Why Recursion Pharmaceuticals Stock Was Getting Mashed on Monday

Recursion Pharmaceuticals (NASDAQ: RXRX) didn't have a fine start to the working week on Monday, at least as far as its stock was concerned. Investors traded out of it following the clinical-stage biotech's first-quarter earnings release and business update, and the share price was down by 15% in mid-session trading. The S&P 500 index was doing comparatively better, with a 0.3% decline.

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Light revenue and a deepening net loss

For the quarter, Recursion -- which although a clinical-stage company earns some coin from collaboration agreements with large pharmaceutical companies -- booked just over $14.7 million in revenue. That topped the nearly $13.8 million in the same period of 2024.

Operating costs nearly doubled across that stretch of time, however, resulting in a much deeper net loss. Recursion's bottom-line shortfall worsened to more than $202 million ($0.50 per share) against the year-ago quarter's $91 million deficit.

Both headline numbers missed analyst estimates, if not by much. On average, pundits tracking Recursion stock anticipated slightly under $15 million for revenue, and a $0.49-per-share net loss.

Aiming for the stars with AI

The company is notable for being a biotech that has actively and enthusiastically embraced artificial intelligence (AI) technology to discover and develop new drugs. It is currently developing treatments mainly for different types of cancer, but also has a pair of rare disease programs. Yet none of these have yet advanced to later stages, and investors might be hungry for more progress at this point.

That being said, AI in medicine is still quite a new factor, and if utilized effectively could speed up both the discovery and development processes significantly. At this point Recursion is a stock for investors willing to accept a significant degree of risk; however, the payoffs could eventually be considerable.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.