ASX Announcement

Recce Meets Antibiotic Leaders to Explore Commercial and Clinical Opportunities

Sydney, Australia, 25 October 2018: Recce Pharmaceuticals Ltd (ASX: RCE), the company developing a new class of synthetic antibiotics, today announced it will be represented at the World Anti-Microbial Resistance Congress in Washington D.C., 25 - 26 October 2018.

The conference features 150 speakers from 20 countries and is a leading international forum for researchers, investors, businesses and governments working to address antibiotic resistance.

Recce Executive Chairman Dr Graham Melrose said, "There is growing international interest in our new class of broad-spectrum synthetic antibiotic technology. With a range of meetings secured, this event allows us to efficiently engage with potential business and clinical partners to discuss commercial and clinical opportunities as we advance towards the start of human clinical trials".

Recce's lead compound, RECCE® 327, is being developed as a new class of antibiotic, for the treatment of blood infections and sepsis derived from E. coli and S. aureus bacteria – including their superbug forms. It was awarded Qualified Infectious Disease Product (QIDP) designation in late-2017, as part of the US Generating Antibiotic Incentives Now (GAIN) Act, labelling it for Fast Track Designation, plus 10 years of market exclusivity post approval.

In 2018, the Company successfully secured almost half of its R&D budget from Australian Government funding.

About Recce Pharmaceuticals Ltd

Recce Pharmaceuticals Ltd (ASX: RCE) is pioneering the development and commercialisation of a new class of synthetic antibiotics with broad spectrum activity designed to address the urgent global health problem of antibiotic resistant superbugs. Its patented lead candidate known as RECCE® 327 has been developed for the treatment of blood infections and sepsis derived from E. coli and S. aureus bacteria – including their superbug forms. Pre-clinical testing in laboratories and animal models, in Australia and overseas has demonstrated positive results. Recce has a manufacturing

facility in Australia and is developing clinical research partners in the USA. The Company has developed an automated process to manufacture its lead compound ahead of first-in-human clinical trials.

For further information please visit www.recce.com.au or contact:

Investor Relations James Graham Executive Director Recce Pharmaceuticals Ltd Tel: +61 (02) 8075 4585

Media (Australia) Andrew Geddes CityPR Tel: +61 (02) 9267 4511 Media (International) Sue Charles/Gemma Harris Instinctif Partners Tel: +44 (0)20 7866 7860 E: [email protected]

World Anti-Microbial Resistance Congress 2018

The leading conference on anti-microbial resistance

October 2018

Disclaimer

DISCLAIMER

This presentation has been prepared by Recce Pharmaceuticals Ltd (the "Company"). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents of this presentation, or any information provided in connection with it, as financial advice, financial product advice or advice relating to legal, taxation or investment matters.

No representation or warranty (whether express or implied) is made by the Company or any of its officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in connection with it, or any omission from this presentation, nor as to the attainability of any estimates, forecasts or projections set out in this presentation.

This presentation is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the presentation and make your own independent decisions about the affairs, financial position or prospects of the Company. The Company reserves the right to update, amend or supplement the information at any time in its absolute discretion (without incurring any obligation to do so).

Neither the Company, nor its related bodies corporate, officers, their advisers, agents and employees accept any responsibility or liability to you or to any other person or entity arising out of this presentation including pursuant to the general law (whether for negligence, under statute or otherwise), or under the Australian Securities and Investments Commission Act 2001, Corporations Act 2001, Competition and Consumer Act 2010 or any corresponding provision of any Australian state or territory legislation (or the law of any similar legislation in any other jurisdiction), or similar provision under any applicable law. Any such responsibility or liability is, to the maximum extent permitted by law, expressly disclaimed and excluded. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in the Company.

FUTURE MATTERS

This presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of the Company.

Those intentions, expectations, future plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or on which views may differ and may be affected by known and unknown risks. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company, or any of its directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved.

Given the risks and uncertainties that may cause the Company's actual future results, performance or achievements to be materially different from those expected, planned or intended, recipients should not place undue reliance on these intentions, expectations, future plans, strategy and prospects. The Company does not warrant or represent that the actual results, performance or achievements will be as expected, planned or intended.

US DISCLOSURE

This document does not constitute any part of any offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of any "US person" as defined in Regulation S under the US Securities Act of 1993 ("Securities Act"). The Company's shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to any US person without being so registered or pursuant to an exemption from registration including an exemption for qualified institutional buyers.

About Recce Pharmaceuticals Ltd

Founded in 2008
Publicly listed on ASX 2016 (ASX:RCE)
Whole new class of antibiotic that kills bacteria including its superbug form even with continued use
RECCE® 327 broad spectrum antibiotic; lead indication is for sepsis - #1 most expensive condition
Qualified Infectious Disease Product (QIDP) designation RECCE® 327 labelled under GAIN Act for:
- ─ 10 years market exclusivity (post approval)
- ─ Fast track (life of regulatory process)
Patented manufacturing producing to Phase I & II volumes

Recce is a drug discovery and development business, commercialising a new class of synthetic antibiotics to address the global health challenge of antibiotic resistant superbugs.

Recce Pharmaceuticals Ltd - Capital structure

Major shareholders 30 September 2018 Snapshot

1. G. & O. Melrose*	35.0%
2. FoordAsset Management	4.6%
3. J. Graham*	4.0%
4. M. Dilizia*	3.2%
5. State One Equities	2.8%

ASX code	RCE
Shares on issue	89.34 million
Share price	AUD 19 cents
Market Cap (approx.)	USD $12.1 million
Cash and deposits30 June 2018	USD $0.5 million
Trading range52 week	AUD 14-26.0 cents
Average daily volume3 months	84.4K

Natural antibiotics vs synthetic antibiotics

Overuse of antibiotics has led to antibiotic resistant bacteria in humans and animals (superbugs)
Antibiotic resistance is widely acknowledged as an urgent global health issue
Commercial antibiotics are naturally derived superbugs have been forming for millennia – and will continue to do so!
RECCE® 327 is a new class of broad-spectrum antibiotic
- ‒ Entirely man-made and designed with purpose not reliant on what's found in nature.
- ‒ Unique mechanism of action many 'Active-sites', as opposed to the traditional (natural) antibiotics 'few'.
- ‒ Universal mechanism of action detailed experimentation demonstrates it does not succumb to superbugs.

RECCE® Antibiotics – Curative study*

Three groups of 10 mice were each infected with MRSA (S. aureus superbug)
All ten mice treated with RECCE® antibiotic survived
Nine mice treated with current antibiotic (Oxacillin) survived
Four mice that had no treatment at all, survived

Note: Oxacillin was chosen for its known activity against MRSA. It is however a 'narrow-spectrum' antibiotic. In a clinical context, where diagnostics cannot immediately determine bacterial type, use in combatting any number of other bacteria, may likely see a less favorable patient outcome…

RECCE® 327, with its proven 'broad-spectrum' activity, has shown strength against a range of bacteria including superbug forms, delivering rapid kill of deadly germs.

RECCE® Antibiotics – Preventative study*

Health scores in mice were maintained:

Blue points represent infected mice that received treatment with RECCE® 327
Grey points represent no infection
Orange points represent infection without treatment (industry recognised data for MRSA infection)
One group of 10 mice was infected with S. aureus
Both groups of 10 mice were treated with RECCE® 327 at 132 mg/Kg
RECCE® antibiotic in-vivo is at this dose
- Both antimicrobial-active against S. aureus superbug and non-toxic.

RECCE® Antibiotics – Preventative study*

Health scores in mice were maintained:

Blue points represent treatment
Grey points represent not treated
Both groups of mice infected with S. pyogenes
- ‒ Only one group treated with RECCE® antibiotics
RECCE® antibiotic in-vivo is antimicrobial active
After the 12 hour-point, S. pyogenes germ was cleared naturally from the blood by RECCE® antibiotics
No treated animals displayed any significant adverse signs
* Results from an independent laboratory in USA

RECCE® antibiotics kill at practical speeds

Rates of kill of Superbugs

All concentrations of bacteria (germ) were 10 cfu/ml 6

8 Concentration of RECCE antibiotic was 1,000 ppm against all bacteria except P. aeruginosa 2,000 ppm was used against P. aeruginosa

RECCE® antibiotics do not Fail1

Number of repetitive uses before displaying loss of antibiotic activity

1After repetitive use, the commercial antibiotic loses activity; >25 repeats RECCE® antibiotic DOES NOT

9 *'Commercial Antibiotic' generates over US $10bn in revenue

RECCE® 327 – how it works (in more detail)

RECCE® antibiotics, attracted by protein in a bacteria's outer membrane, non-specifically attach through hydrophobic interaction
Weakening the outer cell wall, internal pressure causes the bacteria to burst and lose viability
Outer protein can mutate as much as it likes (superbug) - RECCE® antibiotic will still kill it!

RECCE® 327 mechanism of action in practice

00:00 minutes

Before application of RECCE® 327, the E.coli bacteria cells are healthy, smooth and intact

RECCE® 327 mechanism of action in practice

20 minutes

After application of RECCE® 327, the E.coli bacteria cell membrane begins to weaken and is disrupted

RECCE® 327 mechanism of action in practice

180 minutes

E. coli bacteria cells (10e6 cfu/ml) having their outer membrane weakened – and bursting from treatment with RECCE® 327 (1000 ppm)

This is a high-definition electron microscope image generated in February 2017 by Dr Peta Clode and Lyn Kirilak of the Centre for Microscopy, Characterisation and Analysis, University of Western Australia. It was taken to demonstrate RECCE® 327's unique mechanism of action

**RECCE® 327 – Safety* RECCE® 327 – Safety and Efficacy (detail)**

Performs as a broad spectrum antibiot

What is Qualified Infectious Disease Product?

Legal status awarded under US Generating Antibiotic Incentives Now (GAIN) Act
Labeled for fast track designation speed the FDA's review process
10 years market exclusivity, starting from the date of New Drug Application approval if RECCE® 327 completes the necessary clinical trials and is approved by the FDA
QIDP designated drugs to treat serious or life-threatening conditions and fill an unmet medical need, are labeled for expedited review in order to facilitate their development

Qualified Infectious Disease Product (QIDP) designation is awarded if FDA considers the drug to treat "serious or life-threatening infections, including those caused by an antibacterial or antifungal resistant pathogen."

Patents and trademarks

Patent portfolio covers all key geographies, manufacturing and modes of use Patent Family 1 – granted

Filed	PatentFamily 1Granted	Expiry	Patent Family2/3	Expiry	Trademarksregistered
Australia	✓	2028	✓	2035	✓
USA	✓	2029	Pending	2035	✓
Europe	✓	2028	Pending	2035	✓
Germany	✓	2028	Pending	2035	-
Spain	✓	2028	Pending	2035	-
France	✓	2029	Pending	2035	-
United Kingdom	✓	2028	Pending	2035	-
Italy	✓	2028	Pending	2035	-
Sweden	✓	2028	Pending	2035	-
Japan	✓	2028	Pending	2035	✓
China	✓	2028	Pending	2035	✓

Unique and highly economical manufacturing

Patent Family 2 – pending Applications (Multi-drug delivery)

Patent Family 3 – pending Anti-viral uses

Trademarks

process

RECCE® for use on pharmaceutical products and services

Manufacturing and production

Wholly owned automated manufacturing facility in Sydney's Macquarie Park
Raw materials plentiful and CHEAP few $/kilogram
Automated manufacture process taking around 1¼ hours
No expensive waste 99.9% product yield
Currently producing in volumes to support planned Phase I and Phase II clinical trials
Facility built to pharmaceutical specification

Principal Engineer Arthur Kollaras & Executive Chairman/Chief Research Officer Dr Graham Melrose assess finished product

Board and management structure

Dr Graham Melrose – President & CRO

BSc (Hons), PhD (UWA), MBA (Macq), FRACI, C Chem, FAICD Founder and inventor. Former Executive Director and Chief Research at Johnson & Johnson (Aust) Pty Ltd in Sydney, with global responsibilities, particularly in Asia-Pacific

Michele Dilizia – Vice President

BSc (Med Sci), Grad Dip Bus (Mkting), BA (Journ), GAICD, MASM Co-inventor and qualified medical scientist; specialisation in medical microbiology and regulatory affairs

James Graham – Vice President

BCom (Entrepreneurship), GAICD

Extensive experience in marketing, business development and commercialisation of early stage technologies with global potential

Dr John Prendergast – Non-Executive Vice President

BSc (Hons), MSc (UNSW), PhD (UNSW), CSS (HU)

US based, current Chairman and Co-founder of Palatin Technologies, Inc. (NYSE: PTN) and Lead Director of Heat Biologics, Inc. (NASDAQ: HTBX) – extensive experience in the international commercialisation of pharmaceutical technologies

Alistair McKeough – Company Secretary (Outsourced - Whittens & McKeough)

Alistair is a qualified lawyer and Principal/Managing Director of McKeough & Whittens, Alistair has broad experience as a commercial litigator and Company Secretary to ASX Listed companies

Justin Reynolds – CFO (Outsourced - Pitcher Partners Sydney)

Justin is a qualified accountant and Partner of Pitcher Partners Sydney, Justin has broad experience covering all areas of accounting, taxation and assurance. Particularly, Justin's areas of expertise are business services and outsourced accounting

Arthur Kollaras – Principal Engineer

BSc Beng (Chem), PhilEng (Enviro), MIEAust, MISPE

Highly qualified in chemical engineering and microbiology, has significant experience taking a new technology concept to pilot plant and full scale FDA standards and production internationally

Dr Justin Ward – Principal Quality Chemist

BSc (Chem), PhD (Chem), MRACI, CChem

A quality control expert who has worked with leading pharmaceutical companies, he is bringing Recce's research and development, and manufacturing up to US FDA requirements

Economics of antibiotic development

A challenged business model – the antibiotic industry:

Traditionally the more effective an antibiotic, the less likely it is to be used by clinicians who want to 'save it'. Less use – less sales…
Conventional antibiotics commonly suffer resistance quickly; investment in 'new' drug candidates a risk ROI
Pharmco's cutting antibiotic R&D yet market need has never been greater

How might one 'unlock' the anti-infectives industry?

A new class of antibiotics having a unique mechanism of action that DOES NOT lose effectiveness with 'bacterial mutation' – superbugs – even with repeated use
Broad spectrum capabilities against deadly bacteria, Gr +/- and superbugs
A drug that can be administered quickly, without impractical diagnostic delays, where clinical 'guess-work' could be a thing of the past! Indications suggest RECCE® 327 may just be this needed change

US Legislative Support of Antibiotic Development

US Right-to-Try Act passed in May/June 2018
Designed to give US patients with life threatening diseases, immediate and direct access to potentially lifesaving drugs - that have completed Phase I clinical trials
New legislation mitigates possibility of weeks of procedural delay Previous legislation termed Compassionate Use
Potentially resulting in improved patient outcomes
- ‒ With reduced risk to those providing them
- ‒ Potential to build earlier 'direct' distribution diluting late-stage pharma market access model
Further evidence of evolving regulatory environment in the US Largest antibiotic market in the world
Potential aimed at expediting new drugs with lifesaving potential
Legislation does not affect Company's business at present