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  • ASX-listed Recce Pharmaceuticals (RCE) has developed a synthetic anti-infective designed to not only kill bacteria and emerging viral pathogens but treat sepsis before it can take hold
  • Sepsis is the leading cause of hospitalisation in the United States, significantly surpassing heart failure and osteoarthritis, which take second and third place, respectively
  • While the condition can be fatal, it can also be financially devastating for patients who survive, with the average cost per stay for patients who developed sepsis in hospital between US$50,000 and US$70,000 (A$68,700 and A$96,000) in 2018
  • A lack of universal treatment plays a role in this: the current standard of care for sepsis is to pump patients full of several different antibiotics in a bid to kill the infection in the body
  • Recce’s R327 drug is a broad-spectrum anti-infective designed to treat several families of bacteria and has so far been shown to be safe and well-tolerated in first-phase clinical trials
  • With strong research and expertise behind its full pipeline of products, Recce is bullish about its ability to nab a potential share of several multi-billion-dollar markets

Viruses, bugs, and injuries are often the causes of medical emergencies, but things can go particularly awry when the body turns on itself.

This is precisely what happens when someone experiences sepsis.

While a bacterial infection is a precursor for the life-threatening condition, sepsis occurs when — for reasons still largely unknown to researchers — the immune system stops fighting the invasive bacteria and begins to fight itself. An overactive immune response releases toxins into the bloodstream that, if not dealt with immediately, can be fatal.

Yet, it’s not just the cause of sepsis that remains a mystery: there is currently no universal treatment for the condition despite its prevalence.

ASX-listed Recce Pharmaceuticals (RCE) is working to change this, with its RECCE 327 (R327) synthetic anti-infective designed to not only kill bacteria and emerging viral pathogens but treat sepsis before it can take hold.

Sepsis at a glance

Sepsis is the leading cause of hospitalisation in the United States, significantly surpassing heart failure and osteoarthritis, which take second and third place, respectively.

Worldwide, between 47 million and 50 million people each year develop sepsis, resulting in 11 million annual deaths.

Mortality is not limited to developing countries with weaker healthcare systems: 270,000 people die from sepsis each year in the US and 8700 people each year in Australia.

To put it into perspective, sepsis kills more people in the United States each year than prostate cancer, breast cancer, and HIV/AIDS combined.

But even for those who survive, the condition can still be devastating — not just medically, but financially. Sepsis has consistently remained the most expensive condition to treat in the US, and costs climb dramatically as the condition worsens.

A 2019 report from NASDAQ-listed Premier Inc found that the average cost per hospital stay for patients who developed sepsis in hospital topped between US$50,000 and US$70,000 (A$68,700 and A$96,000) in 2018.

The lack of universal treatment plays a big role in this: the current standard of care for sepsis patients is to pump them full of several largely-ineffective antibiotics in a desperate bid to kill the infection in the body.

Recce Pharmaceuticals CEO James Graham described current sepsis treatment as a “cocktail of antibiotics”.

“The clinician draws blood, then tries to identify what type of bacteria is causing the infection and what type of antibiotic that bacteria might be susceptible to,” Mr Graham told The Market Herald.

“Currently, they take a cocktail of antibiotics, they intravascularly administer, and they hope.”

With roughly one-third of patients presenting non-specific symptoms, however, treatment is often delayed, in which case the rising cost of treatment becomes the least of a patient’s concerns — the mortality rate for sepsis increases by around eight per cent for every hour the condition goes untreated.

Basically, there is a major gap in the antibiotics market for effective sepsis treatment.

This is where Recce and its R327 compound come in.

R327 and the fight against superbugs

Recce’s R327 drug is a broad-spectrum anti-infective designed to treat several families of bacteria, including the full suite of ESKAPE pathogens. These pathogens are a family of six highly virulent and antibiotic-resistant bacteria.

Recce is currently conducting a Phase I/II clinical trial assessing the safety and efficacy of R327 as a topical anti-infective for the treatment of burn wound infections. The study has demonstrated promising interim results thus far, with visible reductions in bacterial infection within the first 24 hours of R327 treatment among patients treated to date.

In a separate Phase I intravenous (IV) clinical trial, assessing the safety and tolerability of R327 in 80 healthy male patients, R327 has so far been shown to be safe and well-tolerated with no clinically significant changes in vital signs or adverse events. Recce is expecting a further interim read-out of results before the end of March.

A major threat to the medical world is the decreasing effectiveness of antibiotics: the overuse of antibiotics to treat infections has led to bacteria becoming increasingly resistant to several treatment options. R327 is designed to mitigate this issue.

According to Recce, R327 differs from conventional antibiotics in its ability to not only kill bacteria but continue to kill it even with repeated use — a common failure associated with existing drugs.

“R327 is unique in that it can treat any type of bacteria. This takes the guesswork out of treating sepsis and means rather than a cocktail of antibiotics, patients just need one,” Mr Graham said

“We don’t care, by design, what type of bacteria a patient has. We get in on patient presentation; we bind and interact with any type of bacteria because any type of bacteria is bad bacteria in your blood.

“This is eliminating that guesswork and eliminating time-consuming diagnostics.”

The US Food and Drug Administration (FDA), seeing the potential in R327, awarded the drug Qualified Infectious Disease Product (QIDP) status, giving Recce fast-track designation and 10 years of market exclusivity for R327 post-approval.

On top of this designation, RECCE 327 has been included in The Pew Charitable Trusts’ Global New Antibiotics in Development pipeline as the only synthetic polymer and sepsis drug candidate in development.

A massive market

According to research from Grand View, the global antibiotic market was worth US$40.7 billion (A$56.4 billion) in 2020 and is expected to surge to a whopping US$57.99 billion (A$80.3 billion) by as soon as 2028.

Further to this, Grand View pegged the global sepsis diagnostics market at US$627.73 million (A$869 million) in 2020 with an expected compound annual growth rate (CAGR) of 9.5 per cent through to 2027.

Diagnostics go hand-in-hand with treatment — meaning it stands to reason that as the sepsis diagnostics market grows, more pharmaceutical companies will be on the lookout for the best-available sepsis treatments.

Recce, through its R327 product, has a hand in both the lucrative markets, meaning not only does the drug candidate have the potential to save countless lives, but big rewards may be on the line for investors who back the company and its research.

Recce’s pipeline of opportunity

Along with its lead R327 product, Recce is also testing some other key compounds to meet further gaps in the healthcare market.

The company’s RECCE 435 product is an orally-administered anti-bacterial drug currently being tested against dangerous bacteria that can grow in the stomach and cause stomach ulcers.

Meanwhile, the company has also developed an intravenous and intranasal form of R327 to treat viral infections, dubbed RECCE 529 (R529). Both of these compounds are being tested against COVID-19.

With the size of the addressable market for Recce’s lead drug candidate and the research and expertise behind its full pipeline of products, the company is bullish about its ability to nab a potential share of several multi-billion-dollar markets.

Recce stock was trading at 94 cents a share at midday on March 7. The company has a $161 million market cap.

RCE by the numbers

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