Indonesia faces a torrent of diabetes-related illnesses, partly the result of adopting poor Western diets. Pic via Getty Images
Health & Biotech
Few Western drug developers choose Indonesia as a focal point for their efforts, despite our near neighbour’s population of 280 million and – crucially – increasing affluence.
For anti-infectives house Recce Pharmaceuticals (ASX:RCE), the teeming archipelago became the obvious place to initiate a phase III trial of its synthetic antibiotic R327, to treat diabetic foot infections.
Diabetes is rampant in the country.
Indonesian approval would also enable access to the fast-growing ASEAN countries of Vietnam, the Philippines and Singapore.
And did we mention trials are much cheaper to run in Indonesia?
A year ago, Recce was pondering a traditional US-first path to market.
Serendipitously, Indonesia’s health minister Budi Gunadi Sadikin invited management for a meeting after seeing the positive results of one of the company’s earlier local studies.
The government had also seen a flattering assessment of the therapy from the World Health Organization (WHO).
“It’s a positive coincidence, but we are proud that we have found ourselves in that position,” Recce CEO James Graham says.
While historically politically volatile, Indonesia now looks a safer bet than the US.
There, the Trump administration’s disruption of the US Food & Drug Administration (FDA) is fuelling concerns about delayed trial and marketing approvals.
“Many [life science] companies go to the US thinking ‘USA is the way’ and hoping that everything works out,” Graham says.
“If – heaven forbid – the US health climate evolves to a point where we don’t recognise it, that’s okay because we are well positioned to be the first Australian drug approved in Indonesia.”
Indonesia’s Drug and Food Regulatory Authority approved the trial in December and the company hopes to kick off the 300-patient study (100 of them on placebo) shortly.
“The hospitals are ready, clinicians are trained and nurses are on stand-by,” Graham says.
The patients will be treated for 14 days, with a clinical evaluation seven days thereafter.
R327 is not a Star Wars robot, but a synthetic, broad-spectrum antibiotic that’s thought to be effective against a variety of stubborn superbugs.
Discovered by James Graham’s biochemist grandfather Dr Graham Melrose, R327 (and injectable and anti-viral variants) are derived from common ingredients including polyethylene glycol, acrolein (a derivative of propene) and water.
The compound works by travelling through the blood and attaching to a protein in the bacteria’s outer membrane.
This weakens the cell wall, causing the germs to burst (cell lysis).
R327’s binding properties makes it more effective in tackling superbugs and it is effective on both Gram-negative and Gram-positive bacteria (the bugs fall into these two classes, as determined by the structure of the cell walls).
“Antimicrobial resistance is only getting worse, yet we are not developing new and trailblazing products fast enough to combat the most deadly and dangerous bacteria,” says the WHO’s Dr Yukiko Nakatani.
However, there’s been little antibiotic progress in four decades and the WHO classes R327 as one of only 12 effective bacterial anti-infectives in development.
More than 10% of Indonesians have diabetes and cases are growing at annualised 8% (the incidence is similar in other ASEAN countries).
“About half of patients develop a diabetic ulcer and about 90% of those ulcers get affected, so you have a very active patient population,” Graham says.
He cites the key culprit as the “rapid onset and sudden availability” of Western foods.
“In some cases, it’s just about moving from brown rice to white rice, which has more sugar.
“There are also the additives that come with that which combined has really driven up diabetes rates.”
The lack of prompt diagnosis is also an issue, with many sufferers dying without even knowing they have the disease.
Diabetic foot infections are a subset of acute bacterial skin and skin structure infections – ABSSSIs – which were the subject of a successful Australian phase II trial.
In February the company reported that 25 out of 29 patients (86%) had a “successful clinical response” after seven days, “across a variety of complicated skin structure infections”.
After 14 days, 27 of them (93%) met the primary efficacy endpoint.
In other words: their wounds were healing.
In the words of chief investigator Professor Eugene Athan from Barwon Health, efficacy was “excellent and unprecedented in his treatment experience”.
Graham stresses the Indonesian study remains part of Recce’s global development approach, including an envisaged Australian phase III study and – eventually – a US trial.
The company hopes to submit a formal phase III protocol to the Australian Therapeutic Goods Administration “very soon”, with a view to enrolling 200 patients with ABSSSIs (including DFIs).
“The bacteria would be the same target between phase II and III trials, so there is a pretty good chance of success,” Graham says.
The local trial data could support an eventual marketing submission to the US, where the company has Department of Defense (and Army) grants for an earlier-stage burns wound infection study.
Meanwhile, Recce eyes an early path to market in Indonesia, should the interim data covering the first 100 patients prove “statistically significant”.
Jakarta has granted R327 fast-track review status.
Recce’s commercialisation efforts are likely to be supported by a sales and marketing deal with Indonesian drug company PTE Etana biologic.
The likely terms are not disclosed but Graham says they would involve “comfortable double-digit royalties” for Recce.
At the end of December 2024 Recce had cash of $1.9 million, having raised $12 million in a placement and share purchase plan in June.
But the US defence grants and R&D tax incentive advances should top up the available kitty.
“Beyond that, we would consider an alternative capital arrangement such as traditional capital raise to support our activities.”
Graham says the Indonesian study is costed at a mere US$2 million.
“I challenge you to find any company anywhere that has done a registration phase III trial for US$2 million,” he says.
“Enormous [government] subsidies create an incredibly inviting environment.”
Recce cites estimates of the ABSSSI market being worth US$7.3 billion globally as of 2018 and forecast to grow to US$26 billion by 2032 at a compound annual 9.5% rate.
“[R327] is the only [drug ]with an extremely novel mechanism of action, applicable to 80-90% of bacterial species,” Graham says.
“It keeps working with repeated use, having overcome the problem of antibiotic resistance.”
At Stockhead, we tell it is as it is. While Recce is a Stockhead client, the company did not sponsor this article
Health & Biotech
Health & Biotech
Health & Biotech
