Funding Uncertainty Looms Despite Recce’s Clinical and Patent Advances
Recce Pharmaceuticals reported a doubling of its net loss for the half-year ended December 2025 amid significant progress in its anti-infective drug development and a substantial funding boost. The company is advancing Phase 3 trials and expanding its patent portfolio while managing financial pressures.
- Net loss more than doubled to $16.56 million in H1 2026
- Positive preclinical and clinical data on RECCE® 327 against antibiotic-resistant pathogens
- Phase 3 clinical trial underway in Indonesia targeting diabetic foot infections
- Hong Kong patent granted extending protection to 2041
- Received advanced overseas finding of up to A$85 million for R&D expenditure
Financial Results and Operational Highlights
Recce Pharmaceuticals Ltd has reported a significant increase in its net loss for the half-year ended 31 December 2025, with losses rising 114% to $16.56 million compared to $7.74 million in the previous corresponding period. This widening loss primarily reflects increased research and development (R&D) expenditure, share-based payments, and loan transaction costs as the company intensifies its efforts to develop its synthetic anti-infective drug candidates.
Despite the financial strain, Recce has made meaningful strides in its core business of combating antibiotic-resistant infections. The company’s lead candidate, RECCE® 327, demonstrated statistically significant efficacy in preclinical models against critical pathogens including MRSA and Pseudomonas aeruginosa, both notorious for antibiotic resistance. Additionally, positive data from a study on hospital-acquired pneumonia caused by carbapenem-resistant Acinetobacter baumannii further underscores the drug’s potential.
Clinical Development Progress and Patent Expansion
Recce has commenced patient dosing in its registrational Phase 3 clinical trial for diabetic foot infections (DFI) across five sites in Indonesia, a country with a large DFI patient population. The trial design includes an interim analysis and benefits from expedited regulatory review, positioning the company to potentially meet significant clinical endpoints with approximately 155 patients dosed.
On the intellectual property front, Recce secured a new patent family in the Hong Kong Special Administrative Region, extending protection for its anti-infective platform until 2041. This patent grant complements the company’s global patent portfolio and strengthens its competitive moat in the synthetic antibiotic space.
Funding and Financial Position
To support ongoing operations and clinical development, Recce received an advanced overseas finding of up to A$85 million from the Australian Department of Industry, Science and Resources for eligible R&D expenditure. The company also expects a cash inflow of approximately A$3.6 million in April 2026 from the final tranche of its FY25 R&D tax rebate, adding to the $5.3 million already received.
However, the company’s cash reserves have diminished sharply, with cash and equivalents falling to $365,000 at the end of December 2025 from $10.45 million six months earlier. Net cash used in operating activities was $9.49 million for the half-year. Recce acknowledges material uncertainty regarding its ability to continue as a going concern without securing additional funding, but management remains confident in raising capital and managing expenditures prudently.
Leadership and Legacy
The period was marked by the passing of Recce’s founder and original technology inventor, Dr Graham JH Melrose. Dr Melrose’s scientific and entrepreneurial vision laid the foundation for the company’s innovative synthetic anti-infective platform. The leadership team, including Executive Chairman Dr John Prendergast and Managing Director Mr James Graham, continues to drive the company’s mission forward amidst this transition.
Bottom Line?
Recce Pharmaceuticals faces a critical phase balancing clinical milestones and funding needs as it advances its synthetic antibiotic pipeline.
Questions in the middle?
- Will interim Phase 3 trial results in Indonesia validate RECCE® 327’s clinical efficacy?
- How will Recce manage funding risks given its depleted cash reserves and ongoing losses?
- What impact will the founder’s passing have on company strategy and innovation momentum?
