On Thursday, Exscientia plc ( EXAI ) agreed to merge with Recursion Pharmaceuticals Inc ( RXRX ). .

Exscientia ( EXAI ) shareholders will receive 0.7729 Recursion shares for each Exscientia ( EXAI ) share, with fractional shares paid in cash.

Based on the fixed exchange ratio, Recursion shareholders will own approximately 74% of the combined entity, and Exscientia ( EXAI ) shareholders will own approximately 26%.

Also Read: Recursion Pharmaceuticals Stock Surges 10% As Nvidia-Powered Supercomputer Completion Sparks Investor Optimism.

“We believe the proposed combination is deeply complementary and aligned with our missions to industrialize drug discovery to deliver high-quality medicines and lower prices for consumers,” said Chris Gibson, Co-Founder and CEO of Recursion and the planned CEO of the combined entity.

The combined company, which will be named Recursion, will continue to be headquartered in Salt Lake City, Utah, and trade on the NASDAQ while maintaining a significant presence in the U.K.

Chris Gibson, Co-Founder & CEO of Recursion, will serve as CEO of the combined company and David Hallett, Interim Chief Executive Officer & Chief Scientific Officer of Exscientia ( EXAI ), plans to join the combined company as Chief Scientific Officer.

Related: AI Drug Hunter Firm Exscientia Fires Its CEO Over ‘Inappropriate’ Relationships with Two Employees.

Exscientia ( EXAI ) will bring its precision chemistry design and small-molecules automated synthesis technology to Recursion, contributing to scaled biology exploration and translational capabilities.

Once integrated, the companies believe the extended and evolved Recursion Operating System will enable the discovery and translation of higher-quality medicines more efficiently and at a higher scale with a full-stack technology-enabled small molecule discovery platform.

In addition, the combined company expects to read out approximately ten clinical trials in the next 18 months, where most of these programs, if successful, could have annual peak sales opportunities in excess of $1 billion.

The combined entity will have $850 million in cash and about $200 million in expected milestones over the next 24 months, plus a potential $20 billion in royalties on the line later if any drugs from the pipeline are approved.

The combined company is estimated to achieve approximately $100 million in annual synergies with a runway extending into 2027.

Price Action: On Thursday, EXAI stock closed 17.1% higher to $5.27.

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