Recursion to buy AI rival Exscientia

The business of using artificial intelligence to find new drugs is starting to consolidate. The AI-powered drug discovery firm Recursion Pharmaceuticals will buy rival Exscientia in an all-stock deal that values Exscientia at roughly $650 million.

The transaction is expected to close in early 2025, and the resulting company will have the Recursion name, according to an announcement of the deal.

In the announcement, the companies portray the merger as creating an end-to-end drug discovery company by combining Recursion’s biology expertise and Exscientia’s chemistry know-how.

“Exscientia’s precision chemistry tools and capabilities, including its newly commissioned automated small molecule synthesis platform, will augment our tech-enabled biology and chemistry exploration, hit discovery and translational capabilities,” Recursion CEO Chris Gibson says in the announcement.

Salt Lake City–based Recursion has a huge in-house dataset of chemistry-biology interactions, which allows it to search for new drug targets and hits. Using that expertise, the firm has built a pipeline of drug candidates covering oncology, rare diseases, and infectious diseases.

It also has partnerships with Bayer, Roche, Genentech, and the AI chip company Nvidia. Last year, Recursion bought the firms Cyclica and Valence Discovery to add more chemistry and generative AI expertise.

Exscientia launched in 2012 in the UK with a focus on AI-powered small-molecule drug design. It later added automated synthesis and testing capabilities. The company has collaborations with Merck KGaA and Sanofi and a pipeline that focuses on oncology, which Recursion says has no competitive overlap with its own.

Exscientia recently shed a quarter of its staff as part of a cost-cutting exercise. In February, the firm fired its CEO, Andrew Hopkins, after an investigation found he had “inappropriate” relationships with two employees.

Owners of Exscientia stock will receive 0.7729 Recursion shares for each Exscientia share they hold. After the deal, the combined entity will have about $850 million in cash, which the firms say should last until 2027. Exscientia’s chief scientific officer and interim CEO, David Hallett, will become CSO of Recursion.