Recursion Pharmaceuticals (RXRX) told investors at the Morgan Stanley 24th Annual Global Healthcare Conference on September 15, 2026, that its artificial intelligence–driven drug discovery platform has progressed beyond early research into clinical-stage asset development, marking what CEO Najat Khan described as a fundamental shift for the $1.83 billion company.
"Recursion is a fundamentally different company than 12 to 18 months ago," Khan said during the session moderated by Morgan Stanley mid-cap biotech equity research head Sean Lahman. "We have transitioned from a company with a promise in the novel biology platform to one where the engine has been expanded to all parts you need to make a drug: biology, chemistry, clinical."
The presentation centered on two lead clinical assets. REC-4881, an oral MEK1/2 inhibitor with orphan drug and fast-track designations, is being developed for familial adenomatous polyposis (FAP), a condition affecting an estimated 50,000 patients in the U.S. and EU5. The addressable market for FAP is projected at more than $10 billion and currently has no approved therapies. Recursion reported that nearly 50% of FAP polyps were eliminated within three months of treatment, with effects persisting—and in some cases deepening—after three months off the drug. More than 85% of REC-4881 treatment-related adverse events were Grade 1 or 2, primarily dermatitis. Additional clinical data for REC-4881 are expected at the CGA-IGCC conference in early November, with regulatory clarity anticipated in the second half of the year.
REC-1245, a novel RBM39 degrader targeting genomically unstable solid tumors and pediatric transcriptionally driven cancers including Ewing sarcoma, addresses an estimated 100,000 patients. The asset moved from discovery to IND-enabling studies in approximately 18 months. Further data are expected later in 2024.
Recursion also disclosed that its PI3Kα H1047R program recently entered Phase 1, while other pipeline programs include NPP1 and lysosomal storage disease candidates.
On operational efficiency, the company highlighted that its success rate in advancing programs to development candidate status is roughly 20%, about double the industry average of 10%. Target-to-candidate timelines average 1.5 years—approximately three times faster than the industry benchmark for small molecules. The firm designs about 330 compounds per development candidate, compared with an industry average of 2,500, representing roughly 90% fewer molecules physically synthesized.
The company's Salt Lake City Data Factory, built over a decade, can manufacture up to 1 trillion induced pluripotent stem cell–derived neuronal cells and run whole-genome CRISPR knockouts across 20,000 genes per cell line.
Financially, Recursion reported revenue of $54.86 million over the trailing twelve months and levered free cash flow of negative $352 million. The current ratio stands at 5.03. Pro forma cost base was reduced by approximately 40% following the integration with Exscientia.
Partnership revenues remain a key pillar. Recursion has generated more than $525 million in upfront payments and milestones across collaborations with Roche/Genentech and Sanofi, including $125 million in achieved milestones and more than a dozen milestones triggered across all partnerships. Roche has paid $250 million to date for its neuroscience partnership, which carries single-digit royalties. Genentech has optioned two targets at approximately $30 million per target. The Sanofi collaboration has produced five milestones to date, with teen-level royalties. Each partnership retains more than $300 million in total available milestones.
Looking ahead, Khan emphasized that the company expects additional catalysts over the next 12 to 24 months. "Upfront payments reflect promise while milestones reflect proof," he said. "Quality matters the most, and then faster is definitely a nice couple." When asked what would be hardest for competitors to replicate, Khan pointed to the integrated end-to-end engine itself.
