Cathie Wood Explains Why She Likes Recursion Pharmaceuticals, Inc. (RXRX)

Artificial intelligence (AI) is transforming various industries, and the biopharma sector is no exception. Cathie Wood, CEO of Ark Invest and a renowned growth stock portfolio manager, has taken a keen interest in Recursion Pharmaceuticals, Inc. (RXRX), an AI-driven drug discovery company. In this article, we will explore the reasons behind Wood's enthusiasm for Recursion and its potential as an investment opportunity.



Recursion Pharmaceuticals is a TechBio company that leverages AI, machine learning, and large language models to revolutionize drug discovery and development. Its platform, Recursion OS, enables the company to analyze vast amounts of biological and pharmacological information, generating new drug candidates more efficiently. This approach has the potential to cut timelines, decrease costs, and increase the chances of success in drug development.

Wood's investment in Recursion aligns with her broader portfolio strategy, particularly in the biotech and healthcare sectors. Ark Invest's portfolio includes several biotech and healthcare companies that are working on innovative treatments and technologies. By investing in Recursion, Wood is betting on the company's potential to disrupt traditional drug discovery methods and create new opportunities for collaboration and revenue generation.



One of the key aspects of Recursion that resonates with Wood's investment philosophy is its big idea. The company aims to revolutionize the drug discovery and development process by using AI and machine learning. If successful, Recursion's platform could transform the biopharma R&D landscape, enabling it to commercialize its own medicines and license its platform and data to other players. This could disrupt traditional drug discovery methods and create new opportunities for collaboration and revenue generation.

Another aspect that appeals to Wood is Recursion's use of cutting-edge technology. The company employs advanced technologies such as AI, machine learning, and large language models to analyze vast amounts of biological and pharmacological information. This enables Recursion to generate new drug candidates more efficiently, potentially leading to a hockey stick trajectory in growth.

Recursion's collaboration with major pharmaceutical companies like Bayer and Roche further solidifies its place in Wood's portfolio. These partnerships demonstrate the company's potential to generate significant revenue through licensing its platform and data. Additionally, Recursion's focus on developing new drugs for rare diseases and cancer, as well as its broad pipeline of projects, positions it well for long-term growth.



Wood's investment in Recursion is a testament to her confidence in the company's potential. By expanding her position in Recursion from 61,000 shares to roughly 4 million shares, Wood has shown her commitment to the company's long-term prospects. This investment aligns with Wood's strategy of making big bets on potentially disruptive businesses, even if they come with some level of risk. In the case of Recursion, Wood is likely betting that the company's innovative approach to drug discovery and development will pay off in the long run, despite the challenges it faces as an unprofitable growth stock.

In conclusion, Cathie Wood's investment in Recursion Pharmaceuticals, Inc. (RXRX) is a reflection of her confidence in the company's potential to disrupt the biopharma industry through its AI-driven drug discovery platform. Recursion's big idea, cutting-edge technology, and strategic partnerships position it well for long-term growth. While there are challenges and risks associated with investing in an unprofitable growth stock, Wood's investment strategy is focused on identifying and capitalizing on disruptive businesses with significant long-term potential. As such, Recursion Pharmaceuticals is an attractive investment opportunity for those looking to capitalize on the convergence of AI and biopharma.