2020-09-12| Funding

AI Drug Pioneer Recursion Pharma Raises $239 Million Led by Leaps By Bayer

by Pavel Ryzhov
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Technology-driven innovation in the pharmaceutical and biotechnology sectors continues to dominate many companies’ research and development efforts. The lucrative promise of using big data to solve long-standing challenges in the drug discovery field and many other areas fuels large investment rounds from venture capital firms. To secure long-term success, however, these proprietary technologies need to be not only deployed but also continuously improved upon. Often, it means multiple funding rounds that back solid and promising milestones.

This is best illustrated in the recent news from Recursion Pharmaceuticals, a Salk Lake City, Utah-based digital biology company that aims to reengineer the drug discovery process by leveraging automation, machine learning, and the most extensive biological dataset images. The company announced that it received $239 million of oversubscribed Series D funding in the press release, led by Leaps by Bayer [1].

The success of this round of funding, demonstrated in the fact that it was oversubscribed, is illustrated by Chris Gibson, co-founder, and CEO of Recursion Pharmaceuticals. He said that “this fundraising round provides us with additional resources we need to continue to advance on our mission”, citing “significant progress” since their Series C financing in 2019, in particular, doubling the number of preclinical and clinical programs, size of their proprietary database, expanding capabilities of deep-learning algorithms and other innovations in the drug discovery process.

According to the press release, the funding will be used to provide support for the pipeline’s clinical development and continued investment into Recursion’s proprietary technology. Specific improvements that the company will pursue are the generation of relatable datasets to create comprehensive human biology maps that open doors to digital drug discovery and in vivo studies.

The primary funding source, Leaps by Bayer, an impact investment arm of Bayer AG, also explained their Recursion support. Juergen Eckhardt, Head of Leaps by Bayer, said that the company is “defining and leading technology-enabled drug discovery” and has the potential to discover promising therapeutic candidates and “find curative treatments” in many disease areas. Besides Leaps by Bayer, new investors in this round included Casdin Capital, Catalio Capital Management LP, Laurion Capital Management, and Samsara Biocapital. They join existing investors, like Baillie Gifford, Mubadala, Lux Capital, EPIC Ventures, and others.

The news about the latest fundraising round, a strategic collaboration agreement between Recursion and Bayer, was announced. The partnership will help to identify and develop new treatments for fibrotic diseases of lung, kidney, heart, and more. Specifically, it opens the door for over 10 possible fibrosis R&D programs where development and commercial milestone payments of over $100 million and royalties on future sales per program. Recursion touted this as a model for future strategic partnerships with other industry leaders in other disease areas, such as oncology, inflammation, and aging. This is even more notable considering the agreement’s magnitude: $30 million upfront payment and $50 million of lead equity investment. Both funding and partnership news provides further support for Recursion’s innovative approach to drug discovery.

Related Article: Top 3 Announcements at the J.P. Morgan Healthcare Conference 2019


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