Recce Pharmaceuticals (ASX:RCE) targeting antibiotic resistant bacteria


by Jessica Amir

Recce Pharmaceuticals Limited (ASX:RCE) Executive Director, James Graham provides an update on the company's RECCE 327 product in targeting antibiotic-resistant bacteria and its clinical pathway.

Jessica Amir: Hello, I'm Jessica Amir for the Finance News Network. With me today from Recce Pharmaceuticals (ASX:RCE) is Executive Director James Graham. Hi, James and welcome back.

James Graham: Hi, Jessica.

Jessica Amir: For those who aren't familiar, your company is developing a range of antibiotics to combat superbugs. How is the company progressing?

James Graham: We (Recce Pharmaceuticals (ASX:RCE)) have got a whole new class of antibiotics and particularly a broad spectrum antibiotic at that. We're tackling the global health problem of superbugs and having identified our lead compound years ago, we're advancing that through the regulatory process and we do that with the intention of one, getting into patients very quickly but two, getting to market as quickly as possible as well. On that basis with an international focus, I'd say things are going well.

Jessica Amir: How is the market currently dealing with superbugs and what are big pharma doing?

James Graham: It's amazing. The market is throwing billions and billions of dollars trying to solve this problem of antibiotic resistance and big pharma have been trying to tackle that for many years, but doing the same thing, expecting a different result is just no longer working, so I think of Novartis (NYSE:NVS), the world's largest pharmaceutical company, two years ago, they came out and made a big declaration that they were going to solve this problem. Well, two years later, they haven't and they've actually given up and they've not only let go of all of their anti-microbial assets, they've let them go for baseline price and got rid of all of their staff and facilities in the process. They're giving up at a time when the problem has never been greater.

Jessica Amir: How's the market responding to your drug?

James Graham: It's responding very well and tackling a such urgent health problem, there's a lot of warm tail winds to facilitate our development. When we submitted our regulatory data pack to the U.S. FDA, they actually responded by awarding as a prestigious legal status called a QIDP status under the Generating Antibody Initiatives Now Act. Now for us as an up and coming drug developer. That gives us 10 years of market exclusivity plus fast track regulatory review for the life of the regulatory process with our lead compound. All of these incentives available really helps motivate and encourage and facilitate, I should say, our drug development process.

Jessica Amir: Now to your synthetic antibiotic, RECCE 327, what's the clinical pathway for that?

James Graham: RECCE 327 is our lead compound as part of a bigger overall antibacterial approach so talking about the pathway for our lead compound, which is targeting sepsis, the number one most expensive condition treated in U.S. hospitals, double that of the second most expensive.

We're right at the end of the preclinical phase, meaning we've done a huge range of safety, efficacy, manufacturing type studies and we're about to enter the first in human or more likely a pure safety study. Typically, you think of a safety study in healthy individuals about 12 months, followed by an efficacy study in unhealthy individuals for the following 12 months.

So, within say, a 24-month period, you really know at a clinical human base level, whether one, your drug is safe and two, whether it kills the bacteria you're seeking to tackle. That is obviously a really opportune time in the company to get a grasp of this lead compound followed by the other technology opportunities that this new class of antibiotics may represent.

Jessica Amir: What's your position on a patent?

James Graham: Our entire family one has been granted and that's really looking at it from both the manufacturing context, which gives us the monopolies at that base level through to a curative level, which is using it on the patient. But more recently, as part of our family two, that's expanding on our patent portfolio position by coming into a preventative role as well.

Taking a step back, imagine at a surgical level, using this drug to prevent the bacteria ever getting a hold on the patient ever becoming infected and actually preventing that down the line pipeline use that traditional antibiotics are trying to tackle.

Jessica Amir: Can you just remind us about your strategy.

James Graham: The strategy is to get into patients as quickly as possible. The problem of superbugs has never been greater and it's growing by the day. I mean our lead compound focused on sepsis, that's growing at an annual rate of 8 per cent to 13 per cent so we're in discussions at this very moment with the U.S. FDA, talking about a clinical trial, which would really be a very effective way to assess whether this drug should be expedited beyond its current status to get into patients who have such an urgent health need.

Jessica Amir: Now to finances. Is the business fully funded?

James Graham: The businesses is funded, certainly. We recently got a nice R&D rebate from the Australian Government, about 43.5 per cent of all our research and development or really drug development because the research is kind of a thing of the past here, having identified our compound years ago, is supporting the bottom line.

Uniquely, not only are we supported for our Australian R&D, we uniquely are extended to our international R&D as well, so all drug development done by the company is supported by the Australian government and that greatly assists our ultimate burn rate and supports the bottom line.

Jessica Amir: Thanks, James, and what can you tell us about your share price?

James Graham: The share price has been very stable, particularly as equity markets have taken a hit. I think when investors consider our international opportunities and our activity, particularly in the U.S. in recent times, at evaluation of about AUD $16 million at an 18 cent share price, I believe one might consider that to be much less than you would anticipate being on the corner of what could be the biggest thing since penicillin. Certainly, I'm excited by the path forwards and I hope that the share price will start to reflect that in due course.

Jessica Amir: We're looking forward to seeing you grow. James Graham, thank you so much.

James Graham: Thank you, Jess.


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