Holy Grail Found? The Racura Oncology Story (ASX: RAC)

Good morning Armchair Army,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

When I was a kid, I watched a lot of The Simpsons.

One of my all-time favourites (of the more modern episodes) was "Eternal Moonshine of the Simpson Mind."

Homer wakes up in a pile of snow with no memory of the last 24 hours. 

His family is gone. The dog tries to bite him. From there, the whole episode is Homer piecing the night back together, one fragment at a time, to figure out how he ended up here.

We, as the audience, already know where it's all heading.

But the joy is in unravelling the mystery. 

Uncovering something even better than what you imagined.

That, in a strange way, is the story of the next company in my Biotech 165 Challenge:

Racura Oncology (ASX: RAC).

A few weeks ago, I was sitting down for lunch with Daniel Tillett, the CEO of Racura Oncology (ASX: RAC).

He owns 10% of the company that he purchased with his own money.

I asked him the same question I ask everyone who invests in healthcare stocks...

What do you look for in a biotech?

His answer…

“When it comes to the trial result, I don’t want to guess”

The drug was discovered in 1976.

Approved for sale in France.

46 Phase 2 studies, 1800 patients across them.

Off patent, and in the hands of Racura.

The challenge is not whether the drug works.

It is how the drug works… and whether this can be patent-protected.

Knowing the ending and working out what it takes to get there.

The guessing doesn't come down to the science.

It comes down to the brute-force work (and a little luck) to figure out why this particular drug was so effective all those years ago.

…and what Racura discovered was far beyond what they could have imagined.

The holy grail.

Well, possibly… 

The journey is still going.

Let me tell you about a molecule called bisantrene.

It was discovered in 1976, and the National Cancer Institute (NCI) nicknamed it "Orange Crush" as it glows fluorescent orange in solution.

As an aside, PepsiCo, the owners of the Orange Crush trademark at the time, sent the NCI a legal cease-and-desist letter threatening to sue over this light-hearted scientific joke.

So it went back to being boring old bisantrene.

Across the 1980s and early 1990s, bisantrene showed activity in AML, breast cancer, ovarian cancer, and lymphoma.

In 1988, France approved it for the treatment of Acute Myeloid Leukaemia.

Then it was abandoned. 

Not because it stopped working, but because its owners ran out of money. 

The drug went into a filing cabinet. For about 30 years.

Until 2016, when Racura (then trading as Race Oncology) bought it for roughly US$200,000 from a private US firm called Update Pharma who thought that bisantrene still had potential.

What Racura bought was some “use” patents, limited manufacturing know-how, and a whole lot of dreams.

What it didn’t get is the answer to the question all modern pharma companies care about above all else: how does the thing actually work?

Without that answer, there is no big pharma partnership. No commercial prospects.

The 1980s answer, "it binds with DNA, we think", doesn't fly today.

So Racura set itself the task of taking a 50-year-old approved drug that had once been approved back to the clinic, all while figuring out how it actually works. 

In the background, quietly.

That was the challenge for the next several years.

In late 2025, Racura finally identified how bisantrene works (the all-important “mechanism of action”) and three new patent families were filed.

For the first time in the drug's 50-year history, somebody could tell you exactly how it worked.

Racura discovered that bisantrene was a MYC (pronounced “Mick”) silencer.

A molecule that Big Pharma thought was “undruggable”.

To understand the significance of this discovery, we need to first dive into how most modern traditional cancer drugs work.

Think of cancer as an uncontrolled growth caused by signalling gone wrong.

The body tightly controls when cells should divide and when they should stay still.

When the signalling gets jammed into always-on, cancer happens.

What makes cancer so hard to cure is that there are hundreds of ways to make a cell grow.

This signalling can be thought of like a complex river system.

Up in the mountains, you have the growth factor receptors (kinases) sitting on the surface of the cell. 

EGFR, HER2, VEGFR, PDGFR. 

Signals trickle in from outside the cell and start flowing downhill.

The water gathers into streams, the kinase cascades. 

RAS. RAF. MEK. ERK. PI3K. AKT. mTOR. 

Each of these is a stream feeding the system. Each has a billion-dollar industry built around blocking it.

The streams meet at a confluence, a handful of master transcription factors that decide what the cell actually does with all these different signals.

Survive? Divide? Spread? Evade the immune system?

Think of this as the mouth of the river.

The point downstream is where much of the water has to pass before it reaches the sea of uncontrolled cell proliferation, which we call cancer.

This is where MYC sits.

Most of anticancer drug development actually does is mapping the river system, trying to figure out where to put the next dam. 

Sometimes you build it in the wrong place, and the water just routes around it.

That’s called resistance. 

Or for the cancer patient, relapse.

Sometimes you build it in the right place and miss a small river upstream.

Sometimes you build a brilliant dam, and then the river finds an entirely new channel.

A dam at the river's mouth is the dream.

That's why MYC has been called one of the holy grails of oncology targets.

For the better part of 20 years, Big Pharma has been trying to develop a drug that can block MYC.

It has largely been considered “undruggable”...

(Although that hasn’t stopped billions of dollars from being spent on trying to find a drug that works)

It’s some pretty complex science, but I think that the Racura team did a good job of explaining it at the symposium earlier this year.

In simple terms… 

MYC has a kind of on/off switch built into its DNA that controls whether MYC is made or not.

Bisantrene folds over that switch and turns it off, and the cancer cell can't make any more MYC.

To get a better idea of what I’m talking about, watch this video from the 25-minute mark:

When I first came across the story, the number-one question in my head was...

How can you protect a drug that has been around for 50-years?

Bisantrene's original patent expired in the 1990s.

Since then, the molecule has been in the public domain.

This is a big commercial hurdle for Racura.

(Especially if they actually do discover the holy grail of a MYC inhibitor).

Now, last year, Racura applied for a composition-of-matter patent on a special form of bisantrene called EE-bisantrene.

Their scientists found that only this form of bisantrene could switch off MYC and kill cancer cells. 

The idea was that by separating the original bisantrene molecule into just the active part (the EE), it had identified something new that could be patented.

(There are a couple of other patents that Racura has used to protect the discovery, but this one is the strongest.)

Look…

I’m not a patent expert. 

So, I can’t judge whether this stacks up.

BUT, Racura Chair Dr Peter Smith does discuss the IP question at length here: watch from the 2:07:00 mark.

Alright, so we know that Racura are chasing the holy grail, but what trials is it running at the moment?

Stage: Phase 3 (registration trial)

Target: Relapsed/refractory AML

Next Catalyst: 

Armchair Take: The closest thing to a known-known in biotech. Same active drug, same indication, same dose, same trial design as the one France approved in 1990.

Racura has already run two Phase 2 trials in the last couple of years using the RC110 formulation, which showed the same response rate as in the 1980s.

Stage: Phase 1a/1b (HARNESS-1)

Target: EGFR-mutant NSCLC (lung cancer) patients on osimertinib with rising ctDNA.

Next Catalyst:

Armchair Take: If this works, Racura has a credible add-on for any targeted therapy whose resistance routes through MYC.

Stage: Phase 1a/1b (CPACS)

Target: Advanced solid tumour patients receiving doxorubicin (chemotherapy)

Next Catalyst:

Armchair Take: If RC220 lets doctors give cancer patients more chemo without wrecking their hearts, it opens up a big market opportunity.

In preclinical studies, Racura showed that at the 40 mg/m2 dose, it’s drug protected the hearts of both mice and dogs (and even human heart muscle cells) from chemotherapy damage. 

When I first looked at Racura relative to other ASX-listed cancer drug developers, I thought its market cap was high at $477 million.

But, after digging deeper into the story, it makes sense why.

Racura’s not going after one of the smaller streams of the mountain.

(Which in itself has spawned many billion-dollar products).

Racura is going after the mouth of the river, the holy grail.

The CEO, Daniel Tillett, said to me at lunch: "I think this is a cheaper stock NOW (knowing what we know) compared to when I first came into the company in 2019 at a sub-$10M market cap."

The prize is bigger.

But there is still a long way to go.

I do get nervous about the ability to protect IP over a 50-year-old drug.

While the company has filed patents, and there is an explanation there… I don’t have any edge to identify whether it will hold up.

That said, if the company does get to the point where its discoveries are worth copying… 

The stock should be higher.

But I can see this being a sticking point in commercial/licencing conversations.

Drug development does take time and capital, but at least with Racura, the prize at the end of the tunnel is big.

The company had a cash balance of $19 million at the end of the quarter, and there are about ~$12 million in in-the-money options that expire at the end of this week.

So start at the end.

Work backwards.

And hopefully find something “game-changing” along the journey.

That’s the Racura playbook.

A big thank you to both CEO Daniel Tillett and Chairman Dr Peter Smith for sharing the Racura story with me.

See you all tomorrow,

The Armchair Analyst.

But first…

Neurizon Therapeutics (ASX: NUZ) expands its ALS trial from 160 to 240 participants, due to higher (and faster) than anticipated enrollment. (NUZ)

🪑 More data (particularly in this first part of the Phase 2/3 trial is important.

Recce Pharmaceuticals (ASX: RCE) signs a 10-year exclusive licensing term sheet with a leading Middle Eastern pharmaceutical company. Upfront of USD $3.5M + royalties. (RCE)

🪑 Nice deal.

EMVision Medical Devices (ASX: EMV) completes aeromedical feasibility study with the Royal Flying Doctors Service for its stroke brain scan device, validating usability and scan quality in remote environments. (EMV)

Biome Australia (ASX: BIO) begins a multi-centre clinical trial of its proprietary probiotic strain BMB18. (BIO)

Memphasys (ASX: MEM) receives follow-up orders for 1,000 Felix™ cartridges for its sperm separation device across the Middle East. (MEM)

🪑 Decent reorder rate.

Cryosite (ASX: CTE) reports a 22% revenue year-to-date increase to $13.8M and a 28% EBITDA increase to $3.4M for its biomaterial storage and GMP business. (CTE)

🪑 A good company update.

It's nice when all key numbers (EBITDA, NPAT, margins) are all green. 

Solid growth and profitable, nice work.

Cynata Therapeutics (ASX: CYP) anticipates that results from the osteoarthritis trial will be published “within June”, and Phase 2 acute Graft versus Host Disease trial results “late June, early July”. (CYP)

🪑 The way that the stock has traded (under 30 cents the last few days) reflects the broader sentiment towards binary trial results on the ASX.

Risk off.

After Immutep and Opthea, the market might be waiting until after the results (at least from the first trial) before tipping in.

This means the upside movement from a trial success should be even greater.

5 years in the making.

Good luck, CYP holders!

Trajan Group Holdings (ASX: TRJ) forecasts a $4.0M revenue and $2.0M nEBITDA impact in H2 FY26 due to AUD appreciation. (TRJ)

🪑 The chart in this stock is telling a story. The upcoming financial results may be a struggle.

Avecho Biotechnology (ASX: AVE) held its 2026 AGM, with all resolutions carried.

🪑 Dad went to the AGM, and these were his exact words:

“It’s clear that if the interim results of this Phase 3 insomnia trial are good, then the stock should go crazy… but if it fails, it's all over.”

A bit dramatic, Dad…

But yes, is a binary punt.

Eli Lilly to acquire three vaccine companies, Curevo, LimmaTech Biologics and Vaccine Company, for up to $3.8B to build an infectious disease pipeline. (Reuters)