Recursion said today it is eliminating approximately 20% of its workforce—about 160 jobs—in a restructuring the AI-based drug developer said reflects both its recently-pruned pipeline and the challenge of securing financing seen across the biopharma industry.
Salt Lake City-based Recursion disclosed in a regulatory filing that it will incur about $11 million in charges tied to the workforce reduction this year, to consist of severance payments, employee benefits, and related costs. But the AI drug developer said it expects to benefit from the job cuts because the money it projects to save will enable it to extend its cash runway into the fourth quarter of 2027.
Recursion said it now expects its cash burn to be less than $450 million in 2025 and less than $390 million in 2026, excluding severance costs of income received by the company from collaborations. That income could total more than $100 million in cash generated through payments tied to achieving milestones by the end of 2026, the company added.
Recursion ended the first quarter with about $509 million in cash, cash equivalents, and restricted cash.
“The Company expects cash, cash equivalents and restricted cash for the quarter ending June 30, 2025 to be above $500 million,” Recursion stated in its filing. “This estimate is based on impacts from streamlining of operations, receipt of a one-time $28 million R&D tax credit, partnership inflows and utilization of the Company’s at-the-market offering program, offset by one-time severance payments.”
Recursion reported employing “over 800 Recursionauts” or employees as of December 31, 2024, up 55% from 515 a year earlier, reflecting in part the company’s combining with British AI drug development pioneer Exscientia last year for $630.1 million, a deal value which along with the head count were disclosed in Recursion’s Form 10-K annual report for 2024, filed February 28.
Recursion co-founder and CEO Chris Gibson posted on LinkedIn and on X that the job cuts were “part of our ongoing commitment to deliver maximal impact from the Recursion 2.0 platform, the maturation of AI tools and ongoing friction in biotech capital markets.”
Recursion 2.0 is the company’s early-stage drug discovery platform that integrates scaled data, automation, multimodal models, and AI. Recursion developed the enhanced platform by integrating best features of its original operating system with best features of the platform it inherited last year by acquiring Exscientia.
Maximizing the impact of Recursion 2.0 will require a shift in Recursion’s approach to AI, Gibson explained.
“Having built one of the largest fit-for-purpose datasets, we’re shifting from data generation (mapping) to AI-accelerated hypothesis testing (mining), decreasing capacity in areas where we’ve generated sufficient data and exiting non-differentiated areas like in vivo,” Gibson wrote.
“The work we do at Recursion is hard because the problems we’re solving matter deeply,” Gibson added. “But with challenge comes opportunity and with focus, we believe we can redefine this space, make it better, and deliver medicines to patients at scale.”
Investors appeared to agree with Gibson’s optimism, responding to the news with a mini buying surge that sent Recursion shares rising about 6% from yesterday’s closing price of $5.37 Tuesday morning, to $5.70 as of 11:30 a.m., before dipping to $5.60 and a 4% gain as of 1:37 p.m.
Recursion shares have soared 30% over the past month, including a 20% jump Friday from $4.57 to $5.49 after the company joined MIT’s Computer Science and Artificial Intelligence Lab (CSAIL) and Jameel Clinic to announce the open-source release of Boltz-2, an AI biomolecular foundation model designed to calculate binding affinity values in just 20 seconds, thus broadening access to AI in commercial drug discovery.
But Recursion’s shares have not been immune to the biopharma industrywide stock slump, having declined 24% over the past six months and 34% over the past year.
“While this update is an important step in belt-tightening, cash burn will remain the focus for this stock, with meaningful clinical data slated for 2026 and beyond,” Mani Foroohar, MD, a senior research analyst with Leerink Partners focused on genetic medicines, wrote this morning in a research note. “The reduction in force (RIF) buys some breathing room, though we remain cautious.”
Foroohar noted that investors optimistic about Recursion stock believe that its management can accelerate upfront payments and milestone recognition from collaborations to validate RXRX’s operating system, as well as blunt the impact of continuous use of capital from “at the market” stock offerings.
“A key lever will be the extent to which RXRX can execute on partnership commitments while actively reducing footprint/headcount,” Foroohar commented.
The job cuts come more than a month after Recursion ended development of four of its 11 pipeline programs and paused a fifth, in a pruning designed to further focus Recursion on cancer and rare disease treatments. The program halts shrank Recursion’s pipeline to six active programs—four in cancer and two in rare diseases—and contrasted with the company’s ambition as stated by Gibson last year to GEN Edge of developing 100 pipeline candidates in roughly a decade, mostly internally.
The company also has a seventh pipeline program REC-4539, an LSD1 inhibitor designed to treat small-cell lung cancer, but says it is pausing the program pending emerging clinical data.
Of the four halted programs, three were clinical and one preclinical:
“We’re making tough but necessary choices to ensure we stay focused on where we can have the greatest impact. That means sharpening our efforts, operating with discipline, and holding fast to the mission that brought us here: to radically improve lives through science and technology,” Najat Khan, PhD, Recursion Pharmaceuticals chief R&D officer and chief commercial officer, posted on LinkedIn.
Gibson praised the Recursion staffers whose jobs the company is eliminating: “To my network and the broader community: if you’re building a team that’s ready to challenge the impossible, please take a look at these incredible individuals; reach out to me if you’d like an introduction.”
“To the Recursionauts who will continue on this voyage: you know the path ahead will not be easy, but building something world-changing never is,” Gibson acknowledged. “This moment demands resilience, clarity, and focused execution. We must move forward together with intensity and purpose—challenging disease, inefficiency, and the inertia that too often slows progress in our industry. Our mission is too important to approach with anything less than our full commitment.”
Gibson added: “We are here to decode biology to radically improve lives. And with the right focus, and each of you, I deeply believe we are the company best positioned to deliver on that promise.”
The post Recursion Eliminating 20% of Workforce, Citing Pipeline Pruning and Capital Markets appeared first on GEN - Genetic Engineering and Biotechnology News.
Salt Lake City-based Recursion disclosed in a regulatory filing that it will incur about $11 million in charges tied to the workforce reduction this year, to consist of severance payments, employee benefits, and related costs. But the AI drug developer said it expects to benefit from the job cuts because the money it projects to save will enable it to extend its cash runway into the fourth quarter of 2027.
Recursion said it now expects its cash burn to be less than $450 million in 2025 and less than $390 million in 2026, excluding severance costs of income received by the company from collaborations. That income could total more than $100 million in cash generated through payments tied to achieving milestones by the end of 2026, the company added.
Recursion ended the first quarter with about $509 million in cash, cash equivalents, and restricted cash.
“The Company expects cash, cash equivalents and restricted cash for the quarter ending June 30, 2025 to be above $500 million,” Recursion stated in its filing. “This estimate is based on impacts from streamlining of operations, receipt of a one-time $28 million R&D tax credit, partnership inflows and utilization of the Company’s at-the-market offering program, offset by one-time severance payments.”
Recursion reported employing “over 800 Recursionauts” or employees as of December 31, 2024, up 55% from 515 a year earlier, reflecting in part the company’s combining with British AI drug development pioneer Exscientia last year for $630.1 million, a deal value which along with the head count were disclosed in Recursion’s Form 10-K annual report for 2024, filed February 28.
Recursion co-founder and CEO Chris Gibson posted on LinkedIn and on X that the job cuts were “part of our ongoing commitment to deliver maximal impact from the Recursion 2.0 platform, the maturation of AI tools and ongoing friction in biotech capital markets.”
Recursion 2.0 is the company’s early-stage drug discovery platform that integrates scaled data, automation, multimodal models, and AI. Recursion developed the enhanced platform by integrating best features of its original operating system with best features of the platform it inherited last year by acquiring Exscientia.
From AI mapping to mining
Maximizing the impact of Recursion 2.0 will require a shift in Recursion’s approach to AI, Gibson explained.
“Having built one of the largest fit-for-purpose datasets, we’re shifting from data generation (mapping) to AI-accelerated hypothesis testing (mining), decreasing capacity in areas where we’ve generated sufficient data and exiting non-differentiated areas like in vivo,” Gibson wrote.
“The work we do at Recursion is hard because the problems we’re solving matter deeply,” Gibson added. “But with challenge comes opportunity and with focus, we believe we can redefine this space, make it better, and deliver medicines to patients at scale.”
Investors appeared to agree with Gibson’s optimism, responding to the news with a mini buying surge that sent Recursion shares rising about 6% from yesterday’s closing price of $5.37 Tuesday morning, to $5.70 as of 11:30 a.m., before dipping to $5.60 and a 4% gain as of 1:37 p.m.
Recursion shares have soared 30% over the past month, including a 20% jump Friday from $4.57 to $5.49 after the company joined MIT’s Computer Science and Artificial Intelligence Lab (CSAIL) and Jameel Clinic to announce the open-source release of Boltz-2, an AI biomolecular foundation model designed to calculate binding affinity values in just 20 seconds, thus broadening access to AI in commercial drug discovery.
But Recursion’s shares have not been immune to the biopharma industrywide stock slump, having declined 24% over the past six months and 34% over the past year.
“While this update is an important step in belt-tightening, cash burn will remain the focus for this stock, with meaningful clinical data slated for 2026 and beyond,” Mani Foroohar, MD, a senior research analyst with Leerink Partners focused on genetic medicines, wrote this morning in a research note. “The reduction in force (RIF) buys some breathing room, though we remain cautious.”
Foroohar noted that investors optimistic about Recursion stock believe that its management can accelerate upfront payments and milestone recognition from collaborations to validate RXRX’s operating system, as well as blunt the impact of continuous use of capital from “at the market” stock offerings.
“A key lever will be the extent to which RXRX can execute on partnership commitments while actively reducing footprint/headcount,” Foroohar commented.
Cancer, rare disease focus
The job cuts come more than a month after Recursion ended development of four of its 11 pipeline programs and paused a fifth, in a pruning designed to further focus Recursion on cancer and rare disease treatments. The program halts shrank Recursion’s pipeline to six active programs—four in cancer and two in rare diseases—and contrasted with the company’s ambition as stated by Gibson last year to GEN Edge of developing 100 pipeline candidates in roughly a decade, mostly internally.
The company also has a seventh pipeline program REC-4539, an LSD1 inhibitor designed to treat small-cell lung cancer, but says it is pausing the program pending emerging clinical data.
Of the four halted programs, three were clinical and one preclinical:
- REC-994—a Phase II oral, non-antibiotic small molecule superoxide scavenger being developed to treat symptomatic cerebral cavernous malformation (CCM)
- REC-2282—a Phase II oral, CNS penetrant small molecule pan-histone deacetylase (HDAC) inhibitor designed to treat progressive neurofibromatosis type 2 (NF2)-mutated meningiomas
- REC-3964—a Phase II oral, potential first-in-class, non-antibiotic small molecule designed to selectively inhibit Clostridioides difficile (C.diff) toxin B (TcdB) in the gastrointestinal tract
- REC-4209—a preclinical oral, reversible, potential first-in-class candidate for idiopathic pulmonary fibrosis (IPF), whose target was undisclosed except for its name, Epsilon
“We’re making tough but necessary choices to ensure we stay focused on where we can have the greatest impact. That means sharpening our efforts, operating with discipline, and holding fast to the mission that brought us here: to radically improve lives through science and technology,” Najat Khan, PhD, Recursion Pharmaceuticals chief R&D officer and chief commercial officer, posted on LinkedIn.
Gibson praised the Recursion staffers whose jobs the company is eliminating: “To my network and the broader community: if you’re building a team that’s ready to challenge the impossible, please take a look at these incredible individuals; reach out to me if you’d like an introduction.”
“To the Recursionauts who will continue on this voyage: you know the path ahead will not be easy, but building something world-changing never is,” Gibson acknowledged. “This moment demands resilience, clarity, and focused execution. We must move forward together with intensity and purpose—challenging disease, inefficiency, and the inertia that too often slows progress in our industry. Our mission is too important to approach with anything less than our full commitment.”
Gibson added: “We are here to decode biology to radically improve lives. And with the right focus, and each of you, I deeply believe we are the company best positioned to deliver on that promise.”
The post Recursion Eliminating 20% of Workforce, Citing Pipeline Pruning and Capital Markets appeared first on GEN - Genetic Engineering and Biotechnology News.