Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has received A$11,178,965, as an R&D Advance with Endpoints Capital (Endpoints) capturing Recce’s Research and Development (R&D) tax incentive for FY23/24 & FY25.
The money in non-dilutive cash reflects R&D rebate credits for FY23/24, in addition to future anticipated R&D applicable expenditure for FY25 as well.
Endpoints is an Australian company with a deep-rooted expertise in R&D finance and is making significant strides in the biotechnology field by offering specialised financing solutions.
The company caters specifically to biotech companies that leverage the Australian government's R&D tax incentive scheme and aims to alleviate the financial hurdles these companies often encounter.
This strategic support allows biotech firms to concentrate on their core mission of innovation and development, fostering growth within this critical sector.
For RCE, the agreement allows it to focus on its aim of developing a New Class of Synthetic Anti-Infectives, designed to address issues caused globally by antibiotic-resistant superbugs and emerging viral pathogens.
The money gives RCE the ability to leverage its R&D expenditure benefits on a here today basis.
“We are delighted to be working with Recce Pharmaceuticals and the critical work they are doing advancing this new class of synthetic anti-infectives to address unmet medical needs where no cure exists for antibiotic-resistant superbugs,” Endpoints Capital CEO Andrew Stewart said.
“In a vast landscape of biotech innovators, we are pleased to be collaborating with Recce Pharmaceuticals as they pave the way in advancing their infectious disease portfolio to their next primary efficacy endpoint.”
Advanced Overseas finding
In terms of funding, the agreement with Endpoint follows the Advanced Overseas Finding for AU$54.9 million awarded by the Australian government in recognition of the value of RCE’s anti-infective development.
RCE CEO James Graham said at the time: “We thank the Australian Government’s recognition of the importance of Recce’s anti-infective programs, as a leader in the fight against the global health threat of anti-microbial resistant superbugs.”
Government support underscores the advance funds from Endpoints and extends the 43.5% R&D rebate from locally, to cover those undertaken by RCE anywhere in the world for three years (July 1, 2022 to June 30, 2025).
Recce stands to gain from a competitive 15% per annum interest rate on financing, uniquely structured to be offset against R&D refunds. This arrangement is secured exclusively against accrued R&D credits, ensuring a focus on the company's innovative efforts.
Notably, any excess beyond the R&D rebates, including anticipated refunds for the financial year 2023, remains under Recce's ownership. This financial model presents a market-leading solution, offering Recce an advantageous position in managing its R&D financing efficiently.
“Securing this advanced funding from Endpoints is a testament to the strength of Recce’s scientific platform and the potential of our pipeline,” Recce Pharmaceuticals CEO James Graham said.
“This non-dilutive funding not only extends our financial runway but facilitates the acceleration of our multiple clinical programs. We thank Endpoints for having confidence in our vision and look forward to leveraging this partnership to drive meaningful progress in the fight against antimicrobial resistance."