Recce secures full entitlement shortfall to complete $15.8m raise for phase III clinical trials

Recce receives firm commitments to place the full shortfall from its entitlement offer raising a total of $15.8 million to support phase III clinical trials.

Recce has completed its capital raise to support its phase III clinical trials. Pic via Getty Images

• Recce entitlement offer shortfall placed to existing institutional and sophisticated investors, raising $7.4 million

• Shortfall placement concludes Recce’s $15.8 million capital raising to support phase III clinical trials in Indonesia and Australia

• Following the equity raise Recce will have a pro-forma cash balance of $16 million

 

Special Report: Developer of a new class of synthetic anti-infectives, Recce Pharmaceuticals has received firm commitments to place the full shortfall from its recent 1-for-6 pro-rata non-renounceable entitlement offer.

Recce Pharmaceuticals (ASX:RCE) said a small number of existing institutional and sophisticated investors opted to take up the shortfall, raising $7.4 million at 28 cents per share.

The shortfall price is the same as shares issued under the private placement and entitlement offer announced on April 10.

The shortfall placement marks completion of Reece’s $15.8 million capital raising consisting of:

• The placement of ~17.9 million shares to an Australian-based private investor, raising $5m
• The $3.4m raised under the pro-rata non-renounceable entitlement offer
• The A$7.4m raised via the shortfall placement

Settlement of shortfall shares is scheduled for June 6, with allotment on or around June 10.

Ord Minnett acted as lead manager to the capital raising, while Spark Plus Pte Ltd acted as co-lead manager.

Funding for phase III trials

Proceeds from the capital raising will fund Recce’s phase III clinical trials and commercialisation efforts, including:

• Completion of phase III diabetic foot infection (DFI) registrational topical clinical trial in Indonesia, which is a revenue catalyst for 2026
• Completion of phase III acute bacterial skin and skin structure infections (ABSSSI) registrational topical clinical trial in Australia
• Additional clinical activities, including an investigational new drug application to the US Food and Drug Administration (FDA)
• Payment of offer costs and general working capital

Following the raise, Recce will have a pro-forma cash position of $16m. This excludes an R&D rebate expected from the ATO in Q4 2025 of ~$8.5m and a further $10m in anticipated non-dilutive capital via an R&D advance following the raise.

A critical step forward

CEO James Graham said Recce was pleased to achieve its intended capital raise and receive ongoing support from existing institutional and sophisticated shareholders.

“This successful shortfall placement was very gratifying for Recce, particularly given the more challenging environment for raising capital for biotechnology companies that currently exists,” he said.

“Proceeds from the capital raising will be used to support the completion of a registrational phase III clinical trial for diabetic foot infections in Indonesia and a registrational phase III for ABSSSI across Australia, following a recently announced Phase II ABSSSI clinical study achieving all endpoints.”

Chairman Dr John Prendergast said completion of the shortfall placement and capital raise supports a critical step forward as Recce starts its phase III trial.
“Given current share levels and the anticipated trial timeline, we believe Recce continues to offer strong underlying value,” Dr Prendergast said.

"The outcome of this trial represents a potential major inflection point for the company, with the opportunity to advance a new standard of care in infectious diseases, offering long sought-after improved outcomes for patients.”

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.

Originally published as Recce secures full entitlement shortfall to complete $15.8m raise for phase III clinical trials