The artificial-intelligence-powered drug designer Recursion signed on to a wide-ranging collaboration with Roche and its Genentech division.
Starting with a hefty $150 million upfront payment, the molecule-mining deal allows for up to 40 individual projects split between the two drugmakers in neurology and cancer over the next decade. Each project is pegged to more than $300 million in potential milestone-based payments, plus royalties.
That means that on the remote possibility that Recursion’s AI bats 1,000, and every drug makes it through clinical trials all the way to market, the company could reap more than $12 billion. In the company’s words, the agreement could prove transformational.
The company will work with R&D units at Roche and Genentech to help identify new disease targets in “key areas of neuroscience” as well as a single oncology indication that wasn't disclosed.
Recursion’s automated platform, which aims to merge its computer-driven dry lab approaches with the traditional wet labs of biological research, will examine chemical and genetic changes in cell types related to the brain and nervous system in addition to certain tumor cell lines.
That information will be forged into mathematical models of cellular biology by the company’s neural networks, with the resulting dataset pored over by Roche and Genentech. The trio will also work together to build new machine-learning algorithms to help map out the processes behind life and disease.
"This collaboration highlights the potential of technology to transform drug discovery and unlock previously unknown insights into complex disease in an unbiased way," said Roche’s global head of pharma partnering, James Sabry.
Recursion’s current projects in oncology and neuroscience will continue independent of the collaboration, including preclinical work in non-small cell lung cancer, liver cancer and other immunotherapy targets as well as phase 1 studies of treatments for neurofibromatosis and cerebral cavernous malformations.
The Salt Lake City-based company went public earlier this year following an IPO that ultimately raised more than $500 million in gross proceeds after its terms were bumped up multiple times in succession—from $100 million to over $300 million, then to $375 million, before landing on just over the half-billion-dollar mark.
That path to the Nasdaq came after the former Fierce 15 winner raised $239 million in venture capital financing in late 2020, plus a long-term collaboration with Bayer aimed at fibrotic diseases of the lung, heart, kidney and more.
The German drugmaker led Recursion’s series D round through a $50 million equity investment from Leaps by Bayer and tapped its automated lab experiments to comb through its libraries of potential small molecule treatments, using phenotypic screening and high-resolution imaging to measure AI-selected compounds’ effects on different cells.