Recce secures $30m debt facility to support Phase III trials

Recce Pharmaceuticals secures a debt facility of up to ~$30m to support Phase III registrational trials in Indonesia and Australia.

Recce secures a debt facility of up to ~$30m to support two Phase III trials. Pic via Getty Images

• Recce establishes debt facility of up to ~$30m with Avenue Capital Group

• Initial non-dilutionary funding of ~$11.5m supporting two registrational Phase III clinical trials

• Debt facility builds on Recce’s recent ~$15.8m capital raise, strengthening cash position to ~$27.5m

 

Special Report: Developer of a new class of synthetic anti-infectives, Recce Pharmaceuticals is boosting its balance sheet securing a debt facility of up to ~$30 million to support Phase III registrational trials in Indonesia and Australia.

Recce Pharmaceuticals (ASX:RCE) secured a debt facility of up to ~A$30m from global investment firm Avenue Capital Group with ~$11.5m committed and a further ~$19m available subject to drawdown conditions.

As part of the facility deal, Recce will also issue Avenue Capital warrants equivalent to 8% of the loan amount.

Recce said this would provide Avenue the option to acquire shares in the company valued initially at US$1m, subject to the final exercise price.

The warrants are exercisable over five years from the facility execution date and may be settled in cash or via net share issuance.

Final terms of the warrants are subject to ASX approval.

The debt facility strengthens Recce’s balance sheet and follows a recent capital raise of $15.8m among existing shareholders, bringing its cash position to $27.5m.

Importantly, Recce was allowed to retain its FY25 R&D rebate of ~$8.5m, which is expected to be received in November 2025.

Through these predominantly non-dilutionary means, the company has an effective ~$36m cash runway, sufficient for the two Phase 3 registrational studies to read out and submit for market authorisation.

Funding for Phase III Indonesian and Australian trials

Recce said the debt facility provided non-dilutive growth capital to support Phase III clinical trials in Indonesia and Australia of its lead drug candidate RECCE 327 (R327G) topical gel.

R327G is as an intravenous and topical therapy being developed for the treatment of serious and potentially life-threatening infections due to Gram-positive and Gram-negative  bacteria, including their superbug forms.

Completion of Recce’s phase III diabetic foot infection (DFI) registrational trial in Indonesia is earmarked as a key revenue catalyst for 2026.

The company is also undertaking a phase III registrational trial in Australia for acute bacterial skin and skin structure infections (ABSSSI) using R327G topical gel.

Recce said funding from the debt facility would support manufacturing, regulatory submissions and market launch preparations for R327G along with broader commercialisation efforts across the ASEAN region.

Support from global investment firm

Avenue Capital Group is a global investment firm headquartered in New York founded in 1995 by its senior principals Marc Lasry and Sonia Gardner.

The group has deployed more than US$100 billion in investments across a variety of industries, regions and market cycles with an eye toward value creation and capital conservation.

Avenue Capital is primarily focused on specialty lending, opportunistic credit and other special situations investments in the US, Europe and Asia.

It also has three offices across Europe, four offices throughout Asia, an office in Silicon Valley and an office in Abu Dhabi, managing assets of more than US$11 bn.

Avenue Capital chairman and CEO Marc Lasry said the company was pleased to support Recce Pharmaceuticals as it pursued the commercialisation of its novel anti-infective therapies.

“Recce has a differentiated platform technology, strong leadership and strategic focus on high-burden regions that aligns with our philosophy of backing innovative companies with the potential for global impact,” he said.

Watch: Recce partners with the US Army

‘Preserving shareholder value’

Recce CEO James Graham said the facility marked a significant step in strengthening the company’s capital position at a critical juncture.

“With our lead candidate R327G now in registrational trials and targeting commercial launch in 2026, this strategic partnership with Avenue Capital Group allows us to advance our clinical programs while preserving shareholder value,” he said.

“Avenue’s support reinforces the commercial potential of our synthetic anti-infectives and their transformative role in combating antimicrobial resistance.”

This article was developed in collaboration with Recce Pharmaceuticals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.