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Recursion's Q3 Earnings Beat Estimates on Sanofi Milestone Revenues
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Key Takeaways
Recursion reported a Q3 loss of 22 cents per share, beating estimates, while revenues surged 258.5%.
A $10M Sanofi milestone boosted revenues, with over $300M in additional milestones still possible.
REC-4881 and REC-1245 showed encouraging clinical data, while key pipeline studies advanced.
Recursion Pharmaceuticals (RXRX - Free Report) reported a loss of 22 cents per share in the third quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The company had incurred a loss of 36 cents per share in the year-ago quarter.
In the absence of an approved product, Recursion primarily recognizes collaboration and grant revenues. Total revenues were $18.55 million, which surged 258.5% year over year and beat the Zacks Consensus Estimate of $11 million. A $10 million milestone payment from Sanofi (SNY - Free Report) drove the top-line growth.
RXRX's Q3 Results in Detail
Operating revenues totaled $18.06 million in the third quarter, up 262.3% from $4.98 million in the year-ago quarter. The increase primarily reflected revenues associated with the Sanofi collaboration.
Grant revenues increased 158.9% year over year to $0.50 million from $0.19 million in the prior-year quarter.
Research and development expenses declined 18.1% year over year to $99.12 million. The decline primarily reflected the absence of $22.8 million in in-process research and development costs related to the acquisition of full rights to REC-102 from its joint venture with Rallybio, which were recorded in the year-ago quarter.
General and administrative expenses decreased 21.8% year over year to $32.56 million, primarily due to lower infrastructure technology expenses and professional service costs.
Cost of revenues declined 31.6% to $10.05 million from $14.69 million in the prior-year quarter.
RXRX shares have lost 6.4% year to date against the industry’s 9.8% growth.
Image Source: Zacks Investment Research
Recursion's Sanofi Collaboration Advances
Sanofi exercised its option on the first development candidate from its multi-program research collaboration with Recursion. The potential first-in-class oral small molecule targets two proteins implicated in inflammatory diseases.
The option triggered a $10 million milestone payment, bringing total upfront and milestone payments received under the collaboration to $144 million. Recursion remains eligible for more than $300 million in additional milestones under this program, alongside double-digit royalties on potential net product sales.
Sanofi will fund and lead further development and commercialization. The candidate is expected to enter phase I clinical studies in 2027.
RXRX's Genentech Partnership Update
During the third quarter, Roche's Genentech exercised its first Validated Target Option under the neuroscience collaboration with Recursion, advancing a previously unexplored target into an early discovery program.
The companies will focus on small-molecule design, hit generation and validation using Recursion's AI-enabled chemistry platform. The collaboration has generated $216 million in upfront and milestone payments for Recursion to date.
Recursion's Key Pipeline Updates
REC-4881 is being evaluated for familial adenomatous polyposis in the ongoing phase Ib/II TUPELO study. Updated data showed that 87% of patients experienced reductions in total polyp burden after 12 weeks of treatment, with a median reduction of 47%.
The candidate demonstrated activity across the gastrointestinal tract, with median polyp burden reductions of 55% in the upper gastrointestinal tract and 50% in the lower tract. 12 weeks after treatment discontinuation, 85% of evaluable patients maintained reductions below baseline.
No new safety signals were observed. Recursion anticipates initiating a registrational study in the second half of 2027, pending discussions with the FDA.
RXRX's REC-1245 Shows Encouraging Data
Recursion reported encouraging early results from the phase I/II DAHLIA study of REC-1245, an oral RBM39 degrader being developed for solid tumors.
The candidate demonstrated two confirmed partial responses in endometrial cancer and one unconfirmed partial response in liver cancer. The disease control rate reached 91.7% among 12 patients receiving doses of at least 45 mg.
Recursion selected a daily dose of 45 mg for exploratory expansion cohorts. Preliminary expansion data in endometrial cancer are expected in the second half of 2027.
Recursion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Recursion initiated the phase I/II ZINNIA study of REC-7735 in patients with select PIK3CA H1047R-mutant solid tumors during the second half of 2026. The company continues to prioritize REC-4539, an LSD1 inhibitor for solid tumors and hematologic cancers, and REC-102, an ENPP1 inhibitor for hypophosphatasia.
Recursion also intends to pursue partnership opportunities to advance REC-617, a CDK7 inhibitor, and REC-3565, a MALT1 inhibitor, as it concentrates resources on its prioritized internal pipeline and collaborations.
RXRX’s Zacks Rank & Stocks to Consider
Recursion currently carries a Zacks Rank #3 (Hold).
Over the past 30 days, earnings per share estimates for Amneal Pharmaceuticals have increased from $1.03 to $1.04 for 2026. Over the same period, estimates for 2027 earnings per share have risen from $1.16 to $1.19. AMRX’s shares have surged 62.2% year to date.
Amneal Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 32.82%.
Over the past 30 days, loss per share estimates for Iovance Biotherapeutics have remained constant at 45 cents for 2026. Over the same period, estimates for loss per share have remained constant at 22 cents for 2027. IOVA shares have skyrocketed 193.8% year to date.
Iovance Biotherapeutics beat estimates in three of the trailing four quarters and met in the remaining one, with the average surprise being 16.82%.
View the Zacks #1 Rank List
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Recursion's Q3 Earnings Beat Estimates on Sanofi Milestone Revenues
Key Takeaways
Recursion Pharmaceuticals (RXRX - Free Report) reported a loss of 22 cents per share in the third quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The company had incurred a loss of 36 cents per share in the year-ago quarter.
In the absence of an approved product, Recursion primarily recognizes collaboration and grant revenues. Total revenues were $18.55 million, which surged 258.5% year over year and beat the Zacks Consensus Estimate of $11 million. A $10 million milestone payment from Sanofi (SNY - Free Report) drove the top-line growth.
RXRX's Q3 Results in Detail
Operating revenues totaled $18.06 million in the third quarter, up 262.3% from $4.98 million in the year-ago quarter. The increase primarily reflected revenues associated with the Sanofi collaboration.
Grant revenues increased 158.9% year over year to $0.50 million from $0.19 million in the prior-year quarter.
Research and development expenses declined 18.1% year over year to $99.12 million. The decline primarily reflected the absence of $22.8 million in in-process research and development costs related to the acquisition of full rights to REC-102 from its joint venture with Rallybio, which were recorded in the year-ago quarter.
General and administrative expenses decreased 21.8% year over year to $32.56 million, primarily due to lower infrastructure technology expenses and professional service costs.
Cost of revenues declined 31.6% to $10.05 million from $14.69 million in the prior-year quarter.
RXRX shares have lost 6.4% year to date against the industry’s 9.8% growth.
Image Source: Zacks Investment Research
Recursion's Sanofi Collaboration Advances
Sanofi exercised its option on the first development candidate from its multi-program research collaboration with Recursion. The potential first-in-class oral small molecule targets two proteins implicated in inflammatory diseases.
The option triggered a $10 million milestone payment, bringing total upfront and milestone payments received under the collaboration to $144 million. Recursion remains eligible for more than $300 million in additional milestones under this program, alongside double-digit royalties on potential net product sales.
Sanofi will fund and lead further development and commercialization. The candidate is expected to enter phase I clinical studies in 2027.
RXRX's Genentech Partnership Update
During the third quarter, Roche's Genentech exercised its first Validated Target Option under the neuroscience collaboration with Recursion, advancing a previously unexplored target into an early discovery program.
The companies will focus on small-molecule design, hit generation and validation using Recursion's AI-enabled chemistry platform. The collaboration has generated $216 million in upfront and milestone payments for Recursion to date.
Recursion's Key Pipeline Updates
REC-4881 is being evaluated for familial adenomatous polyposis in the ongoing phase Ib/II TUPELO study. Updated data showed that 87% of patients experienced reductions in total polyp burden after 12 weeks of treatment, with a median reduction of 47%.
The candidate demonstrated activity across the gastrointestinal tract, with median polyp burden reductions of 55% in the upper gastrointestinal tract and 50% in the lower tract. 12 weeks after treatment discontinuation, 85% of evaluable patients maintained reductions below baseline.
No new safety signals were observed. Recursion anticipates initiating a registrational study in the second half of 2027, pending discussions with the FDA.
RXRX's REC-1245 Shows Encouraging Data
Recursion reported encouraging early results from the phase I/II DAHLIA study of REC-1245, an oral RBM39 degrader being developed for solid tumors.
The candidate demonstrated two confirmed partial responses in endometrial cancer and one unconfirmed partial response in liver cancer. The disease control rate reached 91.7% among 12 patients receiving doses of at least 45 mg.
Recursion selected a daily dose of 45 mg for exploratory expansion cohorts. Preliminary expansion data in endometrial cancer are expected in the second half of 2027.
Recursion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Recursion Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Recursion Pharmaceuticals, Inc. Quote
Recursion's Other Clinical Programs Progress
Recursion initiated the phase I/II ZINNIA study of REC-7735 in patients with select PIK3CA H1047R-mutant solid tumors during the second half of 2026. The company continues to prioritize REC-4539, an LSD1 inhibitor for solid tumors and hematologic cancers, and REC-102, an ENPP1 inhibitor for hypophosphatasia.
Recursion also intends to pursue partnership opportunities to advance REC-617, a CDK7 inhibitor, and REC-3565, a MALT1 inhibitor, as it concentrates resources on its prioritized internal pipeline and collaborations.
RXRX’s Zacks Rank & Stocks to Consider
Recursion currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Amneal Pharmaceuticals (AMRX - Free Report) and Iovance Biotherapeutics (IOVA - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 30 days, earnings per share estimates for Amneal Pharmaceuticals have increased from $1.03 to $1.04 for 2026. Over the same period, estimates for 2027 earnings per share have risen from $1.16 to $1.19. AMRX’s shares have surged 62.2% year to date.
Amneal Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 32.82%.
Over the past 30 days, loss per share estimates for Iovance Biotherapeutics have remained constant at 45 cents for 2026. Over the same period, estimates for loss per share have remained constant at 22 cents for 2027. IOVA shares have skyrocketed 193.8% year to date.
Iovance Biotherapeutics beat estimates in three of the trailing four quarters and met in the remaining one, with the average surprise being 16.82%.