Entitlement Offer Shortfall Leaves Uncertainty for Recce’s Capital Plans
Recce Pharmaceuticals has successfully raised A$8.4 million through an entitlement offer and placement to fund pivotal Phase 3 clinical trials, advancing its synthetic anti-infective pipeline towards commercialisation in 2026.
- Raised A$3.4 million from existing shareholders via 1-for-6 entitlement offer
- Total capital raised reaches A$8.4 million including prior A$5 million placement
- Funds earmarked for Phase 3 registrational trials in Indonesia and Australia
- Entitlement offer shortfall of 26.37 million shares may be placed by August 2025
- Recce’s synthetic anti-infectives target antibiotic-resistant superbugs
Capital Raise to Fuel Critical Phase 3 Trials
Recce Pharmaceuticals Limited (ASX: RCE) has announced the successful completion of a 1-for-6 pro-rata entitlement offer, raising approximately A$3.4 million from existing shareholders. This follows a prior A$5 million placement, bringing the total capital raised to A$8.4 million before costs. The funds are earmarked to support the company’s Phase 3 registrational clinical trials in Indonesia and Australia, a crucial step towards commercialising its synthetic anti-infective therapies.
The entitlement offer, priced at A$0.28 per new share, closed on 9 May 2025, with strong participation from existing shareholders, including all company directors. The new shares are expected to commence trading on 19 May 2025. Despite this success, a shortfall of 26.37 million shares remains, which Recce may place at its discretion by 8 August 2025, though no guarantees have been made regarding this placement.
Advancing Synthetic Anti-Infectives Against Superbugs
Recce is developing a novel class of synthetic anti-infectives designed to combat the growing global threat of antibiotic-resistant superbugs. Its lead candidates, RECCE® 327, RECCE® 435, and RECCE® 529, are broad-spectrum therapies targeting serious infections caused by Gram-positive and Gram-negative bacteria, as well as viral infections. These candidates have garnered recognition from the World Health Organization and have received FDA designations, including the Generating Antibiotic Incentives Now (GAIN) Act status for RECCE® 327.
The Phase 3 trials funded by this capital raise focus on diabetic foot infections and acute bacterial skin and skin structure infections, conditions with significant unmet medical needs. Successful completion of these trials is expected to catalyse Recce’s transition from clinical development to commercialisation, with revenue anticipated in calendar year 2026.
Market Implications and Next Steps
Recce’s ability to secure funding from existing shareholders demonstrates confidence in its clinical and commercial prospects. However, the unresolved shortfall introduces some uncertainty regarding future dilution and capital structure. Investors will be watching closely for updates on the placement of these remaining shares and progress in the Phase 3 trials.
CEO James Graham highlighted the company’s optimism, noting the exciting 12 months ahead as Recce aims to complete its pivotal trials and commence commercialisation. The company’s innovative approach to addressing antimicrobial resistance positions it well within a critical and expanding healthcare market.
Bottom Line?
Recce’s capital raise sets the stage for a pivotal year ahead, but the fate of the shortfall shares and trial outcomes will be key to watch.
Questions in the middle?
- Will Recce place the shortfall shares, and how might this impact shareholder dilution?
- What interim data or milestones can investors expect from the Phase 3 trials in the coming months?
- How will Recce’s synthetic anti-infectives compete in the evolving antimicrobial resistance landscape?
