What happened
Shares of Recursion Pharmaceuticals (RXRX -6.65%) were up more than 61% as of 11:30 a.m. on Wednesday. The clinical-stage biotech company announced that technology company Nvidia had made a $50 million investment in Recursion.
So what
Recursion is a drug discovery company that uses uses artificial intelligence (AI) to find therapies, using one of most powerful supercomputers in the world. The investment from Nvidia was made as part of a private investment in public equity (PIPE). Recursion also said it plans to speed the development of its AI models for biology and chemistry, collaborating with Nvidia's cloud services to distribute to other biotech companies.
The move by Nvidia is a vote of confidence in Recursion that encouraged investors. Nvidia's stock was also up nearly 3%, but that may have had more to do with the inflation report that buoyed the market on Wednesday. In May, Recursion signed deals to purchase two other AI-enabled drug discovery companies, Cyclica and Valence, for $40 million and $47.5 million, respectively.
Now what
Artificial intelligence-connected stocks have surged this year and Recursion is showing there may be more than hype to its AI connection. The company has nine programs in its pipeline, with top-line readouts expected from several of them by next year.
As of the first quarter, Recursion reported revenue of $12.1 million, up 128% year over year. Most of the revenue was due to progress in its gastrointestinal oncology collaboration with Roche and its Genentech subsidiary, the company said. Recursion also has a fibrotic disease collaboration with Bayer. Recursion lost $65.3 million compared to a loss of $56 million in the same period a year ago, and said it had $473.1 million in cash.
