Why Recursion Pharamaceuticals Topped the Market Today

Recursion Pharmaceuticals (NASDAQ: RXRX) was in the headlines on Monday, and for the right reason. One of the biotech company's investigational drugs did well in a clinical trial, and investors rewarded the company by trading its stock more than 2% higher on the news.

A very encouraging trial

Before market open, Recursion divulged that its REC-4881 demonstrated notable efficacy in a phase 1b/2 trial. The drug, which treats a disorder called familial adenomatous polyposis (FAP) in which polyps develop within the body, was found to reduce the total polyp burden in most of the trial's 12 participants.

All told, 75% of those administered the drug experienced such reductions. The median reduction was by 43%.

In its press release touting the drug's performance, Recursion said it validated the company's artificial intelligence (AI)-assisted drug discovery platform.

The company wrote that one of Recursion OS's findings inspired it to evaluate REC-4881 for FAP. It quoted CEO and co-founder Chris Gibson as saying that "This is a powerful example of how even the earliest versions of the Recursion OS can uncover therapeutic opportunities in diseases with no approved pharmacotherapy options."

2 big reasons to be cheerful

This is essentially a double win for Recursion -- an advancement in the development of a pipeline drug and an indication that its discovery system is effective. Although the clinical trial was a relatively early stage one, REC-4881's performance is encouraging on both fronts.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.