Recursion Pharmaceuticals, Inc.

Learning Skull. I'm Chris Gibson, co-founder and CEO, and I'm excited to take you through Recursion's 2024, 2025, and the time ahead. So with that, we'll jump into the slides. And I want to just set the stage, first of all, to share a little bit about the moment in time that we're in right now. Recursion is leading this field of tech bio. We're at the frontier of this exciting opportunity to decode biology, to change the way that drugs are discovered and developed. And I think what we're seeing in 2024 at Recursion are leading indicators of what this inevitable future may look like. And what we're gonna see moving into 2025 now is a cascade of proof points that are gonna make it more and more obvious to everyone about what the future of the biopharma industry looks like. Now, to talk a little bit about how we've gotten to this place in 2024, I want to dive into some of the year in review, so to speak. And I want to kick that off by talking about our clinical data readouts. Last year, 2024, was the first time that we got to talk about efficacy in our first two clinical programs, REC 617 and REC 994. And I'll start with REC617. This is a potential best-in-class CDK7 inhibitor for advanced solid tumors. And during this sort of dose escalation phase of the study, before we would have expected to see efficacy, and in fact, in monotherapy, which also is an exciting opportunity for us, we typically would have expected to see efficacy with combo therapy. We saw not only reasonable safety, but we saw early signals of efficacy. We had one patient who had a reduction in their tumor that was sustained for six months or more and a number of patients who had stable disease. So this is really, really exciting. And we're actually kicking off combo studies here in the very, very near term. Rec. 994 was another program, one of the ones that helped originate Recursion, an oral superoxide scavenger for the potential first in disease opportunity to treat symptomatic cerebral cavernous malformation. And we demonstrated robust chronic safety treating these patients for a year or more. But also in this signal finding study, a study designed to help us identify early signals in efficacy across many different potential endpoints to design a future trial. We saw very encouraging reduction in lesion size based on the subjective MRI measure and also encouraging trends in functional improvement in the modified Rankin score in this phase two study. So very exciting from our perspective to get to start to turn over these cards of the earliest programs from the Recursion OS. What's more, we launched multiple additional trials, including our REC1245 trial for RBM39 degradation in solid tumors. We were able to launch our familial adenomatous polyposis trial, REC4881, and then also our C. difficile trial with REC3964. Beyond that, we continue to advance the next generation of molecules towards the clinic or into the clinic with CTA and IND updates for multiple programs, including the IND clearance for LSD1 in small cell lung cancer, the CTA for MALT1 and B-cell malignancies. We were able to initiate IND studies in our IPF program, REC4209, and initiated IND enabling studies in hypophosphatasia with our REV102 program, which was part of a joint venture with with RallyBio. Even more happened on the pipeline slide. You can see some of the deliveries that we made here in green. You can see that we were delivering across this robust pipeline all throughout 2024 and early 2025. And we're excited to continue that as we move into the coming year. But it wasn't just our pipeline. It was also our platform that gave us so many of the early new indications that we're advancing. One of those I want to talk a little bit about today, because over the last couple of years, we've started talking mostly about our clinical programs and talking less about some of the early programs in the space. There's just not enough time to go into all the incredible science. But given the Lily Scorpion deal we saw a couple of months ago, I want to highlight one of those early programs. This program, REC7735, this is a mutant-selective PI3 kinase inhibitor. And we used the Recursion OS to identify and optimize this molecule. And it's 100-fold more selective for the mutant compared to the wild-type in our early preclinical models. It's probably 10x-fold more selective than other wild-type sparing inhibitors that we've been able to test it against. And most importantly, we've seen this limited hyperglycemia when we've tested this. And I'll show you a little bit more of the data here. You can see on the left in vivo in this CDX model, we've taken our molecule, which is in sort of late stage optimization here, REC7735, and you see at a variety of increasing doses, this tumor regression, which is on par with the stx compound here this is the scorpion compound that garnered so much attraction uh so this is this is really exciting to see but what i get even more excited about is if you look in naive wild type mice at hyperglycemia this is one of the major challenges of the pa3 kinase inhibition space is that you can see compared to sdx in in these naive mice that were treated for five days with the molecules that the plasma insulin levels are dramatically lower in this REC7735 molecule, even at a dose of 150. That's twice as high as the highest dose you see over on the efficacy side. We think this is really, really exciting. We've had a lot of interest from potential partners as we first started talking about this in JPMorgan a couple of weeks ago, and we continue to optimize this molecule and advance it. This is just one of the exciting early discovery or advanced discovery programs that our teams are working on here at Recursion. Beyond the pipeline, the exciting programs that we're advancing, we're also in these incredible partnerships working with Roche Genentech, Sanofi, Bayer, and Merck KGA. I want to talk a little bit about the Roche and Sanofi partnerships. Those are the ones we're spending the largest amount of our time on. On the Roche side, we generated multiple whole genome phenomaps in oncology and neuroscience last year. That led to a $30 million milestone that was received. And I would say just a ton of excitement at the Russian NTECH side and on the recursion side as we start to look at novel, exciting biology in both oncology and neuroscience. On the Santa Fe side, in 2024, we advanced two programs through initial milestones. Those generated $15 million in aggregate payments. There's a number of additional programs that are advancing towards or through milestones in the near future as well. So we're really excited about our work there and continue to do really exciting work with Bayer and Merck at KGA. Finally, I want to talk a little bit about the work we did on our platform in 2024. We continue to lead the industry across data, across foundation models, across compute. And I think, really, it feels like it was much further ago than just last year. But we actually built and launched Biohive 2 last year with Nvidia. We believe this is the most powerful supercomputer wholly owned and operated by any single biopharma company. And I know as I watched the dashboard of utilization over the last year, we have been running this thing hard. We've been leveraging it to build a variety of different foundation models, to advance these models, and to explore new architectures of our neural nets across a wide variety of questions as we build sort of towards these world models of biology. Our data capabilities continue to grow and expand as well. We were able to map more than 1.4 million active ligands to binding pockets for structure-based drug discovery and target deconvolution last year. We've generated now up to 6.2 million multi-time point brightfield images each week on our Phenomics platform. And we produced just under a million transcriptomes last year, putting us at a total of more than 1.6 million since we launched this work in 2023. So really exciting to see these new data capabilities, these multimodal data capabilities advancing at Recursion. And of course, what we've been building in the discovery and translational space for many years, 2024 saw the beginning of our work in causal AI models and in ClinTech. So we used AI models on the Tempest data and Helix data to start building out causal understanding of biology from patient data for the first time. I think one of the most exciting projects here was deploying the Tempest data to build a patient stratification framework in small cell lung cancer. for one of our programs that we're advancing into the clinic there. And we've also started building automated site engagement tools and enrollment tools to accelerate patient matching, to accelerate patient recruitment, and essentially do a lot of the ClinOps work as we start to scale this pipeline at Recursion. So early days there on the ClinTech side, but really, really exciting as we build this full stack platform. So we've talked about our platform before, as companies move into the tech bio space, it's really important for us to be able to generate and aggregate data across many different levels of biology and chemistry. And I think recursion really leading the field in generating this real world data or aggregating this real world data. You can take those data, you can learn from them, you can build models, foundation models across all of these different kinds of questions you might ask in biology and leverage those to make hypotheses that you can then go back to the laboratory and test. And it's this iterative loop that makes us so excited that we think is going to be essential for advancing the field. And what we're seeing is that just looking backwards here, looking at recursion and Accenture alone, we've already been able to demonstrate these leading indicators of being able to quickly validate hypotheses compared to the industry average. So using this incredible set of real-world data and these world models, we're able to take an early hypothesis, validate it, and move to the hit stage faster than the rest of the industry. Using looking back at the legacy Accenture tools, we're able to take those compounds, those early hits and design them up to a more optimized stage, synthesizing dramatically fewer molecules than the industry average. And what that means is that we're spending less time compared to the industry average and going faster or we're spending less money and going faster compared to the industry averages. And of course, the most important measure that we want to change is the probability of success of our molecules in the clinic. And we look forward as we start to read out trial after trial in the coming years to being able to benchmark ourselves there and hopefully start to show some movement across the industry average probability of success. But I think these leading indicators are really, really exciting. And now I want to invite up Lena Nielsen, our SVP, head of platform, to join me here in Salt Lake City to talk a little bit about how now, not just looking back, taking our Accenture combination and looking forward and over the last few months since we brought the companies together. Lena, maybe you can talk about how we're seeing these benchmarks start to improve.

Yeah, thanks, Chris. So already as two independent companies, as Chris mentioned, we built two technology platforms that are already realizing great efficiencies in drug discovery and development from two complementary angles. At Recursion, we were founded around novel insights from complex biology mapping, so essentially building giant data sets fit for purpose for generating industry-leading foundation models of human health and disease. And then on the Excientia side, technologies, models for compound optimization, so efficiently synthesizing molecules with the right multi-parameter properties for potential treatments. And now we're bringing these two complementary sites together. And very specifically, at the merger, we created 90-day plans to very rapidly supercharge generating this real value. And we promise to tell you about the outcomes from that. And here I am with some of the first results, and there will be more to come later. Specifically, let's see if we can. Apologies. Specifically, as you can see here on the right, we have brought together massive data sets from both companies into a unified platform from admit, liabilities, phenomics, and cellular function, protein ligand binding, put all of this into our Centaur model management platform together with recursive massive compute that you heard about in order to generate a new generation of models that are more powerful, more accurate, and more generalizable. and then immediately deployed this using Centaur against our pipeline and the recursion OS. And within these short three months, able to quantify some of the benefits to the pipeline. So for example, deploying new scientific agents that have resulted in a 60% reduction in the human time needed to get to hit to lead initiation. Or a federation of models based on a new data set of over a million compounds for more accurate MOA deconvolution. Another set of models and centers also new with a two and a half fold increase in the efficiency of detecting new bioactive compounds. That's whole groups of new potential useful drug starting points and 40% reduction in likely cytotoxic compounds. That's just one example there among 18 new admit applications. So really already now seeing massive progress of building a new joint platform where the new hole is much greater than the sum of the prior parts. And with that, I'm going to hand it off to Ben Taylor, our CFO, who's going to talk about how we are doing all this new exciting work while at the same time, saving money as a joint entity.

Thanks, Lena. Yeah, it's been a great year for us, both coming together as companies as well as what we've seen looking forward. So for starters, we had 83 million in revenue as a combined group that's a pro forma basis in 2024. and had an ending cash balance of over $600 million. Now, that gives us enough of a runway to be able to extend into 2027. So continuing on the business model that we have, we feel very comfortable that we've got the runway to be able to execute on a lot of those things that Chris and Lena were just talking about. An important element of that, when we closed the deal, we gave guidance that we expected up to 100 million in synergies. We actually believe we will achieve a majority of those synergies this year and be able to get to a run rate that is beyond that 100 million over time. Now that is coming both from the more traditional synergies that you would expect from two companies coming together, but also on a lot of the operational synergies. So all of those benefits that Lena was just talking about actually translate to economic benefits for us too as we push forward. In addition, really exciting, important note, we have carved out the Vienna operations into a new company that will continue on and that both gives the new company a great standalone mandate as well as helps to organize some of our operations and really provide us as much focus as we can possibly get. And we're on track to also clean up a lot of the excess office and legacy sites that we had previously when we came together as a combined company. So we will give you a much more in-depth understanding of some of these developments in May. What we are doing right now is basically going through all of our operations and going from the bottoms up as well as doing a strategic assessment. And we want to give that to you all at once in a few months. Now, as we look forward into the next year, We are really, really excited because not only was 2024, as Chris would like to say, our best year yet, but when we look forward to 25, we just see so much coming through the pipeline that really starts to show signal and point that the technologies we're developing are having a material difference. Chris brought up CDK7 and CCM and the initial data there. We have a number of additional studies that are getting started and will have readouts in the near future that could continue to support that moving forward. I think the PI3K is actually a great example as well, because that is an example of how we have this deep pipeline that most people don't even know about. We were able to look at a situation that was in the market and move quickly to provide what we believe is a better quality candidate that we can move forward with. And it is in that area that is not normally viewed by the rest of the investor market. So really exciting to be able to talk about more of those pipeline programs coming through in the future as well. Partnerships will continue to be an important part of our business model. I really want to highlight that in a part of our revenues, We brought in 45 million in cash payments for achieving milestones from Sanofi and Roche. So that's very different from an upfront payment or a license to our technology. That is actually achieving technical goals that were extremely difficult and highly valued by those partners. And so we expect to continue achieving those milestones both generating cash flows, but also validating that the technology is doing what we want it to do. And then we will also continue to bring forward more of the data on how the platform is exceeding benchmarks, moving faster, being very efficient in how it does it. And so you can expect that through the course of 2025. All of that, I think, comes together. We take it very seriously. Our mandate from our investors is not to just be a biotech company. It's actually when we say tech bio, what that means is we want to change the underlying probability of success across the biopharma industry. And that's by creating better quality medicines and doing it in a more efficient way. And so we look at all of these points and try and stay focused on the bigger vision. And I'm going to turn it back over to Chris because he can really talk about how these points come together and where we see it going in the future.