Recursion Pharmaceuticals Shares Surge 8.72% Following Rallybio Acquisition Deal

Recursion Pharmaceuticals (RXRX) gained 8.72% on Tuesday after acquiring a $25-million interest in REV102, an ENPP1 inhibitor in preclinical development for hypophosphatasia treatment. Rallybio will receive $7.5 million in upfront equity, a $12.5 million contingent equity payment, and a $5 million milestone payment. Rallybio CEO Stephen Uden stated that combining expertise with Recursion's AI/experimental platform transformed the concept into a potential oral disease-modifying treatment for HPP.

Recursion Pharmaceuticals (RXRX) gained 8.72% on Tuesday following the acquisition of full rights to REV102, a potential oral ENPP1 inhibitor for the treatment of hypophosphatasia (HPP). The acquisition was announced on July 8, 2025, and marks a significant milestone in the development of a disease-modifying therapy for HPP, a rare genetic disorder affecting over 7,800 diagnosed patients across the US and EU5 [1].

Under the terms of the agreement, Rallybio, the original developer of the REV102 program, will receive $7.5 million in upfront equity, a $12.5 million contingent equity payment upon the initiation of additional preclinical studies, and a $5 million milestone payment upon the initiation of Phase 1 clinical trials [1]. Additionally, Rallybio will be eligible to receive low single-digit royalties on all future net sales by Recursion.

Recursion plans to leverage its advanced AI-driven platform, Recursion OS, to optimize the drug development process. The platform's integration of AI and experimental capabilities has been crucial in transforming the concept of REV102 into a potential oral disease-modifying treatment for HPP [1]. Early preclinical data has demonstrated a favorable safety profile in animal models and validated ENPP1 as a druggable target in later-onset HPP.

REV102 targets ectonucleotide pyrophosphatase/phosphodiesterase 1 (ENPP1), an enzyme implicated in the pathogenesis of HPP. The mechanism of action involves a potent, highly selective inhibition of ENPP1, aiming to restore the crucial balance of inorganic pyrophosphate (PPi) necessary for proper bone mineralization, thereby addressing the underlying cause of HPP. This candidate is designed to potentially be the first oral disease-modifying therapy for HPP, offering advantages in convenience and patient quality of life over injectable treatments [1].

The acquisition of full rights to REV102 presents a significant opportunity for Recursion to accelerate the development of a potential oral treatment for HPP patients, who currently face significant challenges with limited access to existing therapies. The program is currently in IND-enabling studies, with the initiation of Phase 1 clinical trials expected in the second half of 2026 [1].

Recursion's acquisition of REV102 highlights its commitment to leveraging advanced technology to address unmet medical needs. The integration of AI and experimental capabilities has the potential to improve patient access and reduce costs associated with existing therapies. However, the success of the program remains subject to risks inherent in pharmaceutical research and development, including the potential for failure at any stage prior to or after regulatory approval [1].

References:
[1] https://ir.recursion.com/news-releases/news-release-details/recursion-acquires-full-rights-rev102-potential-first-class-oral
[2] https://www.nasdaq.com/articles/recursion-acquires-full-ownership-enpp1-inhibitor-program-rev102-rallybio-hypophosphatasia