Recursion (NASDAQ: RXRX), a U.S.-based clinical-stage TechBio company, and Exscientia plc (NASDAQ: EXAI), a U.K.-headquartered artificial intelligence (AI)-driven drug design and development firm, have announced a definitive agreement to merge. The combined entity will retain the name Recursion, with its headquarters in Salt Lake City, Utah, and will continue to be listed on NASDAQ, while maintaining a significant presence in the U.K.
Chris Gibson, Ph.D., Co-Founder & CEO of Recursion, is set to lead the merged company as CEO, and David Hallett, Ph.D., Interim Chief Executive Officer & Chief Scientific Officer of Exscientia, is expected to take on the role of Chief Scientific Officer. At the conclusion of Q2 2024, the two companies hold approximately USD 850 million in cash and cash equivalents. The merger is projected to yield annual synergies of approximately USD 100 million, with a financial runway extending into 2027.
Recursion, which counts Nvidia as an investor—having received a USD 50 million investment in July last year—is focused on decoding biology to industrialize drug discovery. The partnership with Nvidia aims to optimize cloud services and train AI models for biopharmaceutical applications. Exscientia is committed to creating more effective medicines for patients by integrating precision design with experimentation, striving for the most efficient drug development process.
The merger is expected to accelerate therapeutic discovery collaborations with top biopharma companies, including Roche-Genentech, Sanofi, Bayer, and Merck KGaA. The combined company anticipates approximately USD 200 million in milestone payments over the next two years from current partnerships and has the potential to generate more than USD 20 billion in revenue before royalties on net-sales of partnership programs, which offer royalties ranging from mid single-digit to double-digit percentages.- Flcube.com
