Jingtai Technology VS RXRX

$XTALPI(02228.HK) $Recursion Pharmaceuticals(RXRX.US) Company Fundamentals

**Analysis:** Recursion is a leading US AI drug discovery firm rooted in academia (founded 2013, Nasdaq 2021). Its Salt Lake City-based team combines medical/engineering expertise to "decode biology." XtalPi represents China's tech-driven biotech, founded by MIT PhDs in 2015 and listed as Hong Kong's first Chapter 18C specialized tech firm in 2024. With dual HQs in Shenzhen/Boston, XtalPi applies physics algorithms + AI to medicine. Both have similar team sizes (~800 for Recursion, 700+ for XtalPi) and share the "TechBio" pioneer ethos - using AI/automation to transform drug R&D, albeit with different approaches.

Technology & Core Capabilities

• Recursion: Its proprietary "Recursion OS" integrates biology, chemistry, automation, and data science. Features automated cell experiments generating massive phenotypic data via high-throughput imaging, analyzed by deep learning to uncover drug mechanisms. Key innovation: Combining large-scale phenotypic databases with ML to map "biological relationship networks," revealing hidden gene-phenotype-compound links. Claims to have digitized physical experiments into searchable bio/chemical relationships (trillions of data points). End-to-end platform spans genomics-to-clinical stages, with AI guiding target discovery, lead optimization, and trial design. Expanded capabilities via acquisitions (e.g., 2023 purchases of Cyclica and Valence for AI chemistry/generative AI). Holds ~58 global patents covering compound discovery orchestration, ML analysis of perturbation data, etc. Core moat: Unique biological data + interdisciplinary AI platform enabling integrated optimization. Demonstrates hypothesis-free phenotypic screening to clinical candidate generation.
• XtalPi: Integrates quantum physics, AI algorithms, cloud computing, and robotic automation. Initially renowned for small-molecule crystal prediction (100% accuracy in Pfizer's 2016 challenge vs. industry's 86-93%). Expanded to drug design (small/large molecules) and solid-state research, combining algorithmic prediction with robotic lab validation. Developed autonomous lab tools: XmartChem (synthesis robots), XtalComplete (crystallization), PatSight (IP mining), XMolGen (molecular design). "AI+Robotics" platform automates compound synthesis, crystal forms, and bio-experiments. Currently holds 120+ patents, 27 active drug discovery projects, and 4 R&D centers (>10,000 sqm labs). Full-chain capabilities: computational design → automated synthesis → characterization testing, applicable beyond pharma to materials science. Key strength: Precision algorithms (quantum chem, generative AI) + rapid robotic validation for faster iterations. Leads in crystal screening/molecular design accuracy/efficiency while commercializing modular platform tools.

Comparison: Both emphasize AI+automation but differ in focus. Recursion starts with phenotypic data to build "biological maps" and target discovery, recently adding chemistry via M&A. XtalPi excels in physics-based computational precision, expanding horizontally across drug design with robotic validation. XtalPi's 120+ patents (vs. Recursion's ~58) reflect aggressive IP strategy. Recursion's moat: Proprietary data + AI integration; XtalPi's: Algorithm accuracy + hardware scalability for broad industry 赋能。

Business Models & Clients

• Recursion: "Internal pipeline + strategic partnerships." Focuses on proprietary drug development (novel targets/mechanisms), supplemented by big pharma collaborations. Flagship 2021 deal with Roche/Genentech: $150M upfront for up to 40 programs ($1.2B potential). Later partnerships with Sanofi, Bayer, etc. Sanofi collaboration (2025) advanced 4/15 projects to candidate optimization ($7M milestone; $5.2B total potential). Typically grants partners global rights for milestone/royalty shares. Not a CRO - revenue depends on partnership progress. Also raised strategic investments (e.g., NVIDIA's $50M). No product revenue yet.
• XtalPi: Hybrid "platform services + co-development." As an AI CRO/CRDMO, serves 16/20 top pharma (Pfizer, J&J, Merck, etc.) and Asian biotechs with customized solutions (e.g., crystal screening, lead optimization). Accelerated Pfizer's Paxlovid crystal form confirmation (6 weeks). Recent high-value co-development deals: Lilly (2023, up to $250M upfront), DoveTree (2025, $599M potential, $51M received). Revenue mix: service fees + milestone shares. Broader client base than Recursion, resembling an "AI-powered outsourcing platform." Also explores non-pharma applications (e.g., energy materials with CAS).

Comparison: Recursion prioritizes internal pipelines (high-risk/high-reward) with selective mega-partnerships. XtalPi balances scalable services with shared-value co-development, ensuring steadier cash flow. Recursion's deals are fewer but larger (Roche/Sanofi); XtalPi has diverse projects, now securing Lilly/DoveTree-scale contracts. Long-term: Recursion resembles an "AI biopharma," XtalPi an "AI-enabled R&D ecosystem."

Pipeline Maturity

• Recursion: Clinical-stage with focus on oncology/rare diseases. Previously 11 candidates, now streamlined to 6 core programs (4 oncology, 2 rare) after 2024-2025 terminations. Key assets: REC-4881 (Phase II MEK inhibitor for FAP), REC-3964 (Phase I C. difficile toxin). Using AI for clinical trial design. No late-stage or commercial products yet.
• XtalPi: 27 discovery/preclinical projects, mostly partner-driven. No proprietary clinical assets. Assisted partners like Taiwan's PharmaEngine in clinical-stage candidates. DoveTree collaboration includes preclinical molecules. Earlier-stage than Recursion but demonstrates "drug-generating" capability via partners.

Comparison: Recursion is clinically advanced (multiple Phase I/II) but faces validation risks. XtalPi excels at "0-to-1" discovery, relying on partners for development. Recursion may see binary value inflection; XtalPi's risk/reward is distributed across multiple projects.

Financials

• Recursion: Heavy R&D spend ($128.6M Q2 2025, +74% YoY) with modest revenue ($19.2M Q2 2024, +33%). 2024 net loss: $464M; Q2 2025 loss: $171.9M. $533.8M cash (Jun-2025), projected runway to 2027 post-layoffs. Revenue/cost mismatch but claims 100x efficiency gains in early-stage costs.
• XtalPi: Rapid revenue growth (RMB517M H1 2025, +404%), turning profitable (RMB141M adjusted net). Strong cash from IPO ($115M net) + Tencent/Sequoia backing. Higher capital efficiency via monetizable services.

Comparison: Recursion burns cash awaiting pipeline success; XtalPi shows scalable monetization. Recursion's $2.5B valuation reflects platform potential; XtalPi's $6.2B values proven growth.

Valuation & Market

• Recursion: $2.5B market cap (30x P/S). Volatile: 52wk $3.79-$12.36. ARK Invest held 7%. Tech investors bet on long-term AI-bio story; pharma analysts await clinical proof.
• XtalPi: $6.2B (60x P/S). Hong Kong's AI pharma leader, up 20% past year. Tencent-backed. High growth premium but needs sustained execution.

Comparison: Recursion priced for binary clinical outcomes; XtalPi for execution visibility. Different investor bases (US tech/pharma vs. HK growth).

Strategic Positioning

• Recursion: "AI biopharma" pioneer with "Recursion OS" moat (data + automation + IP). NIH/DoD/NVIDIA endorsements. Challenges: clinical validation, cash burn.
• XtalPi: "AI lab" provider with quantum physics + robotics edge. Serves broad industries. First-mover in China's policy-backed market. Challenges: platform defensibility vs. traditional CROs.

Investment Takeaway: Recursion offers high-risk/high-reward bets; XtalPi provides growth with less binary risk. Both represent TechBio's promise - choose based on risk appetite.