Recursion Pharmaceuticals Faces Challenges and Opportunities
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 29 2026
0mins
Should l Buy RXRX?
Source: Fool
- Expected Clinical Progress: Recursion Pharmaceuticals anticipates data readouts for its potential cancer drug REC-1245 in the first half of the year, although these phase 1 results will primarily focus on safety rather than efficacy, likely limiting stock impact.
- Intensifying Competition: With Eli Lilly developing the industry's most powerful supercomputer, Recursion faces fierce competition from larger pharmaceutical companies, which may hinder its long-term goal of licensing AI models.
- Poor Market Performance: Recursion's stock has significantly declined over the past year, with a current market cap of $2.4 billion and no approved products, indicating a high-risk business model.
- Investment Risk Warning: While Recursion claims its AI technology can enhance drug development efficiency, it has yet to prove its effectiveness, prompting investors to carefully consider the high volatility and risks involved.
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Analyst Views on RXRX
Wall Street analysts forecast RXRX stock price to rise
6 Analyst Rating
2 Buy
4 Hold
0 Sell
Moderate Buy
Current: 3.580
Low
5.00
Averages
7.75
High
11.00
Current: 3.580
Low
5.00
Averages
7.75
High
11.00
About RXRX
Recursion Pharmaceuticals, Inc. is a clinical-stage TechBio company decoding biology and chemistry to industrialize drug discovery. Its Recursion Operating System (OS), a platform built across diverse technologies, enables the Company to map and navigate trillions of biological and chemical relationships within the Recursion Data Universe. The Company integrates physical and digital components as iterative loops of atoms and bits, scaling wet lab biology and chemistry data organized into virtuous cycles with computational tools to rapidly translate silico hypotheses into validated insights and novel chemistry. Its clinical programs in oncology and rare diseases include REC-617, REC-1245, REC-3565 and REC-4539. Its REC-617 is an orally bioavailable, cyclin-dependent kinase 7 (CDK7) inhibitor for the treatment of advanced solid tumors. Its REV102 program targets ectonucleotide pyrophosphatase/phosphodiesterase 1 (ENPP1), an enzyme implicated in the pathogenesis of HPP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Liquid Biopsy Expansion: Guardant Health expands the availability of its Shield™ colorectal cancer screening test to U.S. military personnel and their families, enhancing the foundational data generation for precision medicine through ctDNA analysis.
- Drug Discovery Innovation: Recursion Pharmaceuticals leverages AI and machine learning to accelerate drug discovery, emphasizing platform scalability to reduce development time and costs, while attracting institutional interest from firms like ARK Investment Management.
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- AI Drug Development Platform: Recursion Pharmaceuticals' Recursion OS platform utilizes 65 petabytes of chemical and biological data to conduct virtual drug testing, significantly reducing clinical trial time and costs, allowing pharmaceutical companies to focus resources on their most promising drugs.
- Clinical Trial Progress: Currently, Recursion's drug development pipeline includes eight drugs, half of which are in actual clinical trials, indicating the effectiveness of its technology and market potential.
- Revenue Growth Expectations: Analysts anticipate Recursion's revenue will increase from last year's $62 million to $83 million this year, with projections reaching $163 million by 2028, primarily driven by R&D milestone payments from pharmaceutical partners.
- Industry Outlook and Risks: While the AI drug development sector is expected to grow at an average annual rate of 30% through 2034, Recursion faces risks related to profitability and competition, particularly from larger tech companies potentially entering the field.
See More
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- No Current Partnerships: Currently, OpenAI has no partnerships with any biotech companies, but Altman emphasized that the frontier of scientific discovery will require significant capital, suggesting that OpenAI may act as an investor in certain cases.
- AI in Drug Development: Numerous pharmaceutical companies, including Recursion and Pfizer, are already leveraging AI in drug development, highlighting the immense potential and market demand in this sector, and OpenAI's investment could further accelerate this trend.
- Industry Insights: Altman's comments align with those made by OpenAI CFO Sarah Friar at the World Economic Forum, indicating that OpenAI may seek revenue shares from the applications of its AI tools, reflecting the company's focus on the future biotech market.
See More
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- Strong Investment Demand: VentriPoint Diagnostics doubled its private placement from $500,000 to $1 million, with the capital allocated for commercialization and market expansion, marking a pivotal transition from development to revenue generation.
- Economic Value Proposition: VentriPoint is collaborating with Summit Sciences to develop ROI models that demonstrate measurable savings for hospitals through enhanced diagnostic accuracy and resource optimization, thereby strengthening its competitive position.
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