Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has successfully completed the placement of the shortfall from its recent entitlement offer, raising $7.4 million. The funds will support the biotechnology company's ongoing clinical development efforts, particularly its Phase 3 trials for topical treatments aimed at tackling antibiotic-resistant infections.
Full capital raise now complete
The shortfall placement marks the completion of Recce’s $15.8 million capital raise, which also includes a $5 million private placement and $3.4 million raised through the entitlement offer. The shortfall shares were placed with existing institutional and sophisticated investors at 28 cents per share, consistent with the price set in the entitlement offer announced in April.
The capital raise will enable Recce to progress its key Phase 3 clinical trials, bringing the company closer to its commercialisation goals. It now has a pro-forma cash position of $16 million, which will fund critical steps in the development of its synthetic anti-infective pipeline.
“This successful shortfall placement is very gratifying for Recce, particularly given the more challenging environment for raising capital for biotechnology companies that currently exists,” Recce CEO James Graham said. “We are delighted to achieve our intended capital raise and receive this ongoing support from our existing institutional and sophisticated shareholders.”
Ord Minnett Ltd was lead manager to the capital raising, with Spark Plus Pte Ltd acting as co-lead manager.
Funding key Phase 3 trials
The funds raised will specifically be applied to the completion of pivotal Phase 3 trials for two key indications:
- Diabetic foot infection (DFI): A registrational topical clinical trial in Indonesia, which is expected to serve as a major catalyst for revenue generation in 2026.
- Acute bacterial skin and skin structure infections (ABSSSI): A registrational topical clinical trial in Australia, building on the recently completed Phase 2 trial, which achieved all of its endpoints.
In addition, the funds will support further clinical activities, the submission of an Investigational New Drug Application to the US Food and Drug Administration, and the company’s general working capital needs.
“The completion of the shortfall placement and capital raise supports a critical step forward as we commence our Phase 3 trial, said Recce chairman John Prendergast. “Given current share levels and the anticipated trial timeline, we believe Recce continues to offer strong underlying value,” he added.
‘Major inflection point’
Investors and industry observers will continue to closely watch Recce’s progress in its clinical trials, particularly as the company moves forward in addressing the urgent global health problem of antibiotic-resistant superbugs.
Recce’s pipeline includes the synthetic anti-infectives RECCE® 327, RECCE® 435, and RECCE® 529, which aim to tackle both bacterial and viral infections. With this successful capital raise, Recce is well-positioned to continue its development efforts towards commercialising these therapies, particularly the Phase 3 trials.
“The outcome of this trial represents a potential major inflection point for the company, with the opportunity to advance a new standard of care in infectious diseases, offering long sought-after improved outcomes for patients,” Prendergast said.