Spero Therapeutics Q4 2024 Earnings Call Transcript

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Operator

Good afternoon, and welcome to the Spirit Therapeutics Fourth Quarter and Full Year twenty twenty four Earnings 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 announcement on the Spira Therapeutics website at www.spiotherapeutics.com.

Operator

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

Shai Biran
Shai Biran
Investor Relations at Spero Therapeutics

Thank you, operator, and thank you all for participating in today's conference call. This afternoon, Sparo Therapeutics released financial results and provided a business update for the fourth quarter and full year 2024. The press release is available on the Investor page of the Sparrow 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.

Shai Biran
Shai Biran
Investor Relations at Spero Therapeutics

Expressed or implied by such forward looking statements. These risks and uncertainties associated with our business and factors that could cause or contribute to such differences are described in detail in Spiro Therapeutics' filings with the SEC, including in the Risk Factors section of its earnings report on Form 10 K for the year ended 12/31/2024, filed with the SEC today. Joining me on the call today are Esther Rajavelu, our Interim Chief Executive Officer and Chief Financial Officer and Tim Kloitzer, SPERA's Chief Operating Officer. There will be a Q and A session following the prepared remarks. I will now turn the call over to Esther to begin.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Thank you, Shay. Good afternoon, everyone, and thank you for joining our full year twenty twenty four earnings and business update call. Spero Therapeutics is a clinical stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and multi drug resistant bacterial infections with high unmet medical need. Our most advanced clinical stage product candidate, cabepenem HVR is in a Phase three trial with the potential to be the first broad spectrum oral carbapenem to treat adult patients with complicated urinary tract infections, including acute pyelonephritis. These are patients who have limited or no alternative treatment options and would otherwise likely be treated with an IV carbapenem.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

SPARROW is co developing tebipenem HBR with our partner GSK. Today, we announced that a pre specified interim analysis in the Phase III PIVOTPO clinical trial is expected to be completed in the second quarter of twenty twenty five. Our top priority for this year is the continued advancement of the tebipenem program, which if approved has the potential to fundamentally change the treatment paradigm for complicated UTI by offering patients and prescribers a convenient oral treatment option. Next, on to SPR-seven twenty, our novel Chyrase B inhibitor that was in a Phase IIa proof of concept study as an oral treatment for nontuberculous mycobacterial pulmonary disease or NTMPD. The trial was randomized, double blind, placebo controlled and enrolled 25 treatment naive or treatment experienced patients with non refractory NTM pulmonary disease caused by Mycobacterium avium complex or MAC infections.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

The primary endpoint of the study was change in bacterial load in sputum samples from baseline to the end of the fifty six day treatment period. Key secondary endpoints included assessments of safety and tolerability, clinical response, PK and certain other measures. Enrollment concluded in July 2024. In October 2024, we completed a planned interim analysis, which included 16 patients who had completed dosing and post dose follow-up visits. Results from the interim analysis showed that the study did not meet its primary endpoint.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

While there was some evidence of antimicrobial activity, the treated arm did not show sufficient separation from placebo. In addition, we saw potential dose limiting safety signals, including three cases of reversible Grade three hepatotoxicity in the high dose cohort dosed at one thousand milligrams once daily. We are completing assessment of the full data set of all 25 patients dosed in the trial and plan to determine next steps for the program once that is complete. Lastly, on our pipeline, following a thorough review and reprioritization, we made the decision to discontinue development of SPR206, an IV administered next gen polymyxin antibiotic that cleared an IND in 2024 for a Phase two trial in hospital acquired and ventilator associated bacterial pneumonia. To date, we have made good progress on the Phase three trial for our lead asset, tebipenem HVR, and we look forward to completing the prespecified interim analysis next quarter and with our partner GSK share an update on next steps for the program.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

As a reminder, following completion of the tevipenem HBR Phase three trial, GSK is expected to assume responsibility for regulatory and commercialization efforts And if these are successfully pursued, Spero could qualify for about $400,000,000 in contingent milestones, including $25,000,000 when GSK submits an NDA and subsequent milestones based on commercialization and sales ramp. With that, I'll turn the call over to Tim.

Timothy Keutzer
Timothy Keutzer
COO at Spero Therapeutics

Thank you, Esther. I'll begin with tepipenem HPR the opportunity for this product to address the unmet need and complicated UTI. There are an estimated three point four million episodes of complicated UTIs reported annually in The U. S. And they are a leading cause of hospitalizations.

Timothy Keutzer
Timothy Keutzer
COO at Spero Therapeutics

Complicated infections, as a reminder, are those that occur in patients who have a structural or functional abnormality of the urinary tract or those requiring catheterization. There can also be comorbidities such as kidney stones or kidney infections. Complicated UTIs are also more likely to be caused by multidrug resistant or MDR pathogens. If inadequately treated, these can recur frequently or progress to more severe conditions. The current standard of care for many MDR gram negative infections, including complicated UTIs is treatment with carbapenems.

Timothy Keutzer
Timothy Keutzer
COO at Spero Therapeutics

However, carbapenems are currently only available as intravenous formulations, so they require inpatient admission or outpatient IV therapy and this adds to the complexity of treatment. The lack of an effective well tolerated oral alternative for MDR complicated UTIs means that patients are often subjected to prolonged IV antibiotic use. If approved, we believe temipenem HBR has a potential to reduce length of hospitalization for patients who transition from intravenous to oral carbapenem therapy. The ongoing Phase three trial of PIVOT PO designed to support regulatory approval is a global randomized double blind, double dummy clinical trial comparing tebipinum HPR to IV imipinum silistatin in hospitalized adult patients with complicated UTIs including acute pyelonephritis. Patients are being randomized one to one to receive either tebipinum at a dose of six hundred milligrams orally every six hours or IV amipinum silvastatin given as five hundred milligrams every six hours for a total of seven to ten days.

Timothy Keutzer
Timothy Keutzer
COO at Spero Therapeutics

The primary efficacy endpoint is overall response, which is a composite of clinical cure and microbiological eradication. This is assessed at the test of cure visit. The primary analysis will assess non inferiority in the microbiological intent to treat population using a ten percent margin. Briefly on SPR-seven 20, our decision to spin the oral development program in NTM pulmonary disease followed a preplanned interim analysis based on 16 patients in the Phase 2a proof of concept trial. We are now in the process of completing analysis of the remaining data from all 25 patients that were dosed in the trial and plan to determine next steps for this program thereafter.

Timothy Keutzer
Timothy Keutzer
COO at Spero Therapeutics

I'll now turn the call back to Esther to review the financials.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Thank you, Tim. I'll now walk you through our fourth quarter and full year financials. As of 12/31/2024, Sparrow had cash and cash equivalents of $52,900,000 We estimate that our existing cash and cash equivalents together with the remaining $47,500,000 in earned and non contingent development milestone from GSK will be sufficient to fund our operating expenses and capital expenditures into Q2 twenty twenty six. Total revenue for the fourth quarter of twenty twenty four was $15,000,000 compared with total revenue of $73,500,000 for the fourth quarter of twenty twenty three. Total revenue for the year ended 12/31/2024 was $48,000,000 compared to $103,800,000 for the year ended 12/31/2023.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

The revenue decrease compared with the prior year period was primarily due to a decrease in collaboration revenue from our agreements with GSK and Pfizer. R and D expenses for the fourth quarter of twenty twenty four were $28,800,000 compared to $16,600,000 for the same period in 2023. R and D expenses for the year ended 12/31/2024, were $97,000,000 compared to $51,400,000 for the year ended 12/31/2023. The increase in R and D expenses year over year was primarily due to increased clinical trial activity related to the Phase III PIVOT PO trial for tepipenem HBR. G and A expenses for the fourth quarter of twenty twenty four were $7,100,000 compared to 6,400,000 for the same period in 2023.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

This year over year increase was primarily due to increased consulting and professional fees in the last quarter of the year. G and A expenses for the year ended 12/31/2024, were $23,700,000 compared to $25,600,000 for the year ended 12/31/2023, with lower full year 2024 expenses primarily due to decreases in personnel related costs. The company reported a net loss of $20,700,000 for the fourth quarter and net loss of $68,400,000 for the year ended 12/31/2024. Diluted net loss per share was $0.38 and $1.27 for these periods respectively. We reported a net income of $51,200,000 for the fourth quarter of twenty twenty three and net income of $22,800,000 for the year ended 12/31/2023, respectively.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Net income per share was $0.96 and $0.43 for these periods, respectively. For further details on our financials, please refer to our 10 K filed with the SEC today. With that, we will now open the call for questions. Operator?

Operator

Thank you. We will now begin the question and answer session. First question comes from Gavin Clark Gardner with Evercore ISI. Please go ahead.

Gavin Clark-Gartner
Analyst at Evercore

Hey, thanks for taking the questions. I had a few on the tebepenem interim analysis. Maybe first, does the trial get unblinded if the interim is successful?

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

If the interim is successful, yes, the interim process is going to be managed by an independent data monitoring committee. And if their recommendation is that we stop the trial or stop enrollment, the management team will be unblinded at that time.

Gavin Clark-Gartner
Analyst at Evercore

Got it. So if it does get unblinded early, I guess what I'm wondering is, even if the trial is positive early on, on the ITT population, is there any reason to keep running the trial longer in order to narrow some of the error bars for some of the subgroup analyses, like specifically in the ESBL positive population?

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Yes. We can't speculate on that at the moment given we're blinded and just preparing for the interim analysis. So we'll hopefully be able to respond to that once we've gotten the recommendation from the IDMC.

Gavin Clark-Gartner
Analyst at Evercore

Got it. What's the alpha spend on the interim?

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

We'll be spending a small amount of alpha for the pre specified IA, but since this is a pre specified interim, we've accounted for that alpha spend and determining the overall sample size for the study.

Gavin Clark-Gartner
Analyst at Evercore

Got it. And just my last quick question. Any comments you can make on the bar for success for the interim and when in the trial it's actually conducted?

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

So basically, I mean, there are three scenarios that are likely, right? So either the trial meets the primary endpoint with this pre specified interim, which is the 10% non inferiority margin and we stop the trial or it fails or we stop the trial for futility or lastly, we continue enrolling.

Gavin Clark-Gartner
Analyst at Evercore

Got it.

Gavin Clark-Gartner
Analyst at Evercore

That's helpful. Thanks.

Operator

The next question comes from Ritu Barag with TD Cowen. Please go ahead.

Athena Chin
Biotechnology Equity Research Analyst at TD Cowen

Hi guys. Thanks for taking my question. This is Athena Chin on for Ritu Baral. I have a question on 07/20. As you see it now, what are the potential paths forward for 07/20?

Athena Chin
Biotechnology Equity Research Analyst at TD Cowen

And when can we expect an update? Thank you.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Sure. Hey there. The first step is to complete the data analysis of the full 25 patients dosed in the trial.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Once we have the full picture on the data, we'll be in a better position to decide on the best path forward for the program, which may include a reformulation strategy. We have determined that an oral path for MPNPD is unlikely given the dose limiting grade three talks at the one thousand mg dose, even though they were reversible once the drug was stopped. So step number one, complete the data analysis on the full 25 patients and then determine next steps.

Athena Chin
Biotechnology Equity Research Analyst at TD Cowen

Understood. Thank you.

Operator

This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Esther Rajavelu
Esther Rajavelu
Interim CEO & CFO at Spero Therapeutics

Thank you. We have a very excited setup for the year end, and we're looking forward to completing the interim analysis and providing you an update in the second quarter. Thank you for listening.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Executives
    • Shai Biran
      Shai Biran
      Investor Relations
    • Esther Rajavelu
      Esther Rajavelu
      Interim CEO & CFO
    • Timothy Keutzer
      Timothy Keutzer
      COO
Analysts
Earnings Conference Call
Spero Therapeutics Q4 2024
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