AI Biotech Recursion Commits $88M to a Pair of Drug Discovery Acquisitions

AI Biotech Recursion Commits M to a Pair of Drug Discovery Acquisitions
AI Biotech Recursion Commits M to a Pair of Drug Discovery Acquisitions

Recursion Pharmaceuticals, a drug discovery company that applies artificial intelligence to biology, is shoring up its technology platform by buying two startups that bolster its chemistry capabilities.

Salt Lake City-based Recursion announced on Monday a $40 million agreement to acquire Cyclica and a $47.5 million deal for Valence—both of them stock transactions. The acquisitions are expected to close by the end of June.

Since its founding a decade ago, Recursion has described itself as “a biology-first company.” Its technology platform uses artificial intelligence to interrogate biology, gleaning new understanding about genes and cell types that informs what targets to go after with potential new drugs.

CEO Chris Gibson said that to date, the company has analyzed more than 3 trillion biological and chemical relationships. But the progress in understanding biology has outpaced the chemistry side of the equation. Recursion invested in the development of its own chemistry tools, but concluded that building everything from scratch might not be the best way, Gibson said. Cyclica and Valance are among the hundreds of companies developing new drug discovery technologies, and Recursion identified both of them having capabilities that could ease its chemistry bottlenecks.

“We got to test their tools,” Gibson said, speaking by phone from Cyclica’s offices in Toronto. “If we can bring this in house, we can accelerate so much of our work.”

Cyclica’s AI technology, called MatchMaker, predicts how a ligand interacts with proteins in the proteome, yielding insight that guides the discovery of new small molecule drugs. A second Cyclica technology, Pareto Optimal Embedding Model (POEM), also makes AI predictions using molecular fingerprints to describe molecules. When the acquisition closes, Cyclica’s technologies will be integrated into Recursion’s tech platform, where they will be applied to the Recursion pipeline as well as its drug research partnerships with Roche and Bayer, Gibson said.

Montreal-based Valence, which comes from the deep learning research institute Mila, brings to Recursion generative AI capabilities. The company’s technology is used to identify and design drug candidates using datasets that are too small or noisy for traditional for traditional computational methods. Gibson said Valence will operate as a semi-autonomous research group.

Both Cyclica and Valence come with some small molecules in development. Gibson said those programs will be evaluated in the coming weeks and months, but the main reason for both acquisitions was for the AI technologies and the teams that built them. Cyclica and Valence together bring about 60 new employees to Recursion.

“The teams that developed the technology are most important to me,” Gibson said. “That’s not where our expectations end. We expect them to build new and exciting software.”

Photo: nespix, Getty Images

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