Pharmaceutical and agricultural product manufacturer Bayer invested $50m to lead a $239m series D round for US-based drug discovery technology provider Recursion yesterday through its Leaps by Bayer subsidiary.
Fellow new investors Casdin Capital, Catalio Capital Management, Laurion Capital Management and Samsara BioCapital also took part in the round, which valued Recursion just below $1bn pre-money, a person with knowledge of the matter told The Information.
The round was filled out by existing backers including Intermountain Ventures, care provider Intermountain Healthcare’s corporate venturing unit, as well as Baillie Gifford, Mubadala Investment, DCVC, Lux Capital, Obvious Ventures, Felicis Ventures, Epic Ventures, Advantage Capital and Two Sigma Ventures.
Recursion is combining automation and machine learning technology with what it claims is the largest biological image dataset in the world to discover drug treatments for a range of conditions including cancer and genetic disorders such as neurofibromatosis or GM2 gangliosidosis.
Bayer’s investment was made in connection with a strategic partnership deal that will involve it utilising Recursion’s platform to discover treatments for fibrotic diseases affecting the lungs, kidney and heart.
The corporate is also providing Recursion with a $30m upfront payment and will add up to $100m for each program in addition to royalty payments.
Juergen Eckhardt, head of Leaps by Bayer, said: “With a pipeline of over 30 programs ranging from early discovery to clinical stage, including four clinical stage assets, Recursion is defining and leading technology-enabled drug discovery and has the potential to help enable new curative treatments in a large spectrum of disease areas and discover therapeutic candidates for intractable diseases.
“We are honoured to be joined in this financing by other healthcare and technology experts who share our belief that Recursion’s approach to technology-enabled drug discovery will bring life-changing medicines to patients quickly and in a cost effective manner.”
Recursion had raised approximately $2.5m in debt financing as of 2015 before it secured $15.1m in series A funding from Felicis Ventures, Lux Capital, Obvious Ventures, Epic Ventures, AME Cloud Ventures, Data Collective (DCVC), Wild Basin Investments and unnamed angel investors the following year.
All the series A investors bar Wild Basin returned for a $60m series B round in 2017 that also featured Mubadala Investment, Menlo Ventures, CRV and Two Sigma Ventures.
The company then completed a $121m series C round in July 2019 led by Baillie Gifford’s Scottish Mortgage Investment Trust unit that included Intermountain Ventures, Regents of the University of Minnesota, Texas Tech University System, various individuals and all its existing backers.
