Recce Faces Cash Pressure Despite Regulatory Wins and R&D Tax Incentive Boost

Regulatory Milestones in Indonesia

Recce Pharmaceuticals Ltd (ASX:RCE) has marked a significant step forward in its clinical development program with regulatory approval from Indonesia's Drug and Food Authority (Badan POM) to commence its Registrational Phase 3 clinical trial of RECCE® 327 topical gel (R327G) for diabetic foot infections (DFIs). This approval, coupled with ethics committee clearance, allows the company to begin patient dosing in a double-blinded, placebo-controlled study targeting up to 300 patients.

The trial is designed to run for approximately 12 months, with results anticipated in late 2025. Successful completion and positive outcomes could pave the way for regulatory approval and commercial launch in the first half of 2026, not only in Indonesia but potentially across the broader ASEAN region, addressing a critical unmet medical need amid rising antimicrobial resistance.

Progress on Phase II Clinical Trial

In parallel, Recce has completed patient dosing in its Phase II clinical trial for Acute Bacterial Skin and Skin Structure Infections (ABSSSI), including diabetic foot infections. An independent non-Data Safety Monitoring Board has reviewed interim safety and efficacy data, reporting encouraging results with all treated patients meeting primary endpoints and many achieving complete cure within seven days. The full Phase II data set is expected to be released in the first quarter of 2025, which will be a critical indicator of the compound’s clinical potential.

Financial Position Strengthened by R&D Rebate

Financially, Recce reported a closing cash balance of A$1.94 million for the December 2024 quarter. The company’s net operating cash outflows were A$2.67 million, primarily driven by ongoing research and development activities. Importantly, Recce received a substantial A$6.75 million R&D tax incentive rebate from the Australian Taxation Office for the fiscal year ending June 2024. This cash refund was used to repay advances from Endpoints Capital, effectively enhancing the company’s liquidity and funding runway.

Additionally, the cash position does not yet reflect a recently announced US Department of Defence Army burn wound grant of US$2 million (approximately A$3.21 million), expected to be received in the current quarter, further underpinning Recce’s financial stability.

Intellectual Property and Market Position

Recce also announced the granting of its Australian patent family 3 for its anti-infective compounds, securing intellectual property protection through to 2037. This milestone completes the company’s patent coverage in all major pharmaceutical markets globally, strengthening its competitive position and potential for future commercialisation.

Looking Ahead

With Phase 3 trial approvals in hand and Phase II data imminent, Recce is poised to advance its clinical pipeline aggressively. The Indonesian trial’s success could unlock broader ASEAN market opportunities, while the financial boost from the R&D rebate and government grants provides essential capital to sustain operations and development activities. Investors will be watching closely for the Phase II data release and the initiation of Phase 3 dosing as key inflection points in the company’s trajectory.