Recursion and Exscientia to Merge, Forming a Biotech Powerhouse Focused on Drug Discovery

Recursion and Exscientia, both Nasdaq-listed biotech companies, have announced a definitive agreement to merge, creating a leading entity in AI-driven drug discovery and development. The combined company will harness Recursion’s tech-enabled biology platform and Exscientia’s precision chemistry tools, including an automated small molecule synthesis platform, to enhance the discovery and development of new medicines. Chris Gibson, Ph.D., CEO of Recursion and the planned CEO of the merged entity, emphasized the complementary nature of this union, aiming to industrialize drug discovery and deliver high-quality medicines more efficiently.

The merger is expected to significantly bolster the pipeline of both companies, combining Recursion’s focus on rare diseases, precision oncology, and infectious diseases with Exscientia’s expertise in precision oncology. The integrated Recursion OS platform will further streamline drug discovery processes, enabling the combined company to efficiently translate biological insights into new therapies. The companies project the readout of approximately 10 clinical trials within the next 18 months and expect to advance their collaborations with major biopharma firms like Roche-Genentech, Sanofi, Bayer, and Merck KGaA, with potential milestone payments of around $200 million over the next two years.

Under the merger agreement, Exscientia shareholders will receive 0.7729 shares of Recursion stock for each Exscientia share, with Recursion shareholders holding approximately 74% of the combined company. The merger, which has been approved by both companies' boards and major shareholders, is expected to generate annual synergies of around $100 million and extend the cash runway into 2027. The transaction is anticipated to close by early 2025, pending regulatory approvals and shareholder votes.

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