Recursion Raises $436 Million in Upsized IPO to Advance Rare Disease Pipeline

Recursion Pharmaceuticals has raised $436.4 million in an upsized initial public offering to advance its industrialized drug discovery platform focused on rare diseases and other indications.

The company priced 24.2 million shares of its Class A common stock at $18 per share. Recursion had initially planned to raise $306 million through the sale of 18 million shares priced in the range of $16 to $18 a share but raised the number of shares offered ahead of the IPO. Existing investors Baillie Gifford, on behalf of Scottish Mortgage Investment Trust, and Mubadala Investment Company had said they planned to buy up to $125 million worth of shares in the offering.

The shares will trade on the Nasdaq Global Select Market under the symbol “RXRX.” In addition, Recursion granted the underwriters a 30-day option to purchase up to an additional 3.6 million shares at the initial public offering price, less the underwriting discounts and commissions.

Recursion bills itself as a digital biology company industrializing drug discovery, billing itself as a “biotechnology company scaling more like a technology company.” Its 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. Recursion has on-boarded more than 750 cellular disease models to broadly interrogate diverse therapeutic areas.

While the company is advancing 37 programs, its most advanced programs include one candidate targeting oncology and three targeting rare genetic disorders, all of which are expected to enter Phase 2 or 2/3 trials within the next four to five quarters.

Lead candidates in Recursion’s pipeline of 37 therapies for rare and other diseases ready to enter phase 2 clinical studies, include treatments for neurofibromatosis type 2, cerebral cavernous malformation, and familial adenomatous polyposis.

Including Recursion, 11 companies with rare disease pipelines have completed IPOs so far in 2021, raising $2.3 billion, and accounting for 31.4 percent of the 35 therapeutics companies that have completed IPOs this year and 40.7 percent of the $5.6 billion in capital raised through them.