Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) earlier this week strengthened its intellectual property position in Southeast Asia after securing a Vietnamese patent covering the manufacture and use of its RECCE® 327 and RECCE® 529 synthetic anti-infective candidates.
The Family 4 patent, granted by the Intellectual Property Office of Vietnam, provides protection until 2041 and represents the eighth patent secured by the company within this patent family.
Chief executive James Graham said the award was significant because it extended Recce Pharmaceuticals’ potential market monopoly in Vietnam to 2041. He explained that the claims covered the preparation and manufacture of R327 and R529, as well as their use against bacterial, viral and other infectious diseases.
Graham described the patent as “broad” and “all-encompassing”, with potential applications including acute bacterial skin and skin structure infections, diabetic foot ulcer infections and burn wound infections.
Vietnam was strategically important because it formed part of the ASEAN group of countries, Graham said. He pointed to the prevalence of diabetes in the region and the associated risk of infected diabetic foot ulcers, while also highlighting high levels of resistance to existing antibiotics and the absence of an established standard of care in some markets.
The company’s Indonesian Phase 3 program represented one of the most important near-term catalysts. Graham said Recce Pharmaceuticals remained on track for potential approval in Indonesia later in the year, with sales targeted for the following year. He added that an Indonesian approval could support broader access across ASEAN, including Vietnam.
A second Phase 3 study was being conducted across Australian teaching hospitals. Graham said this program was being run to US Food and Drug Administration standards and under an FDA-aligned protocol, with a submission targeted for the end of the following year.
Licensing activity provided another potential catalyst. Recce Pharmaceuticals had announced a term sheet with a leading Middle Eastern pharmaceutical company covering approximately 11 countries and a proposed 10-year licence.
Graham said the arrangement was targeting net royalties of between 30% and 36%, based on a US$1,500 selling price. He said the company was actively working to convert the term sheet into a definitive agreement.
The company’s recently raised funds were expected to support its clinical, regulatory and licensing activities. Investors are likely to focus on upcoming Phase 3 data, the anticipated Indonesian regulatory decision, progress on the Middle Eastern licence and further expansion of Recce Pharmaceuticals’ global patent portfolio.
Interview highlights
- Recce Pharmaceuticals secured a Vietnamese Family 4 patent covering the manufacture and use of RECCE® 327 and RECCE® 529.
- The patent extends protection in Vietnam until 2041 and is the eighth granted patent within the Family 4 portfolio.
- The claims cover bacterial, viral and other infectious diseases, including acute bacterial skin infections, diabetic foot ulcer infections and burn wound infections.
- James Graham identified Vietnam as strategically important because it is part of ASEAN and has a significant diabetes-related disease burden.
- The company is progressing two Phase 3 studies focused on diabetic foot ulcer infections, including programs in Indonesia and Australia.
- Recce Pharmaceuticals expects the Indonesian program to support an anticipated approval pathway and future sales across ASEAN markets.
- The Australian study is being conducted across teaching hospitals to standards intended to support a future US FDA submission.
- The company is also progressing a Middle Eastern licensing opportunity covering about 11 countries under a proposed 10-year agreement.
- Graham said the proposed licence could deliver net royalties of between 30% and 36%, based on a US$1,500 selling price.
- Near-term catalysts include Phase 3 clinical data, potential Indonesian approval, progress towards a definitive Middle Eastern licensing agreement and further regulatory activity.
Proactive: Recce Pharmaceuticals has strengthened its intellectual property position in Southeast Asia after securing a Vietnamese patent covering its RECCE® 327 and RECCE® 529 anti-infective candidates. Here to discuss the patent and the Vietnamese market is CEO James Graham. James, good to see you again.
James Graham: Hi, Jonathan. Good to be with you.
Proactive: Let’s talk about the Vietnamese patent first. Talk us through how it came about and why this protection is important for the candidates.
James Graham: It is very significant because it takes our market monopolies out to 2041. Furthermore, the patent claims on which these monopolies are based cover the preparation, or method of manufacture, of our compounds.
That includes RECCE 327 for bacterial infections and RECCE 529 for viral infections. It covers topical infections, including acute bacterial skin and skin structure infections, diabetic foot ulcer infections, where we have two Phase 3 programs at the moment, potential first standard-of-care treatment for burn wound infections, and beyond.
It is a broad, all-encompassing patent and is wholly owned intellectual property.
Proactive: Talk us through Vietnam. Why is it a strategically important market for Recce Pharmaceuticals?
James Graham: Vietnam, as a member of the ASEAN group of countries, is a very important market for us.
Firstly, the prevalence of diabetes runs at about 12% in that region. Of those who have diabetes, around 60% will develop a diabetic foot ulcer in their lifetime, and about 80% of those ulcers become infected.
Penicillin, by way of example, was invented in Australia nearly 100 years ago. Next year will mark its centenary. It has a resistance rate of about 75%, so the resistance profile is enormous.
Furthermore, there is no standard of care in the region. We have a Phase 3 study currently running in Indonesia. If approved in Indonesia, as we are on track to achieve later this year, with sales targeted for next year, that approval would support access across the ASEAN group of countries, including Vietnam.
We therefore have a strong intellectual property position, the potential for a first standard of care and the first new antibiotic in more than 40 years.
Proactive: You have been building that patent protection over the past couple of years, and we have discussed several of those patents. How does this latest approval strengthen the broader global patent portfolio and support future commercialisation opportunities?
James Graham: We have five patent families, perhaps even six depending on our recent patent application.
In this case, it is our Family 4 patent. We have had eight patents granted in that family over the recent year or small number of years.
This particular family is broad, covering the method of manufacture, preventative claims, curative claims, viral infections and bacterial infections.
It takes our market monopolies out to 2041, providing a strong market monopoly and an extended timeframe. It is also complementary to the more than 40 patents already granted around the technology.
Proactive: James, Recce Pharmaceuticals recently raised funds, and there is also a share purchase plan underway. How will those funds be deployed across clinical, regulatory and licensing activities?
James Graham: The key phrase there is licensing activities.
We announced a term sheet with a leading Middle Eastern pharmaceutical company. The prevalence of diabetes in the Middle East is more than 30%, at around 35%.
As mentioned, of those who have diabetes, around 60% will develop a diabetic foot ulcer.
The term sheet covers approximately 11 countries and a 10-year licence. It is targeting net royalties to Recce Pharmaceuticals of between 30% and 36%, based on a selling price of US$1,500.
It represents a good market opportunity and significant market coverage. We look forward to progressing it into a definitive agreement, which we are actively working on at this time.
The funds are being used to support that process.
Proactive: There is clearly a lot to look forward to. What will be happening over the next few months?
James Graham: Clinical data will be the primary focus. We have two Phase 3 studies underway.
As mentioned, one is in Indonesia because of the prevalence within the patient population and the potential for data harmonisation across ASEAN and the Middle East.
We expect that product to be approved at the end of this year, with sales targeted for next year and beyond.
In Australia, the same study is running across multiple Australian teaching hospitals. That study is focused on the US Food and Drug Administration. It is being conducted to FDA standards and under an FDA-aligned protocol.
We would expect to submit that program for approval at the end of next year.
These are two market strategies, both focused on the unmet medical need associated with diabetic foot ulcer infections.
Proactive: There is plenty to look forward to, and we will catch up again as it all unfolds. Thanks for your time today.
James Graham: Thanks, Jonathan.