Recce Pharmaceuticals Posts $21.4M Loss as Phase 3 Trials Get Green Light
Recce Pharmaceuticals reported a 21% increase in net loss to $21.4 million for FY2025, driven by intensified R&D spending. The company secured key regulatory approvals for Phase 3 trials of its lead anti-infective gel and bolstered its financial position with significant capital raises and grants.
- 21% increase in net loss to $21.4 million due to higher R&D expenditure
- Regulatory approvals granted for Phase 3 clinical trials of RECCE® 327 Topical Gel in Indonesia
- Positive Phase 2 clinical trial results with high patient response rates
- Raised over A$28 million through placements, entitlement offers, and debt facilities
- Secured patents in Australia, China, and Japan, and partnered with USAMRIID
Financial Performance and R&D Investment
Recce Pharmaceuticals has reported a net loss of $21.4 million for the financial year ending 30 June 2025, marking a 21% increase compared to the previous year. This widening loss reflects the company's strategic decision to ramp up research and development spending as it pushes forward with its synthetic anti-infective programme. Despite the increased operating loss, Recce benefited from a substantial R&D tax incentive rebate of over $6.7 million, cushioning some of the financial impact.
Clinical Trial Progress and Regulatory Milestones
A major highlight for Recce this year was securing approval from Indonesia's Drug and Food Regulatory Authority to initiate registrational Phase 3 clinical trials of its lead compound, RECCE® 327 Topical Gel (R327G), targeting diabetic foot infections (DFIs). Complementing this, the company received Human Research Ethics Committee approvals to commence these trials and to expand its Phase 2 clinical trial cohort, allowing additional patient enrolment in an open-label study.
Phase 2 trial data for R327G in treating Acute Bacterial Skin and Skin Structure Infections (ABSSSI) were promising, with 86% of patients showing a successful clinical response after seven days and 93% meeting primary efficacy endpoints after 14 days. An independent safety review further validated these findings, underscoring the compound's potential.
Funding and Strategic Partnerships
Recce strengthened its financial position through multiple capital raises totaling approximately A$28 million, including a $5 million private placement and a 1-for-6 entitlement offer. Additionally, it secured a debt facility of up to A$30 million from Avenue Capital Group, with $11.5 million already committed. The company also attracted a US$2 million grant from the US Department of Defense, recognizing R327G’s potential as a topical treatment for burn wound infections.
On the collaboration front, Recce entered a Cooperative Research and Development Agreement with the United States Army Medical Research Institute of Infectious Diseases (USAMRIID), supported by the Defence Threat Reduction Agency. This partnership highlights the strategic importance of Recce’s anti-infective technology in addressing global health threats.
Intellectual Property and Global Reach
Recce made significant strides in protecting its innovations, with patents granted in Australia and notices of acceptance or allowance received from patent offices in China and Japan. These intellectual property milestones secure the company’s competitive position in key international markets and extend patent protection through to 2041.
The company also maintained a visible presence in the global antimicrobial resistance discourse, delivering keynote addresses and participating in panel discussions at the World AMR Congress 2024, reinforcing its role as a thought leader in the fight against resistant infections.
Outlook
While Recce Pharmaceuticals continues to operate at a loss, the company’s focus on advancing RECCE® 327 through pivotal clinical trials, supported by robust funding and strategic partnerships, positions it well for future growth. The coming months will be critical as Phase 3 trials progress and further clinical data emerge, potentially unlocking new value for investors and patients alike.
Bottom Line?
Recce’s intensified R&D and clinical progress come at a cost, but set the stage for pivotal trial outcomes that could reshape its prospects.
Questions in the middle?
- How will Recce manage cash flow given the increased losses and ongoing trial expenses?
- What timelines can investors expect for Phase 3 trial readouts and potential regulatory approvals?
- How might US Department of Defense funding influence Recce’s strategic priorities and market positioning?
