Recursion spends $688 million to acquire Exscientia to create a new drug development company

Recursion, a US-based biotech company, announced that it will acquire British pharmaceutical technology company Exscientia in an all-stock transaction. The transaction is expected to be completed in early 2025 and will provide the combined entity with approximately $850 million in cash to fund its operations over the next three years. Reuters reported that Recursion will pay $688 million to acquire Exscientia.

The two companies said that once the integration is complete, they believe that the expanded and improved Recursion will be able to discover and transform higher-quality drugs more efficiently and on a larger scale through a small molecule discovery platform supported by a full-stack technology. In addition, the combined company expects to complete approximately 10 clinical trials in the next 18 months.

"We view the proposed combination as highly complementary and aligned with our mission to industrialize drug discovery and bring high-quality, lower-cost medicines to consumers," said Chris Gibson, co-founder and CEO of Recursion and the planned CEO of the combined company. "Exscientia's precision chemistry tools and capabilities, including its newly commissioned automated small molecule synthesis platform, will accelerate technology-enabled biological and chemical research and enhance hit drug discovery and translation."

"Combining Exscientia's best-in-class internal precision oncology pipeline with Recursion's best-in-class rare disease, precision oncology and infectious disease focused pipeline is highly complementary and we expect to bring treatments to patients faster," said David Hallett, interim CEO of Exscientia and scheduled to serve as Recursion's chief scientific officer after the transaction closes.

According to Recursion and Exscientia, the planned business combination will also advance existing collaborations with biopharmaceutical companies including Roche Genentech, Sanofi, Bayer and Merck. The companies said the partnerships could generate approximately $200 million in milestone payments over the next two years and more than $20 billion in royalties on net sales of the collaboration programs over the life of the collaboration.