US-based drug discovery technology developer Recursion Pharmaceuticals has filed to raise $100m in an initial public offering that would allow pharmaceutical and chemicals group Bayer to exit.
Founded in 2013, Recursion uses machine learning technology to research and develop drug treatments for health conditions such as cancer, neurological diseases and inherited disorders. It also claims to have built the largest biological image dataset for drug discovery research in the world.
The company will use the proceeds from the offering to finance research and development activities for four clinical-stage drug candidates, in addition to six preclinical candidates.
Recursion secured $15.1m in a series A round backed by Felicis Ventures, Lux Capital, Obvious Ventures, Epic Ventures, AME Cloud Ventures, Data Collective (DCVC), Wild Basin Investments and undisclosed angel investors in 2016.
All the series A investors except Wild Basin participated in Recursion’s $60m series B round the following year, alongside Mubadala Investment, Menlo Ventures, CRV and Two Sigma Ventures.
Recursion raised $121m in a mid-2019 series C round led by Baillie Gifford’s flagship investment trust, Scottish Mortgage Investment Trust, and backed by Intermountain Ventures, a subsidiary of healthcare provider Intermountain Healthcare, as well as Regents of the University of Minnesota, Texas Tech University System, all Recursion’s existing investors and a number of private backers.
Bayer’s investment subsidiary, Leaps by Bayer, supplied $50m to lead Recursion’s $239m series D round, in September 2020, which also featured Intermountain Ventures.
Casdin Capital, Catalio Capital Management, Laurion Capital Management, Samsara BioCapital, Baillie Gifford, Mubadala Investment, DCVC, Lux Capital, Obvious Ventures, Felicis Ventures, Epic Ventures, Advantage Capital and Two Sigma Ventures also contributed to the September round.
Lux Ventures is the largest non-executive shareholder in Recursion, with a 13.4% stake, followed by DCVC (10.6%), Mubadala Investment (10.3%), Scottish Mortgage Investment Trust (10%), Obvious Ventures (6.2%), Recursion co-founder Blake Borgeson (6%), Bayer and Advantage Capital (5.8% each).
Goldman Sachs, JP Morgan Securities, BofA Securities, SVB Leerink, Allen & Company and KeyBanc Capital Markets are the underwriters for the offering, which will take place on the Nasdaq Global Select Market.