TenQ

The Recursion Pharmaceuticals story

Recursion Pharmaceuticals uses machine learning and automated labs to discover drugs, with the central question being whether its Sanofi collaboration and internal pipeline can turn early scientific progress into approved medicines before funding needs consume more capital.

Recursion Pharmaceuticals stock reportTenQ Score 7/36 · every chart and check from its filings
  • $3.47share price, last close
  • $1.9Bmarket value
  • 7/36TenQ Score checks passed

The story in brief

  • Sanofi takes responsibility. Sanofi’s first candidate selection triggered a $10 million payment and transferred further development funding and leadership to Sanofi.
  • Clinical proof remains early. Recursion has reported positive REC-4881 trial results, but it has no products approved for commercial sale.
  • Funding remains central. Cash and short-term investments of $546 million stand against free cash flow of -$352 million over the last twelve months.

What drives the business

  • Recursion’s long-term model combines its Recursion OS drug discovery platform with an internal oncology and rare disease pipeline and partnerships that fund research and pay for progress.
  • Collaborations with Roche and Genentech, Sanofi, Bayer, and Merck KGaA have generated more than $500 million in upfront and progress-based payments, including $213 million from Roche and Genentech.
  • The Sanofi collaboration covers immunology and oncology and has achieved six progress-based milestones across five programs, with its first candidate selection bringing total upfront and milestone payments to $144 million.
  • The selected oral immunology candidate carries eligibility for more than $300 million in additional milestones and double-digit royalties if successfully commercialized, while the handoff ends Recursion’s operational requirements for that candidate.
  • Internally, Recursion prioritized REC-4881 for familial adenomatous polyposis and REC-617 for advanced solid tumors in May 2025, and REC-4881 results reported in December 2025 showed a 43% median reduction in polyp burden after 12 weeks of treatment.

What the price assumes

The reverse DCF cannot measure an implied growth rate because free cash flow and operating earnings are both negative, so the price rests on future profits rather than an established cash flow base.

The $2.2 billion market value represents 40.6x sales against $55 million in revenue over the last twelve months, when revenue growth was -15.1%, compared with annual growth of 23.3% over the last three years.

Recursion passes 0 of 6 TenQ Value checks, including failing the requirement for free cash flow yield above 3% with a yield of -15.8%.

What could change the story

  • Recursion expects continued operating losses and substantial additional funding needs, and TenQ’s self-funding check estimates 1.55 years of cash at the measured burn rate despite total debt of only $5 million.
  • Additional financing could dilute shareholders or require Recursion to relinquish program rights, while stock-based pay totaled $91 million over the last twelve months.
  • Sanofi controls further development of the optioned candidate and could delay, deprioritize, or discontinue it, so the potential milestones and royalties are not assured revenue.
  • Preclinical and clinical development remain lengthy and uncertain, with patient enrollment, safety, efficacy, and regulatory approval all capable of delaying or ending programs.
  • Failure to obtain and maintain sufficiently broad patents could weaken protection for Recursion’s technology and drug candidates.

What to watch next

  • Recursion expects Sanofi’s optioned candidate to enter phase 1 clinical trials in 2027 and says other joint programs could reach development candidate or progress-based milestones over the 12 months following its October 2026 announcement.
  • The next financial releases can confirm recognition of the $10 million Sanofi payment in the quarter to September 2026 and show whether additional partner receipts reduce cash consumption relative to free cash flow of -$352 million over the last twelve months.
  • Recursion has scheduled additional REC-4881 clinical results for the first half of 2027, making durability of response, safety, and progress toward a registration pathway important tests of its internal pipeline.

Sources

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