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Recursion and Tempus AI modified their existing partnership on September 15, 2026, to trade access to each other's technology. Recursion is licensing its proprietary RNA foundation model, an AI tool that helps predict how genes behave, to Tempus for use in cancer research. In exchange, Tempus will pay Recursion 12 million dollars over two years and provide additional patient data records.
This is a helpful step for Recursion because it turns its AI technology into a direct source of cash. The company also lowered its future annual fees to Tempus from 42 million dollars down to 14 million dollars, though it will now pay at least 4 million of that in cash rather than just stock. By extending the deal through 2029, Recursion ensures its AI has a steady supply of the real-world data it needs to keep training its models.
Source: 8-K filing
Morgan Stanley lowered its price target for the company from $5.50 to $5.30. This is a small adjustment that does not change the firm's overall rating on the stock. The new target is still well above the current price of about $3.30. Across all Wall Street firms covering the company, the average target price is currently $5. For a biotech company like this, which is still in the early stages of testing its AI-discovered drugs in humans, these targets often reflect a long-term view of what the technology could be worth if those trials succeed.
Source: Morgan Stanley
Recursion lost about 25 cents per share last quarter, just a penny more than analysts expected. While the financial loss is typical for a biotech firm still developing its first products, the real news is that Genentech, a major drugmaker, chose its first brain-science target discovered by Recursion's AI to move into early development. This is a vital piece of evidence that the company's supercomputer can actually find useful drug targets that human scientists might miss.
The company also lowered its expected cash spending for the year to $375 million, down from $390 million. This helps stretch its $665 million cash pile further as it waits for data from its own human trials. A key update on its lead drug for intestinal polyps is expected in November, which will be the next big test for whether its AI-led approach works in patients.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Management has recently moved from a string of misses to more consistent results. This shows they are getting a better handle on their costs as the platform matures.
| Expectation | |
|---|---|
| EPS | $-0.24 |
| Revenue | $13M |
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