The Recce Pharmaceuticals Ltd (ASX: RCE) share price has returned from its trading halt on Tuesday and is shooting higher.
In afternoon trade the biotechnology company's shares rocketed as much as 27% higher to a record high of $1.87 at one stage.
They have since dropped back a touch but are still up 10.5% to $1.63 at the time of writing.
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Why is the Recce share price rocketing higher?
Investors have been buying Recce's shares after it provided an update on the international SARS-CoV-2 (COVID-19) in vitro studies undertaken by Path BioAnalytics and the University of Tennessee's Health Science Centre.
According to the release, Recce 327 (R327) and Recce 529 (R529) compounds have shown concentration-dependent reductions in the COVID-19 virus in an in-vitro study using organoids made from human airway epithelial cells.
Management also advised that the concentrations of R327 and R529 further indicated an excellent toxicity profile (<0.25%) on Vero (monkey) cells, in a separate but related study.
In light of these results, the researchers have recommended that the company should advance research of both R327 and R529. To do so, it has secured testing of the compounds in a gold-standard in-vivo COVID-19 infection study in ferrets. This US ferret study is expected to begin this month and be completed prior to the end of 2020.
Non-Executive Chairman Dr John Prendergast said: "We are very pleased with the anti-viral activity against SARS-CoV-2 demonstrated by our two compounds, RECCE 327 and RECCE 529 in vitro, and look forward to further success in the forthcoming ferret model studies. As COVID-19 infections and mortalities continue to rise, an effective treatment is critical. Recce's anti-infective technology is striving to address the global health problem of emerging viral pathogens."
Though, the company warned investors not get too excited just yet. It explained: "Whilst Recce is delighted by the results, further testing must be completed before either (or both) compounds may be deemed safe or effective as a treatment of SARS-CoV-2."
In other news.
Recce isn't the only junior biotech company that is hoping to develop compounds to fight COVID-19.
On Monday, the Biotron Limited (ASX: BIT) share price rocketed higher after providing an update on the screening of select compounds against COVID-19.
According to the release, Biotron has concluded the first stage of its screenings and found that several compounds have been shown in laboratory cell-culture studies to have antiviral activity against COVID-19.
