Last close As at 12/08/2026
AUD0.38
▲ −0.01 (−2.60%)
Market capitalisation
AUD118m
Research: Healthcare
Recce recently reported that the Australian government has committed to providing up to A$55m in future cash rebates to reimburse upcoming R&D expenditure directed towards the company’s proprietary synthetic anti-infective programmes to June 2025. Notably, this binding agreement with the Australian government’s Department of Industry, Science and Resources (AusIndustry) extends the rebate programme that customarily reimburses 43.5% of eligible R&D expenditures incurred within Australia, to cover the anti-infective R&D activities Recce undertakes anywhere in the world. We view this as key given our expectation that US and global clinical trials will be needed to maximise the commercial potential of Recce’s products, notably lead candidate RECCE® 327 (R327). While our model already assumed the Australian government would reimburse 43.5% of Recce’s overseas R&D costs, there was a minor degree of uncertainty on whether this would be the case. Hence, the signing of this binding commitment with AusIndustry helps de-risk future funding needs for Recce as it advances its anti-infective programmes, notably R327 in sepsis/urosepsis and in complicated urinary tract infection (UTIs).
Recce Pharmaceuticals |
Landmark commitment helps fund R&D costs |
Funding update |
Pharma and biotech |
20 December 2023 |
Share price performance
Business description
Analysts
Recce Pharmaceuticals is a research client of Edison Investment Research Limited. |
||||||||||||||||||||||||||||||||||||||
Recce recently reported that the Australian government has committed to providing up to A$55m in future cash rebates to reimburse upcoming R&D expenditure directed towards the company’s proprietary synthetic anti-infective programmes to June 2025. Notably, this binding agreement with the Australian government’s Department of Industry, Science and Resources (AusIndustry) extends the rebate programme that customarily reimburses 43.5% of eligible R&D expenditures incurred within Australia, to cover the anti-infective R&D activities Recce undertakes anywhere in the world. We view this as key given our expectation that US and global clinical trials will be needed to maximise the commercial potential of Recce’s products, notably lead candidate RECCE® 327 (R327). While our model already assumed the Australian government would reimburse 43.5% of Recce’s overseas R&D costs, there was a minor degree of uncertainty on whether this would be the case. Hence, the signing of this binding commitment with AusIndustry helps de-risk future funding needs for Recce as it advances its anti-infective programmes, notably R327 in sepsis/urosepsis and in complicated urinary tract infection (UTIs).
Year end |
Revenue** |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/22 |
3.1 |
(11.0) |
(0.06) |
0.0 |
N/A |
N/A |
06/23 |
4.3 |
(13.1) |
(0.08) |
0.0 |
N/A |
N/A |
06/24e |
3.2 |
(32.9) |
(0.17) |
0.0 |
N/A |
N/A |
06/25e |
10.9 |
(61.3) |
(0.30) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Revenue figures reflect gross revenues.
This Advanced Overseas Finding (AOF) awarded by AusIndustry is reported to be one of the largest in Australian history and we believe it signals the Australian government recognises the vital importance of developing novel anti-infective therapeutics to combat antimicrobial resistance, described as a leading public health threat by the World Health Organization and the US CDC. The size and scope of the committed arrangement suggests the Australian government has confidence in Recce’s clinical programmes and clinical results to date, as highlighted in our recent note. Altogether, AusIndustry has provided an AOF of up to A$43.8m for Recce’s global activities directed towards synthetic antibiotic R&D and an AOF of up to A$11.2m for global activities directed towards synthetic anti-viral R&D. These AOFs represent firm commitments that the Australian government will provide rebates to Recce without caveats when claimed or drawn through the applicable R&D funding activities.
We believe Recce will continue to seek funding, which may come from partnerships or non-dilutive arrangements, as we expect it to start a US multiple dose R327 Phase II efficacy trial in UTIs/urosepsis in mid-CY24. Nearer term, we look for additional updates from the company’s Phase I/II R327 intravenous study assessing faster infusion rates in healthy volunteers (including the cohort receiving 3,000mg of R327 within 15 minutes).
|
|
Research: Metals & Mining
Pan American Silver (PAAS) released a preliminary economic assessment (PEA) of the La Colorada Skarn project, confirming its potential to become a large-scale operation producing an average 17.2Moz of silver per annum over the first 10 years of its 17-year mine life. At a base case throughput rate of 50ktpd, the company estimates the project’s post-tax NPV8 at US$1.1bn, with an IRR of 14% and a payback period of 4.3 years. We intend to update our valuation shortly to incorporate the PEA and the prevailing stronger than expected gold and silver prices.