Announcement & AGM

Todays announcement of some test results has prompted me to finalise my AGM notes, so I will first cover todays news then my notes from the AGM:

Positive Efficacy Data of Inhaled RECCE® 327 in Hospital/Ventilator Acquired Pneumonia (HAP/VAP) in Mice Models (26/11/25)

In addition to the Phase 3 trials underway for R327G, RCE is continuing to conduct separate lab (pre-clinical) testing on it’s assets to expand application and provide additional support for efficacy. Today’s announcement is the results of testing R327 in rats based on Nebulised inhaled method of delivery, which for the A. baumannii infection in lungs is a better way (more effective) to deliver the drug to the infection (sometimes the hardest part of a treatment).

The results in summary are that it outperformed Merapenem, a common standard of care and one which can not be Nebulised and delivered directly to the lungs. The results are below and show 99.99% effectiveness with results approaching the Limit of Detection (LoD).

This is another feather in the cap for RCE and shows that they are still progressing R327 more broadly than the gel version R327G which is in Phase 3 for DFI in Indonesia and starting Phase 3 in Australia for ABSSSI. It made commercial sense to focus on R327G with limited capital the best approach is pick your most eligible child, pimp them for a quick marriage so you can fund a more selective process for rest of the family… I don’t expect my daughters to read this naturally ????

This announcement is a nice bit of news flow while we wait for the initial read out from Phase 3 Indonesia, with some potential additional value that in addition to the Gel and IV treatment modes, we have an inhaled option for R327 adding to it’s usability and commercial value.

AGM Notes (5/11/25)

My general impression was that outside of prepared comments, that in general the comments and information from all members of the board was provided with genuine belief, excitement and passion in what R327 can offer to address Antimicrobial Resistance (AMR) which is likely to have profound benefits to global health outcomes. I will first cover the comments provided with the presentation then the general comments and responses to questions

Presentation:

• RCE has 3 programs with the DoD, not just 1.
• DFI (R327G) is the priority for US and Australian regulatory approval
• Board self-introduced and the US based Chair (Dr John Prendergast) and director (Dr Alan Dunton) elaborated on why they saw such potential with R327 based on their specific experience in drug development and anti-infectives. Co-inventor Michele Dilizia also elaborated on her experience with R327’s development and the depth of testing in lab.
• The access to R&D credits in Australia for research done overseas for the next 3 years was also flagged – if not the only Australian company to be given this, it is certainly for the highest amount.
• Confirmed that the DFI is highest priority and Indonesia Q1FY26 initial readout expected (which I take as by March 2026).
• Full registration for DFI in ASEAN is expected in FY26 (Dec26?) but a marketable product should be possible on the initial read out in Mid-26.
• Pointed out on many occasions and with confidence that R327 is the most advanced Anti-Infective, it broader than any other and has exhibited no significant resistances despite broad and comprehensive testing.

General Comments and Questions

• James Greham was very blunt that he is adverse to capital raises and continues to seek Non Dilutive Funding (NDF), such as grants, rebates and using lending against rebates to accelerate research.
• There was a discussion on how attractive RCE is to large Phara companies to acquire or partner with. It was noted that these companies are bureaucratic and want to see assets de-risked as much as possible (ie Phase 3 data preferrable). In addition, many focus in particular areas and the Anit-Biotic market has been a widow maker for most pharma companies over the last 40 years due to AMR making investments non-commercial. Hence there are not a lot of companies focusing in the area, but they continue conversations broadly and acknowledge that until they generate some FOMO the large Pharma companies will be prone to sit on their hands and watch.
• A question on what happened to the R529 compound referred to at listing: This is the identifier for the Non-Civilian compound used in the DoD program.
• Questions/Comments on Resistances: unequivocal response that “no evidence of resistance” with Michele Dilizia talking at length on the pre-clinical (lab) testing done, citing 50+ passages tested and they are confident that no resistance will develop.
• Questions/Comments on Side effects: No significant side effects, noting the Phase 2 test results to support this. They also talk around the edges of the DoD program which they speak to directly due to confidentiality, indicating that R529 has been tested with the Military in some of the worst environments possible for infections and some of the worst types, with exceptionally good results. 
• Competition: noted head-to-head testing with Carbapenems (a class of broad-spectrum antibiotics used for severe bacterial infections, often reserved for multidrug-resistant organisms) showing that the infections become resistant to the Carbapenems but not R327
• ·Aerosol: Dr Alan Dunton talked passionately about the ability to use R327 via an aerosol (as per todays announcement), citing this as making it “very special” as a treatment. He talked about Tuberculosis sufferers who live on the street in New York, treatment usually takes 2 years but with R327 they expect it to be less than 1 month.
• AI: a question on staff impacts from AI, James said they didn’t expect any, but obviously use AI assist with pipeline acceleration and in research for repetitive filing tasks.
• DFI Testing: A question about the testing approach used in Indonesia, it was noted that because there was no standard of care they were able to use a placebo group, with 2 Active patients to 1 placebo. Normally this is not possible where there is a standard of care because it is un-ethical to deny care which is what happens for the placebo.

As an investor/outsider we have to accept that the insiders have better knowledge and may be incentivised to hide problems or exaggerate opportunities. That may be the case with the RCE board, if it is I am fooled hook line and sinker, because, I think they genuinely believe R327 is a block buster of block busters both commercially and for human health. Only time will tell for sure.

Disc: I own RL+SM

Indonesia Phase 3 Dosing underway (25/9/25)

A standard news flow item for Biotech’s, dosing underway in the Phase 3 Indonesian trial of R327G for Diabetic Foot Infections, Claytons market sensitive. Five sites now activated (not sure out of how many planned), with initial readouts expected Q1 2026 after 100 of the 310 targeted patients included in the trial have been treated.

I am a bit confused on the date reference, as a 30 June year end reporting company Q1 2026 is now (Sep25), I think they mean the March 2026 quarter end with a view to the first commercial sales possibly falling into CY26. It could be either, the trial was expected to take 12 months – readouts are very quick on efficacy for the treatment and it’s a relatively small trial, and there are a lot of DFI patients in Indonesia (20.9m live with diabetes), so recruitment is not an issue.

Per the below program pipeline, this is just the DFI for the Indonesia (ASEAN) market, not the broader, more complex and likely longer Phase 3 for ASSSI to be held in Australia, which will include DFI but also other wounds and burns.

More than 1 in 10 adults in Indonesia have diabetes and 60% of all diabetic foot ulcers (DFU) develop infections. The incidence of DFU in Indonesia is reportedly 7.3%, and globally 6.3%. So that suggests 1.5m incidences of DFU each year in Indonesia which would suggest around 915k become infected.

Indonesian’s or their health system are unlikely to pay a lot for the treatment and the company hasn’t provided any commercial guidance on this market, but circa 1m patients each year that could use the treatment is a healthy market even with modest penetration at low values and margins for an ASX company with a market cap around $100m, ignoring the rest of ASEAN or the ABSSSI program.

RCE should have enough capital to get to the end of 2026 and to market in Indonesia if all goes to plan. They will need additional capital to get to markets beyond that in the ASEAN region and also to complete clinical approval and bring the ABSSSI to market in Australia and the US.

So they will be looking for a strong share price lift early next calendar year to raise on and pumping the commercial prospects in Indonesia plus start of the ABSSSI trials in Australia to do that. Hopefully that’s the way it plays out and they are well capitalised to go all the way without high levels of dilution.

Disc: I own RL+SM

China Patent (27/5/25)

Yesterday Recce announced the acceptance of their China Patent in what I would qualify as questionably market sensitive announcement.

Today the price has spiked 20% and buyers are overwhelming sellers with a high volume of trade for the stock. Why today and not yesterday is my question, but I suspect the answer is that it has nothing to do with the announcement.

The price is now back around the pre capital raise announcement price and for some reason we have a lot of interested investors… They must have been close to getting a speeding ticket and if they send another market sensitive announcement out later this week (a real one) they will have some questions to answer.

It’s good to see the price rise, just odd to happen all of a sudden.

Disc: I own RL+SM

USAMRIID Cooperative Research & Development Agreement (28/4/25)

Todays announcement indicates a deepening relationship with US Defence agencies adding this agreement with the United States Army Medical Research Institute of Infectious Diseases (USAMRIID) to the US DoD Burns treatment program.

The USAMRIID program is supported and funded by the Defence Threat Reduction Agency (DTRA) and will test Recce’s synthetic anti-infective RECCE® 327 (R327) against a panel of biodefence pathogens in USAMRIID’s established in vitro (in lab) infection models. Then in vitro (in animal) in the US DoD laboratory equipped to safely study highly hazardous pathogens requiring maximum containment at Biosafety Level 4.

No cost or revenue is mentioned, presumably RCE will provide the compound (R327) for free which is inexpensive and if the DoD is paying for the research then it’s a good deal with an opportunity for expanded use at next to no cost.

The announcement also provides a bit more credibility for R327, additional US agency support shows that external groups who have looked deeply at the science see good potential.

This also supports their current capital raise at 28c, the 1-6 entitlement opened on 22 April and closes 5 May. I hope the price stays above 28c to help support the raise, but I will be following and make a call to invest around the close date.

Disc: I own RL+SM