Spero Therapeutics, Inc. (NASDAQ:SPRO) is a multi-asset, clinical-stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and diseases caused by multi-drug resistant (MDR) bacterial infections with high unmet need. The company's pipeline includes several promising product candidates, including SPR720, tebipenem HBr, and SPR206, which are in various stages of clinical development.
Business Overview
Spero Therapeutics' lead product candidate, SPR720, is an oral antimicrobial agent in development for the treatment of nontuberculous mycobacterial (NTM) pulmonary disease, a rare orphan disease. The company believes that SPR720, if successfully developed and approved, has the potential to be the first approved oral agent for NTM pulmonary disease in treatment-naïve and treatment-experienced and non-refractory patients.
Tebipenem HBr, which is partnered with GlaxoSmithKline (GSK), is designed to be the first broad-spectrum oral carbapenem-class antibiotic for the treatment of complicated urinary tract infections (cUTIs), including pyelonephritis, caused by certain microorganisms, in adult patients who have limited oral treatment options. The company recently announced the initiation of the pivotal Phase 3 PIVOT-PO clinical trial evaluating tebipenem HBr in this patient population.
SPR206 is an IV-administered antibiotic being developed as an innovative option to treat MDR Gram-negative bacterial infections in the hospital setting. The company recently received IND clearance from the FDA to initiate a Phase 2 clinical trial for SPR206.
Financials
For the full year 2023, Spero Therapeutics reported annual revenue of $96.7 million, a significant increase from $53.5 million in the prior year. This revenue growth was primarily driven by $96.7 million of collaboration revenue recognized related to the company's agreements with GSK and Pfizer.
The company reported annual net income of $22.8 million for the full year 2023, compared to a net loss of $46.4 million in the prior year. This turnaround in profitability was largely attributable to the increased collaboration revenue.
Spero Therapeutics' annual operating cash flow and free cash flow for 2023 were both -$32.9 million, reflecting the company's continued investment in its clinical development programs.
As of December 31, 2023, Spero Therapeutics had $76.3 million in cash and cash equivalents, which the company believes will be sufficient to fund its operating expenses and capital expenditure requirements into late 2025. This cash position was bolstered by a $95 million development milestone payment from GSK, the first tranche of which ($23.8 million) was received in the first quarter of 2024.
SPR720 for NTM Pulmonary Disease
Spero Therapeutics' wholly-owned lead product candidate, SPR720, is currently being evaluated in a Phase 2a proof-of-concept clinical trial for the treatment of NTM pulmonary disease, a rare and debilitating infectious lung disease. The company is targeting top-line data from this trial in the second half of 2024.
NTM pulmonary disease is a serious and progressive condition with a significant unmet medical need, as there are currently no approved first-line therapies. The current standard of care is a prolonged combination regimen of antibiotics, which has significant tolerability issues and limited effectiveness.
The Phase 2a trial is designed to evaluate the microbiological response of SPR720 monotherapy versus placebo in up to 35 patients who are either treatment-naïve or treatment-experienced but do not have treatment-refractory disease. The primary endpoint is the slope change in sputum bacterial burden from baseline to day 56, which the company believes will demonstrate SPR720's early bactericidal activity in NTM patients.
Spero Therapeutics believes that if SPR720 is successful in this trial and subsequent late-stage studies, it has the potential to establish a new standard of care in NTM pulmonary disease as the first approved oral, first-line treatment option.
Tebipenem HBr for cUTIs
Tebipenem HBr, Spero Therapeutics' partnered program with GSK, is designed to be the first oral carbapenem-class antibiotic for the treatment of cUTIs, including acute pyelonephritis, in adult patients who have limited oral treatment options. In January 2024, the company announced the initiation of the pivotal Phase 3 PIVOT-PO clinical trial evaluating tebipenem HBr in this patient population.
The PIVOT-PO trial is a global study that will randomize approximately 2,648 hospitalized adult patients one-to-one to receive either tebipenem HBr or the current intravenous standard of care, imipenem-cilastatin, for a total of 7 to 10 days of treatment. The primary efficacy endpoint is overall response, a composite of clinical and microbiological response, at the test-of-cure visit.
Spero Therapeutics is responsible for the execution of the Phase 3 trial, while GSK will be responsible for submitting the New Drug Application (NDA) to the FDA. If approved, tebipenem HBr would provide an important new oral treatment option for patients with cUTIs, potentially shifting the treatment paradigm away from the current intravenous carbapenem standard of care.
SPR206 for MDR Gram-Negative Infections
SPR206 is an IV-administered antibiotic that Spero Therapeutics is developing to treat MDR Gram-negative bacterial infections in the hospital setting. The company recently received IND clearance from the FDA to initiate a Phase 2 clinical trial for SPR206.
Based on preclinical data, SPR206 has shown activity against a broad spectrum of MDR Gram-negative pathogens, including carbapenem-resistant Enterobacterales, Acinetobacter baumannii, and Pseudomonas aeruginosa. The company believes SPR206 has the potential to offer an improved safety profile compared to currently available polymyxin antibiotics, with a reduced risk of nephrotoxicity.
Spero Therapeutics is advancing the development of SPR206 in collaboration with various government agencies, including the U.S. National Institute of Allergy and Infectious Diseases (NIAID) and the Biomedical Advanced Research and Development Authority (BARDA). The company's ability to progress SPR206 will depend on securing additional non-dilutive funding from these and other sources.
Risks and Challenges
While Spero Therapeutics has made significant progress with its pipeline, the company faces several risks and challenges common to the biopharmaceutical industry. These include the inherent uncertainties of drug development, the potential for delays or failures in clinical trials, regulatory approval hurdles, competition from other therapies, and the need for additional capital to fund its operations.
Specifically, the success of SPR720 in the ongoing Phase 2a trial will be crucial in determining the future development path for this program. Any setbacks or unfavorable results could significantly impact the company's prospects. Similarly, the execution and outcomes of the pivotal PIVOT-PO trial for tebipenem HBr will be critical, as this program represents a significant opportunity for Spero Therapeutics through its partnership with GSK.
The company's ability to advance SPR206 will also depend on its success in securing additional non-dilutive funding from government agencies and other sources, as the company has limited financial resources to dedicate to this program on its own.
Outlook and Conclusion
Spero Therapeutics enters 2024 with a strengthened balance sheet, having received a $95 million development milestone payment from GSK related to the initiation of the PIVOT-PO trial for tebipenem HBr. This, combined with the company's existing cash and cash equivalents, is expected to fund its operations into late 2025.
The company's pipeline of product candidates targeting rare diseases and resistant infections continues to progress, with key data readouts and clinical milestones expected in the coming year. The successful advancement of SPR720, tebipenem HBr, and SPR206 could significantly enhance Spero Therapeutics' long-term growth prospects and its ability to address significant unmet medical needs.
Overall, Spero Therapeutics appears well-positioned to continue executing on its strategic priorities, leveraging its diverse pipeline and partnerships to drive value for shareholders. The company's focus on innovative solutions for rare diseases and resistant infections makes it an intriguing investment opportunity in the biopharmaceutical sector.