Recce Pharmaceuticals Advances Phase 3 Trials and Nears Licensing Deal in MENA

Strategic Licensing Deal Targets MENA Market

Recce Pharmaceuticals (ASX:RCE) has taken a significant step towards commercialising its synthetic anti-infective R327 Topical Gel with a non-binding term sheet signed with a leading publicly listed Middle Eastern pharmaceutical company. The proposed 10-year exclusive licensing agreement covers sales and distribution rights across the Middle East and North Africa (MENA), including key markets such as Saudi Arabia, the Gulf Cooperation Council countries, Egypt, Algeria, and Morocco.

The deal outlines potential upfront and milestone payments up to USD 3.5 million (approximately A$5 million), alongside a 30% royalty on net sales and an additional 6% on annual sales exceeding USD 50 million. Recce will retain manufacturing and supply responsibilities. Finalising the agreement is targeted for next quarter, pending due diligence and customary approvals.

Clinical Trial Progress Accelerates with Regulatory Approvals

On the clinical front, Recce has received Human Research Ethics Committee (HREC) approval to elevate its Australian Phase II trial of R327G to a pivotal Phase 3 study for diabetic foot infections (DFIs). This upgrade expands patient eligibility to include moderate infections, which constitute about 80% of DFI cases, and now includes infected ulcers below the knee. These changes increase the trial’s statistical power and the likelihood of successful outcomes.

Meanwhile, the Indonesian National Agency of Drug and Food Control (BPOM) completed a comprehensive regulatory inspection of Recce’s Phase 3 trial site with no findings or requests for changes. This clearance is a crucial de-risking milestone supporting regulatory approval in Indonesia, where interim data is expected after enrolling 155 of 310 patients. Commercial approval in Indonesia is anticipated by the end of 2026, opening a near-term revenue opportunity in ASEAN markets.

Capital Raise Strengthens Financial Position

Recce bolstered its balance sheet with a A$4 million institutional placement at A$0.40 per share, attracting strong support from new and existing investors. Following this, a Share Purchase Plan (SPP) was launched to raise up to an additional A$4 million on the same terms, offering retail shareholders a chance to participate.

Combined with a recently received A$3.7 million income tax refund relating to R&D incentives, the company’s pro-forma cash position stands at approximately A$33.1 million. These funds are earmarked to support ongoing Phase 3 trials in Australia and Indonesia, commercial licensing efforts in the MENA region, and regulatory submissions including Investigational New Drug applications to the US FDA and Indonesian BPOM.

Upcoming Milestones and Strategic Focus

Looking ahead, Recce is focused on completing patient enrolment in its pivotal Phase 3 trials and advancing negotiations towards a definitive licensing agreement with its Middle Eastern partner, expected by Q4 2026. The success of these initiatives will be critical in validating the commercial potential of R327G as a novel treatment addressing the global burden of diabetic foot infections and antimicrobial resistance.