Recursion Narrows Loss, Cuts Expense Outlook
Second-quarter revenue fell 60% to $7.7 million as collaboration payments declined.
Recursion Pharmaceuticals (RXRX), an AI-enabled drug-discovery company, narrowed its second-quarter net loss 23.8% to $131.0 million and lowered its full-year expense outlook.
The improvement from a year earlier reflected lower research and administrative costs, though losses and cash use increased from the first quarter. Cash, cash equivalents and restricted cash declined 16.3% during the quarter to $556.8 million, while Recursion maintained that its runway extends into early 2028.
Revenue declined from $19.2 million a year earlier as Recursion recognized less revenue from Roche and Genentech following the prior-year completion of certain project phases. Revenue increased 18.5% from an implied $6.5 million in the first quarter. The diluted loss improved to $0.25 a share from $0.41 a share a year earlier.
Research-and-development expense fell 30.3% to $89.6 million, driven partly by a decline in Tempus data expense to $3.1 million from $22.7 million and improved operating efficiency. General-and-administrative expense decreased 11.0% to $41.5 million, including a $4.9 million salary reduction tied to headcount cuts. Both expense categories rose sequentially, and the operating loss widened 5.0% from the first quarter to $135.0 million.
Operating cash use increased 38.6% to $105.9 million, largely because the year-earlier period included a $28.6 million U.K. research-and-development tax-credit inflow. First-half cash operating expense still declined 4.1% to $191.0 million.
Genentech exercised the collaboration’s first Validated Target Option, advancing a neuroscience target into a joint small-molecule early-discovery program. Cumulative upfront and milestone payments from Roche and Genentech reached $216 million. The company also received Food and Drug Administration clearance to begin testing REC-7735, with the Phase 1/2 ZINNIA trial scheduled to start in the second half of 2026.
The company now expects 2026 cash operating expense of less than $375 million, down $15 million from its previous outlook, due to additional operating efficiencies. Additional dose-escalation data for REC-1245 and a regulatory-path update for REC-4881 remain expected in the second half, with further REC-4881 safety and efficacy results scheduled for November.
Recursion also quantified gains from its agentic-AI tools, stating structural-analysis time fell to 30 minutes from four hours and agent-supported enrollment strategies lifted enrollment rates to between 1.3 and 1.6 times historical benchmarks.