Recce Pharmaceuticals (ASX:RCE) broad spectrum antibiotic potential


by Katrina Bullock

Recce Pharmaceuticals Limited (ASX:RCE) Executive Director James Graham provides an update on positive data against a range of persistent bacteria using the company's synthetic antibiotic RECCE 327, commencement of Phase I human clinical trial in 2H20 and key priorities.

Katrina Bullock: Hello, Katrina Bullock for the Finance News Network. Joining me today at FNN's virtual investor event for Recce Pharmaceuticals is Executive Director James Graham. James, welcome back.

James Graham: Hi Katrina.

Katrina Bullock: Now James, Recce Pharmaceuticals is developing a new class of synthetic antibiotics targeting a range of super bugs. How is it progressing?

James Graham: It's progressing really well. It's funny being an infectious disease company in the midst of a global infectious disease crisis, we've gone from really one compounds tackling the greatest threat to human health today, antibiotic resistance, to start to use that new class of antibiotic technology to other areas. Those areas include viruses, to really tackle this COVID threat that we're all so exposed to. We've got mutating bacteria quickly that our antibiotic is able to work. Suddenly this global health crisis of mutating viruses, you might have a wonderful synergy between the two results. When we look to influenza as the closest model to the COVID crisis, it appears very encouraging. So for the time ahead, I think we are in the right space at the right time, and I'm pleased to be a part of it.

Katrina Bullock: Thanks, James. More recently you've announced positive data for your lead compound, RECCE 327, tackling both bacterial and viral infections. Could you tell us more about that?

James Graham: Yeah, we have. So we've really got to the tail end of the preclinical phase. The preclinical phase was focused at our primary indication of sepsis, [inaudible 00:01:32] blood poisoning. That's really where bacteria gets in the bladder, it spreads very quickly, organ failure and death. There's around 30 million patients per year worldwide, a third of which die.

 So we haven't got to the end of that preclinical program, have now got an agreement with a clinical trial facility in Australia to test on 40 healthy human patients to see if those wonderful safety results that we achieved in animals can be replicated in humans. So small species, large species, pharmacokinetics, pharmacology, efficacy, and then now stepping into humans. So it's a really exciting time to be moving our lead compound into humans, but also to be broadening its capability across other unmet medical needs and key anti-infective areas.

Katrina Bullock: Now James, you've touched on that clinical trial. Could you give us an update on how RECCE 327 is progressing through the clinical trial pathway?

James Graham: So we announced an agreement with a phase one clinical trial group, it's actually the largest clinical trial group. They're responsible for 196 of the top 200 most highest selling pharmaceutical drugs. So they are overseeing our clinical trial. I'm sure they've done, in fact, I know they've done many antibiotic clinical trials in the past, and we're working with a leading clinical trial facility.

So we've taken, I guess, a short-term pain, long-term gain strategy to step away from the traditional hospitals, which globally are rife with other infectious disease challenges and go on specific to just a clinical trial facility. It's our facility, it's their facility, but our facility, their doctors, our patients, and you're not therefore impacted from a sudden outbreak of COVID or similar. So we expect to be dosing in these 40 healthy human individuals in the second half of this year, which we're rapidly coming around to now.

Katrina Bullock: Now to a question that investors are asking every company, especially those conducting trials, what impact is COVID-19 having on the business?

James Graham: Yeah, COVID-19's a really unique opportunity for an infectious disease business. The rapid prevalence of viruses rapidly depletes the immune system. When you have that immune system depletion, you have a prevalence of the natural bacteria spreading beyond control. So we're seeing globally, rapidly a massive increase in the use of antibiotics and a massive decrease in their capability through the mutation that occurs through overuse of existing drugs.

So without our new class of antibiotic, which is not susceptible to bacterial mutation no matter the repeated use, it's a wonderful time to be positioned as the first new class in over 30 years, but to potentially compliment that anti-infective disease space as a whole. We've got early indication in antivirals, I think a wonderful potential down the coronavirus track, but indirectly as part of servicing the whole antibacterial super bug problem, that's going to really be, I think, the apocalypse that we're facing. Not only now with COVID, but for the time ahead.

Katrina Bullock: Now to financials. Could you provide us with a snapshot?

James Graham: Yeah, so we raised $6.78 million in straight equity at the end of last year. At 26% per share with no options, we're now trading at 55 cents per share today. So I think we've got some pretty happy shareholders. What I'd like to see through that time is of significant growth in trade volume. The institutional investors particularly that came in that recent raise, they hadn't heard the story, they dipped their toe in, and I think they've really built a position over the recent months and has been consistent with that growth in volume and share price.

From a cash position, we had announced in our last quarterly of March around $4 million cash. Now that we're coming towards the end of the financial year, I expect that to be topped up significantly. So when you think of approximately $7 million raised, it's about $10 million of true cash runway when you consider the R&D applicability. So where you've got unmet medical needs, a strong cash position and growing opportunity with near-term clinical data around us, we're in a really good position as a business going forwards.

Katrina Bullock: James Graham, thanks for the update.

James Graham: Thank you.


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