Shares of Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) are trading higher Friday after the U.S. Food and Drug Administration announced plans to phase out its requirement for animal testing in favor of more modern, human-relevant methods.

The agency stated that it will begin implementing the shift immediately, replacing animal models with AI-based computational toxicity assessments, human cell lines, and organoid-based testing. The move is designed to streamline drug development, lower research and development costs, and speed up the process of bringing new treatments to market.

Recursion, a biotechnology company focused on using artificial intelligence to accelerate drug discovery, was among the top gainers following the announcement. Other companies in the health care technology and AI-driven biotech space, including Certara Inc., Schrodinger Inc., Simulations Plus Inc. and Absci Corp., also saw double-digit gains in extended trading.

The agency says the change will improve safety and reliability while reducing dependence on animal models, marking a new era in drug development.

RXRX Price Action: Recusion Pharmaceuticals shares were up 19.5% at $5.39 at the time of writing, according to Benzinga Pro.

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