One of the best performers on the Australian share market on Thursday has been the Recce Pharmaceuticals Ltd (ASX: RCE) share price.
This morning the pharmaceutical company's shares rocketed a massive 31% higher to a record high $1.50.
When its shares hit that new record high, it meant they were up a whopping 315% since the start of the year.
Image source: Getty Images
Why did the Recce Pharmaceuticals share price rocket higher?
Investors have been fighting to get hold of the company's shares after it announced an agreement with Path BioAnalytic.
According to the release, the agreement will see the U.S. based precision medicine company study its RECCE 327 and RECCE 529 compounds against SARS CoV-2 – the virus causing COVID-19.
Researchers at Path BioAnalytic will evaluate RECCE 327 and RECCE 529 against SARS-CoV-2 in an ex vivo respiratory organoid model system at the state-of-the-art Biosafety Level 3 containment laboratories of a leading US research university.
Management advised that preliminary data is anticipated to be available in September 2020.
What are these compounds?
RECCE 327 is a broad-spectrum synthetic antibiotic formulated using synthetic polymer technology to treat blood infections and sepsis.
Whereas RECCE 529 is a new synthetic polymer formulation, built upon the company's anti-infective expertise.
Recce Pharmaceuticals' Non-Executive Chairman, Dr. John Prendergast, commented: "The current pandemic underscores the need for more effective treatment approaches to prevent infectious diseases. Over the past few months Recce has received a number of expressions of interest from several universities and research organisations to collaborate on the development of potential new therapies to address the unmet needs of patients with COVID19."
"We're excited to be working with experts at Path BioAnalytics to investigate the potential effectiveness of Recce's compounds in treatment of SARS-CoV-2 infection using their advanced respiratory organoid model system," he added.
Is this the real deal?
While this is promising news, the company has warned investors not to get excited just yet.
It explained: "While Recce is delighted that its compounds have been selected for potential investigational therapies, such selection is not an indication that the compounds are safe or effective for use in treatment of SARS-CoV-2."
I would suggest investors keep their powder dry and wait for data to be released from the trials before considering an investment.
