Key Highlights

  • The baseline interest-only period was extended by three months to 31 December 2026, with two further Options that could extend it to 30 September 2027.
  • The further extensions depend on defined capital-raising targets and positive clinical milestones in the ongoing Phase 3 programs.
  • Recce will issue Avenue 493,103 warrants at A$0.29 exercise price expiring 15 October 2031, and the Tranche 2 draw period now runs to 31 December 2026.

Recce Pharmaceuticals Ltd (ASX:RCE), a developer of synthetic anti-infectives, announced on 16 October 2026 that it has executed an amendment to its secured Debt Facility with Avenue Capital Group, announced on 17 June 2025. The amendments are intended to align the debt service structure with operational milestones in its Phase 3 clinical trial programs.

Interest-only period

The baseline interest-only period has been extended by three months to 31 December 2026. The agreement adds two subsequent interest-only extension options, which could take the period through to 30 September 2027. Those extensions are contingent on Recce meeting defined capital raising targets and achieving positive clinical milestones within its ongoing Phase 3 programs, and the release does not disclose the targets. Without them, the interest-only period ends at the baseline date.

Tranche 2

The availability period for drawing Tranche 2 of the US$5 million facility has been extended from 30 September 2026 to 31 December 2026. Access to the tranche remains subject to satisfaction of the existing clinical and funding milestones. Other key terms of the facility are unchanged and are set out in the 17 June 2025 announcement.

Consideration for the amendments

In return, Recce will issue Avenue 493,103 additional warrants, equivalent to US$100,000 (A$143,000), with an exercise price of A$0.29 and an expiry of 15 October 2031. The warrants will be on substantially the same terms as those previously issued and will be issued under the company's existing Placement capacity under ASX Listing Rule 7.1.

Counterparty and company background

Avenue Capital Group was founded in 1995, has deployed more than US$100 billion in investments, and manages Assets of over US$11 billion, focusing on specialty lending, opportunistic Credit and special situations.

Recce says its pipeline comprises three patented, broad-spectrum synthetic polymer anti-infectives: R327 for intravenous and topical use, R435 as an oral therapy and R529 for viral infections. It notes R327 holds FDA Qualified Infectious Disease Product designation, with Fast Track Designation and ten years of market exclusivity after approval, and that the WHO listed all three candidates among antibacterial products in clinical development.

Facility background

The facility was first announced on 17 June 2025 and includes a US$5 million Tranche 2 whose availability is conditional on clinical and funding milestones. Recce says the amendment provides financial flexibility by aligning the debt service structure with key operational milestones in its Phase 3 programs. The warrants are equivalent to US$100,000, or about A$143,000, and carry an exercise price of A$0.29, so their value to Avenue depends on the share price over a five-year term.

Manufacturing and designations

Recce says it wholly owns its automated manufacturing, which supports current clinical trials. It notes R327 is included in the Pew Charitable Trusts' global pipeline of new antibiotics as the sole synthetic polymer and sepsis drug candidate, and that the WHO added all three candidates to its list of antibacterial products in clinical development for priority pathogens. Recce trades on ASX and the Frankfurt Stock Exchange.