These ASX biotechs are working with the US Department of Defence to bring new drugs to market and have a bright future ahead

Think of ASX stocks working with the US Department of Defence, and investors might imagine defence stocks or perhaps even critical mineral project developers.

This is not completely untrue. The list of stocks working with the US Department of Defence includes critical mineral companies such as Lynas (ASX:LYC), which was granted US$258m back in March 2024 to build a rare earths refinery in Texas, while IperionX (ASX:IPX) obtained a US$12.7m funding grant to develop a titanium production facility in Virginia. But the list of stocks even includes a couple of ASX biotechs.

Recce Pharmaceuticals (ASX:RCE)

Recce Pharmaceuticals is advancing a new class of anti-infective drugs to fight ‘superbugs’, in other words bacterial infections strong enough to resist conventional. The company’s lead candidate is RECCE^® 327 (R327), a drug with a unique Mechanism of Action that works fast and just as effectively with repeated use. R327 has completed several clinical trials for multiple indications including (but not limited to) sepsis, Urinary Tract Infection (UTI)/urosepsis, Burn Wound Infections (BWI), Acute bacterial skin and skin structure infections (ABSSSI) including Diabetic Foot Infections (DFI).

Earlier in July 2024, Recce was awarded US$2m in grant funding (or A$3m) from the US Department of Defence in recognition of R327 as a topical treatment for BWI, as a gel administered to the skin.

The aim of the US Department of Defence in awarding this funding is to establish the potential for R327 to be used in a military setting as a treatment that could be used at the point of injury. In fact, the grant came as part of a specific research program designed to support projects focused on the development of technologies or therapies aimed at addressing burn injuries.

In applying for funding, the company’s application was ranked on a scale of 1 to 5 (with 1 being highest merit and 5 being lowest merit) and was ranked 1.4 (outstanding). This was on the basis of 3 criteria with a rating scale of 10 to 1 (with 10 being the highest and 1 being the lowest).

Source: Company

Scientific Reviewers commenting on Recce’s proposal to the US Department of Defence were in admiration of the application. One particular reviewer noted, ‘Given their excellent preliminary data and the relatively low therapeutic index required in topical antimicrobials, it seems likely that the product would be a success’. Another said,’ If the proposed product is successful, it would improve the quality of life and shorten recovery and healing times for the burned individual’.

The grant funding from the US Department of Defense Congressionally Directed Medical Research Programs (CDMRP) will enable Recce to accelerate the development of R327 as a gel-based treatment to rapidly resolve burn wound infections and minimise the onset of bacteraemia complications, such as sepsis.

Immuron (ASX:IMC)

Immuron (ASX:IMC) is another company working with US Department of Defence. It also serves as an example of how far a clinical candidate can go when a company works with the US Department of Defence for a number of years, and thus what may happen with R327 if there is a long partnership. Immuron has run multiple clinical programs sponsored by the US Department of Defence (one trial with Travelan and the other with CAMP-ETEC).

Travelan, is a tablet that can be a treatment for traveller’s diarrhea as well as a proactive prevention of that condition. Although Travelan has been commercialised in Australia, Canada and the US, it is only approved as a general dietary supplement as opposed to a specific treatment for traveller’s diarrhea. Immuron is seeking to change that and has been conducting clinical trials with Travelan (or more specifically IMM-124, a key compound used in Travelan) to ensure it can be used for traveller’s diarrhea.

In January 2022, Immuron received US$3.4m in funding for a Phase 2 trial, and it reported outstanding interim results in March 2024, compared to the placebo. In particular:

• 36.4% protective efficacy against moderate to severe diarrhea induced by Enterotoxigenic Escherichia coli (ETEC),
• 66.7% protective efficacy against ETEC-induced severe diarrhea,
• 100% of the subjects requiring IV fluids post-challenge (in other words, none needed them),
• 83.3% statistically significant reduction in the number of subjects needing early antibiotic treatment post challenge, and
• 55.6% reduction in the number of subjects experiencing adverse events associated with the challenge.

Immuron is aspiring to take IMM-124 to a Phase 3 trial once Phase 2 has formally concluded.

As for CampETEC, it too is an oral therapeutic that Immuron has been trialling with the US Department of Defence – specifically with the Naval Medical Research Command. CampETEC is so-called because it targets Campylobacter and ETEC infections. The company is running a randomised, placebo-controlled trial in up to 868 participants and it is expected to report during the current quarter. Afterwards, Immuron is planning to start two Phase 2 trials, one in Campylobacter and another in ETEC.

Don’t underestimate the impact the US Department of Defence can have on biotechs

Biotechnology is just as important as critical metals and ‘defence technology’ when it comes to ensuring national security. That is why the US Department of Defence places high importance on innovative companies, both big and small, to advance drugs with potential to make a significant difference to the health of their front-line personnel.

This is a sponsored article. Immuron is a research client on Pitt Street Research.

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