Recursion Pharmaceuticals and Biodexa: A High-Stakes Race in the FAP Market

The biotech sector's fascination with rare disease markets has never been more pronounced, and Familial Adenomatous Polyposis (FAP) stands as a prime example of a condition with unmet medical needs and high commercial potential. Two companies, Recursion Pharmaceuticals (NASDAQ: RXRX) and Biodexa Pharmaceuticals PLC (NASDAQ: BDRX), are locked in a race to develop the first FDA-approved therapy for FAP. While both are targeting the same disease, their divergent clinical strategies, regulatory trajectories, and financial positioning create a compelling case study for investors assessing the long-term implications of clinical-stage competition on biotech valuation and risk.

Recursion's AI-Driven Innovation: A High-Risk, High-Reward Play

Recursion Pharmaceuticals is leveraging its proprietary AI platform, Recursion OS, to identify novel therapeutics for FAP. Its lead candidate, REC-4881, is an orally bioavailable, non-ATP-competitive allosteric MEK1/2 inhibitor currently in a Phase 1b/2 trial (TUPELO). Early data from the Phase 2 portion of the trial showed a 43% median reduction in polyp burden at Week 13 in six efficacy-evaluable patients, with three achieving a ≥1-point reduction in Spigelman stage. These results, presented at Digestive Disease Week 2025, suggest a promising mechanism of action targeting the dysregulated MEK1/2 pathway in FAP.

However, Recursion's path is not without challenges. The drug's safety profile, while generally manageable, includes Grade 3 adverse events in 16% of patients, with acneiform rash, diarrhea, and elevated creatine phosphokinase (CPK) being common. The company's reliance on AI-driven discovery, while innovative, introduces uncertainty about reproducibility and scalability. Additionally, Recursion's valuation—trading at a P/S ratio of 12.5x as of August 2025—reflects high expectations for its platform's broader applications beyond FAP.

Biodexa's Fast-Tracking: A More Traditional, Yet Aggressive Approach

Biodexa, by contrast, is pursuing a more conventional but well-validated strategy with eRapa, an oral formulation of rapamycin (sirolimus) targeting the mTOR pathway. Its Phase 3 trial (Serenta) is already underway, with 168 patients enrolled across 30 U.S. and European sites. Phase 2 data demonstrated an 89% non-progression rate and a 29% median reduction in polyp burden at 12 months, earning Fast Track and Orphan Drug designations in both the U.S. and EU.

Biodexa's competitive edge lies in its advanced regulatory alignment and financial backing. A $20 million grant from the Cancer Prevention & Research Institute of Texas (CPRIT), matched by the company, ensures capital preservation and reduces dilution risk. The company's Type C meeting with the FDA in March 2025 solidified the Phase 3 protocol, including a composite endpoint that balances safety and efficacy. This regulatory clarity, combined with a P/S ratio of 4.2x, suggests a more conservative valuation relative to its clinical progress.

Clinical Competition and Valuation Dynamics

The FAP market, though small (50,000 patients in the U.S. and EU5), is highly lucrative due to the lack of approved therapies and the potential for premium pricing. Recursion and Biodexa represent two archetypes of biotech innovation: platform-driven discovery versus mechanistically validated reformulation.

For Recursion, the key risk lies in the uncertainty of AI-generated drug candidates. While REC-4881's mechanism is novel, the company's platform has yet to deliver a commercial product. A successful Phase 2 readout could justify its valuation, but a failure to replicate results in larger trials would likely trigger a sharp correction. Conversely, Biodexa's eRapa benefits from rapamycin's established safety profile, reducing the risk of unexpected adverse events. Its Phase 3 timeline positions it to potentially secure approval before Recursion, which could dominate market share and investor sentiment.

Investment Implications: Balancing Risk and Reward

Investors must weigh the time-to-market and differentiation factors. Biodexa's advanced Phase 3 trial and regulatory momentum make it a safer bet in the short term, particularly for risk-averse investors. Its non-dilutive funding and clear endpoint agreement with the FDA reduce operational risks. However, Recursion's AI platform offers long-term upside if it can replicate success in other indications, though this requires patience and tolerance for volatility.

For those with a higher risk appetite, Recursion's 43% median polyp reduction in Phase 2 suggests a potentially transformative therapy. Yet, the company's valuation assumes a high probability of success in later-stage trials, which is not guaranteed. Biodexa's 89% non-progression rate in Phase 2, while less headline-grabbing, is more aligned with traditional drug development metrics and may appeal to value-oriented investors.

Conclusion: A Tale of Two Biotechs

The FAP market exemplifies the dual forces shaping biotech valuations: innovation risk and regulatory momentum. Recursion's AI-driven approach represents the future of drug discovery but carries inherent uncertainties. Biodexa's more conventional strategy, while less glamorous, offers a clearer path to approval and commercialization.

For investors, the choice between these two companies hinges on their risk tolerance and time horizon. Biodexa's Phase 3 readiness and financial stability make it a compelling near-term play, while Recursion's platform potential justifies a speculative position for those betting on the next generation of biotech innovation. In either case, the FAP race underscores the importance of clinical differentiation and regulatory alignment in determining long-term investment outcomes.