Recce Pharmaceuticals (ASX:RCE) targeting antibiotic-resistant bacteria


by Anna Napoli

Recce Pharmaceuticals Limited (ASX:RCE) Executive Director, James Graham talks about the company's lead product RECCE 327 for use in targeting antibiotic-resistant bacteria, its US FDA approval pathway and a Phase 1 clinical trial.

Anna Napoli: Hello. I’m Anna Napoli for the Finance News Network. And joining me now from Recce Pharmaceuticals Limited (ASX:RCE) is Executive Director James Graham. James, welcome to FNN.

James Graham: Hello Anna.

Anna Napoli: First up, can you tell our audience just what Recce Pharmaceuticals does?

James Graham: Absolutely. Recce is pioneering the global health problem of superbugs. We’ve got a whole new broad spectrum antibiotic, and we’re tackling that problem head on. So we’re focused on sepsis, septicaemia or blood poisoning, affecting around 30 million people worldwide every year. And we’re currently listed on the Australian Stock Exchange with a market capitalisation of $20 million.

Anna Napoli: Thank you, James. Before you tell us about your lead product, could you tell us about the size of the superbug problem?

James Graham: The superbug problem is enormous, and it’s getting bigger everyday. So by example for sepsis, septicaemia or blood poisoning, it affects around 30 million people worldwide every year and about a third of those prove fatal. It’s the number one most expensive condition treated in hospitals, and it actually kills more people than breast cancer, prostate cancer and HIV/AIDS combined. So this big problem needs to be addressed, and we’re addressing that as quickly as possible.

Anna Napoli: Now to your synthetic antibiotic, RECCE 327, can you tell us how it works?

James Graham: It’s fascinating. It adds a whole new class of antibiotic. It’s got a completely different mechanism of action. Traditionally, you have a bacteria and you have a natural antibiotic. Now if that bacteria mutates, the specific fit no longer works, just like a lock and key. RECCE is actually designed from first principles. We don’t rely on a specific fit, we adhere to the outer membrane of the bacteria, cause the cells to separate and the bacteria inside bursts. The remaining bacteria is absorbed by the healthy cells, and no more bacteria and no more problem. And we do that in the blood. Any bacteria in the blood is bad bacteria. Gram-positive, gram-negative or superbug, it doesn’t matter to us.

Anna Napoli: Fantastic. And can you tell us about the effectiveness of the drug?

James Graham: It’s incredibly effective. Like I mentioned, it doesn’t discern between a positive strain of bacteria, or gram-positive as they’re known, a gram-negative strain or a superbug, it’s all bacteria to us. So we’ve tested in a large range of animals -- small species, large species, mice, rats, rabbits, dogs. And we’ve tested against some of the most deadly bacteria actually known to man, with our primary indications being for Staphylococcus, MRSA, or as people often know it, Golden Staph. and also E.coli. So big, big markets, big applications and very urgent health needs that we’re tackling.

Anna Napoli: Can you tell us about the approvals for the drug?

James Graham: Absolutely. Earlier this year, we submitted a big data pack to the US FDA. The US FDA, because America is about 48 per cent of the world pharmaceutical market. We presented that data pack and they actually responded by awarding us a prestigious legal status, called a QIDP status, Qualified Infectious Disease status. Now what that does for us is, it actually labels our lead compound RECCE 327 for fast track status. Meaning it speeds the process of the regulatory aspect of the FDA, plus 10 years of market exclusivity post approval. Now we’ve got patents to support the product, but there’s nothing better than government backed exclusivity post approval. So that also allows us to open up communications with the FDA. We’ve done that, and we’ve recently met with them and results will follow.

Anna Napoli: Fantastic. And given the urgency of the superbug problem, how far off is a trial?

James Graham: We’ve completed the pre-clinical phase, tested in many, many different animals, dozens of tests, thousands of pages of documentation presented to the FDA. With that and the presentation to the FDA, we’re seeking to start a Phase 1 human trial. We hope to have a response from the FDA very soon, which could mean 12 months for safety studies, 12 months for efficacy and about 18 months for a combination of both. So all going well, about 3.5 years from market, from accessing what is an enormous market and a very big problem that needs to be tackled urgently.

Anna Napoli: Now to your financials and strategy, how are you progressing?

James Graham: Our finance and strategy is going very well, particularly as I think about a meeting later in the week we have. We, as an Australian company, receive a 43.5 per cent R&D rebate for our local R&D. Now, thankfully, we’ve also got that extended for our international R&D. So the Australian Government has reviewed what we’re up to and actually awarded an advanced finding. So all of our offshore R&D as well as local R&D is supported to the tune of 43.5 per cent. And that greatly reduces our bottom line burn and opens up our opportunity to target or to advance our lead indication through the FDA.

Anna Napoli: Last question, James. Why should investors consider adding Recce to their portfolios?

James Graham: We’re tackling such an urgent health problem. I mean, this could be the biggest thing since penicillin. Now 3.5 years from market of significant sales potential, heck, this could be a real breakthrough, and a breakthrough any investor would surely want to be a part of.

Anna Napoli: James Graham, thanks for the update.

James Graham: Thank you.


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