Before market open on Tuesday, Recursion Pharmaceuticals (RXRX -4.66%) published its latest set of quarterly earnings and business update. It might have wished it hadn't, as those quarterly numbers clearly didn't impress the market. The company's stock ended up closing the day almost 5% lower in price, a steeper fall than the 0.5% dip of the benchmark S&P 500 index.

Second quarter: revenue rose, but net loss deepened

For its second quarter, Recursion earned $19.2 million in revenue, which was up from the slightly more than $14.4 million in the same period of 2024. However, the clinical-stage biotech company's generally accepted accounting principles (GAAP) net loss deepened considerably, coming in at almost $172 million ($0.41) against the $97.5 million deficit in the year-ago period.

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Although analysts tracking the stock were collectively modeling a lower revenue figure of $15.4 million, their net loss estimate was considerably narrower, at $0.35 per share.

Recursion, which targets cancer and rare disorders with its investigational drugs, provided an update on its pipeline. The most advanced of its programs, oncology drug REC-617, advanced into a phase 1/2 clinical trial in the first half of the year.

Teaming up

As a biotech without a product currently on pharmacy shelves, Recursion generates modest revenue largely from collaborations with large pharmaceutical companies. Among these well-known mainstays are Bayer and Merck.

In the earnings release, it updated the status of several of these; an especially promising one now is a tie-up with Sanofi, which has the potential to produce more than $300 million in milestone payments.