Recursion Pharmaceuticals had a busy start to the week, scrapping a rare disease asset from its pipeline as part of a strategic rethink while pulling in a $150 million private placement.
The AI-powered drug designer is ending the development of REC-3599, an investigational drug Recursion hoped could treat a rare inherited disease known as infantile GM2 gangliosidosis, according to an SEC filing on Monday. The small molecule inhibitor of protein kinase C was set to enter phase 2 trials this spring, but Recursion delayed patient enrollment in March, setting the trial back by two years.
Eli Lilly had originally conducted a phase 3 trial of the drug, also known as ruboxistaurin, for diabetic retinopathy almost 20 years ago, before out-licensing the therapy to Chromaderm in 2015. Chromaderm, which was later acquired by DermBiont, is working to develop ruboxistaurin as a treatment for skin hyperpigmentation disorders but sold the rights to the asset in non-topical formulations to Recursion in 2019.
Now, Recursion is dropping the therapy, citing the continued advancement of the company’s oncology pipeline. Instead, the biotech will redirect its resources to programs with significant unmet needs that “the company believes has a higher probability of advancing to patients in the near term,” it said in the filing.
One of these is the newly nominated REC-4881, which is taking aim at AXIN1/APC mutant cancers with an initial focus in hepatocellular carcinoma and ovarian cancer. Other programs include a phase 2 oncology candidate and three other rare disease programs. The digital biology company also has a molecule-mining partnership with Roche's Genentech unit that allows for up to 40 individual projects split between the two drugmakers in neurology and cancer over the next decade.
This refocused strategy will be funded by an estimated $150 million private placement, led by Swedish investment company Kinnevik and announced yesterday. As of Sept. 30, Recursion had an estimated $455 million in cash and cash equivalents.