Recursion Pharmaceuticals, Inc. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report; the filing does not provide a clear standalone fourth-quarter income statement summary. Recursion is a clinical-stage TechBio company with no approved products and no product-sales revenue. Its revenue is primarily from research and development collaborations.
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Total revenue | $39.8 million | $10.2 million |
| Operating loss | $245.7 million | $182.8 million |
| Net loss | $239.5 million | $186.5 million |
| Net loss per share, basic and diluted | $1.36 | $1.49 |
| Cash used in operating activities | $83.5 million | $158.6 million |
- Revenue increased 292% year over year, primarily reflecting the Roche/Genentech collaboration. Operating revenue was $39.7 million; grant revenue was $0.2 million.
- Cost of revenue was $48.3 million, exceeding operating revenue. Research and development expense was $155.7 million, up 15%; general and administrative expense was $81.6 million, up 42%.
- At year-end, cash and cash equivalents were $549.9 million, with an additional $9.2 million of restricted cash and no investments reported. Management said available cash and cash equivalents were expected to fund operations for at least 12 months.
- Debt outstanding was $0.6 million, primarily tenant-improvement financing. Future lease commitments were $68.5 million, plus $11.0 million for leases executed but not yet commenced. Purchase obligations totaled $68.0 million, including $49.8 million expected within 12 months.
- Shareholders’ equity was $485.8 million; accumulated deficit was $639.6 million. The October 2022 private placement raised $143.7 million net by issuing 15.3 million Class A shares.
Material changes versus FY 2021
- Net loss widened by $53.0 million, while operating loss increased by $63.0 million. Higher clinical development costs and company growth contributed to expense increases.
- Operating cash use declined by $75.1 million, largely because Recursion received Roche’s $150.0 million upfront payment. The upfront cash is not equivalent to recognized revenue: $150.0 million was recorded as unearned revenue, and total unearned revenue was $127.0 million at year-end.
- Cost of revenue rose to $48.3 million as partnership work was presented separately from research and development costs; platform R&D spending fell partly because spending was reallocated to cost of revenue.
- Interest income rose to $6.3 million, supporting other income of $6.3 million, compared with other expense of $3.7 million in 2021.
Business, outlook and key risks
- Recursion reported five clinical trials initiated in 2022. Its programs include REC-994 for cerebral cavernous malformation, REC-2282 for NF2-mutated meningiomas, REC-4881 for familial adenomatous polyposis, and REC-3964 for C. difficile infection; REC-4881 is also being prepared for a cancer study. The filing describes four programs in active clinical studies and a fifth planned for a later trial.
- Management expected REC-3964 safety and pharmacokinetic data in the second half of 2023, REC-994 top-line data in the second half of 2024, and an REC-2282 Phase 2 interim safety analysis in 2024. A Phase 1b/2 study of REC-4881 in selected cancers was planned for early 2024. These are forward-looking expectations, not reported results.
- Management said expenses and operating losses were expected to remain flat or increase moderately over the near term. The company expects continued losses and anticipates needing additional financing; no product-revenue outlook or profitability target is provided.
- Partnerships with Roche/Genentech and Bayer are important revenue and potential milestone sources. Payments beyond upfront and research funding depend on performance, partner options, and later development or commercial milestones; collaborators may terminate or deprioritize programs.
- Principal risks include uncertain clinical and regulatory outcomes, patient enrollment and trial delays, reliance on third-party manufacturers and suppliers, future capital needs and potential dilution, concentration of collaboration revenue, competition, and cybersecurity or data-platform disruptions.
- Unusual items included a $2.8 million fixed-asset impairment and the $150.0 million Roche upfront payment. No material litigation was reported. The auditor issued unqualified opinions on the financial statements and internal control over financial reporting.
Most important facts for investors to verify
- Current cash, operating cash burn, and whether subsequent spending and commitments remain consistent with management’s stated runway.
- Clinical-trial enrollment, safety findings, readout timing, and any changes to the stated program plans.
- Roche/Genentech and Bayer collaboration progress, revenue recognition, unearned revenue conversion, and whether option or milestone payments are achieved.
- How partnership costs and revenue evolve, including the effect of cost of revenue exceeding operating revenue in FY 2022.
- Share issuance, equity compensation, and other potential dilution, alongside lease and purchase obligations.