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Can Recent Pipeline Expansion Efforts Offset RXRX's Earlier Losses?
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Key Takeaways
RXRX cut three major programs in May 2025, narrowing its pipeline and denting investor confidence.
RXRX is now advancing REC-4881 and several cancer assets, with data readouts expected through 2026.
Acquiring full control of REV102 lets RXRX fast-track a novel HPP therapy and expand its rare disease focus.
Recursion Pharmaceuticals (RXRX - Free Report) faced a significant setback in May 2025 after announcing the discontinuation of three key drug candidates — REC-994, REC-2282, and REC-3964 — as part of its broader strategic pipeline reprioritization. These candidates were being developed for cerebral cavernous malformation, neurofibromatosis type II and Clostridioides difficile infection, respectively. The removal of these candidates narrowed Recursion Pharmaceuticals’ clinical pipeline, shaking investor confidence in the potential of its proprietary AI-driven platform, RecursionOS, and leading to a decline in the stock price.
Following the terminations, Recursion Pharmaceuticals shifted focus to more promising candidates, notably REC-4881, which showed a median 43% reduction in polyp burden in early data from a phase II study. Additional candidates, including REC-1245, REC-617, and REC-3565, are also being developed across various cancer indications to diversify and strengthen the pipeline, with key readouts expected between 2025 and 2026.
Earlier this month, Recursion Pharmaceuticals acquired Rallybio’s full stake in their joint venture for developing REV102 and an associated backup molecule for the treatment of hypophosphatasia (HPP). This positions the company to independently fast-track what could be the first oral, disease-modifying therapy for HPP. By leveraging the Recursion OS platform, Recursion Pharmaceuticals can now streamline and accelerate R&D efforts without partner constraints, enhancing the program’s efficiency and precision. The move also expands Recursion’s pipeline with a differentiated asset targeting a rare genetic disorder with high unmet need.
REV102, a potent and selective ENPP1 inhibitor with strong preclinical safety data, is expected to enter phase I studies by late 2026. Its oral formulation offers a major advantage over current enzyme replacement therapies, potentially improving patient adherence and reducing treatment-associated risks. The acquisition not only strengthens Recursion Pharmaceuticals’ clinical pipeline but also supports its long-term strategy of applying AI to unlock novel therapies in underserved disease areas.
RXRX Faces Competitive Pressure in the TechBio Industry
In the TechBio space, Relay Therapeutics (RLAY - Free Report) and Schrödinger (SDGR - Free Report) are emerging as strong competitors to Recursion Pharmaceuticals, who also leverage AI-driven platforms to enter into strategic collaboration agreements and develop novel therapies. RLAY is on track to advance its lead investigational candidate, RLY-2608, into a phase III study for metastatic breast cancer. An early-stage study evaluating the candidate for a second indication, vascular malformations, is also currently underway.
Meanwhile, SDGR’s lead asset SGR-1505 is currently being evaluated in an early-stage study for B-cell malignancies. Schrödinger is also evaluating two other candidates, SGR-2921 and SGR-3515, in separate phase I studies for leukemia and solid tumors. Both Relay Therapeutics and Schrödinger are steadily building robust pipelines through cutting-edge approaches.
RXRX’sStock Price, Valuation & Estimate Movements
Year to date, RXRX shares have lost 3.3% compared with the industry’s 2.4% decline. During the same time frame, Recursion Pharmaceuticals has also underperformed the S&P 500, but outperformed the overall medical sector, as seen in the chart below.
RXRX Mixed Stock Performance
Image Source: Zacks Investment Research
Recursion Pharmaceuticals is trading at a discount to the industry, as seen in the chart below. Going by the price/book value ratio, the company’s shares currently trade at 2.85, which is less than 3.07 for the industry. The stock is trading significantly below its five-year mean of 3.55.
RXRX Stock Valuation
Image Source: Zacks Investment Research
Loss estimates for 2025 have widened from $1.34 per share to $1.35 over the past 60 days. During the same time frame, RXRX’s 2026 loss per share estimates have narrowed from $1.17 to $1.10.
Image: Bigstock
Can Recent Pipeline Expansion Efforts Offset RXRX's Earlier Losses?
Key Takeaways
Recursion Pharmaceuticals (RXRX - Free Report) faced a significant setback in May 2025 after announcing the discontinuation of three key drug candidates — REC-994, REC-2282, and REC-3964 — as part of its broader strategic pipeline reprioritization. These candidates were being developed for cerebral cavernous malformation, neurofibromatosis type II and Clostridioides difficile infection, respectively. The removal of these candidates narrowed Recursion Pharmaceuticals’ clinical pipeline, shaking investor confidence in the potential of its proprietary AI-driven platform, RecursionOS, and leading to a decline in the stock price.
Following the terminations, Recursion Pharmaceuticals shifted focus to more promising candidates, notably REC-4881, which showed a median 43% reduction in polyp burden in early data from a phase II study. Additional candidates, including REC-1245, REC-617, and REC-3565, are also being developed across various cancer indications to diversify and strengthen the pipeline, with key readouts expected between 2025 and 2026.
Earlier this month, Recursion Pharmaceuticals acquired Rallybio’s full stake in their joint venture for developing REV102 and an associated backup molecule for the treatment of hypophosphatasia (HPP). This positions the company to independently fast-track what could be the first oral, disease-modifying therapy for HPP. By leveraging the Recursion OS platform, Recursion Pharmaceuticals can now streamline and accelerate R&D efforts without partner constraints, enhancing the program’s efficiency and precision. The move also expands Recursion’s pipeline with a differentiated asset targeting a rare genetic disorder with high unmet need.
REV102, a potent and selective ENPP1 inhibitor with strong preclinical safety data, is expected to enter phase I studies by late 2026. Its oral formulation offers a major advantage over current enzyme replacement therapies, potentially improving patient adherence and reducing treatment-associated risks. The acquisition not only strengthens Recursion Pharmaceuticals’ clinical pipeline but also supports its long-term strategy of applying AI to unlock novel therapies in underserved disease areas.
RXRX Faces Competitive Pressure in the TechBio Industry
In the TechBio space, Relay Therapeutics (RLAY - Free Report) and Schrödinger (SDGR - Free Report) are emerging as strong competitors to Recursion Pharmaceuticals, who also leverage AI-driven platforms to enter into strategic collaboration agreements and develop novel therapies. RLAY is on track to advance its lead investigational candidate, RLY-2608, into a phase III study for metastatic breast cancer. An early-stage study evaluating the candidate for a second indication, vascular malformations, is also currently underway.
Meanwhile, SDGR’s lead asset SGR-1505 is currently being evaluated in an early-stage study for B-cell malignancies. Schrödinger is also evaluating two other candidates, SGR-2921 and SGR-3515, in separate phase I studies for leukemia and solid tumors. Both Relay Therapeutics and Schrödinger are steadily building robust pipelines through cutting-edge approaches.
RXRX’sStock Price, Valuation & Estimate Movements
Year to date, RXRX shares have lost 3.3% compared with the industry’s 2.4% decline. During the same time frame, Recursion Pharmaceuticals has also underperformed the S&P 500, but outperformed the overall medical sector, as seen in the chart below.
RXRX Mixed Stock Performance
Recursion Pharmaceuticals is trading at a discount to the industry, as seen in the chart below. Going by the price/book value ratio, the company’s shares currently trade at 2.85, which is less than 3.07 for the industry. The stock is trading significantly below its five-year mean of 3.55.
RXRX Stock Valuation
Loss estimates for 2025 have widened from $1.34 per share to $1.35 over the past 60 days. During the same time frame, RXRX’s 2026 loss per share estimates have narrowed from $1.17 to $1.10.
RXRX Estimate Movement
Recursion Pharmaceuticals currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.