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Bayer Enters Into Strategic Collaboration Deal With Recursion Pharmaceuticals

Bayer AG (BAYZF.PK,BAYRY.PK,BYR.L) and U.S.-based Recursion Pharmaceuticals, Inc., said Wednesday that have entered into a strategic collaboration agreement.

The partnership will leverage Recursion's purpose-built artificial intelligence-guided drug discovery platform as well as Bayer's small molecule compound library and deep scientific expertise to discover and develop new treatments for fibrotic diseases of the lung, kidney, heart and more.

In addition, Leaps by Bayer, the impact investment arm of Bayer, is leading Recursion's Series D financing with a $50 million investment.

Recursion's drug discovery platform combines highly automated, wet lab biology experiments as the base for iterative learning through its computational tools. To date, Recursion has on-boarded over 750 cellular disease models to broadly interrogate diverse therapeutic areas.

"The collaboration with Recursion enables us to discover small molecule drug candidates targeting novel biology for the treatment of fibrotic diseases and complements our expertise in cardiovascular research with digital technologies," said Joerg Moeller, Member of the Executive Committee of Bayer's Pharmaceuticals Division and Head of Research and Development.

Under the terms of the deal, the two companies may initiate more than ten programs with possible development and commercial milestone payments of more than $100 million per program, in addition to royalties on future sales.

Bayer will gain the option to exclusively license novel therapeutics derived from the research activities. The company will contribute with its small molecule compound library as well as expertise in biology and medicinal chemistry.

In addition to the $50 million equity investment, Recursion will receive an upfront payment of $30 million.

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