Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has secured an AusIndustry Advanced Overseas Finding covering up to A$85 million in eligible research and development expenditure for its synthetic anti-infective programs.
The finding, issued by the Department of Industry, Science and Resources under the federal Research and Development Tax Incentive scheme, confirms that Recce’s overseas R&D activities qualify for the 43.5% refundable tax offset for a three-year period, in addition to its Australian-based work. The ruling is not a grant and does not involve any up-front payment.
The decision extends R&D tax support across RCE's global anti-infective portfolio, including its Phase 3 diabetic foot infection (DFI) clinical trial underway in Indonesia, as well as further international programs targeting serious infectious diseases.
Chief executive James Graham said the outcome represents “one of the largest Advance and Overseas Findings in Australian history”, adding that it confirms eligibility for up to A$85 million of R&D expenditure under the program.
"This binding decision supports our global anti-infective programs — extending the 43.5% rebate not only locally, but to activities conducted around the world. This is highlighted by key late-stage clinical programs, including patient dosing in our Phase III clinical trial for DFI. We thank the Australian Government for recognising the importance of our work in efforts to make antibiotic resistance history.”
Synthetic polymer anti-infective
Recce is developing a new class of synthetic polymer anti-infectives aimed at antibiotic-resistant superbugs and viral infections. Its pipeline includes lead candidate RECCE 327, being developed as both an intravenous and topical therapy, oral antibiotic RECCE 435 and antiviral candidate RECCE 529.
The World Health Organization has listed Recce’s candidates among antibacterial products in clinical development for priority pathogens, while the US Food and Drug Administration has granted RECCE 327 Qualified Infectious Disease Product and Fast Track designations, providing 10 years of market exclusivity post-approval.
Plenty of recent milestones
It has been a big month or so for Recce, which has reported strong preclinical efficacy data for its lead anti-infective candidate R327 in ventilator-associated pneumonia (VAP), with mouse model studies by the Murdoch Children’s Research Institute showing the drug was statistically more effective than a market comparator and able to reduce lung bacterial load to near or below the limit of quantification.
Unlike current treatments that are difficult to solubilise for delivery into the lungs, R327 can be administered as a fine mist that penetrates the mucosal barrier to reach the infection site, which CEO James Graham describes as “an excellent sign of new hope in the fight against superbugs”, particularly given VAP mortality rates of up to 70%.
The company has also secured a comprehensive family patent for R327 in the Hong Kong Special Administrative Region, valid until 2041 and covering manufacture, administration, and marketing rights.
In parallel, Recce’s Phase 3 trial in Indonesia for diabetic foot ulcer infections is progressing, leveraging the country’s 11% diabetes rate to access a large patient pool, with an interim readout targeted by the end of Q1 2026 and potential pathways into broader ASEAN and Middle Eastern markets.
Recce continues to collaborate with the US Department of Defense on multiple programs, including burn wound care and chemical countermeasures, and expects further efficacy data updates before the end of 2025.