Sanofi Options First Recursion Candidate for $10 Million Milestone

Recursion Pharmaceuticals announced (RXRX ) on October 15, 2026 that Sanofi has optioned the first development candidate from the two companies’ multi-program research collaboration, triggering a US$10 million milestone payment to Recursion and advancing a potential first-in-class oral small molecule in immunology into Sanofi’s development pipeline.

The option exercise brought total upfront and milestone payments received from Sanofi under the collaboration to $144 million, according to the company. Recursion remains eligible for more than $300 million in additional milestones under the program, plus an average of low double-digit royalties on net product sales if the candidate is successfully commercialized. The $10 million milestone will be recognized as revenue in the third quarter of 2026, and the option ends Recursion’s operational requirements related to the candidate, with all future payments resulting in profit to Recursion, the company said.

The candidate is an oral small molecule designed to achieve a differentiated profile against a challenging dual target implicated in inflammatory disease. Recursion said that optimizing for the target pair required navigating complex and competing chemistry constraints to reach the desired balance of drug-like properties, and that its teams applied multiple computational design approaches across iterative cycles of prediction, chemical design, synthesis, and experimental validation to rapidly explore and optimize a complex chemical space. The molecule was delivered by combining Recursion’s AI-enabled drug design platform and small-molecule chemistry capabilities with Sanofi’s drug discovery and immunology expertise.

“Together with Sanofi, we tackled a difficult design problem against a dual target product profile with high potential and delivered a molecule that Sanofi has now selected for its development pipeline,” said Najat Khan, Recursion’s president and chief executive officer. Khan described the milestone as a further demonstration that the company’s platform can translate computational capabilities into differentiated medicines, and do so repeatedly.

According to Recursion, the candidate has been added to Sanofi’s development pipeline and is expected to enter phase 1 clinical trials in 2027, with Sanofi funding and leading further development and commercialization. “This new development candidate has potential to deliver a differentiated oral medicine with highly selective dual targeting that could be a meaningful advance for people living with inflammatory diseases who still lack adequate treatment options,” said Alyssa Johnsen, Sanofi’s therapeutic area head for development in immunology and inflammation.

Six Milestones Across Five Programs

The collaboration was established to discover and advance a portfolio of potentially first- and best-in-class small molecule medicines across immunology and oncology, combining Sanofi’s therapeutic-area and drug-development expertise with Recursion’s capabilities across biology, AI-enabled molecular design, and chemistry. With the first development candidate now optioned, the collaboration has achieved six progress-based milestones across five programs, Recursion said.

A Collaboration That Began Under Exscientia

The collaboration began with a January 7, 2022 research collaboration and license agreement between Sanofi and Exscientia covering up to 15 novel small molecule candidates across oncology and immunology. Exscientia received a $100 million upfront cash payment and became eligible for up to approximately $5.2 billion in aggregate research, translational, clinical development, regulatory, and commercial milestone payments if all milestones for all programs were achieved, plus tiered royalties on product sales ranging from high-single-digits to mid-teens. The agreement also included an option for clinical co-investment to increase the royalty rate up to 21 percent on net sales of co-funded products. Under its division of responsibilities, Exscientia led small molecule drug design and lead optimization up to development candidate nomination, while Sanofi assumed responsibility for preclinical and clinical development, manufacturing, and commercialization.

The two companies had worked together since 2016, and in 2019 Sanofi in-licensed a novel Exscientia bispecific small molecule candidate capable of targeting two distinct targets in inflammation and immunology.

On December 21, 2023, Sanofi (SNY ) expanded the collaboration by adding an existing discovery-stage program that Exscientia had identified and initially advanced, and for which Exscientia said it had designed a novel lead series with a potential best-in-class profile. The amendment made Exscientia eligible for up to $45 million in upfront and preclinical milestone payments and more than $300 million in additional development, regulatory, and sales-based milestone payments, with tiered royalties on product sales ranging from high-single-digits to mid-teens as described in the original agreement.

Recursion and Exscientia completed their business combination on November 20, 2024, with Exscientia becoming a wholly owned subsidiary of Recursion and its Nasdaq-listed American depositary shares ceasing trading. In its combination announcement, Recursion reported more than 10 partnered programs in areas such as oncology and immunology and approximately $450 million in upfront and milestone payments received from partnerships to date, with the potential to receive more than approximately $20 billion in additional milestone payments before royalties.

Recursion said additional programs across the collaboration continue to advance, and that over the next 12 months other programs in the joint portfolio have the potential to reach development candidate and other progress-based milestones.