RXRX - Recursion Pharmaceuticals: More Of A TechBio Industrializing Drug Discovery

2024-06-24 03:36:09 ET

Summary

• This thesis makes the case for an investment in Recursion Pharmaceuticals operating as a TechBio which "industrializes" the process of drug discovery in contrast to a typical biotech.
• The difference between TechBio and biotech may appear subtle, but is an important one that may have motivated Nvidia to invest $50 million.
• Based on the value of its platform and data assets, it is a buy with a 48.5% upside potential.
• Still, just like other innovators in the biotechnological field, which do not yet have a drug in the commercial phase, it comes with risks of cash burn and share dilution.
• Watch out for the two catalysts that can produce an upside during the second half of this year.

Recursion Pharmaceuticals ( RXRX ) is a clinical-stage biotechnology company that gained fame in July 2023 when it benefited from a $50 million investment by NVIDIA (NASDAQ: NVDA ). As a result, the market cap doubled to around $3.2 billion as shown below, but, after some ups and downs, the stock has since retrenched and is trading at less than $9....

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