bit about our platform and then go to our partnership on the platform front. A ton of work, like three words on a slide, integrated design platform, but actually it should say integrated our end to end platform. The amount of migration work, I have seen this across other companies before with the speed with which that was done and the utility. The fact that we had no slowdown in our productivity of our platform speaks to our fantastic engineering data science teams that exist. Then also the work with MIT and NVIDIA on Boltz-2. Much more that is going on in house which would be a pleasure to share next time, especially with our Frontier team which is our zero to one cutting edge AI team. Really, really proud of the work that they are doing.
VAL and Inception Labs and then ClinTech, this has been a core focus for us in the last several months. Really build out the tech stack end to end also into clinical development. Crucial pillar as we execute on these programs. On the partnership highlight, Chris and Ben mentioned, of course, the Roche $30 million from Microglia. The real work that we're doubling down on is both of the maps in neuroscience and additional maps in GI Onk and really turning, and Chris showed this really beautifully in his slides, turning those into insights with the deep functional validation with our partners to then become programs. That is the core focus for us, translating that value and of course, progress with Sanofi. Four out of four milestones so far in immunology and oncology and much more work ongoing.
You know, we're so honored to be able to work with our partners, Roche, Genentech, Sanofi, Merck KGaA, and Bayer. We learn so much from each and every one of them. So thank you for the partnership and then looking ahead. Stay tuned for the REC-4881. We'll share more data in terms of our phase two in December. In addition to that for next year in RBM39. This is our first in class compound from the Phenomics platform. It's also leveraging, of course, a lot of our ClinTech approaches. Today. We should have some early safety and PK data from our monotherapy trial. And then in addition to that, ENPP1, PI3K, both in GLP tox right now. And pending that data, phase one initiation, the team's all set up, pending what the data looks like.
From a partnership perspective, as I mentioned, deep focus on turning maps into insights into programs. That is a huge focus for us, in addition to some of the programs that we are already working on and additional maps as well. Lots to do. There is never a dull moment at Recursion, I assure you. Loving the pace and we will keep you all posted with that. Thank you so much. I am going to hand it back to Chris for our Q and A.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Najat. All right, let's go. We've got Sean from Morgan Stanley. Ben, this one goes to you. Can you review expectations for cash burn through 2026 and how this works with runway expectations through 2027 without additional financing? I know you just hit that, but maybe break it down for everybody. Also, do you plan to use any additional ATM financing?
Ben, Financial Executive, Recursion: Yeah, of course. I think there's a couple of things that we looked at over the course of the quarter. One, the most important thing for a growth company is delivering on high value milestones. Our role as the management team is to make sure that we have the resources to be able to hit those milestones. We looked at all of the things that we've talked about before. How do we do the right expense control, how do we prioritize the right programs? How do we make sure that we've got the right cash balance in place to be able to reach those milestones and really focus on them? What we decided to do was fully utilize the ATM over the course of the quarter. The remaining balance on the ATM, that is now closed.
We have not opened up a new ATM. What that allows us to do is really go in and put in a cash balance that, without any additional financing, allows us to get to the year end 2027 and achieve those milestones that Najat was just talking about as well as many others. Just because I know the financing has been a critical question for a lot of shareholders, we really looked at two different aspects for that ATM utilization. One was if we look at the biotech financing market, there are a couple of things that we saw very clearly. One, there is increasing volatility, there are fewer open windows, there is a much shorter period of hold that we have seen from a lot of the investor base. Also, the discounts have been increasing as well.
We looked at the ATM as a very attractive cost of capital that would put us in a position to be able to execute on the plan going forward.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Forward.
Ben, Financial Executive, Recursion: The other part was just there was so much focus that was becoming a part of the financing and the cash balance, it was actually starting to overshadow some aspects of the story. With such important data like FAP and some of the other milestones that are upcoming, we wanted people to really be able to focus in on the fundamentals of those events rather than needing to worry about are those events just going to lead to another financing or other aspects like that. We hope that this allows investors to focus. It also gives us a lot of ability to really focus on delivering those milestones over the coming months.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Ben. Financing overhang has been struck. Alec from B of A. One question on platform utilization. It looks like older programs used parts of Recursion's capabilities in their development with Platform 2.0 assets leveraging the full stack. Najat, this one's coming to you. How do you see this feeding into the quality or uniqueness of the newer assets and anything to be read into for the current pipeline like 4881, where it only benefited from phenomics in the version 0.1 of the platform.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Yeah, no, thank you, Alec. And by the way, you are one of the voices that inspired us to create that slide, so thank you for always sharing your feedback. Look, 4881 Phenomics, our platform today, even if we're making it multimodal, still leverages phenomics a lot, right? We are very, very excited in terms of some of the data we've seen to date and more to come, you know, later this year. In terms of with every crank, like, you know, some of the clinical stage programs that we have come from the earlier stages of the platform in discovery, you know, later stages of our platform, I think that's just the true iterative nature of drug discovery and development. The improvement of our compounds doesn't just stop in discovery, it's also in development.
You see some of the innovative approaches that we're also taking in development for FAP, CDK7, et cetera. We look at it more holistically. With every crank the platform gets better and that's just what it is for us. We're learning fast and we want to execute and iterate as quickly as possible to get them into the clinic as well.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Najat. I'm going to bring this next one over to you as well from Gil at Needham, Sean at MS, and Manny from Lear. On the partnership side, is Recursion looking to maintain current biopharma partnerships or expand to new partnerships in the near to midterm. What are some of the milestones.
Ben, Financial Executive, Recursion: That we should be focused on?
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Great question. Our partnerships that we have are deep, highly collaborative and transformational. We are very, very excited about the partnerships that we have. I mentioned some of the milestones that are critical for us, maps to programs, for instance in our Roche Genentech partnerships and for Sanofi, really making progress, progress on the various programs that we have in immunology and oncology. You know, we are always having discussions in terms of potential new partnerships. We are being incredibly choiceful. That is an area that will always be open to, but areas we can drive incredible value as well as our partner. It has to be a win, win. The answer is yes, the door is always open. We also, we tend to curate a set of partners that we can really show tangible value with.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Najat. Next one, I'm going to take this is from Guy and Alec. Would be interested to hear your thoughts on the evolving AI drug development landscape, especially with companies like Lilly throwing their hat in the ring and also partnering with NVIDIA. Look, I think this is extraordinarily exciting. This is a sign that when we said a couple of years ago we look like what the future of biopharma will look like, that we were right. Companies are starting to embrace massively scaled compute, they're starting to embrace AI. This tech bio sector is really, I think, just a harbinger of what the future of biopharma will become. This is super exciting to me. I'm so glad that Lilly is making this visionary investment.
I'm so glad to see them partnered with NVIDIA and I look forward to working alongside many companies in the future that come to the space. We want to move the entire field forward ultimately to bring medicines to patients. Really, really excited by that advance. Final question, I think fittingly over to Najat from Dennis at Jefferies. Congrats on the new role. I mean effective January 1, we've still got a few weeks. Curious what philosophy you're bringing into the seat of CEO and if there are any near or medium term priorities that are top of mind for you.
Najat Khan, Incoming CEO, President and Director (Effective January 1), Recursion: Thank you, Dennis. Look, my priority is gonna be the core. Core priorities can be how do we translate the data, the compute, our amazing people, our platform to tangible proof points that matter. Whether it's our own pipeline, whether it's with our partners. That is the core element that matters the most. As Chris was saying, look, I've been in big pharma before, now I'm in tech bio. Biotech AI inspired by whatever term you want to use. At the end of the day it's about making differentiated programs and then eventually medicines for patients that matter. That is the core focus for me. It starts with that, it ends with that. We have, this is a tough journey. 90% failure rate. I am aware, clear eyed of how tough it is across industry and we're doing something in a way that's never been done before.
That's going to be my core focus. The second is going to be really investing where we have a unique ability to win. That's our platform, that's our program. Programs we're going to make data driven and you've seen me do that before, go, no go decision on our programs. That's why when you see all of the programs, we're doing concurrent, targeted, efficient approaches so that we can get to a rapid go, no go, because unlike a lot of other companies, there are multiple other programs that we're bringing from discovery into the clinic. We need to be choiceful in terms of where we go. The third is discipline and execution and good capital stewardship. You heard Ben talk through. We are grateful for the capital that we have.
My intent is to use every single dollar for what will truly create value for our shareholders and our patients. Those are some of my areas of focus. I'm sure I'll think more on it over the holidays. With Chris's counsel, I am so excited to continue partnering with Chris. It's been such a great journey and so much more to come together.
Chris Gibson, Co-Founder and Current CEO, Recursion: Thanks, Najat. It's been an amazing first 12 years, and I'm looking forward to the next 12. Thank you, everybody, for joining us. I hope you have a great day.
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