Recursion Pharmaceuticals Receives FDA Clearance for AI-Discovered Cancer Drug Trial

Recursion Pharmaceuticals announced that it has received FDA clearance to begin clinical trials for REC-1245, an investigational drug targeting solid tumors and lymphoma. The company, known for its AI-enabled drug discovery platform, was able to progress from identifying a biological target to regulatory approval in under 18 months.

The clearance allows Recursion to initiate a phase 1/2 trial, which will evaluate the safety and tolerability of REC-1245 in patients with cancers such as ovarian, prostate, breast, and pancreatic cancer. The trial is scheduled to begin in the fourth quarter of this year, with the company expecting to complete the initial dose-escalation phase by the end of 2025.

REC-1245 targets the protein RBM39, which is functionally similar to CDK12—a well-studied but difficult-to-target biomarker. Recursion’s platform used large datasets and AI algorithms to pinpoint RBM39 as a viable target for a range of advanced cancers. According to CEO Chris Gibson, this trial is the first to fully utilize Recursion's integrated AI tools.

The biotech sector has been watching to see whether AI-based drug discovery can actually live up to its promises of speed and efficiency. Recursion’s announcement provides a real-world example, but the company still needs to demonstrate clinical success to validate its approach.

The company’s stock, however, has struggled this year, dropping 38% in 2024. Despite this decline, analysts maintain a mix of hold and buy ratings for the stock, with an average price target of $10.14, suggesting a potential 64% upside. Recursion’s investor base includes Nvidia, a company that has been increasingly active in supporting AI initiatives across industries.

In a strategic move to strengthen its AI capabilities, Recursion plans to merge with Exscientia, another AI-focused drug discovery company, early next year. The merger aims to consolidate resources and expand data access, which the company hopes will enhance its drug development processes.