These 2 key milestones awaiting Recce Pharmaceuticals could be very exciting and value accretive!

There are 2 key milestones awaiting Recce Pharmaceuticals (ASX:RCE) in the next few months that investors in this company need to look out for.

The company has had substantial news flow including clinical trial progress, R&D tax rebates and partnerships for its future clinical endeavours, but only a few have generated significant excitement. Arguably, the most exciting announcement for Recce investors was not one made by their company, but an announcement by global giant Pfizer which announced it was upgrading its facility in Australia to fight superbugs, something Recce is also seeking to do.

But the company is facing 2 major milestones expected before the end of 2024, and we thought for the sake of investors (both new and old to the story) we would recap them and what they might mean for the company’s future.

The 2 milestones awaiting Recce Pharmaceuticals

Both milestones awaiting Recce are clinical trials for its R327 topical gel (R327G) and the company is expecting progress immanently. We will recap the progress Recce has made thus far to bring new investors up to speed, then outline what there is to look forward to.

1. A Phase II ABSSSI Clinical Trial being completed

One of Recce’s trials is the Phase II ABSSI (Acute Bacterial Skin and Skin Structure Infections) Trial. The acronym ABSSSI includes conditions such as diabetic foot infections (DFI), necrotising fasciitis, postoperative wound infections, and more. And so in many ways, this trial is bringing all the work the company has done to date in multiple trials, right into one. The ABSSSI market is projected to reach US$26bn by 2032, which would represent a more than tripling of the market in less than a decade and a half.

At its recent AGM, Recce told investors the trial was in final stages with 20 of 30 patients dosed, all of whom either will or have received R327G once daily for 7 to 14 days for an ABSSSI. The company anticipates completion by the end of this calendar year, and had previously told investors that all patients completing treatments were positive on the primary endpoint, achieving either a complete cure or improvement – with some showing results in as little as 7 days.

Success here could lead to the company advancing to a pivotal Phase III trial in Australia or the United States. This would compliment the Company’s recently announced Phase III clinical trial for Diabetic Foot Infections in Indonesia.

2. A Phase III for Diabetic Foot Infections in Indonesia commencing

Only a week ago, Recce obtained ethics committee approval to initiate a Phase III trial of R327G for Diabetic Foot Infections (DFIs) in Indonesia. The trial will begin mid-December, will enrol 300 patients all up (200 of which will receive R327G and 100 will receive a placebo) and is anticipated to take 12 months. Successful results here could see regulatory approval and a commercial launch of the product in the first half of 2026.

Investors could be forgiven for not being as enthusiastic as they would be if this trial was in the USA. But, we don’t think investors should overlook the opportunity in Indonesia and the broader ASEAN region. Antimicrobial resistance (AMR) is a significant problem in that part of the world just as much as it is in the West, with costs related to AMR are anticipated to reach US$550-700bn without any further interventions. Consider that Indonesia has a 12% prevalence of DFIs in hospitals and 24% in community settings. In the US, these figures are just 1.4% and 5.9% respectively. With Indonesian approval, it also provides Recce with access to the broader ASEAN region, including Malaysia, the Philippines, Singapore, and Thailand.

Even if Recce had to complete a further clinical trial to obtain approval in the US and other jurisdictions, it would gain commercial value from this trial in Indonesia, and it should not take as long as conventional Phase III trials.

Conclusion

Recce investors should watch closely for these 2 milestones in the months ahead. The company has done a substantial amount of clinical work to date, with these two milestones bringing all of it together and demonstrate progress towards the eventual goal of commercialisation.

This is a sponsored article.

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