Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) advanced its diabetic foot infection treatment toward commercialisation during the June quarter, securing approval to expand an Australian study into a pivotal Phase 3 trial while progressing a proposed 10-year licensing agreement across the Middle East and North Africa.
The synthetic anti-infective developer also completed a successful regulatory inspection of its Indonesian Phase 3 trial site, raised A$4 million through an institutional placement and reported a pro-forma cash position of about A$33.1 million.
MENA licensing opportunity
Recce signed a non-binding term sheet with a publicly listed Middle Eastern pharmaceutical company that has a multi-billion-dollar market capitalisation and a distribution network spanning more than 30 international markets.
The proposed agreement would grant the partner exclusive rights to register, market and distribute RECCE® 327 Topical Gel, or R327G, for diabetic foot infections across Saudi Arabia, the Gulf Cooperation Council countries, Egypt, Algeria and Morocco.
Under the proposed commercial terms, Recce could receive an upfront fee and milestone payments totalling up to US$3.5 million, equivalent to around A$5 million.
It would also receive 30% of the net selling price, plus an additional 6% royalty on annual net sales above US$50 million. The proposed treatment price is US$1,500, subject to agreement with Saudi Arabia’s regulator.
The parties are targeting completion of a definitive agreement during the December 2026 quarter, subject to due diligence, negotiations and customary approvals.
Australian study elevated to Phase 3
The Human Research Ethics Committee approved a protocol amendment that advances Recce’s Australian R327G diabetic foot infection study from Phase 2 into a pivotal Phase 3 clinical trial.
The revised study can enrol up to 200 patients and has so far treated 18 participants. Interim analysis is planned after half the enrolled patients complete treatment, with full recruitment expected by the end of 2027.
Eligibility has been broadened to include moderate as well as mild diabetic foot infections, expanding the available patient population. The study will be conducted to Australian Therapeutic Goods Administration and US Food and Drug Administration standards.
Indonesian trial passes inspection
Indonesia’s National Agency of Drug and Food Control completed a comprehensive inspection of a Phase 3 clinical trial site without identifying any findings that would prevent the study from continuing.
The review examined trial conduct, site processes, data integrity and compliance with Good Clinical Practice requirements.
Patient dosing remains underway, with an interim data readout expected after 155 of the planned 310 patients have been enrolled. Recce anticipates potential Indonesian regulatory approval during calendar 2026.
Funding clinical and commercial milestones
Recce raised A$4 million before costs through the issue of 10 million shares at A$0.40 each and subsequently launched a share purchase plan targeting up to a further A$4 million.
The company also received an A$3.67 million tax refund after quarter-end, primarily comprising its FY2025 research and development tax incentive.
Recce ended the quarter with A$2.9 million in cash before the expected rebate and recorded net operating cash outflows of A$2.2 million, including A$1.6 million directed toward research and development.
Its pro-forma cash position of about A$33.1 million includes capital-raising proceeds and the potential drawdown of available debt funding, subject to conditions.