Can RXRX's Pipeline Expansion Strengthen Its Long-Term Growth Outlook?

Recursion Pharmaceuticals RXRX uses an AI-driven drug discovery platform, Recursion Operating System (OS), to identify and develop novel therapies across its pipeline. It is advancing several clinical-stage programs, with REC-4881 emerging as its most advanced internal candidate and multiple oncology assets providing additional pipeline diversification.

REC-4881, an allosteric MEK1/2 inhibitor, is being evaluated in a phase Ib/II TUPELO study for familial adenomatous polyposis (FAP), a rare inherited disorder characterized by the development of numerous colorectal polyps. Earlier clinical data showed rapid and durable reductions in polyp burden, which Recursion described as the first clinical validation of the Recursion OS. RXRX has initiated discussions with the FDA on a potential registrational pathway, while additional phase II safety and efficacy data from the TUPELO study are expected in November 2026.

Beyond REC-4881, Recursion is advancing several oncology candidates, including REC-1245 for biomarker-enriched solid tumors and lymphoma, REC-617 for advanced solid tumors and REC-3565 for B-cell malignancies, all of which are currently undergoing early-stage development. REC-4539, an LSD1 inhibitor, also entered clinical-stage development for solid tumors, with potential applicability in hematologic malignancies. Meanwhile, REC-7735, an AI-designed PI3Kα H1047R inhibitor, has received clinical-study clearance and is expected to enter a phase I/II study in the second half of 2026 for selected PIK3CA H1047R-mutant solid tumors, adding another potential catalyst to the pipeline.

Recursion is also advancing REC-102, an ENPP1 inhibitor for hypophosphatasia, following its acquisition of full rights to the program from Rallybio. The oral candidate is designed as a potential disease-modifying treatment for hypophosphatasia and expands Recursion's presence in rare diseases. In addition, Genentech (a wholly owned subsidiary of Roche) recently advanced the first neuroscience target from its collaboration with Recursion into an early discovery program, providing another potential validation of RXRX’s proprietary platform. With multiple clinical programs advancing and several potential catalysts ahead, Recursion’s expanding pipeline could strengthen its long-term growth prospects.

RXRX Faces Competitive Pressure in the TechBio Industry

In the TechBio space, Relay Therapeutics RLAY and Schrödinger SDGR are emerging as strong competitors to Recursion Pharmaceuticals, using computationally driven platforms to discover and develop novel therapies.

RLAY is currently evaluating its lead candidate, zovegalisib (RLY-2608), a mutant-selective PI3Kα inhibitor, in the phase III ReDiscover-2 study in combination with fulvestrant in previously CDK4/6-treated, PIK3CA-mutated HR+/HER2- advanced breast cancer. It is also planning to initiate a separate late-stage frontline breast cancer study of the candidate, subject to regulatory feedback, while the phase I/II ReInspire study is evaluating zovegalisib in PIK3CA-driven vascular anomalies. Relay Therapeutics is also developing RLY-8161, an NRAS-selective inhibitor, in a phase I/II study for NRAS-mutant melanoma and other solid tumors. In addition, the company is advancing a preclinical, non-inhibitory chaperone program for Fabry disease, as well as early-stage discovery programs across both precision oncology and genetic diseases.

Schrödinger’s lead proprietary pipeline consists of SGR-1505, a MALT1 inhibitor in phase I for relapsed/refractory B-cell malignancies, and SGR-3515, a Wee1/Myt1 inhibitor undergoing phase I development for advanced solid tumors. Both programs were discovered using Schrödinger's computational capabilities, with SGR-3515 showing preliminary clinical activity and SGR-1505 demonstrating encouraging activity in B-cell malignancies in earlier updates. SDGR plans to complete its ongoing early-stage studies while seeking strategic partners to advance SGR-1505 and SGR-3515 beyond phase I.

RXRX’s Stock Price, Valuation & Estimate Movements

Year to date, RXRX shares have lost 17.4% against the industry’s 9.7% growth. During the same time frame, Recursion has also underperformed the S&P 500 and the overall medical sector, as seen in the chart below.

RXRX Mixed Stock Performance

Image Source: Zacks Investment Research

Recursion is trading at a discount to the industry, as seen in the chart below. Going by the price/book value ratio, the company’s shares currently trade at 1.97, which is less than 3.97 for the industry. The stock is trading significantly below its five-year mean of 3.22.

RXRX Stock Valuation

Image Source: Zacks Investment Research

Loss estimates for 2026 have narrowed from 99 cents per share to 92 cents over the past 30 days. During the same time frame, RXRX’s 2027 loss per share estimates have narrowed from 96 cents to 92 cents.

RXRX Estimate Movement

Image Source: Zacks Investment Research

Recursion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research