Daily Brief Health Care: Sosei Group, Ryman Healthcare, Recce Ltd and more

• Sosei Group (4565 JP) is a Tokyo-based biopharma group which started small, got big and exciting, and hasn’t grown in market cap in years, while it has grown in ambition.
• It has strategic relationships with AbbVie, Biohaven, Genentech, GSK, Takeda, Pfizer, AstraZeneca, and Takeda and a market cap near ¥200bn.
• It has always had impressive shareholder support. Now after nearly 20 years on TSE Mothers/Growth (the limit was supposed to be 10yrs), it moves to TSE Prime and TOPIX.

• Ryman Healthcare (RYM NZ) announced a US$569m (NZ$902m) raising via a renounceable entitlement offer to reset the firm’s capital structure and reduce its gearing. 
• The institutional part of the entitlement offer saw a strong take up and the shares have held up above the entitlement offer price since the deal was announced.
• In this note, we will talk about the upcoming retail shortfall bookbuild and other updates since our last note.

Recce Pharmaceuticals is developing a novel class of broad-spectrum synthetic anti-infective drugs to which, so far, all tested bacteria have been unable to develop resistance. This could be a very desirable trait given widespread concerns about antimicrobial resistance (AMR). The lead indication for Recce’s synthetic polymer antibiotic, Recce 327 (R327), is sepsis, a substantial area of unmet need with significant mortality and high costs of care. A Phase Ib/IIa multiple-dose study of an intravenous (IV) R327 formulation in healthy subjects is planned to start in H1 CY23. The company is also assessing other infection indications, such as complicated urinary tract infections (UTIs). A topical (spray-on) formulation of R327 is also being assessed in human trials for burn wound infections, and a new study for diabetic foot infections is expected to start shortly. We value Recce at A$497m, or A$2.79/share.