Shares of TechBio firm Recursion (NASDAQ:RXRX), which is working on decoding biology to revolutionize drug discovery, spiked at the time of writing after announcing that it secured a $50 million investment from NVIDIA (NASDAQ:NVDA). This funding comes as part of a private investment in public equity (PIPE) deal. The companies are joining forces to develop Recursion’s AI foundation models for biology and chemistry, aiming to optimize these models and distribute them to biotech companies through NVIDIA’s cloud services. According to Recursion’s CEO, Chris Gibson, the combination of their vast dataset and NVIDIA’s advanced computing capabilities will allow them to create unprecedented foundation models in the biological field.
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Recursion’s extensive proprietary dataset, with over 23 petabytes and 3 trillion searchable gene and compound relationships, will be used to speed up the training of foundation models on the NVIDIA DGX™ Cloud. This collaboration could lead to potential commercial licenses or releases on BioNeMo, NVIDIA’s generative AI cloud service for drug discovery.
Jensen Huang, founder and CEO of NVIDIA, highlighted the importance of generative AI in discovering new medications and treatments and is eager to work with Recursion’s innovative team to leverage NVIDIA’s AI software and accelerate the development of large-scale biomolecular generative AI models. Through its recent acquisition of Valence Discovery, Recursion plans to expedite the development of novel technologies for the biopharma industry, promoting greater access to large-scale models for drug discovery.
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RXRX stock based on three Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. As a result, the average price target of $15 per share implies 31.93% upside potential despite its massive 70% gain at the time of writing.
