Recce secures A$5M from private investor and launches A$10.8M entitlement offer to fund Phase III topical clinical trials

Recce Pharmaceuticals Ltd has secured a A$5 million cornerstone commitment from an Australian-based private investor and announced the launch of a A$10.8 million pro-rata entitlement offer to shareholders, both priced at A$0.28 per share.

The combined capital raising of up to A$15.8 million (before costs) is set to fund Phase III topical clinical trials in Indonesia and Australia, which the company expects to serve as key catalysts for revenue generation in 2026. 

Highlighting their confidence in upcoming trials, Recce directors have signalled their intention to participate in the entitlement offer, in part or in full.

Recce will issue approximately 17.9 million new fully paid ordinary shares as part of the raise, while the entitlement offer comprises a non-renounceable issue of one new share for every six shares held by eligible shareholders on the record date.

“We are delighted to receive the further support from an existing Australian-based shareholder and are pleased to launch an entitlement offer to all shareholders to acquire new shares at the same price as the placement. Proceeds from the capital raising will be used to support a Registrational Phase III clinical trial for Diabetic Foot Infections in Indonesia and a Registrational Phase III for ABSSSI across Australia, following a recently announced Phase II ABSSSI clinical study achieving all endpoints,” Recce CEO  James Graham said.

Recce targets A$17.7 million pro-forma cash position to progress Phase III trials

Recce is advancing a new class of synthetic anti-infectives targeting serious and potentially life-threatening infections.

Proceeds from the placement will fund the start and drive the completion of one of Recce’s Phase III trials. Additional funds raised under the entitlement offer will support other development programs currently underway.

The capital raised will be directed towards:

• The Phase III Diabetic Foot Infection (DFI) registrational topical clinical trial in Indonesia, expected to be a revenue catalyst in 2026;
• Commencement of the Phase III Acute Bacterial Skin and Skin Structure Infections (ABSSSI) topical trial in Australia; and
• Other clinical activities, an Investigational New Drug application to the United States Food and Drug Administration (FDA), and working capital.

Post-raising, Recce anticipates a strong pro-forma cash position of A$17.7 million. The company also expects an additional A$8.5 million research and development (R&D) rebate from the Australian Taxation Office in the fourth quarter of 2025, and approximately A$10.0 million in non-dilutive capital via an R&D advance.

The offer price of A$0.28 per new share reflects a 13.8% discount to the last close and a 19.8% discount to the five-day volume weighted average price. All new shares will rank equally with existing shares.

“This capital raise supports a critical step forward as we commence our Phase III trial. Given current share levels and the anticipated trial timeline, we believe Recce offers strong underlying value. The outcome of this trial represents a potential inflection point for the company, with the opportunity to advance a new standard of care and improve outcomes for patients. We look forward to keeping shareholders updated as we progress,” Recce chairman, Dr John Prendergast said.

The entitlement offer opens on April 22, and closes on May 5, 2025, available to eligible shareholders in select jurisdictions. Directors who qualify as eligible shareholders intend to participate.