With a few days trading holt to draw attention, RCE announced on Monday that Registrational Phase 3 clinical trials for R327G (topical gel DFI treatment) in Indonesia are schedule to begin mid-December and run for around 12 months. The 300 patient (100 placebo) double blinded study expects read outs in late CY25 and commercial launch H1 CY26 (within 18 months).

At a cost of US$2m (R&D rebate eligible spending), this provides a cheap and accelerated path to revenue for RCE. There are 19.5 million adults with diabetes in Indonesia, so it’s a significant market from a population perspective, but we don’t have any guidance on expected revenue opportunities.

That said RCE has a market cap of just over $100m, so any relatively near-term revenue could be significant at the current price. There is also value as a proof of concept as well as the value of in market experience with treatments at scale. Currently R327G has TGA Special Access Scheme – Category A status so is in use in Australia on a very restricted basis. 

The update also flagged the results of the Phase 2 ABSSSI clinical trials of R327G in Australia will be released prior to year end. Progress updates earlier in the trial were strong, so the real news is that the Phase 3 registrational study for R327G is scheduled to start in H1 CY25 and parallel program across the ASEAN are also scheduled. 

I have questions on what markets are included in “ASEAN” and how much this and the Australian trial is going to cost as well as the timeline to market in each market. However, I would assume that these trials would not be much longer than the Indonesian trials given infections are acute rather than chronic conditions and the trial lengths are shorter as a result.

So, we may see first revenues from Indonesia in 18 months and possible revenues in Australia or other ASEAN countries in 24-30 months. US and Europe, I was expecting to be at least 2-3 years away, but how much of the TGA trials will assist the US or Europe trials and approvals is probably the key swing factor as is cost and the need for additional capital raises.

Stepping into Phase 3 should provide a valuation boost, but there is still a while before revenues. A big value drive in the near term would be a partnership agreement with a large US Pharma company, which I am sure they have been and continue to be in discussion about.

Disc: I own RL+SM