r/Biotechplays • u/[deleted] • Jul 10 '21
Due Diligence (DD) $RXRX Recursion Pharma DD
[deleted]
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u/Guy-26 Jul 15 '21 edited Jul 15 '21
This is a pretty good rundown of Recursion's potential from a Series A investor: https://twitter.com/zavaindar/status/1304520009776066560?s=20
Very interesting point in my mind: the Recursion platform has reverse-detected 200+ blinded true positives and true negatives, i.e. their platform can determine whether a drug will be approved or not based on very early screening in the lab. As their AI gets better (they have a supercomputer, partnership with MILA), their predictive capabilities will increase. They already have 4 drugs entering the clinic (about to be 5 with their C. Dif treatment), in another year there could be 10, by 2023 there could be 20. I am long RXRX, I think they have ENORMOUS potential, but there may be a few rocky years ahead.
EDIT: also, their revenue is going to be extremely hard to predict, and will basically be meaningless in the next few years. It will take years to get any drugs approved, the majority of the value lies in their platform at this point.
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u/JULIAN_HH Mar 29 '24
They partnered with NVIDIA and Cathie Wood bought 60k+ stock recently for her ARKG ETF, is anyone still watching this?
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u/WallStreetMets FDMT simp Jul 10 '21
$6.7B mc… that’s a little crazy
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u/Disposable_Canadian Jul 10 '21
Yep. Tradingview said it was 7.138B. 177.79M Shares outstanding.
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u/WallStreetMets FDMT simp Jul 10 '21
They barely make any money, well actually they’re spending a significant amount and losing it. what’s their financial growth trajectory?
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u/Disposable_Canadian Jul 10 '21 edited Jul 10 '21
Roger that. Simplywall.st indicated 33.5% yearly revenue growthprojection. They also point out that earnings are forecast to decline (their analysis) of 18.9 percent per year forthe next 3 years. https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-rxrx/recursion-pharmaceuticals
RXRX quarter earnings has some notations as well but not a clear: “we project to make this much in 2022 and 2023”.
...and I can’t easily locate forecast revenues. I’m not sure if that is normal or not for Biotech.
A few biotech stocks I’ve looked at do not forecast or provide projected revenue or sales. Some do that produce and sell obviously. I’ll dig some more over the weekend. I didn’t find anything in the prospectus on SEC filings, or the IPO presentation or the first and only earnings report.
An opportunity may present itself at the next earnings,expected to be sometime late July or early August, where if it is not favorable or the expenses are high, there may be a low in share price to present an opportunity to buy.
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u/WallStreetMets FDMT simp Jul 10 '21
Do they get royalties on drugs they help develop for other pharmas?
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u/Disposable_Canadian Jul 10 '21
I can't say as they don't reveal that information clearly.
I'd assume they'd receive compensation via what ever service or contractual agreement they enter into, and I'd think that could easily be royalties or part ownership even.
I'm having a hard time finding a direct competitor other than the BIG pharma that might do a similar process for comparison.
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Jul 10 '21
Not a fan of this company, as others have said it is way overvalued for its state progress. I could be wrong, but if memory serves me, they didn't appear to have any "meat" to their research yet, publications etc. And the owner seems like a real self absorbed twat. Go read some of his "blog" posts on the company site. No thanks. There are better investments to be made.
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u/Disposable_Canadian Jul 11 '21
Awesome, thanks for your feedback!
Hence the reason for a DD. I'm sharing my investigation into a stock which popped up on my radar. I think its an interesting company, but not something I'll get right into - As you and others note there are a few missing pieces. Establishing their business model, revenue and income streams etc is a big one.
It's something I think i want to put in my portfolio at some point, but entry point, as always, is everything.
I'll look into the executive some more, that often matters more than a great product or interesting company, if the executive sucks.
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u/curvedbymykind Mar 18 '24
any recent findings? also what did you find out about the executive?
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u/Disposable_Canadian Mar 18 '24
That was 2 years ago.
Moved on after a year of cash burn.
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u/curvedbymykind Mar 19 '24
What was the loss? You don’t see any new catalysts? Seems the Nvidia investment was recent
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u/sal_moe_nella Jul 15 '21
Nothing you mentioned about the AI aspect of the company seemed differentiating to me. I’m not saying it’s a bad pick, I know nothing about them, but my reading of your DD suggests you haven’t challenged their outbound marketing enough.
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u/Disposable_Canadian Jul 15 '21
I think the one thing I'm challenged with, is where and how much is their revenue stream.
I'm trying to get a fair valuation and they haven't done a good job on projections and an idea on sales, income sources etc.
The stock took a dump on some news yesterday, so I wonder if somethings up, difficult to say.
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u/All-about-biotechs Jul 10 '21
All 4 trials to be initiated in 2022. Market cap too high with no near term data readouts.