Recce Pharmaceuticals Ltd has announced a significant capital raising initiative totaling A$15.8 million to advance its Phase III clinical trials for novel synthetic anti-infectives. The funding consists of a A$5.0 million placement from an Australian-based private investor and a A$10.8 million entitlement offer to shareholders.
The capital raise will primarily fund registrational Phase III clinical trials for diabetic foot infections (DFI) in Indonesia and acute bacterial skin and skin structure infections (ABSSSI) in Australia. These trials follow the company's recently announced successful Phase II ABSSSI study that achieved all endpoints.
"We are delighted to receive further support from an existing Australian-based shareholder and are pleased to launch an entitlement offer to all shareholders to acquire new shares at the same price as the placement," said James Graham, Chief Executive Officer of Recce Pharmaceuticals. "Proceeds from the capital raising will be used to support a Registrational Phase III clinical trial for diabetic foot infections in Indonesia and a Registrational Phase III for ABSSSI across Australia."
Capital Raising Structure and Terms
The A$5.0 million placement involves approximately 17.9 million new fully paid ordinary shares at A$0.28 per share. The entitlement offer is structured as a pro-rata non-renounceable offer of one new share for every six existing shares held by eligible shareholders at the same price.
The offer price represents a 13.8% discount to the last closing price of A$0.325 on April 9, 2025, and a 19.8% discount to the 5-day Volume Weighted Average Price of A$0.3492. All company directors who are eligible shareholders have indicated their intention to participate in the entitlement offer.
Dr. John Prendergast, Chairman of Recce Pharmaceuticals, emphasized the strategic importance of this funding: "This capital raise supports a critical step forward as we commence our Phase III trial. Given current share levels and the anticipated trial timeline, we believe Recce offers strong underlying value. The outcome of this trial represents a potential inflection point for the Company, with the opportunity to advance a new standard of care and improve outcomes for patients."
Financial Position and Additional Funding
Following the capital raising, Recce will have a pro-forma cash position of A$17.7 million. The company also anticipates additional non-dilutive funding, including an estimated A$8.5 million R&D rebate from the Australian Taxation Office expected in Q4 2025, and a potential R&D advance of approximately A$10.0 million.
The placement is expected to settle on April 16, 2025, with allotment anticipated on April 17, 2025. The entitlement offer will be open from April 22, 2025, to May 5, 2025, for eligible shareholders with registered addresses in Australia, New Zealand, Hong Kong, Singapore, and Accredited Investors in the United States.
Addressing the Global Antimicrobial Resistance Crisis
Recce Pharmaceuticals is developing a new class of synthetic anti-infectives designed to combat the urgent global health challenge of antibiotic-resistant superbugs. The company's pipeline includes three patented, broad-spectrum synthetic polymer anti-infectives:
- RECCE® 327 (R327): An intravenous and topical therapy for serious and potentially life-threatening infections caused by Gram-positive and Gram-negative bacteria, including their superbug forms
- RECCE® 435 (R435): An orally administered therapy for bacterial infections
- RECCE® 529 (R529): A treatment for viral infections
These anti-infectives employ multi-layered mechanisms of action that potentially overcome bacterial and viral resistance mechanisms—a significant advantage over existing antibiotics.
Regulatory Recognition and Market Potential
The World Health Organization has added all three of Recce's anti-infectives to its list of antibacterial products in clinical development for priority pathogens, recognizing the company's efforts to combat antimicrobial resistance. Additionally, the U.S. Food and Drug Administration granted R327 Qualified Infectious Disease Product designation under the Generating Antibiotic Initiatives Now (GAIN) Act, providing Fast Track Designation and 10 years of market exclusivity post-approval.
R327 is also included on The Pew Charitable Trusts' Global New Antibiotics in Development Pipeline as the sole synthetic polymer and sepsis drug candidate in development. Recce wholly owns its automated manufacturing capabilities, which support current clinical trials.
The successful completion of the planned Phase III trials could position Recce to generate revenue by 2026, representing a significant milestone for the company and potentially offering a new standard of care for patients with difficult-to-treat infections.
