Cautious Optimism for Recursion Pharmaceuticals Amid Promising REC-994 Data and Awaited Pipeline Updates

Analyst Alec Stranahan of Bank of America Securities maintained a Hold rating on Recursion Pharmaceuticals (RXRX – Research Report), retaining the price target of $10.00.

Alec Stranahan has given his Hold rating due to a combination of factors affecting Recursion Pharmaceuticals. One key aspect of his evaluation is the recent data from the phase 2 SYCAMORE study for REC-994, which showed promising results in safety and functional outcomes. However, the data mainly reflects the earliest stages of Recursion’s platform, with more potential seen in other assets like REC-1245 and REC-3964.
Despite the positive indications for REC-994, Stranahan is cautious and awaits further updates across Recursion’s pipeline over the next 12-18 months to better assess the overall potential of their AI drug discovery platform. The proof-of-concept for disease impact is acknowledged, but the patient-reported outcomes did not show significant differences, leading to a more reserved outlook. Thus, while the current data lays a decent foundation for future regulatory discussions, it does not yet warrant a more bullish rating than Hold.