Recursion Reports Third Quarter 2026 Financial Results and Extends Cash Runway; Highlights Positive Clinical Data in REC-4881 and REC-1245, Sanofi…
RECURSION PHARMACEUTICALS, INC. (RXRX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Recursion Reports Third Quarter 2026 Financial Results and Extends Cash Runway; Highlights Positive Clinical Data in REC-4881 and REC-1245, Sanofi Development Candidate Option and Appointment of Fred Hassan as Chair • New Phase 2 REC-4881 data presented at CGA-IGC in
How this was made
The 30-second read
Why it matters
The filing provides new clinical efficacy and durability details for REC-4881, an early efficacy snapshot for REC-1245, and balance-sheet runway extension into 2029 with operating expense guidance reiterated, which together can shift near-term valuation expectations.
Market read
Traders can reassess RXRX’s clinical trajectory and financing risk after the filing, with additional Q&A exposure via the scheduled Nov 3 webinar.
What to watch
The filing reiterates operating expense guidance rather than providing new cost leverage, and the REC-1245 update is early (Phase 1) with mixed confirmed versus unconfirmed responses.
Recursion reported third-quarter revenue of $18.6 million, reduced net loss and operating cash use, extended its cash runway into 2029, and reported positive REC-4881 and REC-1245 clinical updates.
Revenue increased to $18.6 million, supported by a $10.0 million Sanofi milestone, while research and development expense, general and administrative expense, net loss and operating cash use declined. The company also reported approximately $748.7 million of pro forma cash and reiterated 2026 cash operating expense guidance while introducing lower 2027 guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30GAAP | $18.55M | – | – |
| Operating revenue, three months ended September 30GAAP | $18.05M | – | – |
| Grant revenue, three months ended September 30GAAP | 497K | – | – |
| Cost of revenue, three months ended September 30GAAP | 10.04M | – | – |
| Research and development expense, three months ended September 30GAAP | $99.1M | – | – |
| General and administrative expense, three months ended September 30GAAP | $32.6M | – | – |
| Total operating costs and expenses, three months ended September 30GAAP | 141.7M | – | – |
| Loss from operations, three months ended September 30GAAP | −123.2M | – | – |
| Other income, net, three months ended September 30GAAP | 4.17M | – | – |
| Loss before income taxes, three months ended September 30GAAP | −119.0M | – | – |
| Income tax benefit (expense), three months ended September 30GAAP | −25K | – | – |
| Net loss, three months ended September 30GAAP | −$119.0M | – | – |
| Net loss per share of Class A, B and Exchangeable common stock, basic and diluted, three months ended September 30GAAP | $ (0.22) | – | – |
| Weighted-average shares (Class A, B and Exchangeable) outstanding, basic and diluted, three months ended September 30GAAP | 543,000,977 | – | – |
| Total revenue, nine months ended September 30GAAP | 32.69M | – | – |
| Operating revenue, nine months ended September 30GAAP | 31.66M | – | – |
| Grant revenue, nine months ended September 30GAAP | 1.03M | – | – |
| Cost of revenue, nine months ended September 30GAAP | 34.03M | – | – |
| Research and development expense, nine months ended September 30GAAP | 276.6M | – | – |
| General and administrative expense, nine months ended September 30GAAP | 108.7M | – | – |
| Total operating costs and expenses, nine months ended September 30GAAP | 419.3M | – | – |
| Loss from operations, nine months ended September 30GAAP | −386.6M | – | – |
| Net loss, nine months ended September 30GAAP | −$367.5M | – | – |
| Net loss per share of Class A, B and Exchangeable common stock, basic and diluted, nine months ended September 30GAAP | $ (0.69) | – | – |
| Net cash used in operating activities, three months ended September 30GAAP | −$77.41M | – | – |
| Net cash used in operating activities, nine months ended September 30GAAP | −$264.5M | – | – |
| Net cash used in investing activities, three months ended September 30GAAP | −407K | – | – |
| Net cash used in investing activities, nine months ended September 30GAAP | −2.70M | – | – |
| Net cash provided by financing activities, three months ended September 30GAAP | 83.14M | – | – |
| Net cash provided by financing activities, nine months ended September 30GAAP | 78.41M | – | – |
| Cash operating expense, nine months ended September 30non-GAAP | $271.5M | – | – |
2026 and 2027 outlook
- Note2026 cash operating expense guidance reiterated at less than $375 million
- Note2027 guidance of less than $360 million
- NoteBased on current operating plans with no additional financing, the Company expects its cash runway to extend into 2029.
- NoteThe Company anticipates initiating a registrational trial in the second half of 2027, pending ongoing FDA discussions.
- NotePreliminary dose expansion data in endometrial cancer are expected in the second half of 2027.
- NotePhase 1 clinical study expected to begin in 2027.
What drove it
- The increase in total revenue was driven primarily by the Company's collaboration with Sanofi, under which the Company achieved a $10.0 million milestone for an immunology small molecule program during the quarter.
- The decline in research and development expense was driven primarily by $22.8 million of in-process research and development costs related to the acquisition of full rights to REC-102 in the third quarter of 2025 that did not recur in the current period.
- The decrease in general and administrative expense was primarily driven by a decrease in infrastructure technology expenses and professional service costs.
- The decrease in cash used in operating activities was primarily driven by operating efficiencies across the company and working capital movements.
- Sanofi's option triggered a $10 million milestone payment to Recursion, bringing total upfront and milestone payments achieved from Sanofi under the collaboration to $144 million.
Concerns
- The company reported a net loss of $119.0 million for the third quarter of 2026.
- Total revenue consists primarily of revenue from collaboration agreements.
- REC-4881 registrational trial initiation is pending ongoing FDA discussions.
- REC-1245 data are from the Phase 1 dose-escalation portion of DAHLIA, and dose escalation will continue in other solid tumor indications.
- The company stated that interim, preliminary, or topline clinical data may change as more patient data become available and may not be predictive of final results.
What to watch
- Additional REC-4881 registrational-trial details, which the company said it will provide later this year.
- Initiation of the REC-4881 registrational trial in the second half of 2027, pending ongoing FDA discussions.
- Preliminary REC-1245 dose-expansion data in endometrial cancer expected in the second half of 2027.
- Sanofi's expected Phase 1 clinical study in 2027 for the optioned immunology development candidate.
- Potential additional Sanofi development-candidate and late-stage discovery milestones over the next 12 months.
- Cash operating expense relative to guidance of less than $375 million for 2026 and less than $360 million for 2027.
Balance sheet and cash flow
- Cash, cash equivalents and restricted cash were $561.5 million as of September 30, 2026.
- Cash and cash equivalents were $ 549,853 (in thousands) as of September 30, 2026, compared to $ 743,294 (in thousands) as of December 31, 2025.
- Restricted cash was 6,657 (in thousands) as of September 30, 2026, compared to 4,594 (in thousands) as of December 31, 2025.
- Restricted cash, non-current was 5,020 (in thousands) as of September 30, 2026, compared to 6,033 (in thousands) as of December 31, 2025.
- Including net proceeds of approximately $187.2 million from the Company's underwritten offering which completed on October 16, 2026, pro forma cash, cash equivalents and restricted cash were approximately $748.7 million.
- Notes payable and financing lease liabilities were 11,808 (in thousands) current and 93 (in thousands) non-current as of September 30, 2026.
- Net cash used in operating activities was $77.4 million for the three months ended September 30, 2026, compared to net cash used in operating activities of $117.4 million for the three months ended September 30, 2025.
- Cash, cash equivalents and restricted cash, end of period were $ 561,530 (in thousands) for the three months and nine months ended September 30, 2026.
Analysis
Third-quarter revenue was $18.6 million, compared to $5.2 million in the third quarter of 2025. The release attributed the increase primarily to a $10.0 million Sanofi milestone for an immunology small molecule program. Operating revenue was $ 18,055 (in thousands), while grant revenue was 497 (in thousands). For the nine months ended September 30, total revenue was 32,694 (in thousands), compared with 39,143 (in thousands) in the prior-year period, showing that the quarterly milestone did not offset lower year-to-date revenue.
The cost base declined across major operating lines. Research and development expense was $99.1 million, compared with $121.1 million, principally because $22.8 million of REC-102 in-process research and development costs recognized in the third quarter of 2025 did not recur. General and administrative expense was $32.6 million, compared with $41.6 million, due primarily to lower infrastructure technology expense and professional-service costs. Loss from operations was (123,176) (in thousands) and net loss was $ (119,036) (in thousands), compared with $ (162,253) (in thousands) a year earlier.
Liquidity improved following the October financing. Cash, cash equivalents and restricted cash were $561.5 million as of September 30, 2026, and pro forma cash, cash equivalents and restricted cash were approximately $748.7 million after approximately $187.2 million in net proceeds from the October 16, 2026 underwritten offering. Net cash used in operating activities was $77.4 million for the quarter, compared with $117.4 million in the prior-year quarter. Nine-month cash operating expense was $271.5 million, compared with $323.2 million, and management expects cash runway to extend into 2029 based on current operating plans with no additional financing.
The clinical and partnership updates were central to the release. In REC-4881, 87% of patients had a reduction in total polyp burden after 12 weeks of treatment, with a 47% median reduction, and 85% of evaluable patients remained below baseline 12 weeks after stopping treatment. REC-1245 produced three partial responses per RECIST 1.1 criteria, including 2 confirmed and 1 unconfirmed, at doses of 45 mg once daily or higher, with a 91.7% disease control rate at those doses. Sanofi's option of a development candidate generated a $10 million milestone, while Recursion plans to focus resources on selected internal programs and high-impact partnerships.
The company reiterated 2026 cash operating expense guidance of less than $375 million and issued 2027 cash operating expense guidance of less than $360 million. Operational milestones to follow include additional REC-4881 registrational-trial detail later this year, an anticipated REC-4881 registrational-trial initiation in the second half of 2027 pending FDA discussions, preliminary REC-1245 endometrial-cancer expansion data in the second half of 2027, and the expected start of Sanofi's Phase 1 study in 2027.
Management, verbatim
To pioneer a new blueprint for making medicines with AI, we believe you have to tie together three core capabilities in one engine: uncover novel biology, design differentiated molecules against challenging targets, and generate clinical evidence that matters for patients. The new TUPELO data are important clinical evidence, with REC-4881 showing deep polyp burden reductions across the upper and lower GI tract, including larger, higher-risk polyps, and reductions that persist after treatment stops. REC-1245 is an encouraging early example of that engine coming together within a single program, from biological insight surfaced by our platform to molecule design and now early clinical signals in heavily pretreated patients.
Najat Khan, Ph.D., President and Chief Executive Officer of Recursion
Beyond our own pipeline, Sanofi has optioned a potential first-in-class molecule against a challenging dual target, while Genentech has advanced an unexplored neuroscience target from our maps. These are different programs, but they are outputs of the same AI-native engine, providing evidence of repeatability. We will keep concentrating capital where the evidence is strongest and turning innovation into impact for patients who are waiting.
Najat Khan, Ph.D., President and Chief Executive Officer of Recursion
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- non-GAAP net income or loss
- non-GAAP earnings per share
- free cash flow
- dividends
- share repurchases
- prior-quarter comparisons for reported operating metrics
- revenue guidance
- gross margin guidance
- tax rate guidance
- previous-release outlook for comparison
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Recursion furnished an SEC 8-K with Q3 2026 financial results and clinical/pipeline updates, including new TUPELO Phase 2 data for REC-4881 and a Phase 1 update for REC-1245, plus a Sanofi option and board chair appointment.
Ticker impact
Recursion (RXRX) reported Q3 2026 results, extended cash runway into 2029, and presented new positive Phase 2 TUPELO data for REC-4881 and REC-1245 updates.
Shares may face upward pressure as investors price in improved probability of continued clinical progress and lower dilution risk from the extended cash runway.
The filing includes specific efficacy and durability percentages for REC-4881, a REC-1245 response update, and explicit cash runway and operating expense guidance reiterated into 2029.
Market effects
Reinforces investor appetite for AI-enabled drug discovery platforms with credible clinical readouts, potentially supporting the broader clinical-stage biotech sentiment.
Limited direct regional spillover beyond US-listed biotech risk appetite.
Sanofi optioning a development candidate highlights continued global pharma interest in partnered early-stage assets.
Counterpoint
Durability and safety are encouraging, but Phase 2 data in FAP may still face translational and endpoint risk before any definitive regulatory path.
Key entities
- companyRecursion Pharmaceuticals, Inc.
Nasdaq-listed clinical-stage company reporting Q3 2026 results, extending cash runway, and highlighting positive REC-4881 and REC-1245 clinical data.
- clinical_programREC-4881
Oral MEK1/2 inhibitor in TUPELO Phase 1b/2 for FAP, with new expanded adult population data and durability off treatment.
- clinical_programREC-1245
Program with Phase 1 monotherapy activity update including confirmed partial responses and disease control rate.
- partnerSanofi
Optioned a development candidate from Recursion’s collaboration, with Phase 1 expected to begin in 2027.
- executiveFred Hassan
Appointed Chair of the Board effective October 31, 2026.
