The Future of Drug Discovery: Our Journey with Recursion Pharma
When Mubadala Capital launched its ventures platform in San Francisco three years ago, we had a simple mission: partner early with founders who want to build globally enduring companies and support them throughout their journey by leveraging Mubadala’s global assets and resources.
One of the most critical industries undergoing a technology-enabled transformation is healthcare, and drug discovery and development in particular. While prescription drug sales account for nearly 10% of overall US healthcare spend, and pharmaceutical companies are relied upon to develop treatments and cures for a wide variety of ailments, the industry has, in some sense, been a victim of its own success. As low-hanging therapeutic targets are addressed, R&D efficiency has drastically decreased (only one out of 10 drugs make it through clinical development, which typically lasts 8–10 years to get a drug to market). At the same time, discovery and development costs have risen to as much as $2 billion to get to market. These factors, combined with the downward pressures on drug pricing, have compromised pharmaceutical companies’ bottom lines and threaten the very survival of the legacy model.
The scientific, regulatory and societal factors to which these challenges can be attributed are numerous and hard to quantify, but it is beyond dispute that the drug discovery process still relies on slow, manual workstreams for running biological experiments. This puts the onus on individual scientists and lab workers, leading to overly simplified representation of biology, and limited data sets and feedback loops. In light of these factors, it is perhaps not surprising that one of the pillars of our healthcare investment thesis is finding companies that integrate technology (Artificial Intelligence (AI) and Machine Learning (ML) in particular) and biology to radically alter prevailing drug discovery scientific and business models.
One of the most exciting companies we’ve partnered with, and the very first we invested in as part of the Mubadala’s ventures platform is Recursion Pharmaceuticals. Chris Gibson, Recursion’s Co-founder and CEO, understood the power of applying automation and ML to build the world’s largest biological image dataset, allowing Recursion to drive valuable pre-clinical insights that can increase the success rate of clinical development.
We were immediately inspired by Chris’s vision, focus and leadership. From the start, he wanted to build a new type of pharma company: a company that embraces AI and ML while remaining grounded in a deep understanding of biology and chemistry; a company that seamlessly integrates technology and biology under one roof; and a company where data scientists and bench scientists collaborate closely to build on insights not previously attainable by traditional methods.
When we made that first investment in Recursion’s Series B financing back in 2017, Recursion was a pre-clinical company, focused only on Mendelian diseases and relying on the repurposing of the shelved assets of large pharma.
Today, Recursion has become a fully integrated pharma company, with a pipeline that includes four clinical stage assets, a broadened therapeutic focus, and an expanded late pre-clinical pipeline that includes more than 11 assets. This sustained success has brought not only additional capital — Recursion just announced the closing of a >$200 million Series D financing — but commercial partnerships, including a milestone agreement with Bayer Pharmaceutical.
The Recursion journey highlights our thesis and investment capabilities. We started with an initial investment that increased as the company grew and executed successfully. Mubadala has the unique ability to dramatically expand our investment in top-performing companies in our ventures portfolio. We are proud to expand our partnership with Recursion by investing in its Series D financing, bringing to bear capital from the balance sheet of Mubadala Investment Company. This funding brings a new source of differentiated, long-term-oriented and patient capital that will support the Recursion team on its mission.
This is a critical milestone for the ventures platform. We invest early in a company’s innovative journey, and we increase our support over time, including deploying the full resources of Mubadala.
Healthcare, and the need for innovation and rapid throughput in particular, has never been more important, and we remain committed to partnering with founders who are tirelessly tackling some of the toughest challenges in life sciences.