Recce Pharmaceuticals Limited (ASX:RCE, FSE:R9Q) Managing Director & CEO, James Graham provides an update on its portfolio of Synthetic Anti-Infectives to address the global health issue of antibiotic resistant superbugs and emerging viral pathogens, patent portfolio and investment highlights.
Hi Clive. Good to be with you. And thank you for joining us, everyone. Starting off our presentation, we'll skip a couple of slides in, beyond the usual disclaimer.
What is Recce about? Recce is an infectious disease company in the midst of a global infectious disease crisis. We term the term anti-infective as really the umbrella over two major unmet medical needs, those falling beneath, well, within the antibacterial side of our business, being a new class of antibiotics and ends under the antiviral pathogens, being a new class of anti-viral compounds that are attracted to the proteinaceous, or have an affinity to attract and bind to the proteins of viral envelopes together addressing the global health threat of anti-infectives.
So where we are as a company, is we are listed on the Australian Stock Exchange and we are just last week, have too du-listed on the Frankfurt Stock Exchange.
Our late antibiotic compound is known as RECCE 327, and that is focused on sepsis, septicemia or blood poisoning; the number one most expensive condition traded in health. That lead compound has a qualified infectious disease designation, which is a legal status awarded by the USFDA providing fast track regulatory review, plus 10 years of market exclusivity, above and beyond our patent position. So really unique, intellectual property right that this company has. We just recently have joined the S&P 500, which we're quite proud about if I say. And we are very well-funded advancing a number of compounds through the regulatory process.
Next slide. So this is a snapshot of the company. The infantry is a former Head of Research of Johnson and Johnson Australasia, Executive Director of their Board of approximately 10 years. He had a global responsibility, but with a particular focus on a third of the region that we represent here today. He and his retirement, with his pharmaceutical hat on and chemistry expertise. When I know this significant unmet medical need that existing antibiotics have not been able to address, how can I create a compound to do that?
So it's Dr. Melrose's invention having began with the end in mind and what he wanted rather than what's found in nature. As we've built the company at around him, we have behind some of these names, some very large institutional funds behind HSBC nominees is Fidelity International. There is Wilson Asset Management. I'm in there at number four. My background is actually the commercial side. Although of course, I represent all sides of the business, and I've invested in almost every capital round to date.
Our cash position at this time is we have around $20 something million cash at bank, as our budget's forecast that's around three years of cash runway. I really say that more likely is at around two and we typically have a good history of raising capital not on a cash needed basis, but on a material event basis, as you move from one stage in the company to the next stage. So therefore, I say that about a two-year horizon. We have no debt. We wholly own our technology and at about $175 million market cap, we're advancing with our compounds.
Next slide. Really our company is a sum of all parts. Our chairman, Dr. John Prendergast joined us a couple of years ago. He is Chairman of a New York Stock Exchange biotech company, Lead Director of a NASDAQ biotech company. And he actually approached us a couple of years ago saying "Guys, I'm a former Aussie, I did my doctorate at UNSW studying bacteria and blood diseases. How can we work together?" And then he went, you are just the person we seek to work with, and is consistent with our path of beginning in Australia, expanding in the United States and really broadening out our portfolio around the infectious disease crisis that exists around us today.
I come from the commercial side of things, obviously representing all sides of the business. I've been Executive Director of the Board for five years, and recently stepped into the role of CEO. Dr. Alan Dunton is a wonderful addition to our team, he's former Head of Research, Global Head of Research of Janssen Research, which is Johnson and Johnson's R&D arm. He's responsible from going from concept to commercialisation with three antibiotics. It's only ever been about 30 created. So he's a very unique skillset to have around us and Michele Dilizia, of course, on the technical side, as well as co-inventor and all the other wonderful skillsets around us.
Next slide. This is kind of a nice summary of really where we are as a company at this stage. We have two clinical assets, as well as a number of other assets running, following the preclinical path. We don't do research for research sake. All of our studies are what's called IND-enabling studies or studies with the goal of getting into humans. Our first key asset there, is an intravascular compound. It's basically a liquid formulation intravascularly infused into the veins. Why? Because sepsis is a bacterial blood disease, and that's where it's easiest to target. We completed all of the preclinical studies to do that. And as we'll see a little further in, we've announced a Phase I human study happening in the background, as we speak.
A topical administration is utilising the same compound in a spray on solution. Getting on top of the broad spectrum nature of antibody of bacteria that exists in burns wounds, and particularly led by Professor Fiona Wood, former Australian of the year for her burns work. By all indications, working with the best of government here in Australia and a number of leading institutes overseas and Murdoch Children's Research Institute for Helicobacter pylori, which is an oral solution for the bad bacteria that exists in upper duodenum, avoiding the good bacteria that exists in the lower. We talk a little more about that further in.
Next slide. So why are we different? So only antibiotic side of things or existing antibiotics are naturally derived. The bacterial fungi, they're cultivated out and they're put against whatever it bacteria or fungi you're competing against. Basically, it's like a lock and a key. You've got the bacteria, you've got the antibiotic, today, they come together and the antibiotic works. Tomorrow, when that bacteria is wised up to survive that lock and key mechanism no longer works.
So with these fundamentals in mind, Dr. Melrose began, how can I design a compound that overcomes that cellular mutation, that's attracted to the proteins of the bacteria, and interacts with unique cellular structures, unique to those bacteria without harming the healthy human cells. And most importantly, keep on working with repeated use, whilst also in the process, removing a lot of the unwanted compounds that come with traditional drugs. So we've really tried to recreate nature, but empower ourselves by having the optimum product or starting from a position of power. Meaning we'll keep on working with repeated use, and that's something our technology represents today.
Next slide. So our prime focus, or really, I think we're a sum of all parts in our portfolio approach, but one of those is sepsis, septicemia or blood poisoning. Basically, any bacteria that gets in the blood from being a scratch or an operation, spreads very, very quickly. Currently, there's around 50 million cases worldwide every year, or one in five result in death. That's terrible in modern medicine as we know it, or one in three in hospitals. It is the number one most expensive condition treated in health. In fact, in the United States, it costs around half a million dollars, US dollars, per patient to treat. There are currently no drug therapies specifically for sepsis.
The reason you have such a high death rate is that the patient presents, a clinician says, "Hey, mate, you've got sepsis, but I don't know what type of bacteria. We'll do a blood draw. We'll cultivate it out and we'll come back and try to work out what type of bacteria you've got, and what type of antibiotic that's susceptible to. Until then it's guesswork." So they've put in a cocktail of antibiotics, I've had it up in a sepsis patient. And if that antibiotic for that type of bacteria, the guesswork is wrong, the outcome of the patient is no good. So we are, in a beginning with the end in mind, have sought to create a compound that works against any bacteria in the blood, because any bacteria, there is bad bacteria and we want to still kill it. And that is why we've got an ability against a broad range of bacteria.
Next slide. So, recently, in the last week or so, we were recognised in the Global Antibiotic Pipeline, which is monitored, or created by Pew Charitable Trusts. There is 36 new drug candidates under clinical development between Phase I and Phase III in that pipeline. There hasn't been a new class of antibiotic for 30 years. So if anyone of these six get it, that'd be great. But as you'll see on this page we're the only synthetic antibiotic in the world in phase one clinical development, and we are the only compound for sepsis. So there's quite a bit of weight on our shoulders to achieve there, but we're very pleased to be recognised as such.
Next slide. This is our Phase I human clinical study happening in Adelaide. It's a phase one human study. It's 48 or so healthy individuals. Dose escalation. You're looking at safety parameters. Basically, how much can you put in the blood without recognising an overdose, to monitor where a toxicity is, and where a therapeutic element is. Currently, our therapeutic indication is very low so that window between the two is the absolute goal.
Next slide. This is an example, I'll just breeze over this, basically on the left-hand side of the screen, you see against MRSA, 10 out of 10 mice survived, nine out of 10 with oxacillin. Well obviously that's a hundred and every thousand patients not having a particularly good outcome. What's important here is oxacillin is the best against MRSA. Could have been streptococcus pyogenes or any other type of bacteria, even against the best therapeutic alternative, we still outperformed.
Next slide. This is just an example with some of the studies we've done today. It's all what's called IND-enabling studies, which is regulatory focused. Here is dose escalations in rats in this instance, a small species, and what you see in the upper columns there of groups of animals at 4,000 milligrams per kg, not just one day, but each day they're in thereafter for around at least seven days. What you're really looking at, is the no observed adverse effect level, which at around 500 milligrams per kg is a very happy comfort zone intravascularly infused, where we get efficacy at about that 50 to a hundred mgs. So you got a nice window.
Next slide. This is an extended version of it in dogs. They're slightly more susceptible, but you get the same thing.
Next slide. This is, one that I personally get quite excited about because firstly, I have the privilege of working with Professor Fiona Wood, who is former Australian of the Year for her burns work. We have our compound in Fiona Stanley Hospital with professor Fiona and her esteemed colleagues are utilising our compound on their vulnerable burns patient population. Really that for the first time you see whether you can support these patients who have been perhaps drug resistant to existing antibiotics are burdened by major burns infections currently. And when you can see that at a therapeutic level and potentially extrapolate that into real world outcomes. I think you start to see some real clinical first. So that I anticipate some very interesting news over the time ahead.
Next slide. This is an example of just some of the efficacy. Here against the best in class in that space, they got those twice daily, we got dose once daily. We still reduce the bacterial concentration at a better rate than they did. And when we look to the right-hand side of the screen, how do we go in assisting in wound closure or wound contraction? We did better than that again there too. So a very positive indication.
Next slide. This is how Helicobacter Pylori Program at Murdoch children's Research Institute. It's an oral dosing program. We're doing the usual preclinical studies there. If successful, we would seek in Q4 of this year to have a third clinical trial, which would be an oral dosing trial.
Next slide. Here you can say the existing best therapy is a combination therapy. We significantly outperformed that using our just a single dosing therapy.
And if we go to the next slide, which is probably the, what I find the most interesting about this, and we talked about beginning with the end in mind. This compound is a hundred percent soluble at all pH, pH of the blood to the opposite acidity of the stomach. The bad bacteria exist in the upper duodenum; the good bacteria exists in the lower. Our compound is designed to break down in the stomach acids so that when it gets down through the GI tract to the good bacteria, it no longer has an antibacterial effect. Demonstrating that, you've got two groups of mice here. One group had water twice daily. The other group had quite a high concentration of our compound twice daily and they still put on the same body weight. They still ate the same, put on the same body weight, go through all their traditional little animal habits. And that's a very positive indication because if they took another compound, they probably would have bombed out the good bacteria and have terrible diarrhoea and all the other negative side effects.
Next slide. Our COVID program priority one test candidate with a leading institution here in Australia.
Next slide shows that we achieved a 99.9% viral inhibition against the coronavirus itself. Most importantly, with a very positive safety window, meaning the virus was no longer detected at 4,000 milligrams per kg with very minimal toxicity to the healthy cells.
Next slide. Here, we've done it in hamsters. That's a nasal administration, getting into the viral titers in the hamster's sinuses, and we're doing that as we speak.
Next slide. We work on all the bad bacteria. These is the top five designated by World Health. We work with the same concentration in the same time, whether it's the standard form or the superbug form.
Next slide. Most importantly, we keep on working with repeated use when others do not.
Go to the next slide. We'll brief over the next three slides. These are just visual examples of it reacting with E.coli cells. You basically cause the cells to burst through into reacting with the high metabolic processes that exist within those cells and are unique to those cells.
Next slide. This is probably the slide that I'll conclude on. In essence, what we have is, as a new synthetic anti-infective, our space has been a land grab. So we have composition of matter patents, which in family one, have a curative claims in manufacturing claims, family two, preventative claims as well as dose administration so intervascular oral, nasal inhaler, so on. And in family three, our antiviral claims These take us out to very late in 2037 and above and beyond that position, we have government backed market exclusivity for our sepsis application in the United States. So I guess in summary, what it really means is we've got a company with a world first technology, two clinical programs working in parallel, multiple news flow events working from now and into the future. We are not raising capital. We are very well funded to support our clinical programs and as an infectious disease company, in the midst of an infectious disease crisis, we are getting ahead with these world first indications, and we welcome you to join us on that journey. Thanks for listening.