Recursion Raises $239 Million and Strikes Fibrotic Diseases Collaboration with Bayer
September 10, 2020
Rare Daily Staff
Recursion Pharmaceuticals has entered into a strategic drug discovery collaboration with Bayer and closed a $239 million in a series D financing round, led by a $50 million investment by Leaps by Bayer, the pharmaceutical’s investment arm.
The terms of their agreement, valued in excess of $1 billion, covers initiating more than ten programs with possible development and commercial milestone payments of more than $100 million per program plus royalties on future sales. Bayer will gain the option to exclusively license novel therapeutics derived from the research activities. Bayer will contribute with its small molecule compound library and expertise in biology and medicinal chemistry. Besides its equity investment, Bayer will also pay Recursion $30 million in cash upfront.
Recursion bills itself as a digital biology company industrializing drug discovery. The partnership with Bayer will leverage Recursion’s purpose-built artificial intelligence-guided drug discovery platform and Bayer’s small molecule compound library and deep scientific expertise to discover and develop new treatments for fibrotic diseases of the lung, kidney, heart and more.
“We are driving forward digital transformation in R&D as we believe that digital technologies such as artificial intelligence and machine learning, offer a myriad of novel opportunities to address the complex biology of many diseases and identify new treatments for patients,” said Joerg Moeller, member of the executive committee of Bayer’s Pharmaceuticals division and head of research and development. “The collaboration with Recursion enables us to discover small molecule drug candidates targeting novel biology for the treatment of fibrotic diseases and complements our expertise in cardiovascular research with digital technologies.”
One of the biggest challenges in the treatment of fibrotic diseases is the underlying complex biology and the associated difficulty in discovering relevant drug targets. Phenotypic screening is a method to screen for novel therapeutic molecules to uncover novel drug targets and their role in complex disease processes. Artificial intelligence and the use of machine learning methods allow the processing of enormous amounts of data—including high-resolution imaging—generated by these screens and offers unprecedented potential for the discovery of new drug candidates for diseases with complex biology such as fibrotic diseases.
Recursion’s drug discovery platform combines highly automated, wet lab biology experiments as the base for iterative learning through its computational tools. The purpose-built drug-discovery platform is based on a proprietary library of more than half a billion images of human cells from more than 33 million experiments conducted in-house at Recursion and coupled with advanced data analytics based on machine learning. To date, Recursion has on-boarded more than 750 cellular disease models to broadly interrogate diverse therapeutic areas.
“Many of the most significant innovations of this century will occur at the intersection of biology and technology,” said Chris Gibson, co-founder and CEO of Recursion.
“We believe that our vision of using technology to unravel the exceptional complexity of biological systems will lead to next generation biotherapeutics at unprecedented speed, scale and precision.”
Leaps by Bayer led the $239 million series D financing with participation by Casdin Capital, Catalio Capital Management, Laurion Capital Management, Samsara BioCapital, and others. It also included all of Recursion’s existing major institutional investors: Baillie Gifford, Mubadala, DCVC, Lux Capital, Obvious Ventures, Felicis Ventures, EPIC Ventures, Two Sigma Ventures, Advantage Capital, Intermountain Ventures, and others.
Photo: Chris Gibson, co-founder and CEO of Recursion
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