Is Recursion Pharmaceuticals Stock a Buy?
Small-cap biotech companies can deliver outsized returns over the long run if they develop breakthrough medicines that go on to generate massive sales. However, some of these smaller drugmakers aren't just drugmakers. That's the case with Recursion Pharmaceuticals (NASDAQ: RXRX), a biotech whose technologically focused approach to discovering and developing medicines could be even more important than the revenue it could eventually earn from its own pipeline candidates.
With a market capitalization of just $1.9 billion, Recursion still provides a potentially good entry point for investors, but that's only if there are good reasons to think that its strategy will pan out. Let's find out whether that's the case.
What exactly does Recursion Pharmaceuticals do? It describes itself as a TechBio company, meaning it seeks to use technology to improve healthcare. Specifically, Recursion uses an artificial intelligence (AI)-based algorithm in a virtual lab that tests clinical compounds on a library of human genes. The goal is to identify the most promising compounds to move to studies and increase the success of medicines that first enter clinical trials, the overwhelming majority of which never reach the market.
Source Fool.com
