Recce Pharmaceuticals (ASX:RCE) Strengthens Clinical Pipeline via Avenue Capital Deal | ASX 200

Highlights

• Recce Pharmaceuticals secures a significant non-dilutive facility from Avenue Capital to enhance its late-stage clinical trials.

• Funding supports registrational Phase 3 trials of R327G in Australia and Indonesia.

• Pro-forma cash position enhanced by recent financing activities, including equity raise and upcoming rebates.

Recce Pharmaceuticals (ASX:RCE) (OTC:RECEF), a company listed on the ASX 200, is accelerating its clinical programs with a new financial arrangement from Avenue Capital Group. The synthetic anti-infective developer has announced the establishment of a secured non-dilutive debt facility aimed at advancing the registrational Phase 3 trials of its lead candidate, R327G. This move underpins the company's strategy to strengthen its capital base without issuing new shares, preserving existing shareholder structure while moving toward commercial readiness.

Strategic Clinical Trial Funding

The initial allocation from the Avenue Capital facility will fund key clinical development milestones. The Phase 3 trials focus on the use of R327G in treating diabetic foot infections (DFI) and acute bacterial skin and skin structure infections (ABSSSI). These trials are underway across Australia and Indonesia, representing crucial territories in Recce’s broader development strategy.

Additionally, funding will assist with manufacturing scale-up, regulatory compliance efforts, and commercial launch planning. This ensures that resources are channelled effectively toward getting R327G market-ready within projected timelines.

Expanded Financial Capacity and Liquidity

In addition to the Avenue Capital agreement, Recce recently completed an equity raise and anticipates an upcoming rebate from its research and development efforts. These initiatives collectively bolster the company’s liquidity profile. The combination of funding mechanisms increases operational runway, ensuring progress across development, submission, and launch stages with financial stability.

The partnership with Avenue Capital also incorporates staged disbursements, which are designed to align with the company’s evolving needs through different stages of clinical and regulatory progress. Further tranches are conditional, extending through subsequent years and contingent on specific benchmarks.

Commercial Partnership and Global Confidence

Avenue Capital Group, known for managing assets across specialized lending and credit strategies, brings more than financial backing to the table. The firm’s commitment reinforces Recce’s platform for synthetic anti-infectives and its positioning within a global framework to tackle antimicrobial resistance.

Avenue's interest in Recce aligns with its strategic focus on businesses operating in high-need therapeutic areas. This collaboration also underscores confidence in Recce’s differentiated product pipeline and long-term commercial blueprint.

Warrants and Loan Facility Terms

As part of the agreement, Avenue will receive warrants linked to equity valuation triggers or future funding events. These instruments remain exercisable over several years and are subject to listing approvals. Provisions also allow Avenue to participate in future capital rounds, further deepening its engagement with Recce’s roadmap.

The facility structure includes initial, conditional, and discretionary tranches with clear timelines. Interest arrangements and a maturity-linked payment component have been disclosed, alongside prepayment provisions that include tiered penalties. The loan is secured across Recce’s global asset portfolio, including its intellectual property, with covenants ensuring oversight and transparency through the term.

Commitment to Advancing Synthetic Anti-Infectives

Recce Pharmaceuticals continues to focus on its proprietary synthetic anti-infective candidates, including R327, R435, and R529. These compounds are recognized by global health organizations for their unique approach to combating resistance-driven challenges in infectious disease treatment. The strengthened financial footing enables sustained momentum in this mission.