On September 9, 2020, Bayer, a global life sciences, healthcare, and nutrition company, and Utah-based Recursion Pharmaceuticals, Inc., a digital biology company industrializing drug discovery, entered into a strategic collaboration. Under the collaboration, Recursion’s purpose-built artificial intelligence-guided drug discovery platform and Bayer’s small molecule compound library and deep scientific expertise will be leveraged to discover and develop new treatments for fibrotic diseases. In addition, Leaps by Bayer, the impact investment arm of Bayer AG, is leading Recursion’s $239 million Series D financing with an investment of $50 million. Wilson Sonsini Goodrich & Rosati represented Recursion in both transactions.
Pursuant to their collaboration, the parties may initiate more than ten research and development programs in fibrosis. Bayer has the option to exclusively license novel therapeutics derived from the research activities, pursuant to license agreements in which Recursion has the potential to receive development and commercial milestone payments of more than $100 million per program plus royalties on future sales. In addition to the $50 million equity investment, Recursion will receive an upfront payment of $30 million under the collaboration agreement.
Fibrotic diseases are a significant cause of morbidity and mortality worldwide. One of the biggest challenges in the treatment of fibrotic diseases is the underlying complex biology and the associated difficulty in discovering relevant drug targets. Phenotypic screening is a method to screen for novel therapeutic molecules to uncover novel drug targets and their role in complex disease processes. Artificial intelligence and the use of machine learning methods allow the processing of enormous amounts of data—including high-resolution imaging—generated by these screens and offers unprecedented potential for the discovery of new drug candidates for diseases with complex biology such as fibrotic diseases. Recursion’s drug discovery platform combines highly automated, wet lab biology experiments as the base for iterative learning through its computational tools. The purpose-built drug-discovery platform is based on a proprietary library of over half a billion images of human cells from more than 33 million experiments conducted in-house at Recursion and coupled with advanced data analytics based on machine learning.
The Wilson Sonsini team that represented Recursion in the transactions includes Farah Gerdes (Technology Transactions); Patrick Schultheis, Ashley Schmidt, and Philip Oettinger (Corporate); Jill Fulwiler (Corporate Finance); (Antitrust); Josh Gruenspecht and Seth Cowell (CFIUS); Anne Seymour (Export Controls); David Hoffmeister (FDA/Regulatory); and Myra Sutanto Shen (Tax).
For more information, please see Recursion's press releases regarding the partnership and Series D transaction.