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Entered into and closed exclusive license agreement with GSK for tebipenem HBr, pursuant to which Spero receives $66 million upfront, and a $9 million direct equity investment in Spero shares of common stock, with potential for future milestone payments and tiered royalties
Initiation of a placebo-controlled Phase 2 trial designed to provide clinical proof-of-concept for SPR720 in nontuberculous mycobacterial pulmonary disease with top line results expected in 1H 2024
Conference call and live webcast at 4:30 p.m. ET today
CAMBRIDGE, Mass., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Spero Therapeutics, Inc. (Nasdaq: SPRO) today announced financial results for the third quarter ended September 30, 2022 and provided a business update.
“Recent accomplishments added strength to our balance sheet, investor base, and executive team,” said Ankit Mahadevia, M.D., Chief Executive Officer of Spero Therapeutics. “We achieved alignment with the FDA on key components of a pivotal study design for tebipenem HBr. Our progress and the therapeutic potential of tebipenem helped us secure an exclusive license agreement and equity investment from GSK. In addition to a $66 million upfront payment, and a $9 million equity investment, the license agreement provides upside in the form of potential milestone payments and royalties, extends our cash runway beyond 2024, and provides validation from a long-standing commercial leader in infectious diseases. We also achieved a regulatory milestone in our SPR206 program during the quarter, triggering a $5 million payment under our 2021 license agreement with Pfizer.”
Dr. Mahadevia continued, “Spero made additional progress on our lead SPR720 program, which has the potential to deliver the first FDA-approved agent for the first-line treatment of non-tuberculosis mycobacterium pulmonary disease. We remain on track, having initiated a Phase 2 proof-of-concept trial in the current quarter, and under the leadership of our recently appointed Chief Medical Officer, we have taken important steps to fine tune our development strategy for a 1H 2024 top line data readout.”
Program Highlights and Upcoming Milestones
SPR720:
Tebipenem HBr:
SPR206:
Management Highlights:
Key Opinion Leader and Patient Advocate Engagement:
Medical Congress Engagement
Third Quarter 2022 Financial Results
Spero reported a net loss for the third quarter ended September 30, 2022, of $11.7 million or $.33 per common share, compared to a net loss of $22.5 million or $.70 per common share reported for the same period in 2021.
Total revenues for the third quarter of 2022 were $2 million, compared with revenues of $3.1 million in the third quarter of 2021. The revenue decrease was primarily due to a $1.5 million decrease in funding under our DoD agreement relating to SPR206, a $0.2 million decrease in qualified expenses under the BARDA contract for tebipenem HBr, partially offset by an increase of $0.2 million under the NIAID agreement relating to SPR206 and recognition of $1.1 million in collaboration revenue relating to the Pfizer agreement.
Research and development expenses for the third quarter of 2022 were $7.4 million, compared with $14.4 million of research and development expenses for the same period in 2021. This year-over-year decrease was primarily due to a $4.5 million reduction direct costs associated with program activity for tebipenem HBr, a $1.2 million decrease due to reduced clinical activity during the period for SPR206 and a decrease in personnel-related costs of $2.7 million, related to a reduction in research and development headcount due to the May 2022 strategic restructuring, partially offset by $1.3 million of increased costs due to increased clinical and preclinical activity for SPR720.
General and administrative expenses for the third quarter of 2022 of $6.6 million were lower than the $11.2 million reported in the same period in 2021, primarily as a result of a decrease in personnel-related costs, as a result of a decrease in headcount in commercial, general and administrative functions due to our strategic restructuring, and a decrease in professional and consultant fees of $2.6 million.
As of September 30, 2022, Spero had cash, cash equivalents, and marketable securities of $50.4 million. This does not include the $75 million in total gross proceeds from the upfront payment and equity investment being made by GSK, in connection with the exclusive license agreement for tebipenem HBr. Subsequent to the end of quarter, the $9 million equity investment has been received, while the $66 million upfront payment has been invoiced and is expected to be delivered before the end of the month. Based on its current projections, Spero believes that its existing cash, cash equivalents, and marketable securities, together with other non-dilutive funding commitments and the anticipated proceeds expected from the GSK licensing agreement, equity investment and milestones, will be sufficient to fund its operating expenses and capital expenditure requirements beyond 2024.
Inducement Awards
In connection with Dr. Hamed joining Spero, on September 12, 2022 (the Start Date), the Human Capital Management Committee of Spero’s Board of Directors granted Dr. Hamed (i) 210,000 restricted stock units (the RSUs) and (ii) 140,000 performance stock units (the PSUs) (collectively, the Inducement Awards), under the Spero Therapeutics, Inc. 2019 Inducement Equity Incentive Plan, as amended (the 2019 Inducement Plan). The Inducement Awards were granted as inducements material to Dr. Hamed becoming an employee of Spero in accordance with Nasdaq Listing Rule 5635(c)(4). The RSUs will vest in four equal annual installments beginning on the first anniversary the Start Date. The PSUs will be eligible to vest to the extent certain performance goals are met by May 31, 2023, as determined by the Human Capital Management Committee. To the extent a goal is determined to have been met, the portion of the PSUs associated with such goal will vest 50% on the first anniversary of the Start Date and 50% on the second anniversary of the Start Date, subject to Dr. Hamed’s continued employment with Spero on such vesting dates. The Inducement Awards are subject to the terms and conditions of the 2019 Inducement Plan and the terms and conditions of a restricted stock unit agreement and performance stock unit agreement covering the grants.
Conference Call and Webcast
Spero will host a conference call and webcast today at 4:30 p.m. ET. To access the call, please dial 1-855-327-6837 (domestic) or 1-631-891-4304 (international) and refer to conference ID 10020538. The conference call will also be webcast live and a link to the webcast can be accessed here and on Spero Therapeutics' website at www.sperotherapeutics.com in the "Investors and Media" section under "Events and Presentations." An archived webcast will be available on Spero's website for 30 days following the presentation.
Tebipenem HBr Research Support
Select tebipenem HBr studies have been funded in part with federal funds from the Department of Health and Human Services; Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority, under contract number HHSO100201800015C.
Government Agency Research Support
The views expressed in this press release are those of the authors and may not reflect the official policy or position of the Department of the Army, Department of Defense, or the U.S. Government.
Department of Defense
Select SPR206 studies are supported by the Office of the Assistant Secretary of Defense for Health Affairs, through the Joint Warfighter Medical Research Program under Award No. W81XWH 19 1 0295. Opinions, interpretations, conclusions and recommendations are those of the author and are not necessarily endorsed by the Department of Defense.
National Institute of Allergy and Infectious Disease
Select SPR206 studies have been funded in whole or in part with Federal funds from the National Institute of Allergy and Infectious Diseases, National Institutes of Health, Department of Health and Human Services, under Contract No. 75N93021C00022.
About Spero Therapeutics
Spero Therapeutics, headquartered in Cambridge, Massachusetts, is a multi-asset, clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing novel treatments for bacterial infections, including multi-drug resistant bacterial infections and rare diseases.
For more information, visit https://sperotherapeutics.com.
Forward Looking Statements
This press release may contain forward-looking statements. These statements include, but are not limited to, statements about the regulatory path forward for tebipenem HBr and potential FDA approval, the potential commercialization of tebipenem HBr and its future value, the potential receipt of milestone payments and royalties on future sales under the GSK license agreement, the design, initiation, timing, progress and results of Spero's preclinical studies and clinical trials and its research and development programs, and Spero’s cash runway. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intent,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including whether tebipenem HBr will advance through the clinical trial process on a timely basis, or at all, taking into account the effects of possible regulatory delays, slower than anticipated patient enrollment, manufacturing challenges, clinical trial design and clinical outcomes; whether the results of such trials will warrant submission for approval from the FDA or equivalent foreign regulatory agencies; whether the FDA will ultimately approve tebipenem HBr and, if so, the timing of any such approval; whether the FDA will require any additional clinical data or place labeling restrictions on the use of tebipenem HBr that would delay approval and/or reduce the commercial prospects of tebipenem HBr; whether a successful commercial launch can be achieved and market acceptance of tebipenem HBr can be established; the lengthy, expensive, and uncertain process of clinical drug development for SPR720 and SPR206; whether results obtained in preclinical studies and clinical trials will be indicative of results obtained in future clinical trials; Spero's reliance on third parties to manufacture, develop, and commercialize its product candidates, if approved; the ability to commercialize Spero's product candidates, if approved; Spero's ability to retain key personnel; whether Spero’s cash resources will be sufficient to fund its continuing operations for the periods and/or trials anticipated; and other factors discussed in the “Risk Factors” set forth in filings that Spero periodically makes with the U.S. Securities and Exchange Commission. The forward-looking statements included in this press release represent Spero’s views as of the date of this press release. Spero anticipates that subsequent events and developments will cause its views to change. However, while Spero may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Spero’s views as of any date subsequent to the date of this press release.
Investor Relations Contact:
Ted Jenkins
Vice President, Investor Relations and Strategic Finance
IR@sperotherapeutics.com
(617) 798-4039
Media Inquiries:
Lora Grassilli, Health Media Relations
Zeno Group
lora.grassilli@zenogroup.com
646-932-3735
| Spero Therapeutics, Inc. | |||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues: | |||||||||||||||
| Grant revenue | $ | 924 | $ | 2,356 | $ | 3,843 | $ | 12,698 | |||||||
| Collaboration revenue | 1,082 | 708 | 2,225 | 2,814 | |||||||||||
| Total revenues | 2,006 | 3,064 | 6,068 | 15,512 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 7,360 | 14,436 | 32,504 | 47,301 | |||||||||||
| General and administrative | 6,632 | 11,152 | 29,988 | 28,680 | |||||||||||
| Restructuring | (152 | ) | — | 11,697 | — | ||||||||||
| Total operating expenses | 13,840 | 25,588 | 74,189 | 75,981 | |||||||||||
| Loss from operations | (11,834 | ) | (22,524 | ) | (68,121 | ) | (60,469 | ) | |||||||
| Other income (expense) | 159 | 3 | (5,065 | ) | (47 | ) | |||||||||
| Net loss | $ | (11,675 | ) | $ | (22,521 | ) | $ | (73,186 | ) | $ | (60,516 | ) | |||
| Net loss attributable to common shareholders of Spero Therapeutics, Inc. | $ | (11,675 | ) | $ | (22,521 | ) | $ | (73,186 | ) | $ | (60,516 | ) | |||
| Net loss per share attributable to common shareholders per share, basic and diluted | $ | (0.33 | ) | $ | (0.70 | ) | $ | (2.16 | ) | $ | (1.99 | ) | |||
| Weighted average shares outstanding, basic and diluted: | 35,882,076 | 32,132,500 | 33,834,198 | 30,417,305 | |||||||||||
| Spero Therapeutics, Inc. | |||||||||
| Condensed Consolidated Balance Sheet Data | |||||||||
| (in thousands) | |||||||||
| (Unaudited) | |||||||||
| September 30, | December 31, | ||||||||
| 2022 | 2021 | Change | |||||||
| Cash, cash equivalents and marketable securities | $ | 50,446 | $ | 146,402 | $ | (95,956 | ) | ||
Other assets | 14,030 | 24,670 | (10,640 | ) | |||||
Total assets | $ | 64,476 | $ | 171,072 | $ | (106,596 | ) | ||
Total liabilities | 31,992 | 82,783 | (50,791 | ) | |||||
Total stockholder's equity | 32,484 | 88,289 | (55,805 | ) | |||||
Total liabilities and stockholders' equity | $ | 64,476 | $ | 171,072 | $ | (106,596 | ) | ||