FDA's Shift to AI-Based Drug Testing Boosts AI-Driven Biotech Stocks

Recursion Pharmaceuticals Shares Are Up Today: what's Going On? - Recursion Pharmaceuticals (NASDAQ:RXRX)

Shares of Recursion Pharmaceuticals, Inc. RXRX are trading higher Friday after the U.S. Food and Drug Administration announced plans to phase out its requirement for animal testing in favor of more modern, human-relevant methods. The agency stated that it will begin implementing the shift immediately, replacing animal models with AI-based computational toxicity assessments, human cell lines, and organoid-based testing. The move is designed to streamline drug development, lower research and development costs, and speed up the process of bringing new treatments to market. Recursion, a biotechnology company focused on using artificial intelligence to accelerate drug discovery, was among the top gainers following the announcement. Other companies in the health care technology and AI-driven biotech space, including Certara Inc., Schrodinger Inc., Simulations Plus Inc. and Absci Corp., also saw double-digit gains in extended trading. The agency says the change will improve safety and reliability while reducing dependence on animal models, marking a new era in drug development. RXRX Price Action: Recusion Pharmaceuticals shares were up 19.5% at $5.39 at the time of writing, according to Benzinga Pro. Read next: Producer Inflation Cools Sharply In March, Yet Investors Show Muted Reaction Image Via Shutterstock. RXRXRecursion Pharmaceuticals Inc$5.4320.4%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum17.50Growth-Quality-Value19.18Price TrendShortMediumLongOverviewGot Questions? AskWhich biotech companies will benefit most from FDA changes?How will AI-driven drug discovery evolve post-FDA shift?What impact will this have on R&D costs for biotech firms?Could healthcare technology stocks see sustained growth?Which companies might struggle with new FDA regulations?Is the biotech sector ready for rapid innovations?How will investors react to this shift in drug development?Which AI companies will capitalize on FDA changes?What trends will emerge in drug testing methodologies?Could Recursion Pharmaceuticals become a leader in the market?Powered ByMarket News and Data brought to you by Benzinga APIs

Nvidia-Backed Recursion, Ginkgo Bioworks Rally Following FDA's Decision To End Animal Testing - Absci (NASDAQ:ABSI), Charles River (NYSE:CRL)

The U.S. Food and Drug Administration (FDA) announced its plans to end the mandatory animal testing of new drugs, a move that sent AI-enabled biotech companies such as Recursion Pharmaceuticals Inc. RXRX and Ginkgo Bioworks Holdings Inc. DNA rallying last week. What Happened: On Thursday, the new FDA commissioner, Martin Makary, announced a major reform to its drug evaluation standards. As per the agency's press release, mandatory animal testing is no longer required for monoclonal antibody therapies and other drugs, and it would instead be replaced with "more effective, human relevant methods." The agency lays out several approaches to replace animal testing, such as AI-based computational models of toxicity, cell lines, and organoid toxicity testing in a laboratory setting. See More: FDA Grants Complete Approval To Bayer's Drug For Certain Type Cancer With Mutation Calling it a "win-win for public health and ethics," commissioner Makary adds that drug manufacturers have performed animal testing of drugs longer than was necessary, especially those "drugs that have data in broad human use internationally." The move sent Nvidia Corp.-backed NVDA Recursion Pharmaceuticals, along with Ginkgo Bioworks, Absci Corp. ABSI and Schrodinger Inc. SDGR, all techBio or AI-enabled biotech companies, rallying 27.72%, 11.23%, 23%, and 27.42%, respectively, following the announcement. On the flip side, however, companies operating in the preclinical laboratory services industry, such as Charles River Laboratories Inc. CRL and Inotiv Inc. NOTV witnessed a steep pullback of nearly 28%, and 44%, respectively, being major legacy players in the contract research organization (CRO) space. Why It Matters: Leading biotech analysts have, however, expressed mixed views on the FDA's announcement, with Leerink Partners analysts referring to it as "more public relations than a change in policy," adding that they expect minimal near-term impact on preclinical testing, as reported by BioSpace. Analyst Rick Weissenstein of TD Cowen had a rather optimistic take on the announcement, stating to Axios that the initiative "combines deregulatory themes and cutting-edge technology," in service of a broadly popular goal of reducing animal testing. Weissenstein further adds that the FDA's plans could help accelerate drug development with the use of AI and by leveraging computational models, resulting in lower costs and improved safety. Despite its rally over the past week, shares of Recursion Pharmaceuticals don't score too well on Benzinga's Edge Stock Rankings, but what about Ginkgo Bioworks and Schrodinger? Sign up for Benzinga Edge Stock Rankings today for more such insights. Read More: This Is What Whales Are Betting On Recursion Pharmaceuticals Photo courtesy: Shutterstock ABSIAbsci Corp $3.061.32% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum 12.44 Growth - Quality - Value 6.38 Price Trend Short Medium Long Overview CRLCharles River Laboratories International Inc $101.001.25% DNAGinkgo Bioworks Holdings Inc $8.01-1.35% NOTVInotiv Inc $1.48-1.33% NVDANVIDIA Corp $113.562.37% RXRXRecursion Pharmaceuticals Inc $5.993.99% SDGRSchrodinger Inc $24.801.27% TEMTempus AI Inc $43.513.30% Got Questions? Ask Which biotech companies will benefit from FDA changes? How might AI-driven drug development impact costs? Will Ginkgo Bioworks see sustained growth? Which investors are backing Recursion Pharmaceuticals? How will contract research organizations adapt to FDA reforms? Which emerging biotech firms could gain market share? What risks do traditional testing companies face now? Is there potential in AI biotech partnerships? Could Absci Corp. leverage this change for growth? How will shareholder sentiment shift post-FDA announcement? Powered By Market News and Data brought to you by Benzinga APIs

Why Recursion Pharmaceuticals Stock Is Skyrocketing Today | The Motley Fool

Shares of Recursion Pharmaceuticals (RXRX 20.40%) were skyrocketing around 20% higher as of 11 a.m. ET on Friday. The big gain for the biotech stock came after the U.S. Food and Drug Administration (FDA) announced on Thursday that it plans to replace the use of animals in testing drugs with "more effective, human-relevant methods," including artificial intelligence (AI) models. Recursion uses AI in its drug discovery and development processes. The company built one of the largest datasets in the biopharmaceutical industry with over 60 petabytes of data. The FDA will initially focus on monoclonal antibodies with its initiative to replace animal testing and later expand to other types of drugs. How will the agency's move impact Recursion? It's too soon to know for sure. However, it's possible that other drugmakers could be more interested in teaming up with Recursion with the FDA promoting the use of AI models in drug development. Recursion already partners with four big pharmaceutical companies: Bayer, Merck KGaA, Roche's Genentech unit, and Sanofi. Recursion Pharmaceuticals stock isn't a good fit for risk-averse investors. The company remains unprofitable and is losing more money as it ramps up clinical development of several candidates. Recursion's most advanced program is only in phase 1/2 testing. There's no guarantee that any of the pipeline candidates will be successful in clinical studies and win regulatory approvals. However, aggressive investors could find Recursion Pharmaceuticals attractive. Its collaborations with big drugmakers give it more stability than many clinical-stage biotech companies have. The company is also backed by Nvidia. Recursion's AI-driven processes hold significant potential. This is a risky pick, but one that just might pay off handsomely over the long run.

Recursion (RXRX): FDA To Replace Animal Testing With AI? - A Small But Necessary Win

Upgrading Recursion to "Hold" due to potential AI-driven opportunities and goodwill, but caution remains due to high cash burn and uncertain long-term viability. Investment Overview I've generally been neutral to bearish on Recursion Pharmaceuticals (NASDAQ:RXRX) in notes for Seeking Alpha in the past. In my last post on the AI-driven drug discovery company last November, I If you like what you have just read and want to receive at least 4 exclusive stock tips every week focused on Pharma, Biotech and Healthcare, then join me at my marketplace channel, Haggerston BioHealth. Invest alongside the model portfolio or simply access the investment bank-grade financial models and research. I hope to see you there. Edmund Ingham is a biotech consultant. He has been covering biotech, healthcare, and pharma for over 5 years, and has put together detailed reports of over 1,000 companies. He leads the investing group Haggerston BioHealth. The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts for all the Big Pharmas, forecasting, integrated financial statements, discounted cash flow analysis and market by market analysis. Learn more. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.