Spero Therapeutics Q2 2024 Earnings Call Transcript

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Provided by Quartr
August 5, 2024

There are 7 speakers on the call.

Operator

Good afternoon, and welcome to the Spirent Therapeutics Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen only mode. Following the company's formal remarks, we will open up the call for questions. Please be advised that this call is being recorded and a replay will be available. You can find information on the replay and further information related to today's announcements on the Sphero Therapeutics website at www.spherotherapeutics.com.

Operator

At this time, I would like to turn the call over to Shay Biran, Senior Director, Investor Relations. Mr. Biran, please go ahead.

Speaker 1

Thank you, operator, and thank you all for participating in today's conference call. This afternoon, Spiro Therapeutics released financial results and provided a business update for the Q2 of 2024. The press release is available on the Investor page of the Spara Therapeutics website. Before we begin, I would like to remind you that some of the information presented on this conference call contains forward looking statements under the securities laws. These forward looking statements involve substantial risks and uncertainties that could cause our actual clinical programs, future results, progress, timing, performances or achievements to differ materially from those expressed or implied by such forward looking statements.

Speaker 1

These risks and uncertainties associated with our business and factors that could cause or contribute to such differences are described in detail in Sterile Therapeutics filings with the SEC, including in the Risk Factors section of the earnings reports on Form 10 Q for the quarter ended June 30, 2024 filed with the SEC today. We also ask that you reference the cautionary statements or forward looking statements included with the slide presentation accompanying this conference call. Participating in today's call are Saab Shukla, Chief Executive Officer and Esther Rajavelu, Chief Financial Officer and Chief Business Officer. Saath Shukla will begin the discussion. Please go ahead, Saath.

Speaker 2

Thank you, Shay. Good afternoon, everyone, and thank you for joining our conference call today. I am pleased to provide an update on the ongoing progress across our portfolio of clinical stage assets. Before that, I would like to note a change in our executive leadership team with the departure of our Chief Medical Officer, Doctor. Kamal Hamid.

Speaker 2

On behalf of the Board, management and all of our employees, we thank Doctor. Hamed for his many contributions to Spiro and wish him every success for the future. We are pleased to announce that Doctor. John Pottage, a distinguished industry veteran in our field and a member of Ferro's Board for the last 6 years, will help oversee and provide strategic guidance for our clinical programs during this transitionary period, while we continue the search for our next Chief Medical Officer. Moving to our clinical pipeline.

Speaker 2

Let me begin with SPR-seven twenty, which we are developing as a first line oral agent for nontuberculous mycobacterial pulmonary disease or NTMPD. NTMPD has an estimated patient population of 245,000 patients in the U. S, EU and Japan, with approximately 95,000 of those patients in the U. S. There is currently no approved first line therapy for these patients.

Speaker 2

The current guidelines recommend off label TB drugs, which have a history of lack of efficacy as well as serious tolerability issues. SPR-seven twenty has a novel mechanism of action that is different from other standard of care agents, as well as those in development for NTNPT. Spiro has conducted extensive in vitro and in vivo study, which have shown no evidence of cross resistance against marketed antibiotics, as well as a low propensity for selection of resistance. Further, we have demonstrated SVR-seven twenty to be potent against multiple NTM pathogens. Overall, we believe the preclinical data support SPR-seven twenty's potential for therapeutic benefit.

Speaker 2

In Q4, we expect to share a comprehensive data set from our ongoing and recently completed clinical studies. This is anticipated to include data from the Phase 2a proof of concept study and treatment naive and treatment experienced non refractory patients. We will also report data from 2 supportive Phase 1 studies in healthy volunteers, one of which assesses SPR-seven twenty exposure in lung as monotherapy and the second of which assesses exposure in plasma when co administered with standard of care agents Azithromycin and ethambutol. The Phase IIa clinical trial compares 2 doses of SPR-seven twenty, 500 mg and 1,000 mg administered as monotherapy versus placebo in patients with NTMPD due to M ABM complex or MAC. We have enrolled a total of 25 patients, including both treatment naive and treatment experienced patients who do not have treatment refractory disease.

Speaker 2

It is our hope that the data from this study will indicate that SPR-seven twenty as a monotherapy can decrease the NTM bacterial load over the treatment course of 56 days. To analyze this early bactericidal activity, we are measuring changes in bacterial loads in patients' distribution, including the rate of change in log10 colony forming units per milliliter, which is our primary endpoint in this study. We are also looking at the rate of change in time to positivity, which is a key secondary endpoint in the study. A clear numerical difference in these measures between the treatage arms and placebo could indicate that SPR-seven twenty has a potential therapeutic effect in patients with NTMPD. We anticipate that success on these endpoints would also make SPR-seven twenty the only oral agent in development that we are aware of to demonstrate early bactericidal activity in patients with NTNPD due to MAT and would enable us to move confidently into late stage development.

Speaker 2

Ultimately, we believe that SPR-seven twenty could be used as part of combination treatment regimens and if the ongoing study confirms our expectations that the drug has monotherapy activity, we anticipate the future registration enabling studies to be designed to include standard of care agents. Complementing the Phase IIa data, as previously mentioned, we will also share data from 2 Phase 1 studies in healthy volunteers. The first study used a bronchoalveolar lavage or BAL to examine intrapulmonary pharmacokinetics of cell SPR-seven nineteen, the active moiety of the prodrug SPR-seven twenty. We expect to share PK measures showing the extent of exposures in the lungs, that is the site of infection. The second study evaluates changes in plasma PK when SPR-seven twenty is co administered with azithromycin and ifambutol.

Speaker 2

We anticipate this data to be informative when selecting doses in future combination studies. Lastly, we recently completed an in vitro resistance study of SPR-seven nineteen in combination with standard of care agents and anticipate sharing these data at IG Week in October. The team is excited about this upcoming data readout in Q4. These studies are expected to provide us with a robust data set that we will use to determine the registrational path for SBR-seven twenty as first line oral treatment for NTMPD. Turning now to teripenum HBR, which we are developing as the first potential oral carbapenum antibiotic for the treatment of complicated urinary tract infections or CUTI.

Speaker 2

Enrollment in our ongoing Phase 3 global PIVX PO clinical trial is on track and we are pleased with the progress made since the beginning of the year. Our goal remains to complete enrollment in the second half of twenty twenty five. Patients are randomized 1 to 1 in this pivotal Phase 3 clinical trial to receive teripenem HBR-six hundred mgs orally every 6 hours or inipenem filestatium 500 mgs intravenously every 6 hours for a total of 7 to 10 days. Target enrollment is approximately 2,648 patients. The primary efficacy endpoint is overall response, which is a composite of clinical and microbiological response and the test of cure visit.

Speaker 2

The primary analysis for the trial will be an assessment of non inferiority in the microbiological intent to treat population based on a 10% non inferiority margin. As a reminder, Trepanam HVR is partnered with GSK. We are responsible for the execution of the ongoing Phase 2 trial and GSK is responsible for ex U. S. Development and worldwide commercialization, excluding certain rights in Asian territories, hedged by another partner, Majlis Dehka.

Speaker 2

QTR infections are a leading cause of hospitalization in the U. S. The incidence is estimated to be over 3,000,000 cases per year, which translates into a significant burden on the healthcare system. Terpenum HVR is to our knowledge the only oral carbapenem in development. If approved, it could address the need for an oral carbapenem in patients with complicated urinary tract infections caused by multidrug resistant uropathogens, potentially eliminating the need for hospitalization or reducing length of stay with transition from intravenous to oral parabenum therapy.

Speaker 2

Finally, wrapping up with SPR-two zero six. SPR-two zero six is an innovative investigational intravenously administered direct acting polymyxin partnered with Pfizer for European markets. We announced that in the Q1 of this year, the FDA cleared the IND to advance SPR206 into a Phase 2 clinical trial in patients with hospital acquired or ventilator associated bacterial pneumonia and that the FDA also awarded SPR206 fast track designation. As a reminder, we plan to initiate a Phase 2 study contingent on availability of non dilutive funding. With that, I'll turn the call over to Esther to review our quarterly financial results.

Speaker 3

Thank you, Seth, and good afternoon to all of you joining us on the call. I'll begin with our cash guidance first and then summarize our GAAP financials. Ferro ended the 2nd quarter with $63,500,000 in cash and cash equivalents. In addition to the cash on our balance sheet, we anticipate 3 remaining tranches of development milestone payments from GSK in the approximate amount of $24,000,000 every 6 months. As a reminder, upon initiation of the Phase 3 PIVOT PO clinical trial, FARO qualified for $95,000,000 in development milestones from GSK, which are payable in 4 equal installments over 2 years.

Speaker 3

The 2nd tranche of approximately $24,000,000 is payable in the Q3 of this year. We estimate that our cash and cash equivalents together with other non dilutive funding commitments will be sufficient to fund our operating expenses and capital expenditure requirements into late 2025. Now moving on to summarize our GAAP financials. Total revenue for the Q2 of 2024 was $10,200,000 compared with total revenue of $2,700,000 for the Q2 of 2023. The revenue increase for the Q2 of 2024 was primarily due to an increase in collaboration revenue related to our agreement with GSK and an increase in grant revenue related to our BARDA contract, both for tepipetum HDR.

Speaker 3

These were partially offset by a decrease under our NIAID agreement relating to SPR206 and collaboration revenue related to our agreement with Pfizer for SPR-two zero six. Research and development expenses of 2023. The increase in research and development expenses year over year was primarily due to higher direct costs related to the pivotal Phase III trial for tebipenem HBR and the Phase IIa clinical trial for SPR-seven twenty, partially offset by lower direct costs related to the SPR-two zero six. G and A expenses for the Q2 of 2024 were 5 $500,000 compared to $6,100,000 for the same period in 2023. This year over year decrease was primarily due to a decrease in G and A personnel related costs, partially offset by increases in professional and consulting fees.

Speaker 3

Taylor reported a net loss of $17,900,000 or $0.33 per share of common stock, basic and diluted for the Q2 ended June 30, 2024. This compares with a net loss of $11,900,000 or $0.23 per share of common stock for the comparable period in 2023. For further details on our financials, please refer to our 10 Q filed with the SEC today. We will now open the call for questions. Operator?

Operator

Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. Our first question comes from the line of Louise Chen with Cantor Fitzgerald. Please go ahead.

Speaker 4

Hi, congratulations on all the progress and thanks for taking my questions here. So I have two quick questions for you. First one, I wanted to ask you was the significance of the IDWeek data that you're going to present and what we think we should learn from all of this? And then second question is just on Kamal's departure. You didn't give a lot of details here, but obviously ahead of the data, people are wondering what happened here.

Speaker 4

So any color you give would be great. Thank you.

Speaker 2

Hey, Louise. Thanks for the questions and great to hear from you. I'll answer your questions in reverse order. Kamal's departure obviously is an event for the company, but it has nothing to do with the data or the programs. That we can share with you.

Speaker 2

Like the rest of you, we are looking forward to the unblinding and reporting of the top line data for SBR-seven twenty in 4Q. And then, of course, for chevipanum next year, where our enrollment continues on track and is expected to be completed in the second half of next year. Moving to your first question for IDWeek, we are particularly excited about presenting resistance data. So one of the value date has shown a low propensity for resistance and no evidence of cross resistance. So, for IGB in particular, that will be a data set we will build on.

Speaker 3

Thank you.

Operator

Thank you. Our next question comes from the line of Gavin Clark Gartner with Evercore ISI. Please go ahead.

Speaker 5

Hey guys, thanks for taking the question. I just had one. So I appreciate that you're doing the PK sub study, which includes bowels. But for both of the doses that you're testing in your Phase 2a, over a given day, roughly what duration of MYC90 coverage

Speaker 1

do you

Speaker 5

believe that 720 has at both of the doses and specifically at the site of infection? Thanks.

Speaker 2

Thanks for the question, Gavin. I'll have to look back on what we have disclosed on that question and perhaps come back to you. But I do not believe that we have disclosed that data just yet. Obviously, that data will be part of what we report out. But for today, I'm not sure I can elaborate on it to the degree you ask.

Speaker 5

Great. We look forward to seeing more. Thanks.

Speaker 2

Thanks, Gail.

Operator

Thank you. Our next question comes from the line of Ritu Baral with TD Cowen. Please go ahead.

Speaker 6

Good afternoon, everyone. Thanks for taking the questions. Saath, I wanted to make sure that I heard you correctly. You said that the 25 patients enrolled were I'm sorry if I put this wrong, but the 25 patients were all treatment naive or did you have treatment experienced patients in there? And, well, I'll let you answer that before my follow-up.

Speaker 2

Sure. So we've always said that this trial would have treatment night and non refractory treatment experienced patients with it. And that is the expectation for those 25 patients. Did I answer your question?

Speaker 6

Yes. Can you speak to the mix that you ended up with final enrollment and how it might impact both the primary and secondary endpoint expectations? And then I have a follow-up.

Speaker 2

Unfortunately, right now, we can't, Ritu, because most of those data are blinded to us. So, even the mix of treatment naive and treatment experienced patients is not something we have disclosed just yet.

Speaker 6

Got it. I wanted to also ask about the secondary endpoint of time to positivity. Can you elaborate on that? I think previous drugs have discussed sort of time to sputum negativity. Can you go into a little detail on what time to positivity is and what sort of a meaningful time point in that endpoint?

Speaker 2

Yes. So I think for context, for both log10 CFU per milliliter as well as time for positivity. These are metrics that are well established and covered in TB, for example. But in NTM, of course, this being a relatively new therapeutic space, there is limited academic and medical literature that creates cutoffs, for example. But the way time to positivity works is that it's basically the daily prolongation of time to positivity, so it measures the time growth.

Speaker 2

In this process, the liquid media inartilated with a sputum sample and then when that reaches a predefined signal for the evidence of bacterial growth, that can indicate the efficacy of the treatment in question. So really the longer that time to positivity, the better it is. In TB, this measure is well established. For us, it's always been a key secondary endpoint. But within TB, there's usually a high degree of correlation between what we have characterized as a primary endpoint, the log reduction, and the time to positivity.

Speaker 2

So what we hope is that as we report both of these out, they will show a activity of the drug on a microbial reduction.

Operator

Thank you. Our next question comes from the line of Ram Selvaraju with H. C. Wainwright. Please go ahead.

Operator

Hi, thanks very much for taking my questions and congrats on all the progress. I wanted to ask about the tepitinib Phase 3 program and if you could give us an additional granularity regarding the total number of clinical sites that are currently involved and what factors you expect to impact enrollment either positively or negatively with respect to being able to get to that enrollment completion timeline target that you disclosed in today's press release? Thank you.

Speaker 2

Sure. Thanks, Ron, for the question. We haven't given a precise number yet, but if you were to assume somewhere in the triple digits in it's a global study, so multiple countries, you would be in the ballpark. So larger trial than the last one, as you know. And as you mentioned on the call, on track for enrollment.

Speaker 2

To date, we have not seen headwinds like the one we saw for Adapt where COVID among other features was a restricting factor for us. So at this moment in time, we continue to hold to our expectation of that completion of enrollment in the second half of next year. And as you know, our partners at GSK are also setting out their timelines for NDA submission that is also congruent with that timeframe. So the bottom line for Tebby is on track and we are excited to see the data.

Operator

Okay. And then just two technical questions regarding 720. First is, can you just give us a brief description of the manner in which the prodrug720 is converted into the active moiety 719? And secondly, if you can comment on what additional combinations or permutations, if any, you might want to look at to assess in terms of variability in plasma PK beyond azithromycin and ethambutol in the context of use of 7 20? Thanks.

Speaker 2

Sure. For the first question, we'll dig into the publications we have and send them to you. What we have stated in calls is that a 720 has a very rapid conversion to its active moiety. But on the granularity, azithromycin serves as a macrolide. And so with a macrolide under discussion, we feel that that is a appropriate measure to evaluate coadministration with along with the tambutal.

Speaker 2

Which as the landscape for NTM evolves, obviously, we will be open to evaluation of what makes sense as we enter later stage development. For today, as a oral therapy, right now, the only one in development, as you know, in first line, those are the oral therapies that make the most sense to us. But certainly, after we see the data and in discussions with the FDA, we will be evaluating all the optionality that would make sense in progressing the asset.

Operator

Thank you very much. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session. I would now hand the conference over to Sat Shukla for his closing comments.

Speaker 2

Thank you everyone for dialing in. We look forward to updating you as we progress our pipeline. Have a great

Operator

day. Thank you. The conference of Spiro Telepetics has now concluded. Thank you for your participation. You may now disconnect your lines.

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