Cathie Wood Sizes Up Biotech Stocks: Intellia and Recursion

The report discusses Cathie Wood's strategic investment in two biotech firms, Intellia Therapeutics and Recursion Pharmaceuticals. With substantial cash reserves and promising pipelines, these stocks could offer significant growth potential despite inherent risks.

Date: 29-09-2024

AI Rating: 7

The report highlights Cathie Wood's recent investments in two biotech firms: Intellia Therapeutics (NASDAQ: NTLA) and Recursion Pharmaceuticals (NASDAQ: RXRX). Both companies are involved in innovative sectors with differing focuses. While Intellia works on groundbreaking gene-editing technologies, Recursion leverages artificial intelligence in drug development.

Intellia Therapeutics

Intellia's financials appear healthy with approximately $940 million in cash and up to $449 million in trailing 12-month R&D expenses. This suggests a stable financial position and an ability to sustain operations until late 2026.

Moreover, Intellia's venture into late-stage trials for therapies targeting ATTR amyloidosis and hereditary angioedema offers a considerable upside potential for investors. However, the prevalent risks involving regulatory approvals and potential scientific obstacles pose significant concerns.

Recursion Pharmaceuticals

Recursion’s strategy involves merging with another AI-focused biotech, Exscientia, which will create a larger entity with a heightened emphasis on oncology. The merged company anticipates maintaining a cash runway into 2026 and exploiting collaboration opportunities with major biopharma firms.

With up to $850 million in cash reserves, Recursion is positioned for growth alongside potential future revenue from clinical data readouts and milestone payments. However, the efficacy of AI in drug development remains unproven, which raises questions about its long-term financial viability.

Despite speculative risk factors, both Intellia and Recursion showcase functional pipelines and financial backing that may attract investors seeking exposure to innovative biotechnology. Overall, the sentiment tends towards positive for both companies, given their strategic initiatives and existing resources.

Stocks: NTLA RXRX MRK RHHBY NVDA