Recce Pharmaceuticals - R327 progressing in rapid infusion study

Recce recently reported the completion of its data review from its earlier long-infusion Phase I study of the intravenous (IV) RECCE 327 (R327) formulation, confirming that the drug candidate shows favourable safety characteristics, a robust dose-dependent pharmacokinetic drug concentration response, as well as evidence of increased drug concentration into the urinary tract. The company is proceeding with a Phase I/II study assessing using a more rapid infusion rate, with recent completion of the first 2,500mg cohort of the Phase I part ahead of schedule. Obtaining financing is a near-term strategic priority given the cash at hand (A$1.6m at 30 June 2023), and the company’s current cash runway is short (into late Q3 CY23). Recce has signalled that it is seeking to raise A$12–15m. After rolling forward our estimates and updating forex assumptions, we obtain an rNPV valuation of A$562.4m (or A$3.15 per share), up from A$535.6m previously.