AI-driven drug discovery pioneer Recursion Pharmaceuticals (RXRX -6.65%) shared its earnings for Q1 2024 on Thursday, May 9, beating analysts' forecasts. A net loss per share of $0.39 came in better than the predicted $0.42 loss. The earnings beat was complemented by Q1 revenue of $13.8 million which outpaced the expected $11.1 million.
This performance headlines Recursion's solid grounding in a challenging sector.
| Metric | Q1 2024 | Analysts Estimate | Q1 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $13.8 million | $11.1 million | $12.1 million | 14% |
| Net income (loss) | ($91.4 million) | N/A | ($65.3 million) | N/A |
| Earnings per share | ($0.39) | ($0.42) | ($0.35) | Improved |
| R&D expenses | $67.6 million | N/A | $46.7 million | 45% |
Data sources: Company results from company. Analyst estimates from FactSet. YOY = Year over year.
About Recursion Pharmaceuticals
At its core, Recursion Pharmaceuticals leverages computational power to reinvent drug discovery. Using its proprietary Recursion Operating System (OS), the company sifts through extensive biological and chemical data to identify promising therapeutic candidates. This artificial intelligence (AI)-driven approach aims to streamline the traditionally time-consuming and costly process of bringing new drugs to market.
Recent business highlights include advancements in clinical trials and technological expansion. With strategic collaborations bolstering its operation, Recursion is poised for significant breakthroughs in drug discovery.
Quarter highlights
Recursion's Q1 achievements spotlight its operational and technological prowess. Clinical trials are progressing on at least seven different projects, with Phase 2 readouts on the horizon. The launch of BioHive-2, a next-generation supercomputer it's developing in partnership with Nvidia (currently in the benchmarking phase), represents a leap in computational capabilities, essential for handling complex biological data and accelerating drug discovery.
The company's financial health remains robust, with a cash reserve of $296.3 million, underscoring its capability to fund ongoing operations and research endeavors. Revenue growth, from $12.1 million last year to $13.8 million this quarter, indicates a solid trajectory in business operations.
The increase in net loss year over year is a reflection of growing operational costs and expenditures in research and development (R&D). R&D expenses jumped 45% year over year to $67.6 million in Q1. Despite this, the improved earnings per share suggest efficiency improvements and a strategic focus on high-potential projects.
Partnerships formed with leading biotech and tech companies have been instrumental, enabling Recursion to leverage external expertise and resources, enhancing its drug discovery platform.
Looking ahead
Recursion's outlook remains ambitious, with significant milestones expected in the coming quarters. The company anticipates delivering multiple Phase 2 trial readouts, starting in Q3 2024, marking crucial steps in its clinical development pathway. The company didn't offer any specific guidance on its financials.
Investors should watch for advancements in Recursion's platform technologies and their application in drug discovery processes. Updates on strategic partnerships and their impact on the company's pipeline and technological capabilities will also be key focus areas.
