RXRX Stock Up on Acquiring Full Rights to the Hypophosphatasia Program

Shares of Recursion Pharmaceuticals RXRX gained 8.7% on Tuesday and continue to gain today. The uptrend was triggered after it announced acquiring Rallybio’s RLYB full interest in their joint venture for developing REV102 and an associated backup molecule for the treatment of hypophosphatasia (HPP), a rare and debilitating genetic disorder.

Recursion Pharmaceuticals and Rallybio launched their joint venture in 2019 to explore the use of AI-driven drug discovery for rare diseases. Using its proprietary AI platform, Recursion OS, Recursion Pharmaceuticals pinpointed ENPP1 as a therapeutic target for treating HPP, which ultimately led to the discovery of REV102 — an orally bioavailable, selective ENPP1 inhibitor designed for chronic use, offering high potency and a favorable safety profile.

The acquisition of full rights to the HPP program marks a strategic move for Recursion Pharmaceuticals, enabling the company to independently accelerate development of what could become the first oral, disease-modifying therapy for HPP. With full control, the company can now more effectively deploy its Recursion OS platform to deepen insights and streamline R&D efforts to bring the treatment to the market as soon as possible.

Year to date, RXRX shares have plunged 20.7% compared with the industry’s 2.9% decline.

Per the terms of the agreement with Rallybio, Recursion Pharmaceuticals will provide $7.5 million in upfront equity, with an additional $12.5 million in contingent equity payable upon the start of further preclinical studies. RXRX will also make a $5 million milestone payment to RLYB upon the initiation of dosing in an upcoming early-stage clinical study. Rallybio is entitled to receive low single-digit royalties on any future net sales generated by Recursion Pharmaceuticals from the program. Additionally, Rallybio may receive further payments if RXRX pursues a sale of the REV102 program.

The sudden influx of funds in the form of the upfront payment from Recursion Pharmaceuticals strengthened Rallybio’s balance sheet. It also extended RLYB’s cash runway into mid-2027. Rallybio’s shares soared 50.2% on Tuesday in response to the news.

RXRX’s REV102 Development Program for HPP in Detail

Recursion Pharmaceuticals’ REV102 has a unique mechanism of action, which involves a potent, highly selective inhibition of ENPP1, aiming to restore the crucial balance of PPi necessary for proper bone mineralization, thereby addressing the underlying cause of HPP.

Initial preclinical data have shown that REV102 has a favorable safety profile in animal models and supports ENPP1 as a viable therapeutic target for later-onset HPP. The program is currently undergoing IND-enabling studies, with phase I clinical studies anticipated to begin in the second half of 2026.

HPP impacts more than 7,800 diagnosed patients in the United States and the EU, many of whom face limited access to current enzyme replacement therapies (ERTs). Advancing REV102 offers the potential for a more accessible and cost-effective long-term treatment option for HPP.

Recursion Pharmaceuticals believes that REV102 also has the potential to significantly improve patient convenience and quality of life compared to injectable ERTs. As a small molecule with low immunogenicity, it could also offer a safer alternative by reducing the risk of immune-related side effects.

Recursion Pharmaceuticals, Inc. Price and Consensus

Recursion Pharmaceuticals, Inc. price-consensus-chart | Recursion Pharmaceuticals, Inc. Quote

RXRX’s Zacks Rank and Stocks to Consider

Recursion Pharmaceuticals currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Verona Pharma VRNA and Bayer BAYRY. While VRNA currently sports a Zacks Rank #1 (Strong Buy), BAYRY carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 90 days, Verona Pharma’s bottom-line estimates for 2025 have significantly improved from a loss of 7 cents per share to earnings of 22 cents. During the same timeframe, estimates for 2026 earnings per share have improved from $2.21 to $2.88. VRNA stock has soared 96.4% so far this year.

Verona Pharma’s earnings beat estimates in one of the trailing four quarters and missed the mark on the other three occasions, delivering an average negative surprise of 6.76%.

BAYRY’s 2025 earnings per share estimate has increased from $1.19 to $1.27 for 2025 over the past 90 days, while that for 2026 has gone up from $1.28 to $1.34 over the same timeframe. Year to date, shares of Bayer have surged 56.6%.

BAYRY’s earnings beat estimates in one of the trailing four quarters, matched twice and missed on the remaining occasion, the average negative surprise being 13.91%.

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