Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has raised $8 million via an institutional placement at A$0.45 per share.
The company says the placement drew strong support from new and existing investors, including NorthStar Impact Fund, which committed just on $2 million.
Strong cash position
This funding secures Recce’s financial position through to the fiscal year 2026, facilitating significant clinical trials in South East Asia.
The funds will be allocated to advance clinical trials for intravenous use of R327, topical applications of R327G and Registrational Phase 3 clinical activities in Indonesia, Phase 2 UTI/Urosepsis trials and Phase 2 acute bacterial skin and skin structure infections trials.
Additionally, $1.5 million will support investigational new drug (IND) application activities with the US Food and Drug Administration (FDA), and A$1 million will cover general working capital and offer costs.
"Delighted with support"
CEO James Graham said: “We are delighted with the support of our capital raising from our existing shareholders and welcome new institutional shareholders to our register.
"We would like to thank NorthStar Impact Fund for taking the time to understand Recce and the positive impact we are setting out to achieve.
"Proceeds from the capital raising will see Recce funded through to the completion of Phase 2/3 trials and potential for commercialisation in South East Asia with immediate catalysts to announce to market."
SPP planned
In addition to the placement, Recce announced a share purchase plan (SPP) offering eligible shareholders an opportunity to subscribe for up to $30,000 worth of new shares at the same price, A$0.45, as the placement.
The SPP will enable eligible shareholders, irrespective of the size of their holding, to apply to participate in the capital raising at the same issue price as the placement, and not incur any brokerage or transaction costs.
Post-offer, Recce expects to have pro forma cash liquidity of some A$18.5 million.
R&D funding too
The company also anticipates receiving an additional $8.7 million from the US Department of Defence and R&D Advance, providing a total cash runway of $27.2 million to fund operations through the 2026 financial year.
Ord Minnett Ltd acted as sole lead manager to the placement, with Evolution Capital as co-manager.
Recce Pharmaceuticals is focused on developing synthetic anti-infectives to combat antibiotic-resistant superbugs and emerging viral pathogens, with its flagship product, RECCE® 327, receiving Fast Track Designation from the FDA.
"Exciting future"
"The company has an exciting future ahead with many key milestones over the next 12 months and we look forward to keeping shareholders up to date on our progress," Graham said.
"We acknowledge and appreciate the support of our retail shareholders.
"As a board, we are pleased to be able to offer the ability for shareholders to participate in the company’s capital raising activities on the same terms as the placement through the share purchase plan.”