$RXRX earnings report

This Item 2.02 filing is a collaboration-development update rather than a complete quarterly earnings release. Sanofi optioned the first development candidate from the companies’ multi-program research collaboration, triggering a $10 million milestone payment. Recursion states that this payment will be recognized as revenue in the third quarter of 2026, but the filing does not report total third-quarter revenue or any other complete quarterly financial results.

The option raises total upfront and milestone payments received from Sanofi under the collaboration to $144 million. The companies have achieved six progress-based milestones across five programs. Recursion remains eligible for more than $300 million in additional milestones for the optioned program, along with an average of low double-digit royalties on net product sales if it is successfully commercialized.

The operational structure changes favorably for Recursion on the optioned program: Sanofi will fund and lead further development and commercialization, while the option ends Recursion’s operational requirements related to this candidate. Recursion states that all future payments related to the candidate will result in profit to Recursion. The candidate has been added to Sanofi’s development pipeline and is expected to enter phase 1 clinical trials in 2027.

The milestone supports the stated utility of Recursion’s platform in progressing a complex dual-target small-molecule design program. The company attributes delivery of the candidate to iterative computational prediction, chemical design, synthesis, and experimental validation, combined with Sanofi’s drug-discovery and immunology expertise. The filing also identifies further potential milestone activity, stating that other joint-portfolio programs could reach development-candidate and other progress-based milestones over the next 12 months.

The principal limitation is that the filing provides no total revenue, expenses, profitability, cash balance, cash flow, or balance-sheet data for the third quarter of 2026. The future economic value remains contingent on development progress, clinical outcomes, regulatory approval, commercialization, and Sanofi’s decisions on funding and program prioritization.

Second-quarter revenue was $7.7 million, compared to $19.2 million in the second quarter of 2025. The company attributed lower Roche and Genentech revenue recognition to successful completion of certain project phases in the prior period. The result underscores that reported collaboration revenue can vary with the timing of project milestones and completion phases.

Research and development expenses decreased to $89.6 million from $128.6 million. Recursion cited lower platform costs resulting from the timing of Tempus record purchases as a primary driver. The company also reduced 2026 cash operating expense guidance to <$375 million from <$390 million, placing expense control alongside continued pipeline development.

Cash, cash equivalents and restricted cash were $556.8 million as of June 30, 2026, compared with $753.9 million as of December 31, 2025. Management stated that, based on current operating plans with no additional financing, its cash runway is expected to extend into early 2028. No operating cash flow, free cash flow, debt, repurchase, or dividend data were included in the supplied text.

Operationally, Genentech exercised the first Validated Target Option in the neuroscience collaboration and advanced a previously unexplored target into a small molecule early discovery program. Recursion also reported an IND clearance for REC-7735 and expects to initiate its Phase 1/2 ZINNIA study in the second half of 2026. Near-term execution points include the expected REC-4881 registrational-path update in 2H26, additional REC-4881 Phase 2 data in November 2026, REC-7735 trial initiation, and additional REC-1245 Phase 1 data in 2H26.