Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF), an innovator in broad-spectrum synthetic anti-infective drugs, has recently announced a considerable financial boost through an A$11.18 million research and development (R&D) advance credit from Endpoints Capital.
Operational reach expands
The financial infusion is set to extend Recce’s operational reach, allowing for the continued advancement of its R327 intravenous (IV) formulation.
“We believe this non-dilutive source of funding should extend Recce’s operating runway into FY25,” Edison Investment Research says in a recent report on the company.
The advance is earmarked for the anticipated R&D tax credit rebates for fiscal years 2023 through 2025, enhancing Recce's financial sustainability without diluting shareholder value.
Edison has slightly adjusted its valuation of Recce, now estimating a risk-adjusted net present value (rNPV) of A$644.4 million, or A$3.16 per share, a slight decrease from the previous A$652.6 million valuation.
Recce's R327 IV formulation, primarily aimed at treating sepsis and complicated urinary tract infections (UTIs), has progressed to the 20-minute dosing cohort in its Phase I/II study.
Safety and efficacy affirmed
The safety and efficacy of the drug, particularly at varying infusion rates, have been affirmatively reviewed by an independent safety committee, allowing the trial to advance.
Recce has now received approval to expand its Phase 1/2 study of topical R327 in diabetic foot infections (DFI) to additional sites globally, following positive interim efficacy results.
This expansion is anticipated to extend to Southeast Asia, leveraging Recce’s strategic partnership with PT Etana Biotechnologies.
Financially, Recce's R&D advance from Endpoints Capital has alleviated any immediate funding concerns, with the company now expected to maintain its operational activities well into next year.
Edison notes that Recce's financial manoeuvring, including the non-dilutive funding strategy, not only prolongs its financial runway but also enables the acceleration of its clinical programs.
The company’s strategic financial and clinical advancements have solidified its position in the pharmaceutical industry, focusing on the development of novel anti-infective treatments.
With the financial backing from Endpoints Capital and positive progress in its clinical trials, Edison believes Recce is well-positioned to continue its development of the R327 product line and expand its global clinical trial footprint.