Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 30, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40323 | |
Entity Registrant Name | RECURSION PHARMACEUTICALS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4099738 | |
Entity Address, Address Line One | 41 S Rio Grande Street | |
Entity Address, City or Town | Salt Lake City, | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84101 | |
City Area Code | 385 | |
Local Phone Number | 269 - 0203 | |
Title of 12(b) Security | Class A Common Stock, par value $0.00001 | |
Trading Symbol | RXRX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001601830 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 184,643,171 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,716,209 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 473,145 | $ 549,912 |
Restricted cash | 1,311 | 1,280 |
Other receivables | 2,057 | 2,753 |
Other current assets | 15,612 | 15,869 |
Total current assets | 492,125 | 569,814 |
Restricted cash, non-current | 7,920 | 7,920 |
Property and equipment, net | 90,004 | 88,192 |
Operating lease right-of-use assets | 35,116 | 33,255 |
Intangible assets, net | 1,318 | 1,306 |
Goodwill | 801 | 801 |
Other assets, non-current | 82 | 0 |
Total assets | 627,366 | 701,288 |
Current liabilities | ||
Accounts payable | 4,247 | 4,586 |
Accrued expenses and other liabilities | 25,041 | 32,904 |
Unearned revenue | 57,761 | 56,726 |
Notes payable | 661 | 97 |
Operating lease liabilities | 4,440 | 5,952 |
Total current liabilities | 92,150 | 100,265 |
Unearned revenue, non-current | 57,091 | 70,261 |
Notes payable, non-current | 1,179 | 536 |
Operating lease liabilities, non-current | 46,771 | 44,420 |
Total liabilities | 197,191 | 215,482 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity | ||
Common stock, $0.00001 par value; 2,000,000,000 shares (Class A 1,989,032,117 and Class B 10,967,883) authorized as of March 31, 2023 and December 31, 2022; 192,230,854 shares (Class A 184,514,645 and Class B 7,716,209) and 191,022,864 shares (Class A 183,209,655 and Class B 7,813,209) issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 2 | 2 |
Additional paid-in capital | 1,135,056 | 1,125,360 |
Accumulated deficit | (704,883) | (639,556) |
Total stockholders’ equity | 430,175 | 485,806 |
Total liabilities and stockholders’ equity | $ 627,366 | $ 701,288 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 192,230,854 | 191,022,864 |
Common sock, shares outstanding (in shares) | 192,230,854 | 191,022,864 |
Class A | ||
Common stock, shares authorized (in shares) | 1,989,032,117 | 1,989,032,117 |
Common stock, shares issued (in shares) | 184,514,645 | 183,209,655 |
Common sock, shares outstanding (in shares) | 184,514,645 | 183,209,655 |
Class B | ||
Common stock, shares authorized (in shares) | 10,967,883 | 10,967,883 |
Common stock, shares issued (in shares) | 7,716,209 | 7,813,209 |
Common sock, shares outstanding (in shares) | 7,716,209 | 7,813,209 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Total revenue | $ 12,134 | $ 5,333 |
Operating costs and expenses | ||
Cost of revenue | 12,448 | 7,799 |
Research and development | 46,677 | 32,441 |
General and administrative | 22,874 | 21,074 |
Total operating costs and expenses | 81,999 | 61,314 |
Loss from operations | (69,865) | (55,981) |
Other income, net | 4,538 | 2 |
Net loss | $ (65,327) | $ (55,979) |
Per share data | ||
Net loss per share of Class A and B common stock, basic (in dollars per share) | $ (0.34) | $ (0.33) |
Net loss per share of Class A and B common stock, diluted (in dollars per share) | $ (0.34) | $ (0.33) |
Weighted-average shares (Class A and B) outstanding, basic (in shares) | 191,618,238 | 170,690,392 |
Weighted-average shares (Class A and B) outstanding, diluted (in shares) | 191,618,238 | 170,690,392 |
Operating revenue | ||
Revenue | ||
Total revenue | $ 12,134 | $ 5,299 |
Grant revenue | ||
Revenue | ||
Total revenue | $ 0 | $ 34 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (65,327) | $ (55,979) |
Unrealized loss on investments | 0 | (222) |
Net realized loss on investments reclassified into net loss | 0 | 39 |
Other comprehensive loss | 0 | (183) |
Comprehensive loss | $ (65,327) | $ (56,162) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (unaudited) - USD ($) $ in Thousands | Total | Common Stock (Class A and B) | Additional Paid-in-Capital | Accumulated Deficit | Accumulated other comprehensive loss |
Common stock, shares outstanding at beginning period (in shares) at Dec. 31, 2021 | 170,272,462 | ||||
Total stockholders’ equity (deficit) at beginning of period at Dec. 31, 2021 | $ 542,938 | $ 2 | $ 943,142 | $ (400,080) | $ (126) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (55,979) | (55,979) | |||
Other comprehensive loss | (183) | (183) | |||
Stock option exercises and other (in shares) | 805,626 | ||||
Stock option exercises and other | 1,158 | 1,158 | |||
Stock-based compensation | 5,632 | 5,632 | |||
Common stock, shares outstanding at end period (in shares) at Mar. 31, 2022 | 171,078,088 | ||||
Total stockholders’ equity (deficit) at end of period at Mar. 31, 2022 | $ 493,566 | $ 2 | 949,932 | (456,059) | (309) |
Common stock, shares outstanding at beginning period (in shares) at Dec. 31, 2022 | 191,022,864 | 191,022,864 | |||
Total stockholders’ equity (deficit) at beginning of period at Dec. 31, 2022 | $ 485,806 | $ 2 | 1,125,360 | (639,556) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (65,327) | (65,327) | |||
Other comprehensive loss | $ 0 | ||||
Stock option exercises and other (in shares) | 582,395 | 1,207,990 | |||
Stock option exercises and other | $ 882 | 882 | |||
Stock-based compensation | $ 8,814 | 8,814 | |||
Common stock, shares outstanding at end period (in shares) at Mar. 31, 2023 | 192,230,854 | 192,230,854 | |||
Total stockholders’ equity (deficit) at end of period at Mar. 31, 2023 | $ 430,175 | $ 2 | $ 1,135,056 | $ (704,883) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (65,327) | $ (55,979) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 3,728 | 2,767 |
Stock-based compensation | 8,814 | 5,632 |
Fixed asset impairment | 1,169 | 0 |
Lease expense | 1,988 | 1,742 |
Other, net | 716 | 402 |
Changes in operating assets and liabilities: | ||
Other receivables and assets | (317) | (7,551) |
Unearned revenue | (12,134) | 144,701 |
Accounts payable | (339) | 1,344 |
Accrued development expense | 676 | 1,413 |
Accrued expenses and other current liabilities | (9,846) | (15,903) |
Operating lease liabilities | (2,444) | (1,265) |
Other, net | 0 | 85 |
Net cash provided by (used in) operating activities | (73,316) | 77,388 |
Cash flows from investing activities | ||
Purchases of property and equipment | (5,175) | (4,342) |
Purchase of an intangible asset | (165) | 0 |
Sales and maturities of investments | 0 | 147,646 |
Net cash provided by (used in) investing activities | (5,340) | 143,304 |
Cash flows from financing activities | ||
Proceeds from equity incentive plans | 1,946 | 2,106 |
Repayment of long-term debt | (24) | (22) |
Net cash provided by financing activities | 1,922 | 2,084 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | 0 |
Net change in cash, cash equivalents and restricted cash | (76,736) | 222,776 |
Cash, cash equivalents and restricted cash, beginning of period | 559,112 | 295,349 |
Cash, cash equivalents and restricted cash, end of period | 482,376 | 518,125 |
Supplemental schedule of non-cash investing and financing activities | ||
Accrued property and equipment | 244 | 4,328 |
Right-of-use asset additions and modifications | 3,520 | 1,548 |
Financed equipment purchase | 1,214 | 0 |
Supplemental schedule of cash flow information | ||
Cash paid for operating leases | 2,444 | 1,265 |
Cash paid for interest | $ 13 | $ 14 |
Description of the Business
Description of the Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business Recursion Pharmaceuticals, Inc. (Recursion, the Company, we or our) was originally formed as a limited liability company on November 4, 2013 under the name Recursion Pharmaceuticals, LLC. In September 2016, the Company converted to a Delaware corporation and changed its name to Recursion Pharmaceuticals, Inc. Recursion is a clinical stage TechBio company decoding biology to industrialize drug discovery. The Recursion Operating System (OS), a platform built across diverse technologies, enables the Company to map and navigate trillions of biological and chemical relationships within the Recursion Data Universe, one of the world’s largest proprietary biological and chemical datasets. The Company integrates physical and digital components as iterative loops of atoms and bits scaling wet lab biology and chemistry data organized into virtuous cycles with computational tools to rapidly translate in silico hypotheses into validated insights and novel chemistry. As of March 31, 2023, the Company had an accumulated deficit of $704.9 million. The Company expects to incur substantial operating losses in future periods and will require additional capital to advance its drug candidates. The Company does not expect to generate significant revenue until the Company successfully completes significant drug development milestones with its subsidiaries or in collaboration with third parties, which the Company expects will take a number of years. In order to commercialize its drug candidates, the Company or its partners need to complete clinical development and comply with comprehensive regulatory requirements. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as the uncertainty of clinical trial outcomes, uncertainty of additional funding and a history of operating losses. The Company has funded its operations to date primarily through the issuance of convertible preferred stock and the issuance of Class A common stock (see Note 7, “Common Stock” for additional details). Additionally, we have received payments of $180.0 million from our strategic partnerships (see Note 8, “Collaborative Development Contracts” for additional details). Recursion will likely be required to raise additional capital. As of March 31, 2023, the Company did not have any unconditional outstanding commitments for additional funding. If the Company is unable to access additional funds when needed, it may not be able to continue the development of its products or the Company could be required to delay, scale back or abandon some or all of its development programs and other operations. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, could materially harm its business, financial condition and results of operations. Recursion believes that the Company’s existing cash and cash equivalents will be sufficient to fund the Company’s operating expenses and capital expenditures for at least the next 12 months. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2022. It is management’s opinion that these condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial statements. Revenues and net loss for any interim period are not necessarily indicative of future or annual results. Recent Accounting Pronouncements New accounting pronouncements are routinely issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies and adopted by Recursion as of the specified effective date. The Company does not expect |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Property and Equipment March 31, December 31, (in thousands) 2023 2022 Lab equipment $ 53,323 $ 47,524 Leasehold improvements 42,958 41,872 Office equipment 21,839 20,164 Construction in progress 5,518 8,747 Property and equipment, gross 123,638 118,307 Less: Accumulated depreciation (33,634) (30,115) Property and equipment, net $ 90,004 $ 88,192 Depreciation expense on property and equipment was $3.6 million and $2.7 million during the three months ended March 31, 2023 and 2022, respectively. The Company recorded an impairment of $1.2 million during the three months ended March 31, 2023 related to a construction project for leasehold improvements as the Company no longer intended to use them. The impairment was recorded in “General and Administrative” in the Condensed Consolidated Statements of Operations. For the three months ended March 31, 2023, the Company initiated and completed a project to upgrade the BioHive supercomputer for $1.7 million . The supercomputer was classified as office equipment in the above table. The increase in lab equipment from the prior year was driven by the completion of several labs in the headquarters expansion. The majority of the balance was included in construction in progress in the prior year. The construction in progress balance primarily relates to lab equipment under construction. Accrued Expenses and Other Liabilities March 31, December 31, (in thousands) 2023 2022 Accrued compensation $ 10,240 $ 20,433 Accrued development expenses 4,048 3,372 Accrued early discovery expenses 3,227 3,192 Materials received not invoiced 4,036 2,028 Accrued other expenses 3,490 3,879 Accrued expense and other liabilities $ 25,041 $ 32,904 Notes Payable In January 2023, the Company entered into a financing agreement for borrowing $1.9 million as part of the supercomputer upgrade project. The debt will be repaid over a three-year period at a 7% interest rate. As of March 31, 2023, the outstanding balance was $1.2 million. In 2018, the Company borrowed $992 thousand, which was available as part of a lease agreement for use on tenant improvements. Under the terms of the lease, the note will be repaid over a 10-year period at an 8% interest rate. As of March 31, 2023, the outstanding balance was $609 thousand. Interest Income, Net Three months ended (in thousands) 2023 2022 Interest income $ 4,660 $ 87 Interest expense (19) (14) Interest income, net $ 4,641 $ 73 For the three months ended March 31, 2023, interest income primarily related to earnings on cash and cash equivalents in money market funds. Interest income was included in “Other income, net” on the Condensed Consolidated Statements of Operations. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various long-term real estate leases primarily related to office, research and development and operating activities. The Company’s leases have remaining terms from 1 to 10 years, and some of those leases include options that provide Recursion with the ability to extend the lease term for five years. The options are included in the lease term when it is reasonably certain that the option will be exercised. For the three months ended March 31, 2023 , Recursion entered into a lease modification resulting in an increase to the related right-of-use asset and lease liability of $3.5 million. The modification had no impact to the Condensed Consolidated Statements of Operations. In May 2022, the Company entered into a lease agreement for laboratory and office space in Toronto, Ontario with approximately 26,320 square feet (the “Toronto Lease”). This lease was separated into multiple lease components based on the intended use of the portions of the space. For some of those components, the right of use began May 2022 when the control of the assets were obtained. The right of use asset for the remaining lease component is expected to begin in the second quarter of 2023 . The Toronto Lease terms for each component are ten years with a five-year renewal option. The Toronto Lease includes provisions for escalating rent payments and a tenant improvement allowance of up to $1.5 million. Total fixed payments are expected to be approximately $10.8 million with additional variable expenses, including building expenses. See Note 6, “ Commitments and Contingencies” for information on the Industry lease. The components of the lease cost are as follows: Three months ended (in thousands) 2023 2022 Operating lease cost $ 1,998 $ 1,827 Variable lease cost 657 204 Lease cost $ 2,655 $ 2,031 Lease term and discount rates as of March 31, 2023 were: (in thousands) March 31, 2023 Operating leases Weighted-average remaining lease term (years) 7.3 Weighted-average discount rate 7.6 % Maturities of operating lease liabilities as of March 31, 2023 were: (in thousands) March 31, 2023 Remainder of 2023 $ 5,906 2024 9,561 2025 9,745 2026 9,996 2027 10,254 Thereafter 24,081 Total lease payments 69,543 Less: imputed interest (18,332) Present value of lease liabilities $ 51,211 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill There were no changes to the carrying amount of goodwill during the three months ended March 31, 2023 and 2022. No goodwill impairment was recorded during the three months ended March 31, 2023 and 2022. Intangible Assets, Net The following table summarizes intangible assets: March 31, 2023 December 31, 2022 (in thousands) Gross carrying amount Accumulated Amortization Net carrying amount Gross carrying amount Accumulated Amortization Net carrying amount Definite-lived intangible asset $ 1,376 $ (962) $ 414 $ 1,211 $ (809) $ 402 Indefinite-lived intangible asset 904 — 904 904 — 904 Intangible assets, net $ 2,280 $ (962) $ 1,318 $ 2,115 $ (809) $ 1,306 Amortization expense was $152 thousand and $76 thousand during the three months ended March 31, 2023 and 2022, respectively. Amortization expense was included in research and development in the Condensed Consolidated Statements of Operations. The indefinite-lived intangible asset represents the Recursion domain name that the Company purchased. No indefinite-lived intangible asset impairment charges were recorded during the three months ended March 31, 2023 and 2022. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contract Obligations In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination on notice and are cancellable contracts. Indemnification The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The Company purchases directors and officers liability insurance coverage that provides for reimbursement to the Company for covered obligations and this is intended to limit the Company’s exposure and enable it to recover a portion of any amounts it pays under its indemnification obligations. The Company had no liabilities recorded for these agreements as of March 31, 2023 and December 31, 2022, as no amounts were probable. Employee Agreements The Company has signed employment agreements with certain key employees pursuant to which, if their employment is terminated following a change of control of the Company, the employees are entitled to receive certain benefits, including accelerated vesting of equity incentives. Legal Matters In February 2021, the Company entered into a lease agreement for laboratory and office space (the Industry Lease) with Industry Office SLC, LLC (the landlord). For the three months ended March 31, 2023, the Company determined there were several issues related to the agreement including with the assets being constructed and the timing of the project. The Company is in negotiations with the landlord. There are a wide-range of potential outcomes, some of which include: the termination of the lease contract or legal action. Several of the potential outcomes could require the Company to distribute a payment to the landlord. The Company is unable to estimate the possible payment or range of payments. As of March 31, 2023, the Company had no liability recorded for these events as an unfavorable outcome was not probable. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Common Stock | Common Stock Each share of Class A common stock entitles the holder to one vote per share and each share of Class B common stock entitles the holder to 10 votes per share on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s Board of Directors. As of March 31, 2023 and December 31, 2022, no dividends had been declared. Private Placement In October 2022, Recursion issued 15,336,734 shares of the Company’s Class A common stock (the Shares) at a purchase price of $9.80 per share in a private placement (the Private Placement) to qualified institutional buyers and institutional accredited investors (the Purchasers) for net proceeds of $143.7 million, after deducting fees and offering costs of $6.6 million. Registration Rights Agreement In October 2022, i n connection with the Private Placement, the Company entered into a Registration Rights Agreement (the Agreement) providing for the registration for resale of the Shares. A prospectus supplement to a registration statement (File No. 333-264845) was subsequently filed in October 2022 to register the resale of the Shares by the Purchasers. The Agreement must remain effective until registrable securities covered by the Agreement have been publicly sold by the holders or all shares cease to be registrable securities. In the event the holders cannot sell their shares due to certain circumstances causing the Agreement to be ineffective, the Company must pay each holder of shares outstanding on the date and each month thereafter 1.0% of the aggregate purchase price paid by the holder without limit until the Agreement is cured. As of March 31, 2023, there was no accrued liability related to this agreement, as it was not probable that a payment would be required. Class A and B Common Shares Authorization In April 2021 , the Company’s Board of Directors authorized two classes of common stock, Class A and Class B. The rights of the holders of Class A and B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share and is convertible at any time into one share of Class A common stock. All Class B common stock is held by Christopher Gibson, Ph.D., the Company’s Chief Executive Officer (CEO), or his affiliates. As of March 31, 2023, Dr. Gibson and his affiliates held outstanding shares of Class B common stock representing approximately 29% of the voting power of the Company’s outstanding shares. This voting power may increase over time as Dr. Gibson vests in and exercises equity awards outstanding. If all the exchangeable equity awards held by Dr. Gibson had been fully vested, exercised and exchanged for shares of Class B common stock as of March 31, 2023, Dr. Gibson and his affiliates would hold approximately 32% of the voting power of the |
Collaborative Development Contr
Collaborative Development Contracts | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Development Contracts | Collaborative Development Contracts Roche and Genentech Description In December 2021, Recursion entered into a collaboration and license agreement with Roche and Genentech (collectively referred to as Roche). Recursion is constructing, using the Company’s imaging technology and proprietary machine-learning algorithms, unique maps of the inferred relationships amongst perturbation phenotypes in a given cellular context with the goal to discover and develop therapeutic small molecule programs in a gastrointestinal cancer indication and in key areas of neuroscience. Roche and Recursion will collaborate to select certain novel inferences with respect to small molecules or targets generated from the Phenomaps for further validation and optimization as collaboration programs. Roche and Recursion may also combine sequencing datasets from Roche with Recursion’s Phenomaps and collaborate to generate new algorithms to produce multi-modal maps from which additional collaboration programs may be initiated. For every collaboration program that successfully identifies potential therapeutic small molecules or validates a target, Roche will have an option to obtain an exclusive license to develop and commercialize such potential therapeutic small molecules or to exploit such target in the applicable exclusive field. Pricing In January 2022, Recursion received a $150.0 million non-refundable upfront payment from the Company’s collaboration with Roche. Recursion is eligible for additional milestone payments based on performance progress of the collaboration. Each of the Phenomaps requested by Roche and created by Recursion may be subject to either an initiation fee, acceptance fee or both. Such fees could exceed $250.0 million for 16 accepted Phenomaps. In addition, for a period of time after Roche’s acceptance of certain Phenomaps, Roche will have the option to obtain, subject to payment of an exercise fee, rights to use outside the collaboration the raw images generated in the course of creating those Phenomaps. If Roche exercises its external use option for all 12 eligible Phenomaps, Roche’s associated exercise fee payments to Recursion could exceed $250.0 million. Under the collaboration, Roche may initiate up to 40 programs, each of which, if successfully developed and commercialized, could yield more than $300.0 million in development, commercialization and net revenue milestones for Recursion, as well as tiered royalties on net revenue. Accounting This agreement represents a transaction with a customer and therefore is accounted for in accordance with Accounting Standards Codification (ASC) 606. Recursion has determined that it has three performance obligations, one related to gastrointestinal cancer and two in neuroscience. These performance obligations are for performing research and development services for Roche to identify targets and medicines. The performance obligations also include potential licenses related to the intellectual property. The Company concluded that licenses within the contract are not distinct from the research and development services as they are interrelated due to the fact that the research and development services significantly impact the potential licenses. Any additional services are considered customer options and will be considered as separate contracts for accounting purposes. The Company has determined the transaction price to be $150.0 million, comprised of the upfront payment. Recursion will fully constrain the amounts of variable consideration to be received from potential milestones considering the stage of development and the risks associated with the remaining development required to achieve each milestone. Recursion will re-evaluate the transaction price each reporting period. The transaction price was allocated to the performance obligations based on the estimated relative stand-alone selling price of each performance obligation as determined using an expected cost plus margin approach. The Company recognizes revenue over time based on costs incurred relative to total expected costs to perform the research and development services. Recursion determined that this method provides a faithful depiction of the transfer of control to the customer. This method of recognizing revenue requires the Company to make estimates of total costs to provide the services required under the performance obligations. Significant inputs used to determine the total costs included the length of time required, service hours performed by Company employees and materials costs. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion has estimated the completion of the performance obligations by 2025. Bayer AG Description In August 2020, the Company entered into a Research Collaboration and Option Agreement (the Bayer Agreement) with Bayer AG (Bayer) for a five-year term pursuant to which the Company and Bayer may initiate approximately 10 research projects related to fibrosis across multiple organ systems, including the lung, liver and heart. Under the agreement, the Company contributed compounds from its proprietary library and Bayer contributed compounds from its proprietary library and will contribute scientific expertise throughout the collaboration. Under each research project, the Company will work with Bayer to identify potential candidates for development. Under the agreement, Bayer has the first option for licenses to potential candidates. Pricing In October 2020, the Company received a $30.0 million non-refundable upfront payment. Each such license could potentially result in option exercise fees and development and commercial milestone payments payable to the Company, with an aggregate value of up to approximately $100.0 million (for an option on a lead series) or up to approximately $120.0 million (for an option on a development candidate), as well as tiered royalties for each such license, ranging from low- to mid-single digit percentages of sales, depending on commercial success. Accounting The Company determined that it has one performance obligation under the agreement, which is to perform research and development services for Bayer. Recursion determined the transaction price to be $30.0 million, comprised of the upfront payment. The Company allocated the amount to the single performance obligation. The Company is recognizing revenue over time by measuring progress towards completion of the performance obligation. This method of recognizing revenue requires the Company to make estimates of the total time to provide the services required under the performance obligation. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion has estimated the completion of the performance obligation in 2023. Additional Revenue Disclosures Recursion recognized $12.1 million of operating revenue during the three months ended March 31, 2023, all of which was included in the unearned revenue balance as of December 31, 2022. Of the revenue recognized during the three months ended March 31, 2022, $2.5 million was included in the unearned revenue balance as of December 31, 2021. Revenue recognized was from upfront payments received at the inception of the related contracts, which decreased the initial unearned revenue recognized. As of March 31, 2023, the Company had $7.2 million of costs incurred to fulfill a contract on its Condensed Consolidated Balance Sheet within “Other current assets.” |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In April 2021, the Board of Directors and the stockholders of the Company adopted the 2021 Equity Incentive Plan (the 2021 Plan). Under the 2021 Plan, 16,186,000 shares of Class A common stock were reserved. Additionally, shares were reserved for all outstanding awards under the previous 2016 Plan. The Company may grant stock options, restricted stock units (RSUs), stock appreciation rights, restricted stock awards and other forms of stock-based compensation. As of March 31, 2023, 20,652,818 shares of Class A common stock were available for grant. The following table presents the classification of stock-based compensation expense for stock options and RSUs for employees and non-employees within the Condensed Consolidated Statements of Operations: Three months ended March 31, (in thousands) 2023 2022 Cost of revenue $ 1,011 $ 348 Research and development 2,683 1,635 General and administrative 4,578 3,361 Total $ 8,272 $ 5,344 Stock Options Stock options are primarily granted to executive leaders at the Company, generally vest over four years and expire no later than 10 years from the date of grant. Stock option activity during the three months ended March 31, 2023 was as follows: (in thousands except share data) Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 16,154,924 $ 5.10 7.5 $ 67,997 Granted 2,757,614 8.55 Cancelled (671,116) 7.41 Exercised (582,395) 2.03 3,527 Outstanding as of March 31, 2023 17,659,027 $ 5.65 7.6 $ 50,807 Exercisable as of March 31, 2023 9,233,673 $ 4.02 6.6 $ 37,544 The fair value of options granted to employees is calculated on the grant date using the Black-Scholes option valuation model. The weighted-average grant-date fair values of stock options granted during the three months ended March 31, 2023 and 2022 were $5.32 and $7.42, respectively. The following weighted-average assumptions were used to calculate the grant-date fair value of stock options: Three months ended March 31, 2023 2022 Expected term (in years) 6.3 6.2 Expected volatility 64 % 63 % Expected dividend yield — — Risk-free interest rate 3.5 % 1.7 % As of March 31, 2023, $37.1 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next three years. RSUs Equity awards granted to employees primarily consist of RSUs and generally vest over four years. The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Recursion’s common stock on the date of grant. The following table summarizes Recursion’s RSU activity during the three months ended March 31, 2023: Stock units Weighted-average grant date fair value Outstanding as of December 31, 2022 6,894,525 $ 8.17 Granted 1,916,806 9.05 Vested (484,444) 8.58 Forfeited (303,686) 8.31 Outstanding as of March 31, 2023 8,023,201 $ 8.19 The fair market value of RSUs vested was $5.2 million during the three months ended March 31, 2023. As of March 31, 2023, $59.8 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next three years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company did not record any income tax expense during the three months ended March 31, 2023 and 2022. The Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. Foreign taxes were insignificant during the three months ended March 31, 2023. Net operating losses (NOLs) and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subject to annual limitation due to ownership changes that have occurred previously or that could occur in the future under Section 382 of the Internal Revenue Code, as amended and similar state provisions. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of ownership has occurred or whether there have been multiple ownership changes since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of ownership, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed and any limitation is known, no amounts are being presented as an uncertain tax position. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share For the three months ended March 31, 2023 and 2022 , Recursion calculated net loss per share of Class A and Class B common stock using the two-class method. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options and other contingently issuable shares. For periods presented in which the Company reports a net loss, all potentially dilutive shares are anti-dilutive and as such are excluded from the calculation. For the three months ended March 31, 2023 and 2022, the Company reported a net loss and therefore basic and diluted loss per share were the same. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A and Class B common stock are identical, except with respect to voting. As a result, the undistributed earnings for each period are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting amount per share for Class A and Class B common stock was the same during the three months ended March 31, 2023 and 2022 . The following tables set forth the computation of basic and diluted net loss per share of Class A and Class B common stock: Three months ended Three months ended March 31, 2023 March 31, 2022 (in thousands, except share amount) Class A Class B Class A Class B Numerator: Allocation of undistributed earnings $ (62,679) $ (2,648) $ (53,022) $ (2,957) Denominator: Weighted average common shares outstanding 183,851,596 7,766,642 161,674,169 9,016,223 Net loss per share, basic and diluted $ (0.34) $ (0.34) $ (0.33) $ (0.33) The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three months ended March 31, 2023 March 31, 2022 Stock based compensation 8,534,876 12,089,621 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value hierarchy consists of the following three levels: • Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access; • Level 2 — Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and • Level 3 — Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company's management about the assumptions market participants would use in pricing the asset or liability. The Company is required to maintain a cash balance in a collateralized account to secure the Company’s credit cards. Additionally, the Company holds restricted cash related to an outstanding letter of credit issued by J.P. Morgan, which was obtained to secure certain Company obligations relating to tenant improvements. The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis: Basis of fair value measurement (in thousands) March 31, 2023 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 408,711 $ 408,711 $ — $ — Restricted cash 9,231 9,231 — — Total assets $ 417,942 $ 417,942 $ — $ — Basis of fair value measurement (in thousands) December 31, 2022 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 404,613 $ 404,613 $ — $ — Restricted cash 9,200 9,200 — — Total assets $ 413,813 $ 413,813 $ — $ — In addition to the financial instruments that are recognized at fair value on the Condensed Consolidated Balance Sheet, the Company has certain financial instruments that are recognized at amortized cost or some basis other than fair value. The carrying amount of these instruments are considered to be representative of their approximate fair values. The following tables summarize the Company’s financial instruments that are not measured at fair value: Book values Fair values (in thousands) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Liabilities Current portion of notes payable $ 661 $ 97 $ 661 $ 97 Notes payable, net of current portion 1,179 536 1,179 536 Total liabilities $ 1,840 $ 633 $ 1,840 $ 633 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Cyclica Inc. On May 8, 2023, Recursion and its indirect wholly owned subsidiary (the “Cyclica Purchaser”) entered into a definitive agreement pursuant to which, subject to applicable closing conditions, the Cyclica Purchaser will, among other things acquire all of the outstanding equity securities of Cyclica Inc. (“Cyclica”) to be paid in the form of shares of Recursion Class A common stock (the “Class A Shares”), cash and the assumption by Recursion of outstanding options to purchase shares of Cyclica. Following the completion of the Cyclica Acquisition, Recursion would issue up to approximately 6.9 million Class A Shares in the Cyclica Acquisition (including Class A Shares issuable upon the exercise of options to purchase shares of Cyclica assumed by Recursion in the Cyclica Acquisition) based on a reference price of Class A Shares of $5.78 (the “Reference Price”), which is the volume weighted average price of Class A Shares over the 30 days ended May 5, 2023. The purchase price for the Cyclica Acquisition is subject to customary closing and post-closing purchase price adjustments, which may result in the issuance of additional or fewer Class A Shares. In addition, under the terms of the Cyclica Purchase Agreement, in certain circumstances Recursion may pay cash consideration to Cyclica shareholders in lieu of Class A Shares at a value based on the Reference Price, which may result in the issuance of fewer Class A Shares. Recursion expects to close the transaction in the second quarter of 2023. Cyclica has built a digital chemistry software suite which enables mechanism of action deconvolution and generative chemistry suggestions based on desired targets. Cyclica’s platform is expected to enhance the optimization of Recursion’s compounds for efficacy while minimizing liabilities through generative machine learning approaches. Cyclica is located in Toronto Canada and the teams at Cyclica will be fully integrated into Recursion. Valence Discovery Inc. On May 8, 2023, Recursion and its indirect wholly owned subsidiary (the “Valence Purchaser”) entered into a definitive agreement (the “Valence Purchase Agreement”) pursuant to which, subject to applicable closing conditions, the Valence Purchaser will, among other things, acquire all of the outstanding equity securities of Valence Discovery Inc. (“Valence”) to be paid in the form of (i) Class A Shares and shares of the Valence Purchaser Valence is a machine learning (ML) / artificial intelligence digital chemistry company that creates chemical compound and interaction representations using graph neural networks. Valence designs novel chemical matter using artificial intelligence and proprietary computation tools. Valence is located in Montr é al |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New accounting pronouncements are routinely issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies and adopted by Recursion as of the specified effective date. The Company does not expect |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Financial Information [Abstract] | |
Schedule of Property and Equipment | Property and Equipment March 31, December 31, (in thousands) 2023 2022 Lab equipment $ 53,323 $ 47,524 Leasehold improvements 42,958 41,872 Office equipment 21,839 20,164 Construction in progress 5,518 8,747 Property and equipment, gross 123,638 118,307 Less: Accumulated depreciation (33,634) (30,115) Property and equipment, net $ 90,004 $ 88,192 |
Schedule of Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities March 31, December 31, (in thousands) 2023 2022 Accrued compensation $ 10,240 $ 20,433 Accrued development expenses 4,048 3,372 Accrued early discovery expenses 3,227 3,192 Materials received not invoiced 4,036 2,028 Accrued other expenses 3,490 3,879 Accrued expense and other liabilities $ 25,041 $ 32,904 |
Schedule of Interest Income and Expense Disclosure | Interest Income, Net Three months ended (in thousands) 2023 2022 Interest income $ 4,660 $ 87 Interest expense (19) (14) Interest income, net $ 4,641 $ 73 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Cost, Supplemental Cash Flow Information Related to Leases, Lease Term and Discount Rates | The components of the lease cost are as follows: Three months ended (in thousands) 2023 2022 Operating lease cost $ 1,998 $ 1,827 Variable lease cost 657 204 Lease cost $ 2,655 $ 2,031 Lease term and discount rates as of March 31, 2023 were: (in thousands) March 31, 2023 Operating leases Weighted-average remaining lease term (years) 7.3 Weighted-average discount rate 7.6 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of March 31, 2023 were: (in thousands) March 31, 2023 Remainder of 2023 $ 5,906 2024 9,561 2025 9,745 2026 9,996 2027 10,254 Thereafter 24,081 Total lease payments 69,543 Less: imputed interest (18,332) Present value of lease liabilities $ 51,211 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | The following table summarizes intangible assets: March 31, 2023 December 31, 2022 (in thousands) Gross carrying amount Accumulated Amortization Net carrying amount Gross carrying amount Accumulated Amortization Net carrying amount Definite-lived intangible asset $ 1,376 $ (962) $ 414 $ 1,211 $ (809) $ 402 Indefinite-lived intangible asset 904 — 904 904 — 904 Intangible assets, net $ 2,280 $ (962) $ 1,318 $ 2,115 $ (809) $ 1,306 |
Schedule of indefinite-lived intangible assets | The following table summarizes intangible assets: March 31, 2023 December 31, 2022 (in thousands) Gross carrying amount Accumulated Amortization Net carrying amount Gross carrying amount Accumulated Amortization Net carrying amount Definite-lived intangible asset $ 1,376 $ (962) $ 414 $ 1,211 $ (809) $ 402 Indefinite-lived intangible asset 904 — 904 904 — 904 Intangible assets, net $ 2,280 $ (962) $ 1,318 $ 2,115 $ (809) $ 1,306 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expenses | The following table presents the classification of stock-based compensation expense for stock options and RSUs for employees and non-employees within the Condensed Consolidated Statements of Operations: Three months ended March 31, (in thousands) 2023 2022 Cost of revenue $ 1,011 $ 348 Research and development 2,683 1,635 General and administrative 4,578 3,361 Total $ 8,272 $ 5,344 |
Schedule of Share-based Payment Arrangement, Option, Activity | Stock option activity during the three months ended March 31, 2023 was as follows: (in thousands except share data) Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 16,154,924 $ 5.10 7.5 $ 67,997 Granted 2,757,614 8.55 Cancelled (671,116) 7.41 Exercised (582,395) 2.03 3,527 Outstanding as of March 31, 2023 17,659,027 $ 5.65 7.6 $ 50,807 Exercisable as of March 31, 2023 9,233,673 $ 4.02 6.6 $ 37,544 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following weighted-average assumptions were used to calculate the grant-date fair value of stock options: Three months ended March 31, 2023 2022 Expected term (in years) 6.3 6.2 Expected volatility 64 % 63 % Expected dividend yield — — Risk-free interest rate 3.5 % 1.7 % |
Schedule of Nonvested RSU Activity | The following table summarizes Recursion’s RSU activity during the three months ended March 31, 2023: Stock units Weighted-average grant date fair value Outstanding as of December 31, 2022 6,894,525 $ 8.17 Granted 1,916,806 9.05 Vested (484,444) 8.58 Forfeited (303,686) 8.31 Outstanding as of March 31, 2023 8,023,201 $ 8.19 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share | The following tables set forth the computation of basic and diluted net loss per share of Class A and Class B common stock: Three months ended Three months ended March 31, 2023 March 31, 2022 (in thousands, except share amount) Class A Class B Class A Class B Numerator: Allocation of undistributed earnings $ (62,679) $ (2,648) $ (53,022) $ (2,957) Denominator: Weighted average common shares outstanding 183,851,596 7,766,642 161,674,169 9,016,223 Net loss per share, basic and diluted $ (0.34) $ (0.34) $ (0.33) $ (0.33) |
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share | The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three months ended March 31, 2023 March 31, 2022 Stock based compensation 8,534,876 12,089,621 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis: Basis of fair value measurement (in thousands) March 31, 2023 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 408,711 $ 408,711 $ — $ — Restricted cash 9,231 9,231 — — Total assets $ 417,942 $ 417,942 $ — $ — Basis of fair value measurement (in thousands) December 31, 2022 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 404,613 $ 404,613 $ — $ — Restricted cash 9,200 9,200 — — Total assets $ 413,813 $ 413,813 $ — $ — |
Schedule of Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | The following tables summarize the Company’s financial instruments that are not measured at fair value: Book values Fair values (in thousands) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Liabilities Current portion of notes payable $ 661 $ 97 $ 661 $ 97 Notes payable, net of current portion 1,179 536 1,179 536 Total liabilities $ 1,840 $ 633 $ 1,840 $ 633 |
Description of the Business (De
Description of the Business (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 704,883 | $ 639,556 |
Proceeds received from strategic partnerships | $ 180,000 |
Supplemental Financial Inform_3
Supplemental Financial Information - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 123,638 | $ 118,307 |
Less: Accumulated depreciation | (33,634) | (30,115) |
Property and equipment, net | 90,004 | 88,192 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 53,323 | 47,524 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 42,958 | 41,872 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,839 | 20,164 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,518 | $ 8,747 |
Supplemental Financial Inform_4
Supplemental Financial Information - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 3,600 | $ 2,700 | ||
Fixed asset impairment | 1,169 | 0 | ||
Purchases of property and equipment | 5,175 | $ 4,342 | ||
Notes Payable | ||||
Property, Plant and Equipment [Line Items] | ||||
Issuance of long-term debt | 1,900 | |||
Debt instrument, term (in years) | 3 years | |||
Debt Instrument, interest rate (as percent) | 7% | |||
Notes payable | 1,200 | |||
Notes Payable | Station 41 Lease | ||||
Property, Plant and Equipment [Line Items] | ||||
Issuance of long-term debt | $ 992 | |||
Debt instrument, term (in years) | 10 years | |||
Debt Instrument, interest rate (as percent) | 8% | |||
Notes payable | 609 | |||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Fixed asset impairment | 1,200 | |||
BioHive Supercomputer | ||||
Property, Plant and Equipment [Line Items] | ||||
Purchases of property and equipment | $ 1,700 |
Supplemental Financial Inform_5
Supplemental Financial Information - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Supplemental Financial Information [Abstract] | ||
Accrued compensation | $ 10,240 | $ 20,433 |
Accrued development expenses | 4,048 | 3,372 |
Accrued early discovery expenses | 3,227 | 3,192 |
Materials received not invoiced | 4,036 | 2,028 |
Accrued other expenses | 3,490 | 3,879 |
Accrued expenses and other liabilities | $ 25,041 | $ 32,904 |
Supplemental Financial Inform_6
Supplemental Financial Information - Schedule of Interest Income and Expense Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental Financial Information [Abstract] | ||
Interest expense | $ (19) | $ (14) |
Interest income | 4,660 | 87 |
Interest income, net | $ 4,641 | $ 73 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended |
May 31, 2022 USD ($) ft² | Mar. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease, renewal term (in years) | 5 years | |
Increase in operating lease right-of-use assets | $ 3,500 | |
Increase in operating lease liabilities | 3,500 | |
Total lease payments | $ 69,543 | |
Toronto lease | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, renewal term (in years) | 5 years | |
Square footage of leased space (in square feet) | ft² | 26,320 | |
Lease term | 10 years | |
Tenant improvement allowance | $ 1,500 | |
Total lease payments | $ 10,800 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining operating lease term (in years) | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining operating lease term (in years) | 10 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,998 | $ 1,827 |
Variable lease cost | 657 | 204 |
Lease cost | $ 2,655 | $ 2,031 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rates (Details) | Mar. 31, 2023 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 7 years 3 months 18 days |
Weighted-average discount rate | 7.60% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 5,906 |
2024 | 9,561 |
2025 | 9,745 |
2026 | 9,996 |
2027 | 10,254 |
Thereafter | 24,081 |
Total lease payments | 69,543 |
Less: imputed interest | (18,332) |
Present value of lease liabilities | $ 51,211 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Change in carrying amount of goodwill | $ 0 | $ 0 | |
Goodwill impairment | 0 | 0 | |
Intangible Assets, Net | |||
Gross carrying amount | 1,376,000 | $ 1,211,000 | |
Accumulated Amortization | (962,000) | (809,000) | |
Net carrying amount | 414,000 | 402,000 | |
Indefinite-lived intangible asset | 904,000 | 904,000 | |
Intangible assets, gross | 2,280,000 | 2,115,000 | |
Intangible assets, net | 1,318,000 | $ 1,306,000 | |
Amortization expense | 152,000 | 76,000 | |
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency accrual | $ 0 | $ 0 | $ 0 |
Common Stock (Details)
Common Stock (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) vote | Dec. 31, 2022 USD ($) | Apr. 30, 2021 vote class | |
Class of Stock [Line Items] | ||||
Dividends, stock | $ 0 | $ 0 | ||
Percent of aggregate purchase price paid by the holder due if agreement is broken | 1% | |||
Registration rights agreement, accrued liability | $ 0 | |||
Number of classes of common stock authorized | class | 2 | |||
Common stock, conversion ratio | 1 | |||
Company CEO and Affiliates | ||||
Class of Stock [Line Items] | ||||
Affiliated holders, ownership percentage | 0.29 | |||
Affiliated holders, potential ownership percentage when outstanding equity awards vest | 0.32 | |||
Class A | ||||
Class of Stock [Line Items] | ||||
Vote per share of common stock (in votes) | vote | 1 | 1 | ||
Class A | Private Placement | ||||
Class of Stock [Line Items] | ||||
IPO, number of shares issued (in shares) | shares | 15,336,734 | |||
Price per share (in dollars per share) | $ / shares | $ 9.80 | |||
IPO, net proceeds received | $ 143,700,000 | |||
IPO, underwriting discounts and commissions | $ 6,600,000 | |||
Class B | ||||
Class of Stock [Line Items] | ||||
Vote per share of common stock (in votes) | vote | 10 | 10 |
Collaborative Development Con_2
Collaborative Development Contracts (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Jan. 31, 2022 USD ($) program performance_obligation phenomap | Oct. 31, 2020 USD ($) performance_obligation | Aug. 31, 2020 project | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Total revenue | $ 12,134 | $ 5,333 | ||||
Unearned revenue | 57,761 | $ 56,726 | ||||
Collaborative Arrangement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Total revenue | 12,100 | |||||
Collaborative Arrangement | Roche and Genentech | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Remaining unearned revenue | $ 150,000 | |||||
Number of performance obligations under the agreement (in performance obligations) | performance_obligation | 3 | |||||
Remaining performance obligation revenue | $ 150,000 | |||||
Unearned revenue | $ 7,200 | $ 2,500 | ||||
Collaborative Arrangement | Roche and Genentech | Phenomaps Creation | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Research project, fees and milestones payments receivable for an option on a lead series | $ 250,000 | |||||
Number of eligible phenomaps (in phenomaps) | phenomap | 16 | |||||
Collaborative Arrangement | Roche and Genentech | Phenomaps Raw Images | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Research project, fees and milestones payments receivable for an option on a lead series | $ 250,000 | |||||
Number of eligible phenomaps (in phenomaps) | phenomap | 12 | |||||
Collaborative Arrangement | Roche and Genentech | Developed and Commercialized Programs | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Research project, fees and milestones payments receivable for an option on a lead series | $ 300,000 | |||||
Number of projects that may be initiated (in projects) | program | 40 | |||||
Collaborative Arrangement | Roche and Genentech | Gastrointestinal Cancer | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Number of performance obligations under the agreement (in performance obligations) | performance_obligation | 1 | |||||
Collaborative Arrangement | Roche and Genentech | Neuroscience | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Number of performance obligations under the agreement (in performance obligations) | performance_obligation | 2 | |||||
Collaborative Arrangement | Bayer AG | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Research project, fees and milestones payments receivable for an option on a lead series | $ 100,000 | |||||
Number of projects that may be initiated (in projects) | project | 10 | |||||
Number of performance obligations under the agreement (in performance obligations) | performance_obligation | 1 | |||||
Remaining performance obligation revenue | $ 30,000 | |||||
Collaborative agreement, term (in years) | 5 years | |||||
Non-refundable upfront payment received | 30,000 | |||||
Research project, fees and milestones payments receivable for an option on a development candidate | $ 120,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Apr. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted in period, weighted average grant date fair value (in dollars per share) | $ 5.32 | $ 7.42 | |
Unvested stock options, unamortized stock-based compensation cost | $ 37.1 | ||
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition (in years) | 3 years | ||
Employee stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, vesting period (in years) | 4 years | ||
Stock options, expiration period (in years) | 10 years | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, vesting period (in years) | 4 years | ||
Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition (in years) | 3 years | ||
Fair market value of vested shares | $ 5.2 | ||
Unrecognized compensation cost | $ 59.8 | ||
2021 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, capital shares reserved for future issuance (in shares) | 16,186,000 | ||
Number of shares available for grant (in shares) | 20,652,818 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based payment arrangement, expense | $ 8,272 | $ 5,344 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based payment arrangement, expense | 1,011 | 348 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based payment arrangement, expense | 2,683 | 1,635 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based payment arrangement, expense | $ 4,578 | $ 3,361 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Share-based Payment Arrangement, Option, Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options, outstanding, number at beginning of period (in shares) | 16,154,924 | |
Options, granted in period (in shares) | 2,757,614 | |
Options, cancelled in period (in shares) | (671,116) | |
Options, exercised in period (in shares) | (582,395) | |
Options, outstanding, number at end of period (in shares) | 17,659,027 | 16,154,924 |
Options, exercisable, number (in shares) | 9,233,673 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options, outstanding, weighted average exercise price at beginning of period (in dollars per share) | $ 5.10 | |
Options, granted in period, weighted average exercise price (in dollars per share) | 8.55 | |
Options, cancelled in period, weighted average exercise price (in dollars per share) | 7.41 | |
Options, exercised in period, weighted average exercise price (in dollars per share) | 2.03 | |
Options, outstanding, weighted average exercise price at end of period (in dollars per share) | 5.65 | $ 5.10 |
Options, exercisable, weighted average exercise price (in dollars per share) | $ 4.02 | |
Options, outstanding, weighted average remaining contractual life | 7 years 7 months 6 days | 7 years 6 months |
Options, exercisable, weighted average remaining contractual life | 6 years 7 months 6 days | |
Options, outstanding, intrinsic value | $ 50,807 | $ 67,997 |
Options, exercised in period, intrinsic value | 3,527 | |
Options, exercisable, intrinsic value | $ 37,544 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumption (Details) - Stock based compensation | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 3 months 18 days | 6 years 2 months 12 days |
Expected volatility | 64% | 63% |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 3.50% | 1.70% |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Stock units | |
Beginning balance, outstanding (in shares) | shares | 6,894,525 |
Granted (in shares) | shares | 1,916,806 |
Vested (in shares) | shares | (484,444) |
Forfeited (in shares) | shares | (303,686) |
Ending balance, outstanding (in shares) | shares | 8,023,201 |
Weighted-average grant date fair value | |
Beginning balance, outstanding Weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.17 |
Granted (in dollars per share) | $ / shares | 9.05 |
Vested (in dollars per share) | $ / shares | 8.58 |
Forfeited (in dollars per share) | $ / shares | 8.31 |
Ending balance, outstanding Weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.19 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 0 | $ 0 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Denominator: | ||
Weighted average common shares outstanding, basic (in shares) | 191,618,238 | 170,690,392 |
Weighted average common shares outstanding, diluted (in shares) | 191,618,238 | 170,690,392 |
Net loss per share, basic (in dollars per shares) | $ (0.34) | $ (0.33) |
Net loss per share, diluted (in dollars per shares) | $ (0.34) | $ (0.33) |
Class A | ||
Numerator: | ||
Undistributed earnings, basic | $ (62,679) | $ (53,022) |
Undistributed earnings, diluted | $ (62,679) | $ (53,022) |
Denominator: | ||
Weighted average common shares outstanding, basic (in shares) | 183,851,596 | 161,674,169 |
Weighted average common shares outstanding, diluted (in shares) | 183,851,596 | 161,674,169 |
Net loss per share, basic (in dollars per shares) | $ (0.34) | $ (0.33) |
Net loss per share, diluted (in dollars per shares) | $ (0.34) | $ (0.33) |
Class B | ||
Numerator: | ||
Undistributed earnings, basic | $ (2,648) | $ (2,957) |
Undistributed earnings, diluted | $ (2,648) | $ (2,957) |
Denominator: | ||
Weighted average common shares outstanding, basic (in shares) | 7,766,642 | 9,016,223 |
Weighted average common shares outstanding, diluted (in shares) | 7,766,642 | 9,016,223 |
Net loss per share, basic (in dollars per shares) | $ (0.34) | $ (0.33) |
Net loss per share, diluted (in dollars per shares) | $ (0.34) | $ (0.33) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock based compensation | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share, amount (in shares) | 8,534,876 | 12,089,621 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | $ 9,231 | $ 9,200 |
Total assets | 417,942 | 413,813 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 408,711 | 404,613 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | 9,231 | 9,200 |
Total assets | 417,942 | 413,813 |
Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 408,711 | 404,613 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | 0 | 0 |
Total assets | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash | 0 | 0 |
Total assets | 0 | 0 |
Level 3 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value Disclosure of Asset and Liability Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Book values | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total liabilities | $ 1,840 | $ 633 |
Book values | Notes Payable | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Current portion of notes payable | 661 | 97 |
Notes payable, net of current portion | 1,179 | 536 |
Fair values | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total liabilities | 1,840 | 633 |
Fair values | Notes Payable | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Current portion of notes payable | 661 | 97 |
Notes payable, net of current portion | $ 1,179 | $ 536 |
Subsequent Events (Details)
Subsequent Events (Details) - Class A - Subsequent event | May 08, 2023 $ / shares shares |
Cyclica Inc | |
Subsequent Event [Line Items] | |
Business acquisition, equity interest issued or issuable, number of shares (in shares) | 6,900,000 |
Reference price (in dollars per share) | $ / shares | $ 5.78 |
Weighted average share price reference period | 30 days |
Valence Discovery Inc | |
Subsequent Event [Line Items] | |
Business acquisition, equity interest issued or issuable, number of shares (in shares) | 8,200,000 |
Exercisable shares for outstanding options assumed (in dollars per share) | 1 |