Recursion and Exscientia agreed to merge in an all-stock deal, the two AI-focused biotechs said Thursday morning.
The merger is one of the biggest M&A deals for the nascent but fast-evolving AI biotech space. The companies were both founded roughly a decade ago and are among the highest-profile AI-focused biotechs. But both have also struggled since their public market debuts, with their respective stock prices falling by roughly 80%. Exscientia’s board fired founder and former CEO Andrew Hopkins earlier this year, determining he had inappropriate relationships with two employees.
As part of the merger, Recursion shareholders will own a majority, or about 74%, of the combined business, which is expected to have about $850 million in cash and equivalents. The companies said they plan to achieve “annual synergies of approximately $100 million with a runway extending into 2027.”
Recursion and Exscientia expect the combined company to report a flurry of early human data in the near future, planning for 10 clinical readouts in the next 18 months. Most of those programs would have blockbuster sales potential if successful, they added.
The companies expect the deal to close by early 2025.
Exscientia’s stock $EXAI was up about 9% in premarket trading on Thursday.