Recce Pharmaceuticals (ASX:RCE) Advances Toward Commercialization with Innovative Antibiotic, R327

The battle against infectious diseases remains a global concern, with antimicrobial resistance (AMR) rendering many anti-infective drugs ineffective. However, Recce Pharmaceuticals (RCE) is reshaping the landscape of infection treatment with a revolutionary class of synthetic anti-infectives, offering hope in an era plagued by antibiotic-resistant infectious diseases.

Recce’s product portfolio features the world’s most clinically advanced class of anti-infectives, specifically targeting the pressing global health crisis of antibiotic-resistant superbugs. Leading this innovative charge is RECCE® 327 (R327), an intravenous therapy recognized in The Pew Charitable Trusts Global New Antibiotics in Development Pipeline as the world’s most advanced polymeric antibiotic and the sole clinical-stage candidate for sepsis treatment.

The company envisions these anti-infectives as potential broad-spectrum therapies for critical unmet medical needs, including sepsis/urosepsis, urinary tract infections (UTI), diabetic foot infections (DFI), and burn wound infections.

According to Recce, its pioneering technology represents the first new antibiotic class introduced in over three decades and is well on its way to becoming a commercial reality.

At the forefront of their efforts is R327, the company’s lead drug candidate, which recently completed its initial human phase one testing. This versatile drug is under investigation for various indications, encompassing both complicated and uncomplicated UTIs, urosepsis, and topical applications for burn wounds and DFIs.

Edison Research, an independent research body, has valued the company at $535.6 million with an equity price of $3.00 per share, signaling a remarkable increase in market capitalization.

Recce Pharmaceuticals aims to secure the necessary capital through future partnerships, funding initiatives, and investment support to unlock the full research and development potential of their groundbreaking anti-infectives.

Recent Research and Development Achievements

In April of this year, RCE received further approvals from the Australian Patent Office (APO) for the initial installment of its ‘Patent Family 4.’ These approvals pertain to the utilization of R327 and R529 in treating bacterial and viral infections. They serve as a validation of Recce’s anti-infectives based on earlier studies in burn wounds, UTIs, gonorrhea, influenza, and COVID-19.

Dr. John Prendergast, Executive Chair of RCE, expressed the company’s focus on uncovering R327’s potential as a viable treatment for challenging UTIs, emphasizing their Human Research Ethics Committee (HREC) approval to conduct clinical trials. These trials aim to demonstrate the therapeutic potential and efficacy of R327 in patients with UTIs.

In July, RCE initiated phase I/II intravenous clinical trials for R327 in humans, assessing its effectiveness and safety at South Australia’s CMAX clinical research facility and subsequently expanding the trial to New South Wales Scientia Clinical Research. The trial examines R327’s intravenous dosing at faster infusion rates across three participant cohorts, collecting plasma and urine samples to evaluate its antibacterial properties and concentration effects. Dr. Prendergast highlighted that peak concentrations of R327 in urine can rapidly eliminate E. coli, unlike currently approved antibiotics for UTI treatment, which take hours.

R327 has also been developed as a topical agent for DFIs, receiving HREC approval in December 2022 to commence a phase I/II DFI study. While not yet approved for clinical use, R327 was administered as a topical gel (R327G) under the Therapeutic Goods Administration’s Special Access Scheme, Category A, by qualified medical practitioners on five patients. All patients treated with R327G responded positively, with complete eradication of antibiotic-resistant infections.

Recce’s Financial Position

In 2021, the global antibiotics market was valued at A$55.86 billion (US$38.08 billion), projected to reach $66.46 billion (US$45.30 billion) by 2028, with a CAGR of 2.5%.

In September, Recce announced a capital raising effort of approximately $11 million, with $8 million in commitments from new and existing institutional and sophisticated investors, and an entitlement offer to existing shareholders for raising up to $3 million. The company also benefits from the Australian Government’s R&D tax rebate, which provides a 43.5% rebate for every dollar spent on research and development from the Australian Taxation Office. Additionally, Recce has an at-the-market (ATM) equity financing facility with Acuity Capital, expiring in January 2026, offering up to $20 million in standby equity capital.

Recce’s Future Expansion Opportunities

Recce’s intellectual property portfolio comprises four wholly-owned patent families encompassing over 40 issued patents and patent applications in major markets such as the United States, Europe, Japan, China, and Australia. The FDA has granted RECCE® 327 Qualified Infectious Disease Product designation under the Generating Antibiotic Initiatives Now (GAIN) Act, expediting its approval process and providing ten years of market exclusivity post-approval.

Dr. Prendergast noted that the approval has opened doors for research and development collaborations with major pharmaceutical companies closely monitoring their progress.

Recce continues to form partnerships to expand its patient population, exemplified by the recent clinical trial expansion with Scientia Clinical Research. CEO James Graham expressed satisfaction with expanding phase I/II UTI studies, anticipating accelerated clinical trial progress to address the global health threats posed by UTIs and urosepsis.

In May, Recce was sponsored, alongside three other Western Australian companies, by the State Government to attend the 18th BIO Korea International Convention. Mr. Graham engaged with leading biotech companies, investors, executives, and researchers at the event. In June, the company also participated in BIO US in Boston, Massachusetts, attracting over 14,000 biotechnology and pharma industry leaders.

Dr. Alan Dunton, Non-Executive Director and Chief Medical Advisor, delivered the opening R&D address at the World Antimicrobial Resistance Congress in September, positioning the company as a beacon of hope in the battle against antibiotic-resistant superbugs.

The World Health Organization estimates that approximately 50 million sepsis cases occur annually, resulting in 11 million sepsis-related deaths, with urogenital tract infections (urosepsis) localized in roughly 30% of septic patients.

Key Takeaways for Investors

Recce Pharmaceuticals aspires to lead the development and commercialization of a novel class of synthetic anti-infectives, addressing the critical global health threat posed by antibiotic-resistant superbugs. Anti-infectives play a pivotal role in curing and preventing life-threatening infections, and despite investor skepticism towards pre-profit companies in some sectors, the biopharma industry continues to attract substantial interest and investment.

Recce asserts that its multi-faceted mechanisms of action have the potential to overcome the bacterial hypermutation challenge—a significant hurdle for existing antibiotics.

Source: Recce Pharmaceuticals