Almost a 12 months in the past we concluded that AI Drug Discovery Shares Proceed to Disappoint. The perfect examples are two names we cowl carefully that seemingly pivoted from “thrilling AI-enabled drug discovery platforms” to “dangerous in-house drug builders.” Since then, the 2 have run equally in reverse instructions with one up +36% and one down 36% in comparison with a Nasdaq return of 26% over the identical time-frame. Let’s begin by attempting to grasp the underlying causes of those two diverging outcomes.
Recursion’s Underperformance
ARK Make investments darling Recursion Prescribed drugs $RXRX is down -36% since our final piece and sitting close to all-time lows. This firm initially caught our eye with their fascinating expertise that invovled taking tens of millions of microscopic photos of cells to see how they reply to numerous stimuli. The corporate (after all) makes use of AI to assist analyze these adjustments which guarantees to assist velocity up the arduous drug improvement course of. It feels like peak science, so why have shareholders been decimated?
In our final piece we pointed to some rising considerations surrounding Recursion’s enterprise. The primary was their dwindling pipeline of scientific candidates. We assumed ab
