Recursion
The market
Driven by the integration of advanced technologies across multiple scientific disciplines, the drug discovery sector is undergoing a transformation. Historically, the sector has been challenged by high failure rates and exorbitant costs, with over 90 percent of drugs failing in clinical trials and an average R&D cost of $1 billion per approved medicine (Wouters, O. J., McKee, M., & Luyten, J. (2020). Estimated research and development investment needed to bring a new medicine to market, 2009-2018. JAMA, 323(9), 844-853). This failure rate disappoints patients who are waiting for therapy and incurs huge costs that drive up drug prices.
To solve this, the sector needs novel, data-first approaches to finding new medicines — such as Recursion’s. By reducing uncertainty and transforming R&D into a more predictable, data-oriented process, Recursion seeks to decrease the time and cost of drug discovery while increasing the likelihood of success.
The company
Recursion is a clinical-stage TechBio company leading the space by decoding biology to industrialise drug discovery. Enabling its mission is the Recursion OS, a platform built across diverse technologies that continuously expands one of the world’s largest proprietary biological and chemical datasets. Recursion leverages sophisticated machine-learning algorithms to extract novel insights from its unique dataset of trillions of searchable relationships across biology and chemistry - unconstrained by human bias. By commanding massive experimental scale—up to millions of wet lab experiments weekly—and massive computational scale—owning and operating one of the most powerful supercomputers in the world, Recursion is uniting technology, biology, and chemistry to advance the future of medicine.
The Investment Case
Recursion is pioneering the future of biopharma, blending the power of AI and machine learning to redefine what’s possible in drug discovery. Recursion employs a trio of strategic business models within the AI-driven drug discovery sector:
- Firstly, it invests in developing an extensive in-house pipeline, bearing all R&D expenses while retaining full profits from successful drugs.
- Secondly, it fosters co-development partnerships, exemplified by agreements with Roche-Genentech and Bayer.
- Lastly, Recursion monetises its proprietary technology and data platform through SaaS licensing agreements, offering access to its cutting-edge tools and insights.
Kinnevik believes Recursion is the leading AI/machine-learning-based drug discovery company on the market and will become a consolidator in the space, due to its access to capital and multi-billion dollar milestones payments potentially unlocking over the coming years. Kinnevik is particularly excited by the remarkable collaboration with NVIDIA, which marks a groundbreaking venture to advance foundation models in biology and chemistry, using the most powerful private supercomputer in the biological domain.
