Recce Pharmaceuticals (ASX:RCE) has announced a non-binding term sheet with a major publicly listed Middle Eastern pharmaceutical company for a proposed 10-year exclusive licence to register, market and distribute its R327 Topical Gel for the treatment of Diabetic Foot Infections across the Middle East and North Africa (MENA).
The partner is described in the announcement as having a multi-billion dollar market capitalisation and a distribution network spanning more than 30 international markets.
Under the proposed commercial structure, Recce would receive an upfront signing fee and milestone payments totalling up to US$3.5 million, 30 per cent of the net selling price and an additional 6 per cent annual royalty on net sales exceeding US$50 million per year.
The parties have proposed a selling price of US$1,500 per treatment, subject to regulatory agreement in Saudi Arabia, and the definitive agreement remains subject to negotiation, due diligence, and customary approvals, with completion targeted for next quarter.
The licence would cover the Kingdom of Saudi Arabia (KSA), the Gulf Cooperation Council countries and key North African markets, including Egypt, Algeria and Morocco, while Recce would remain responsible for manufacture and supply.
Recce said it intends to rely on data from its ongoing Registrational Phase 3 clinical trial in Indonesia to support regulatory submission in KSA. That trial plans a total enrolment of 310 patients, randomised to R327G or placebo, with an approvable interim data readout following enrolment of 155 patients and an anticipated expedited regulatory review for possible approval by year's end.
The announcement highlights the size of the addressable population in the region, noting a MENA diabetes prevalence of 17.6 per cent, with over 84 million people living with diabetes, and a Saudi prevalence estimated at 23.1 per cent, equal to about 5.3 million people.
Recce’s chief executive, James Graham, said, “This is a major milestone in the development and commercialisation of Recce’s anti-infective platform. The proposed establishment of marketing and distribution channels for R327G across the MENA region highlights the growing demand for novel, innovative, and groundbreaking treatments for addressing antimicrobial resistance. This term sheet represents a positive step in the commercialisation pathway of Recce’s innovative pipeline as a next-generation solution for addressing the infectious disease challenges associated with the global pandemic of diabetes.”