Exscientia, acquired by Recursion with investment from NVIDIA, saw its stock price surge by 16%
Artificial intelligence-driven drug development company Recursion Pharmaceuticals has agreed to acquire competitor Exscientia in an all-stock deal worth $688 million. The transaction is expected to be completed in early 2025, providing the combined entity with approximately $850 million in cash for its operations over the next three years. After the completion of the deal, Recursion shareholders will own approximately 74% of the merged company, while Exscientia shareholders will own the remaining shares
According to the Zhītōng Finance APP, artificial intelligence-driven drug development company Recursion Pharmaceuticals (RXRX.US) has agreed to acquire smaller competitor Exscientia (EXAI.US) in a full stock transaction valued at $688 million. Recursion leverages AI technology to empower new drug development, with supporters including chip maker NVIDIA (NVDA.US). Following the announcement, as of the time of writing, Exscientia has risen by 16%, while Recursion has risen by 2%.
Under the agreement, Exscientia shareholders will receive 0.7729 shares of Recursion Class A common stock for each share of common stock held. Some shares will be paid in cash.
This transaction is expected to be completed in early 2025, providing the combined entity with approximately $850 million in cash for its operations over the next three years. After the completion of the transaction, Recursion shareholders will own approximately 74% of the merged company, with Exscientia shareholders holding the remaining shares.
The combined Recursion will be led by co-founder and CEO Chris Gibson, while Exscientia's interim CEO David Hallett will assume the role of Chief Scientific Officer.
In July 2023, Recursion received a $50 million investment from chip maker NVIDIA, fueling the surge in AI-driven biopharmaceutical stocks. Its peers Abcellera Biologics (ABCL.US), Absci Corporation (ABSI.US), Exscientia, and Schrodinger (SDGR.US) all saw gains in response.
Earlier this year, the company also launched a NVIDIA supercomputer named BioHive-2, which helps accelerate the drug discovery process.
Currently, major pharmaceutical companies are doubling down on AI to advance drug development, aiming to quickly find clinical trial patients or reduce the number of individuals needed to test drugs. This approach can accelerate the drug development process and potentially save millions of dollars.
Recursion's Chief R&D Officer Najat Khan stated, "Using an end-to-end approach from biology to chemistry, combining Recursion and Exscientia is highly complementary. This will enable better and faster drug production, which is what we are striving to achieve."