Announcement PDF Corporate Presentation March 2023 ASX:RCE FSE:R9Q Disclaimer DISCLAIMER This presentation has been prepared by Recce Pharmaceuticals Ltd (the “Company”). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents of this presentation, or any information provided in connection with it, as financial advice, financial product advice or advice relating to legal, taxation or investment matters. No representation or warranty (whether express or implied) is made by the Company or any of its officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in connection with it, or any omission from this presentation, nor as to the attainability of any estimates, forecasts or projections set out in this presentation. This presentation is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the presentation and make your own independent decisions about the affairs, financial position or prospects of the Company. The Company reserves the right to update, amend or supplement the information at any time in its absolute discretion (without incurring any obligation to do so). Neither the Company, nor its related bodies corporate, officers, their advisers, agents and employees accept any responsibility or liability to you or to any other person or entity arising out of this presentation including pursuant to the general law (whether for negligence, under statute or otherwise), or under the Australian Securities and Investments Commission Act 2001, Corporations Act 2001, Competition and Consumer Act 2010 or any corresponding provision of any Australian state or territory legislation (or the law of any similar legislation in any other jurisdiction), or similar provision under any applicable law. Any such responsibility or liability is, to the maximum extent permitted by law, expressly disclaimed and excluded. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in the Company. FUTURE MATTERS This presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of the Company. Those intentions, expectations, future plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or on which views may differ and may be affected by known and unknown risks. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company, or any of its directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved. Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to be materially different from those expected, planned or intended, recipients should not place undue reliance on these intentions, expectations, future plans, strategy and prospects. The Company does not warrant or represent that the actual results, performance or achievements will be as expected, planned or intended. US DISCLOSURE This document does not constitute any part of any offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of any “US person” as defined in Regulation S under the US Securities Act of 1993 (“Securities Act”). The Company’s shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to any US person without being so registered or pursuant to an exemption from registration including an exemption for qualified institutional buyers. Board Structure Dr John Prendergast Executive Chairman (Shares: 250,000) (Options: 2,175,000) James Graham Chief Executive Officer (Shares: 6,031,932 – 3.39%) (Options: 2,250,000) Alistair McKeough Non-Executive Director (Shares: 25,000) (Options: 1,125,000) Michele Dilizia Chief Scientific Officer (Shares: 3,543,485 – 2.0%) (Options: 1,500,000) Dr Alan Dunton Non-Executive Director (Shares: 60,000) (Options: 1,125,000) Justin Ward Executive Director & Principal Quality Chemist Justin Reynolds Outsourced CFO (Shares: 158,966) (Options: 600,000) Maggie Niewidok Company Secretary Investment Highlights Proprietary first-in-class anti-infectives against bacteria and viruses Multiple shots on goal, initially pursuing four indications: Sepsis, UTI, Burn wounds and Diabetic Foot Ulcers Multiple Phase I and Phase II clinical programs, addressing unmet medical needs The global antibiotics market was US$38.08 billion in 2021 projected to grow to US$45.30 billion in 2028 at a CAGR of 2.5% Multiple near-term clinical readouts over the next 6-18 months 3 A Versatile Technology Platform • Clinical-stage biotech company developing Anti-infectives targeting both bacterial and viral indications • Strong IP and own manufacturing capability • Qualified Infectious Disease Product designation • 10 years market exclusivity plus fast track approval* • Versatile delivery platform – oral, intravenous and topical formulations • Designed to safely provide treatment without developing resistance over time • Multiple infectious disease opportunities with RECCE® 327 *Awarded by the US FDA in 2017 for R327 bacteraemia (broad-spectrum bacterial sepsis). Time starts only from potential market approval. Strong Pipeline Over Various Indications and Upcoming Inflection Points Asset and Route of Administration Indications R327 Intravenous* Serious/life threatening bacterial infections including sepsis Discovery Pre-Clinical Phase I Phase II Phase III Market Urinary tract infections including urosepsis Multidose, early stage sepsis efficacy study R327 Topical* Wound infections including infected burns Diabetic Foot Ulcers RCE Compounds* Mycobacterium abscessus pre-clinical program Bacterial Sinusitis pre-clinical program Additional TBA pre-clinical program *Anti-bacterial program 5 Empowering Clinicians with a New Class of Antibiotics The need for new antibiotics has never been greater • Initial resistance to use new approved drugs due to antibiotic resistance • “New antibiotics, able to kill drug-resistant bacteria, is essential to saving modern medicine.” • Wellcome Trust Physician perspectives on R327 “We have so few options when patients have difficult pathogens. This agent would be great to come into play for them.” – ID KOL • “Lack of new antibiotics threatens global efforts to contain drug-resistant infections.” • World Health Organization R327 addressing market need • R327 does not contribute to AMR, supported by unique and multi-layered MoA. “This may start off being used in resistant patients, but if it is really compelling, of course physicians will use it for more people.” – Pulm. KOL • Empowering clinicians to confidently and quickly administer R327 at first patient presentation. • Use of R327 may alleviate the selective pressure on bacteria posed by other antibiotics and allow them to regain efficacy. “If a patient has M. abscessus, they’re fortunate if they get any improvement, and there’s sometimes potentially permanent damage.” – Pulm. KOL MDR: Multidrug Resistant; ROA: Route of Administration; IV: Intravenous; MOA: Mechanism of Action; KOL: Key Opinion Leaders. Source: Physician Interviews; Clearview Analysis. 6 Independent Study Undertaken on R327 MoA1 By Leading Experts in Bacterial MoA Analysis Stage 2 Stage 1 R327 permeabilizes cell membrane and enters the cell R327 interrupts bacterial cellular energetics via ATP Synthesis Stage 4 Stage 3 Cellular division & nondividing cell functions are disrupted R327 is rapidly and irreversibly bactericidal 7 1 – Dilizia, M., Tsunemoto, H., Quach, D. et al. Elucidating the Mechanism of Action of Novel Polymer-based Synthetic Anti-infective Compound RECCE 327 - Abstract RECCE® 327 Activity Against Escherichia coli • E. coli grows fast. Eukaryotic cells healthy and not affected. Without R327 R327 (3,000 ppm) • R327 at 3,000 ppm shown to be highly effective against E. coli without affecting growing, healthy eukaryotic cells. • R327 rapidly and irreversibly shuts down the ATP in E. coli, not allowing it to divide and grow. eukaryotic cells E. coli RECCE® 327 Activity Against Staphylococcus aureus • S. aureus bacterial growth slower than E. coli, not affecting eukaryotic cells. Without R327 R327 (2,300 ppm) • R327 at 2,300 ppm shows to be highly effective against S. aureus without affecting growing, healthy eukaryotic cells. • R327 rapidly and irreversibly shuts down the ATP in S. aureus, not allowing it to divide and grow. eukaryotic cells S. aureus R327 faster acting than existing antibiotics – no prolonged exposure needed E. coli Xen14 BiXenofilm 180000 • R327 kills pathogenic bacteria at a faster rate. Luminescence* 150000 50% PEG 50% PEG • Untreated B0076 Cephalexin CEPH Ciprofloxacin 120000 90000 60000 30000 0 0 30 60 90 R327 designed to work faster than all existing antibiotics, reinforced by MoA work undertaken by experts in their field. Colistin CIP Tetracycline COL R327 TET “R327 kills bacteria in conditions where other antibiotics are ineffective.” UNTREATED - Marc Sharp, PhD, Chief Scientific Officer, Linnaeus Bioscience 120 Time (min) R327 is faster-acting against bacteria than other antibiotics – works quickly, without prolonged cellular exposure times required of other antibiotics (extended exposures commonly associated with systemic toxicity). *Xen14 (a reduction in luminescence correlates with decrease in cell viability) *All compounds used at 2X Minimum Inhibitory Concentration (MIC) Multiple Upcoming Clinical Milestones Burn Wounds Q4 23: Readout of Phase H2 24: Initiate Phase III I/II Burn Wound Infection sepsis trial Trial DFU H1: Initiate Phase I/II DFU Sepsis DFU Clinical Q4 23: Readout of Phase Mid 24: Readout of I/II DFU Trial Phase II sepsis trial Present CY23 Burn Wounds H1: Initiate Phase I/II Burn Wound Infection Clinical Trial CY25 CY24 UTI UTI Mid 23: Initiate Q4 23/Q1 24: Readout of Phase I/II UTI Trial Phase I/II UTI Trial Sepsis H2 23: Initiate Phase II sepsis trial Key inflection points Sepsis UTI H2 24: Initiate Phase III UTI Trial Displayed as calendar years 11 Milestones are displayed for illustrative purposes only Sepsis – it’s a big problem! 2 What is Sepsis? Economic Impact Social Impact Sepsis is a life-threatening inflammatory response to infection that has spread in the body. Is the most expensive condition to treat in the last 8 years5. Kills more people in the US than prostate, breast cancer and HIV/AIDS combined4. Double the average cost per stay across all other conditions5. Currently no drug therapies specifically for the treatment of sepsis6 . 1,2,3 – The Lancet 4 – BioMed Central 5 – University of Texas 6 – International Medicine Journal RACP Recently Approved Antibiotics – Benchmark for Pricing Anticipated Pricing Benchmarks1 • Though Xigris (activated protein C) was pulled from the market in 2011, its pricing represents a potential premium benchmark for a novel sepsis agent • Fetroja, a recently approved agent for UTIs, was granted an NTAP by CMS with a maximum payment of ~$8K for a patient treated with the agent • Arikayce (Amikacin) is an aminoglycoside antibiotic. Used to treat certain kinds of bacterial infections in the lungs, with a potential pricing as low as USD $27K Physician Perspectives “A novel molecule demonstrating convincing efficacy may get pricing up to $15 – 20 K like Xigris.” – Payer USD $25,000 – $30,000 USD $15,000 – $20,000 USD $5,000 – $10,000 USD $1,000 - $2,000 “Cost savings are important here; even if we don’t see that many sepsis patients annually, the individual patient cost is very high.” – Payer Fortaz 1 Antibiotic prices assume an average 7 – 10 day treatment course, although duration of antibiotic therapy in sepsis is not well characterized; 2 DRG codes are differentiated based on whether patient is ventilated for >96 hours and designation of major complications/comorbidities. HEOR: Health Economics and Outcomes Research; NTAP: New Technology Add-on Payment. Source: Busch. The Journal of Infectious Diseases. 2020; Paoli. Crit Care Med. 2018; CMS; Payer Interviews; ClearView Analysis. Successfully Completing a Clinical Trial Phase Can Lead to Significant Share Price Increase Case studies: Other antibiotic companies • Positive top line results from a global, pivotal Phase III clinical trial of solithromycin oral capsules (Solitaire-Oral) in the treatment of patients with community acquired bacterial pneumonia. Price (US$) Oct 2015: Ann. mixed results from 2nd clinical trial $250.00 5.0 4.5 4.0 $200.00 3.5 Jan 2015: Ann. positive results from 1st clinical trial $150.00 • Solithromycin met the primary and secondary objectives of non-inferiority compared to moxifloxacin. Volume (m) 3.0 2.5 $100.00 2.0 1.5 $50.00 1.0 0.5 Mar-12 Sep-12 Mar-13 Sep-13 Volume Mar-14 Sep-14 Mar-15 Sep-15 - Share Pricing https://www.globenewswire.com/en/news-release/2015/01/04/694774/26624/en/Cempra-Announces-Positive-Topline-Phase-3-Clinical-Results-for-OralSolithromycin-in-the-Treatment-of-Community-Acquired-Bacterial-Pneumonia.html 14 Successfully Completing a Clinical Trial Phase Can Lead to Significant Share Price Increase Case studies: Other antibiotic companies Price (US$) • In December 2016, Achaogen announces positive results in Phase III cUTI and CRE clinical trials of Plazomicin. • EPIC registration trial successfully achieved FDA primary endpoints in patients with cUTI. • Achaogen planned to submit a new drug application (NDA), which will include EPIC and CARE data, to FDA in second half of 2017. Volume (m) $30.00 60.0 $25.00 50.0 $20.00 40.0 $15.00 Dec 2016:Plazomicin positive Phase 3 trials 30.0 $10.00 20.0 $5.00 10.0 Sep-16 Jan-17 Volume May-17 - Share Price https://www.reuters.com/article/idCNASC09MUW 15 Large strategics are also paying attention Case studies: Partnering antibiotic assets creates value US$66 million upfront and Up to US$525 million in potential milestones plus royalties GSK and Spero Therapeutics announce exclusive licence agreement for late-stage antibiotic that may treat complicated UTIs Spero will start a new Phase III clinical trial in 2023, following encouraging US FDA regulatory feedback on the proposed clinical trial design Exclusive licence agreement for tebipenem HBr September 2022 First oral carbapenem antibiotic to potentially treat complicated urinary tract infections (cUTI), including pyelonephritis, caused by certain bacteria 16 Many recent deals within the anti-infectives space have seen larger companies with an entrenched presence acquiring smaller Biotech's Key Recent Deals in Infectious Disease Companies Involved Deal Details • Deal Date: April 2021 • Deal Type: Acquisition of Company Total Value Undisclosed • Deal Date: February 2021 • Deal Type: Acquisition of Brands • Deal Date: July 2020 • Deal Type: Acquisition of Company Up to $500 M Up to $75 M • Deal Date: March 2020 • Deal Type: Research Collaboration and Licensing Up to $190.5 M Key Takeaways • Amplyx was developing therapies for patients with compromised immune systems • Antifungal lead compound, Fosmanogepix, in Phase 2 clinical trials • Sandoz acquired GSK’s cephalosporin antibiotics business including global rights to Zinnat, Zinacef, and Fortum • $350 M upfront and up to $150 M in milestones • $43 M upfront and up to $32 M in milestones contingent on net sales of Xerava • Tetraphase terminated previous agreement with Melinta given La Jolla’s stronger offer • Roche licensed Forge’s FG-LpxC LUNG, an antibiotic for treatment of lung infections attributed to antibiotic-resistant Gram-negative bacteria Source: Global Data; Press Releases; ClearView Analysis Phase I Human Clinical Trial Complete • Study to assess IV infusion of RECCE® 327 in healthy male subjects as a single ascending dose. • Randomized, double-blind, placebo-controlled, safety, tolerability and pharmacokinetics study. • Single dose of a 1-hour via IV infusion at a uniform rate in hospital setting. • Primary endpoint: vital signs, 12-lead ECG parameters, clinical chemistry, hematology, and urinalysis. High Dose 7-10 subjects in each cohort: 2 control, 8 R327 Low Dose 36 subjects successfully dosed across Cohorts 1-4 *Dose increase fold based off 50mg 120x dose amount* 6,000 mg ✓ 80x dose amount* 4,000 mg ✓ 40x dose amount* 2,000 mg ✓ 20x dose amount* 1,000 mg ✓ 10x dose amount* 500 mg ✓ 3x dose amount* 150 mg ✓ 1x dose amount 50 mg ✓ Reason for Optimism in Treating UTI/Sepsis Dr Alan Dunton’s Clinical Update Concentration of R327 in Urine Compared to Plasma In over 60 healthy subjects – R327 primary route of elimination appears to be through the kidney to the ureters and bladder. – High concentrations of R327 noted in the urine of Phase I healthy subjects. – Insight consistent with pre-clinical in-vivo kidney and UTI bacterial infection studies. Ratio Urine/Plasma 15x 13x 15x 17x 14x 20x 13x – Opportunities for therapeutic in array of UTIs (uncomplicated UTI - single dose, complicated UTI, recurrent UTI, treatment resistant etc). – Suggests broader anti-infective treatment model in pre-sepsis. RECCE® 327 Kills Quickly in the Urine E. coli ATCC 25922 Viable Cells Treated with RECCE® 327 in Urine + 10%LB • R327 in the presence of human urine was able to have a fast (near minutes effect against E. coli and irreversible 10.00 Viable Cells (log(CFU/ml) 9.00 8.00 • Bacteria could not be ‘washed out’ and regrown 7.00 6.00 • R327 capability starting from comparatively low concentrations 5.00 • Achieved 6-log reduction in viable cell count 4.00 Understanding logs (example of a small colony of 1 million MRSA bacteria)* 3.00 A 1-log kill reduces the colony to 100,000 MRSA bacteria after a 90% reduction 2.00 A 2-log kill reduces the colony to 10,000 bacteria after a 99% reduction 0 5 10 15 20 25 30 35 40 45 50 Exposure Time (minutes) Untreated 520 ppm R327 2.5% Water 5% Water 1040 ppm R327 55 60 A 3-log kill reduces the colony to 1,000 bacteria after a 99.9% reduction A 4-log kill reduces the colony to 100 bacteria after a 99.99% reduction PEG Control 2600 ppm R327 A 5-log kill reduces the colony to 10 bacteria after a 99.999% reduction A 6-log kill reduces the colony to 1 MRSA bacterium after a 99.9999% reduction *https://halosil.com/what-are-logs-and-why-do-they-matter-in-preventing-infections/ Patents Four families across all major markets Filed Australia USA Europe Germany Spain France UK Italy Sweden Japan Patent Family 1 Expiry Patent Family 2 Expiry Patent Family 3 Expiry ✓ 2028 ✓ 2037 Accepted 2037 2037 ✓ 2037 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 2029 2028 2028 2028 2029 2028 2028 2028 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 2037 2037 2037 2037 2037 2037 2037 2028 ✓ 2037 China ✓ 2028 Pending 2037 HK Pending 2028 Pending 2037 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 2037 2037 2037 2037 2037 2037 2037 2037 2037 2037 Family 1 group relates to the Company’s Unique and Highly Economical Manufacturing Process and use of the Polymer in Treatment of Diseases. Family 2 relates to the Method of Manufacture, Administration and Application to Treat a Broad Range of Common Human Infections. Family 3 relates to a Method of Treatment of a Broad Range of Viral Infections, particularly Parenteral Viral Infection. Recce’s patent portfolio contains over 40 patents and patent applications in the world’s major markets. In-house Manufacturing Capabilities Manufacturing facility in Sydney’s Macquarie Park • Raw materials plentiful and cheap – few $/Kg • No expensive waste – 99.9% product yield • Automated manufacture process taking approx. 1 hour • 500 doses per fully automated run • Quality and Quantity demonstrated capability to support present and future human clinical trials. • Facility built to pharmaceutical specification. • Packaging and labelling to international standards Recce Pharmaceuticals Ltd – Capital Structure 7% Snapshot Tickers ASX:RCE, FSE:R9Q Market Cap (approx.) AUD $107 million Priced at AUD $0.60/share Cash and deposits* AUD $8.05 million** Outstanding shares 178.25 million Average daily volume 57.6k Debt Nil 30 January 2023 3 months **Includes cash balance of $A1.84m and A$6.21m from R&D rebate 28% Top 20 Shareholder Distribution 57% 8% RCE recce.com.au Institution Retail Other Thank you James Graham Managing Director and Chief Executive Officer Recce Pharmaceuticals Ltd ASX:RCE; FSE:R9Q +61 2 9256 2505 james.graham@recce.com.au recce.com.au