Recursion Announces Sanofi Options Potential First-in-Class Immunology Development Candidate from Their Collaboration

Sanofi will fund further development, while Recursion retains eligibility for additional milestones and royalties.

Rhea-AI Summary

Recursion Pharmaceuticals (NASDAQ: RXRX) announced that Sanofi optioned the first development candidate from their research collaboration, triggering a $10 million milestone payment. Total upfront and milestone payments received under the collaboration reached $144 million. The oral small molecule targets two targets implicated in inflammatory disease and has entered Sanofi’s development pipeline.

A phase 1 clinical study is currently planned to begin in 2027. Sanofi will fund and lead further development and commercialization, ending Recursion’s operational requirements for the candidate. Recursion remains eligible for more than $300 million in additional program milestones and double-digit royalties on net product sales if approved. The collaboration has achieved six progress-based milestones across five programs. The $10 million payment will be recognized as revenue in the third quarter of 2026.

7 points · 0 major

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Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.$10 million milestone payment triggered by Sanofi’s option will be recognized as third-quarter 2026 revenue.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Sanofi-funded development and commercialization end Recursion’s operational requirements for the candidate; all future payments will result in profit.
• Moderate point. Forward-looking: it has not happened yet and may not happen.More than $300 million in additional program milestones remain available to Recursion. 15% of market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.Double-digit royalties on net product sales are available to Recursion if approved.
• Minor point. Forward-looking: it has not happened yet and may not happen.Phase 1 clinical study is currently planned to begin in 2027.

2 minor points

• Minor pointSix progress-based milestones across five programs have been achieved under the collaboration.
• Minor point. Forward-looking: it has not happened yet and may not happen.Other collaboration programs could reach development-candidate and other progress-based milestones over the next 12 months.

Negative

• None.

News Explained

Recursion says all future payments under the program will result in profit to the company, while future milestone payments remain conditional on progress and sales royalties on successful commercialization.

Key Figures

Milestone payment: $10 million Collaboration payments received: $144 million Additional program milestones: More than $300 million +3 more

Milestone payment

$10 million

Triggered by Sanofi's candidate selection; to be recognized as Q3 2026 revenue

Collaboration payments received

$144 million

Total upfront and milestone payments received to date

Additional program milestones

More than $300 million

Further milestones Recursion is eligible to receive under the program

Royalties

Low double-digit royalties

On net product sales if successfully commercialized

Phase 1 trial timing

2027

Clinical trials are expected to begin; Sanofi will fund and lead further development

Collaboration progress milestones

Six milestones across five programs

Progress-based milestones achieved across the collaboration

Key Terms

phase 1 clinical trials

1 terms

phase 1 clinical trials medical

"expected to enter phase 1 clinical trials in 2027"

Phase 1 clinical trials are the first tests of a new drug or medical treatment in humans, done with a small number of volunteers to check safety, side effects, and how the body handles the treatment (such as dosing). For investors, phase 1 is an early de‑risking milestone: successful results let a program advance to larger trials and reduce uncertainty, while safety problems or poor dosing results can sharply affect a drug’s value and development timeline — think of it as the first road test of a prototype.

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Potential first-in-class dual targeting inhibitor oral small molecule to enter Sanofi’s development pipeline, with phase 1 clinical study currently planned to begin in 2027

Salt Lake City, UT, Oct. 15, 2026 (GLOBE NEWSWIRE) -- Recursion Pharmaceuticals, Inc. (“Recursion”) (NASDAQ: RXRX), a leading clinical-stage company pioneering AI-enabled drug discovery and development decoding biology to radically improve lives, today announced that Sanofi has optioned the first development candidate from the two companies’ multi-program research collaboration.

The option triggered a $10 million milestone payment to Recursion, bringing total upfront and milestone payments received from Sanofi under the collaboration to $144 million; Recursion is eligible for more than $300 million in additional milestones under the program, with double digit royalties on net product sales, if approved.

“The most important test of any technology platform in drug discovery is whether it can translate into differentiated medicines,” said Najat Khan, Ph.D., President and Chief Executive Officer of Recursion. “Together with Sanofi, we tackled a difficult design problem against a dual target product profile with high potential and delivered a molecule that Sanofi has now selected for its development pipeline. With additional programs advancing across our collaboration, this milestone is another important demonstration of how our platform can translate computational capabilities into differentiated medicines — and do so repeatedly.”

The potential first-in-class oral small molecule was designed to achieve a differentiated profile against a challenging dual target implicated in inflammatory disease. Optimizing for this target pair required navigating complex and competing chemistry constraints to achieve the desired balance of drug-like properties. The candidate was delivered by the combination of Recursion’s integrated AI-enabled drug design platform and small-molecule chemistry capabilities with Sanofi’s deep expertise in drug discovery and immunology. Recursion applied multiple computational design approaches across iterative cycles of prediction, chemical design, synthesis, and experimental validation to rapidly explore and optimize a complex chemical space.

"By combining Sanofi's drug discovery and clinical and translational knowledge in immunology with Recursion's AI-driven platform, we were able to move with speed and precision in a space where that balance is notoriously hard to achieve,” said Alyssa Johnsen, Therapeutic Area Head, Development, Immunology & Inflammation, Sanofi. “This new development candidate has potential to deliver a differentiated oral medicine with highly selective dual targeting that could be a meaningful advance for people living with inflammatory diseases who still lack adequate treatment options."

The candidate has now been added to Sanofi’s development pipeline and is expected to enter phase 1 clinical trials in 2027, with Sanofi funding and leading further development and commercialization to advance the program toward patients.

Building a growing portfolio through the Recursion-Sanofi collaboration

The Recursion-Sanofi collaboration was established to discover and advance a portfolio of potentially first- and best-in-class small molecule medicines across immunology and oncology by combining Sanofi’s deep therapeutic-area and drug-development expertise with Recursion’s integrated capabilities across biology, AI-enabled molecular design and chemistry.

 With the first development candidate optioned, the collaboration has now achieved six progress-based milestones across five programs. Sanofi’s selection of the development candidate triggered a $10 million milestone payment to Recursion, bringing total upfront and milestone payments under the collaboration to $144 million to date.

Recursion remains eligible for more than $300 million in additional milestones under the program, with an average of low double-digit royalties on net product sales if successfully commercialized. The $10 million milestone payment will be recognized as revenue in the third quarter of 2026, and ends Recursion’s operational requirements related to this candidate, with all future payments resulting in profit to Recursion. 

Additional programs across the collaboration continue to advance. Over the next 12 months, other programs in the joint portfolio have the potential to reach development candidate and other progress-based milestones.

About Recursion

Recursion (NASDAQ: RXRX) is a leading clinical-stage company pioneering AI-enabled drug discovery and development decoding biology to radically improve lives. Recursion is advancing a portfolio of differentiated investigational medicines across its wholly owned and partnered pipeline in oncology, rare disease, neuroscience, immunology, and other therapeutic areas with significant unmet need. Enabling its mission is the Recursion OS, an AI-native, end-to-end drug discovery and development platform integrating biology, chemistry, and clinical development into a unified intelligence system. Powered by proprietary multimodal data, purpose-built AI models, and bilingual teams fluent in both science and AI, the Recursion OS is designed to translate complex science into medicines that matter — faster, better, and at scale — for patients who are waiting.

Recursion's platform infrastructure is anchored in Salt Lake City, Utah and Milton Park, Oxfordshire, where its automated biology and chemistry laboratories generate proprietary data at industrial scale. Recursion also maintains offices in New York, Montréal, and London, three global hubs for talent and leadership at the intersection of AI and scientific innovation.

Forward-Looking Statements

This document contains information that includes or is based upon "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, those regarding the expected timing of the initiation of phase 1 clinical trials for the development candidate optioned by Sanofi; the potential of such development candidate, including its potential to be a first-in-class, differentiated oral medicine for inflammatory diseases; Sanofi’s funding and leadership of further development and commercialization of such development candidate; Recursion’s eligibility to receive future milestone payments and royalties under its collaboration with Sanofi, and the expected timing of revenue recognition for the $10 million milestone payment; the potential for additional programs in the collaboration to reach development candidate and other progress-based milestones over the next 12 months; the ability of Recursion’s platform to repeatedly translate computational capabilities into differentiated medicines; and all other statements that are not historical facts. Forward-looking statements may or may not include identifying words such as "plan," "will," "may," "could," "should," "expect," "anticipate," "intend," "believe," "estimate," "project," "designed to," "potential," "continue," and similar terms. These statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements, including but not limited to: challenges inherent in pharmaceutical research and development, including the timing and results of preclinical and clinical programs, where the risk of failure is high and failure can occur at any stage prior to or after regulatory approval due to lack of sufficient efficacy, safety considerations, or other factors; our ability to leverage and enhance our drug discovery platform; the performance and limitations of our artificial intelligence and machine learning models and the data on which they are trained; our reliance on third parties, including collaborators, contract research organizations, and manufacturers; our ability to initiate clinical trials and enroll patients on expected timelines; competition from other therapies and platforms; our ability to obtain financing for development activities and other corporate purposes; the success of our collaboration activities and our collaborators' discretion over option exercises, program advancement, and funding, including the risk that Sanofi may delay, deprioritize, or discontinue development of the optioned development candidate; our ability to obtain regulatory approval of, and ultimately commercialize, drug candidates; our ability to obtain, maintain, and enforce intellectual property protections; cyberattacks or other disruptions to our technology systems; our ability to attract, motivate, and retain key employees and manage our growth; inflation and other macroeconomic issues; and other risks and uncertainties such as those described under the heading "Risk Factors" in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date of this document and are based on management's current estimates, projections, and assumptions, and Recursion undertakes no obligation to correct or update any such statements, whether as a result of new information, future developments, or otherwise, except to the extent required by applicable law.

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FAQ

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How much does Recursion receive from Sanofi’s development-candidate option?

Sanofi’s option triggered a $10 million milestone payment to Recursion, bringing total upfront and milestone payments received under the collaboration to $144 million. Recursion remains eligible for more than $300 million in additional milestones under this program.

When will the Recursion-Sanofi immunology candidate enter clinical trials?

A phase 1 clinical study is currently planned to begin in 2027. The candidate has entered Sanofi’s development pipeline, and Sanofi will fund and lead further development and commercialization.