RARE Daily

Recursion to Acquire Cyclica and Valence to Bolster Chemistry and Generative AI Capabilities

May 8, 2023

Rare Daily Staff

AI-driven drug developer Recursion said it has agreed to acquire Cyclica and Valence, two companies in the AI-enabled drug discovery space.

Recursion has entered into agreements to acquire Cyclica for a purchase price of $40 million and Valence for a purchase price of $47.5 million. Both acquisitions are subject to customary closing and post-closing purchase price adjustments. The purchase price in the acquisitions will be payable in the form of shares of Recursion Class A common stock, shares of a subsidiary of Recursion exchangeable for shares of Recursion’s Class A common stock and the assumption of certain outstanding Valence and Cyclica options.

In certain limited circumstances, Recursion may pay nominal cash consideration to Valence and Cyclica shareholders in lieu of such exchangeable shares or Recursion Class A common stock. Recursion expects no material change to its cash runway as a result of these acquisitions. Recursion expects both acquisitions to be completed in the second quarter of 2023, subject to applicable closing conditions.

Cyclica, headquartered in Toronto, has built two highly differentiated products in the digital chemistry space that will be integrated into the RecursionOS. MatchMaker is an AI-enabled deep learning engine that predicts the polypharmacology of small molecules as the foundation for small molecule drug discovery. It is able to generalize across the proteome and uses both AlphaFold2 structures and homology models. POEM (Pareto Optimal Embedding Model) is a unique, similarity-based property prediction model. In contrast to other AI prediction models, POEM uses multiple types of molecular fingerprints to describe molecules, providing a much richer measure of similarity that leads to greater accuracy.

Valence, headquartered in Montréal at Mila, the world’s largest deep learning research institute, is committed to unlocking the full potential of deep learning in the drug discovery process. The company has pioneered the application of low-data learning in drug design, unlocking the ability to design differentiated small molecules with improved properties and function from datasets too small, sparse, or noisy for traditional deep learning methods. Valence has an unparalleled track record of innovation in molecular machine learning, including best-in-class methods for AI-enabled structural biology, generative chemistry, and multi-parametric optimization, ultimately enabling the design of best-in-class or first-in-class chemistry against challenging biology.

Joining forces with Recursion’s Montréal deep learning research office, Valence will become an artificial intelligence and machine learning research center.

“Recursion has pioneered the massive, parallel generation of -omics data with machine learning in order to map and navigate biology to discover new medicines faster,” said Chris Gibson, co-founder and CEO of Recursion. “The strategic acquisitions of Cyclica and Valence add industry-leading capabilities in digital chemistry, as well as machine-learning and artificial intelligence, which combined with our large-scale automated wet-laboratories and supercomputing capabilities, enables us to deploy what I believe is the most complete, technology-enabled drug discovery solution in the biopharma industry.”


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