10 Worst ARK Stocks To Buy According to Short Sellers

2. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)

Short Interest as % of  Shares Outstanding: 22.53%

Number of Hedge Fund Investors In Q3 2024: 16

Ark Invest’s Q3 2024 Stake: $215.9 million

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a pre-revenue stage biotechnology company that is developing treatments for a wide variety of illnesses. These include cancer, spine ailments, and brain diseases. While most pre-revenue biotechnology firms depend on a handful of drugs in their portfolio, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) stands out from the back by having more than ten drugs in trials. One drug that is key to its hypothesis is its brain illness treatment REC-994, which met key objectives during its Phase 2 trial. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) also benefits from a strong technological aspect through which it has collaborated with Google Cloud and NVIDIA for drug discovery. NVIDIA has invested $50 million in the firm for AI-driven drug discovery, and as it waits to commercialize any drugs, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) earns money through partnerships with firms such as Exscientia.

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) management shared key details about its Exscientia partnership during the Q2 2024 earnings call. Here is what they said:

“And I think this deal, in many ways, will make Recursion perhaps a partner of choice for others in the industry. Finally, our platform. Our platforms at Recursion really focused on exploration of biology, hit discovery, target discovery. We’ve been building that for over a decade, and our colleagues at Exscientia have really been building for about the same amount of time this incredible precision chemistry platform. The ability to go from a hit to a development candidate with active learning and automated synthesis, is really, really exciting to us and putting these two platforms together, we think, is going to put us on the cutting edge. And finally, when we combine these businesses, we believe that we will have not only the team, the tools and the technology to go to the distance, but we’ll also have the resources to do that.

At the end of Q2, the companies combined have roughly $850 million, which we believe, with the right kind of operational synergies, puts us on a runway into 2027.”