Ann: Corporate Presentation - December 2019, page-26

Phages are bacterial specific narrow spectrum & have to be manufactured specifically for a specific strain of superbug.

Bacteria mutate during continuous exposure to antibiotics & form new strains with resistance = superbugs.

I am comfortable with Recce's patented technology & believe it works as stated by the company otherwise the FDA would not give them Fast Track approval status.

The FDA approval process will take time & require more funds injected into the company in future. Then once FDA approval is granted they will require more funds to expand the production facility which will cost at least $50M. And that is where they came unstuck during the Chemeq days.

Building a pharmaceutical production facility is a highly regulated capital intensive process. I was involved with CSL when they built the new Blood Products facility in Broadmeadows & transferred production from Parkville. There were numerous issues resulting in about a 2 year delay & cost blow out due to the delays.

With a pharmaceutical production facility you have delays with the actual building construction & it takes a few years as union labour is involved. Then you require the installation of various specialist pharmaceutical equipment. There are only a handful of contractors with suitable pharmaceutical qualifications capable of the fit out during construction phase & everything is extremely expensive.

Once construction is finalized then you need to commission & validate the equipment & the process. Everything has to be extensively documented including each weld on the stainless steel pipes within the facility. There will be numerous issues to address during this period. And then you require TGA approval for the production facility prior to being able to commence production.

CSL had a highly skilled experienced team at the time along with heaps of funding but still had delays & cost blow outs.

My biggest concern with Recce is with the ability/skills/past history of the current team to build a full scale pharmaceutical production plant. They may possibly be better off having the product manufactured for them by a capable third party.