Exscientia and Recursion Pharmaceuticals to Merge, Creating a Powerhouse in AI-Driven Drug Discovery
Exscientia plc (EXAI) and Recursion Pharmaceuticals Inc. (RXRX) announced a definitive agreement to merge, creating a leading force in artificial intelligence (AI)-powered drug discovery. The combined entity, which will operate under the Recursion name, will leverage the strengths of both companies to accelerate the development of novel therapies.
Under the terms of the agreement, Exscientia shareholders will receive 0.7729 Recursion shares for each Exscientia share, with fractional shares paid in cash. Recursion shareholders will own approximately 74% of the combined entity, while Exscientia shareholders will hold the remaining 26%.
The combined company will boast a robust pipeline of approximately ten clinical trials expected to read out within the next 18 months. These programs, if successful, could potentially generate annual peak sales exceeding $1 billion each.
The merger brings together Exscientia's expertise in precision chemistry design and small-molecule automated synthesis technology with Recursion's advanced AI-powered drug discovery platform. This synergy is expected to significantly enhance the discovery and translation of high-quality medicines, enabling faster and more efficient development at a larger scale.
The combined entity will have a strong financial position, with $850 million in cash and approximately $200 million in expected milestones over the next two years. Additionally, potential royalties of $20 billion are on the line if any drugs from the pipeline receive approval. The company is also projected to achieve annual synergies of approximately $100 million, extending its runway into 2027.
Chris Gibson, Co-Founder and CEO of Recursion, will lead the combined company as CEO. David Hallett, Interim Chief Executive Officer and Chief Scientific Officer of Exscientia, will join as Chief Scientific Officer. The combined company will maintain its headquarters in Salt Lake City, Utah, and trade on the NASDAQ, while retaining a significant presence in the UK.
This merger represents a significant step forward in the field of AI-driven drug discovery. The combined expertise and resources of Exscientia and Recursion have the potential to revolutionize the way new medicines are developed, bringing hope to patients in need and transforming the future of healthcare.