1 Reason to Buy Recursion Pharmaceuticals Stock and 2 Reasons to Sell
Recursion Pharmaceuticals (NASDAQ: RXRX) is arguably one of the most unique drugmakers on the planet. Though it's classified as a biotech company, its claim to fame is an artificial intelligence (AI)-based approach to speeding up drug discovery and development. Recursion Pharmaceuticals remains a small and little-known player in the industry, and like all clinical-stage biotechs, the stock is relatively risky. There are arguments for and against buying shares -- let's consider one in favor and two against.
Developing brand-new drugs is difficult, risky, and expensive. There is the pre-clinical stage, where novel clinical compounds are tested on laboratory animals. Then, provided results are positive, human clinical trials begin, typically in three phases, each more daunting than the last. Some drugs never make it past phase 1 studies despite acing pre-clinical testing. Some stop at the phase 2 level, and others fail late-stage studies. Those that make it through this grueling process aren't guaranteed approval -- sometimes, regulatory bodies decline to grant it.
And among those that do get marketing authorization, many don't generate enough revenue to cover the cost that went into developing them. This slow process doesn't just affect drugmakers' bottom lines. It affects all of us since a more efficient approach would lead to more breakthroughs in drug development and cheaper medicines.
Source Fool.com
