Bayer Aktiengesellschaft BAYRY entered into a strategic collaboration agreement with Recursion Pharmaceuticals, Inc., a digital biology company industrializing drug discovery for the treatment of fibrotic diseases.
Bayer plans to leverage Recursion’s drug discovery platform, combining artificial intelligence (AI) along with the potential small-molecule treatments of the former for fibrotic diseases of the lung, kidney, heart and more.
According to Bayer, the collaboration with Recursion will enable the former to discover small molecule drug candidates targeting novel biology for the treatment of fibrotic diseases and the portfolio will complement its expertise in cardiovascular research with digital technologies.
Leaps by Bayer, the impact investment arm of Bayer AG, is leading Recursion’s Series D financing with an investment of $50 million.
Shares of the company have lost 19.0% so far this year against the industry’s 0.5% growth.
Recursion’s purpose-built drug-discovery platform is based on a proprietary library of more thanhalf a billion images of human cells from more than 33 million experiments conducted in-house at Recursion and coupled with advanced data analytics based on machine learning. As of date, Recursion has on-boarded more than750 cellular disease models to broadly interrogate diverse therapeutic areas.
Per the collaboration agreement, Bayer and Recursion may launch 10 or more research programs, with potential milestone payments of more than$100 million relatedto each. In addition, Bayer will have the option to exclusively license any novel therapeutics discovered. In addition to the $50 million equity investment, Recursion will receive an upfront payment of $30 million.
Zacks Rank &Stocks to Consider
Bayer currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the healthcare sector include Emergent Biosolutions Inc. EBS, Bio Techne Corp TECH and Alimera Sciences Inc. ALIM. While Emergent sports a Zacks Rank #1 (Strong Buy), Alimera and Bio Techne carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Emergent’s earnings estimates have increased from $3.45 to $6.32 for 2020 and from $4.31 to $7.01 for 2021 over the past 60 days. Shares of the company have increased 92.7% year to date.
Bio Techne’s earnings estimates have increased from $5.33 to $5.58 for 2020 and from $6.41 to $6.45 for 2021 over the past 60 days. Shares of the company have increased 13.9% year to date.
Alimera’s loss per share estimates have narrowed from $2.33 to $1.31 for 2020 and from 63 cents to 52 cents for 2021 over the past 60 days. Shares of the company have decreased 24.1% year to date.
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