Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) Q1 2024 Earnings Call Transcript

But as we all know, there’s a lot that goes into every clinical trial, a lot of resources and trial design that can really influence the outcome and the probability of success of the average Phase 2 is somewhere between 25% and 35%. And so we know that there will, we hope, be both successes and we know there may be some failures. Ultimately, I think there’s an uncorrelated opportunity with each of the programs we have moving forward. And by that, I mean technically uncorrelated. Because even though we’re using the same platform to identify each potential opportunity, we are validating those opportunities against the same gold standard animal models, pediacs oncology models, et cetera, that anyone else in the industry would use. And so while we certainly think a positive trial gives people a lot of optimism around what we’re building.

If any of these trials are negative, then we certainly could imagine that the technical risk is relatively uncorrelated between each of these. And that’s why we’re pushing so hard to advance a whole pipeline of programs with readouts coming on a quarterly cadence. What’s more, we’ve got programs that are now moving forward with pharma partners. We’ve got the potential for additional programs to move forward. And we’ve got the potential for driving value through our data and through our computational and software opportunities. So I think Recursion, unlike a traditional biopharma company really doesn’t have the same bimodal risk that many other companies in this space do, who will typically advance one or two drugs to this big sort of Phase 2 to read out.

Great. Thanks for that question. Next, I’m going to go to Mary S and Gil What success have you had to date with using the Tempus data? What other population genomics data might you look to access? And how could such data complement what you were able to learn from Tempus? Great question. So we’ve already leveraged the Tempus data, signed that collaboration in either late November, early December of last year, had data coming in within weeks. The team worked over the holidays, and we had deployed some of our early AI models onto Tempus data in the first, really by the start of J.P. Morgan in the first couple of weeks of January. We’ve continued to refine that work, and as I shared earlier, we’ve already identified an exciting novel opportunity in the context of non-small cell lung cancer.

We have a program that’s now moving forward using the Tempus data, and I think we’re really uniquely positioned to take the Tempus data alongside the proprietary data we’ve generated at recursion to bring those together to identify targets that, really, you wouldn’t be able to identify without these complementary data sets. And so, you’ll see us continue to move programs forward that way, and we hope, as those programs hit kind of the preclinical stage, we’ll be able to share more about them. But as we just announced today in our collaboration with Helix, we’re also now looking at sort of non-oncology scaled population scale genomics transcriptomics data. And we think that’s a really fascinating opportunity, not only for the same play, can we take that data looking across large non-oncology diseases, maybe in neuroscience, maybe in cardiovascular metabolism, combine it with our internal data to identify sort of this combination of forward and reverse genetics that can move the company forward, probably in some of our partnerships, either existing or future partnerships.

But also, I would say, I think there’s some opportunity in oncology and non-oncology space to actually use both the Tempus and the Helix data, along with our underlying data, to get a sense of how these genetic, these gene networks really work. Knowing how they’re perturbed in the context of oncology settings, and how they’re perturbed in the context of non-oncology settings, I think will give us a really robust field from which to work, robust substrate. It takes a while to take a discovery program and get it into the preclinical space, but rest assured, Mary and Gil, as we get those programs into IND-enabling studies, we look forward to being able to share quite a bit more. All right. Next, we’re going to go to Laura, who asks about our London office.

What are we looking for in the London office? Why are we opening a London office, and what are our international growth plans beyond that? Great question, Laura. We like to operate in cities, in communities where we feel like there’s an arbitrage, where there’s great talent, and maybe fewer companies that are leveraging that talent. We’re based in Salt Lake City. We’ve got fantastic teams, really focused in software engineering in Toronto, and other related areas, digital chemistry as well. We’ve got a great team in AI and AI research in Montreal. We’ve got a fantastic team in San Jose, Milpitas, with our InVivo facility. And London felt like an opportunity for us to accelerate our computational biology talent. We think the UK has done a really tremendous job of training folks at the intersection of data science and computation with biology and chemistry, really probably ahead of the universities in the U.S. in terms of that integrated training.

And we had nearly 300 applicants in just the first couple of days when we announced our London office for just a couple of dozen positions that we posted, and these were extraordinarily talented folks. So we feel like that bet is already paying off with fantastic talent in London. As far as other international plans, you know, I think that office is probably going to be a fantastic step for us internationally. We’re still only a team of 530 or 540 folks, so I don’t think you’ll see us do a lot of additional international growth in the near term. But certainly as the company begins to move into development, begins to scale our development ambitions, maybe even thinks about commercialization in the intermediate to long term, we’ll have an opportunity to grow in places like Asia, Western Europe, and beyond.

So, I think those are more intermediate to long-term plans. Thanks, Laura. All right. Next up, we’ve got a question from Lucille M., who asks, what do you think about Xaira being founded, and how much are they a competitor for Recursion? Great question. So, for those who don’t know, there’s an exciting new tech bio company with a great cast of characters that got announced a couple weeks ago. They’ve got significant funding, really, you know, Marc Tessier-Lavigne and others who are leading that organization. There’s a lot of disease that needs to be treated, needs to be cured. So we welcome everybody to the space. And our belief is that the biopharma industry in a decade is going to look a lot more like scaled versions of companies like Recursion than it does today.