Recursion, targeting cancer, rare disease midstage tests, sets terms for $306M IPO

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Recursion Pharmaceuticals has set terms for a major $306 million IPO as the artificial intelligence biotech eyes a $3 billion valuation.

That’s a lot of money, though Recursion is used to that: The biotech has been doubling the size of its venture rounds these past few years, from a $60 million series B in 2017 to a $121 million financing in 2019 and then a $239 million round last year.

Now, it's setting terms for a $306 million cash haul by offering 18 million shares at a price range of $16 to $18. Just under half will be going to insiders Baillie Gifford and Mubadala Investment, which intend to purchase up to $125 million worth of shares in the offering.

At the midpoint of the proposed range, Recursion Pharmaceuticals would command a market value of $3 billion, according to Renaissance Capital.

The company’s AI approach to drug discovery—originally developed to find new uses for old drugs—is built on its collection of cellular images and other data, analyzed with computer vision and neural networks to spot changes and discover new biology.

RELATED: Recursion Pharma nets $239M, plus an AI research contract with Bayer

It’s now seeking to push on with its own pipeline, which includes four phase 1 assets in rare diseases, such as GM2 gangliosidosis, a disorder that progressively destroys nerve cells in the brain and spinal cord, and neurofibromatosis Type 2, a disorder that causes benign tumors to form in the nerves.

In all, the biotech has a major 37 programs under its roof, according to its Securities and Exchange Commission filing, but its most advanced programs include one candidate targeting oncology and three targeting rare genetic disorders, all of which are expected to enter phase 2 or 2/3 trials within the next year or so.

It plans to list on the Nasdaq under the ticker "RXRX."