Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has raised A$4 million to support commercial licensing activity, clinical trials and regulatory-enabling work for its synthetic anti-infective pipeline.
The placement, priced at A$0.40 per share, comprises 10.0 million new fully paid ordinary shares and was supported by new and existing institutional, sophisticated and professional investors.
Recce will also launch a share purchase plan (SPP) to allow eligible shareholders to subscribe for up to A$30,000 worth of new shares on the same terms as the placement, targeting up to an additional A$4 million before costs for a prospective total of $8 million..
Funds directed to licensing and clinical milestones
The money from the placement and SPP will be used to strengthen Recce’s balance sheet for commercial licensing with a leading Middle Eastern pharmaceutical company, including initiatives to support a potential commercial agreement.
The company has allocated A$3.2 million to this area, alongside A$2 million for clinical trials targeting significant unmet medical needs.
This includes completion of a Phase 3 diabetic foot infections (DFI) registrational topical clinical trial in Indonesia, a Phase 3 DFI registrational topical clinical trial in Australia for the US Food and Drug Administration, and continuation of the US Department of War Burn Wound Program.
A further A$2 million will be used for activities enabling Investigational New Drug applications to the FDA and Indonesia’s BPOM, while A$800,000 will support general working capital and offer costs.
Following the offer, Recce expects pro forma cash liquidity before offer costs of about A$29.5 million, including anticipated additional funding from an estimated A$7.5 million R&D rebate and A$10 million in non-dilutive capital through an R&D advance.
Shareholder participation and option structure
Participants in the placement and SPP will receive 1 free-attaching unlisted option for every two new shares issued.
The attaching options will have an exercise price of A$0.60 and expire on June 30, 2027. If exercised, holders will receive 1 fully paid ordinary share and 2 free unlisted piggyback options for each attaching option exercised.
The piggyback options will have an exercise price of A$1.00 and expire on June 30, 2028.
Recce said the offer of the attaching options and piggyback options would be made under a prospectus to facilitate secondary trading of shares issued on exercise, subject to ASX confirmation that the structure complies with Listing Rules.
“Exciting time” for Recce
Recce CEO James Graham said the capital raising came as the company progressed commercial and clinical milestones.
“The capital raising comes at an exciting time for the Recce business, having recently signed a non-binding term sheet with a leading Middle Eastern Pharmaceuticals Company and ahead of interim data readouts in Indonesia which is a positive step towards the potential commercialisation of R327G,” Graham said.
Anti-infective pipeline
Recce is developing a new class of synthetic anti-infectives designed to address antibiotic-resistant infections.
Its pipeline includes RECCE® 327 as an intravenous and topical therapy for serious and potentially life-threatening bacterial infections, RECCE® 435 as an oral therapy for bacterial infections and RECCE® 529 for viral infections.
Recce's anti-infectives use multi-layered mechanisms of action intended to overcome resistance pathways used by bacteria and viruses.