Why the Recce Pharmaceuticals (ASX:RCE) share price crashed 15% lower today

The Recce Pharmaceuticals Ltd (ASX:RCE) share price is sinking lower on Wednesday after completing a $28 million placement…
The post Why the Recce Pharmaceuticals (ASX:RCE) share price crashed 15% lower today appeared first on Motley Fool Australia. –

red arrow pointing down, falling share price

The Recce Pharmaceuticals Ltd (ASX: RCE) share price has come under pressure on Wednesday after returning from its trading halt.

The pharmaceutical company’s shares crashed as much as 15% lower to $1.38 this morning.

They have since recovered the majority of this decline but are still down over 3% to $1.58 at the time of writing.

Why is the Recce share price sinking lower today?

Investors have been selling Recce’s shares after it completed a placement of shares to institutional, professional and sophisticated investors.

The company raised a total of approximately $28 million before costs at an issue price of $1.30 per share. This represents a sizeable 20% discount to its last close price.

Why is Recce raising funds?

Recce launched the capital raising in order to fund the advancement of its synthetic anti-infective pipeline.

This comprises the RECCE 327, RECCE 435 and RECCE 529 compounds which are addressing the urgent global health problems of antibiotic resistant superbugs and emerging viral pathogens.

The company notes that there will be additional financial support from the Australian Government’s 43.5% R&D rebate on R&D applicable activities.

This ensures it is fully funded to complete its Phase I human clinical trial, SARSCoV-2 (COVID-19) pre-clinical program, Helicobacter pylori preclinical program, and the anticipated Phase I/II topical study at a leading Australian teaching hospital.

Recce’s Chief Executive Officer, James Graham, commented: “We greatly appreciate the support shown by both our existing investors and new institutional investors. Their financial support comes at a transformative time for Recce as we prepare to advance human clinical trials. We welcome all new investors and look forward to updating the market as our pivotal trials progress in the coming months.”

There certainly is a lot of optimism around these compounds. Despite its share price weakness today, the Recce share price is up over 360% since the start of the year.

The coming months will soon reveal whether investors were right to back this one.

These stocks could rocket in a Post-COVID world (FREE STOCK REPORT)

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Recce Pharmaceuticals (ASX:RCE) share price crashed 15% lower today appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!