Unified company aims to ‘industrialize drug discovery’ with AI – bringing new drugs to market faster and at a lower cost.
AI drug discovery companies Recursion and Exscientia have announced they are to merge in a move intended to create an “end-to-end drug discovery platform.” The merger creates a significant new player in the AI-powered drug discovery landscape, following several years of consolidation in the field.
According to Reuters, US-headquartered Recursion bought UK-based Exscientia for $688 million as part of an all-stock deal. The combined entity will be well-capitalized, with approximately $850 million in cash and cash equivalents, and expects to realize “annual synergies” exceeding $100 million. Following the merger, the combined company will be headquartered in Salt Lake City, Utah, and continue to trade on NASDAQ under the name Recursion, with a significant presence maintained in the UK.
Both companies leverage AI as part of their mission to industrialize drug discovery, which aims to shorten drug discovery and development time and ultimately deliver new medicines at lower costs. The combined entity brings together Recursion’s expertise in scaled biology exploration and translational with Exscientia’s capabilities in precision chemistry design and small molecule automated synthesis.
The unified company is expected to be well-positioned to deliver approximately 10 clinical readouts over the next 18 months, as well as the potential to receive about $200 million in milestone payments over the next two years. The companies claim that long-term potential of the merger could generate more than $20 billion in revenue before royalties through its partnerships. With no competitive overlap, the integration of the companies’ pipelines will create a diverse portfolio of clinical and near-clinical programs with the potential to achieve annual peak sales in excess of $1 billion.
In a post on LinkedIn, the founder of Insilico Medicine Alex Zhavoronkov referred to the merger as “huge news” that would benefit both companies in terms of improved chemistry capabilities and target discovery. Zhavoronkov expects the merger will lead to clinical trials of novel target and novel molecule combinations in a few years’ time.
The merger is expected to significantly enhance the Recursion OS platform, facilitating the discovery and translation of higher-quality medicines more efficiently and at a larger scale. Exscientia’s capabilities in automated chemistry design and synthesis platform are expected to enhance Recursion’s ability to conduct structure-activity relationship cycles during drug discovery, ultimately improving predictive maps of biology and chemistry.
Chris Gibson, the current CEO of Recursion, will lead the combined entity, while David Hallett, interim CEO of Exscientia, will serve as Chief Scientific Officer.
“Exscientia’s precision chemistry tools and capabilities, including its newly commissioned automated small molecule synthesis platform, will augment our tech-enabled biology and chemistry exploration, hit discovery and translational capabilities,” said Gibson.
