10-K: Spero Therapeutics Navigates Financial Uncertainty, Suspends Key Programs in Strategic Shift

• Spero Therapeutics is a clinical-stage biopharmaceutical company focused on developing treatments for rare diseases and multi-drug resistant bacterial infections.
• The company has no approved products and has not generated revenue from product sales.
• Spero's most advanced candidate, tebipenem HBr, is in Phase 3 development for complicated urinary tract infections (cUTIs).
• Development of SPR720 for nontuberculous mycobacterial (NTM) pulmonary disease has been suspended after interim analysis showed it did not meet its primary endpoint.
• Development of SPR206 for hospital-acquired and ventilator-associated bacterial pneumonia (HABP/VABP) has been discontinued.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• Spero believes its current cash runway will be sufficient to fund operations into the second quarter of 2026, but additional funding will be needed beyond that point.
• The company is subject to an SEC investigation regarding certain public disclosures made in 2022.
• Spero is dependent on its collaboration with GSK for tebipenem HBr, and any termination or failure to earn milestone payments could adversely affect the business.
• The company faces substantial competition from other pharmaceutical and biotechnology companies.

Score: 3

Explanation: The document presents a concerning financial outlook with program suspensions and an SEC investigation, overshadowing the potential of tebipenem HBr.

• Tebipenem HBr has received Qualified Infectious Disease Product (QIDP) and fast track designations from the FDA.
• Spero has a licensing agreement with GSK for tebipenem HBr, which includes potential milestone payments and royalties.
• The company has received funding support from BARDA and NIAID.
• Spero has a portfolio of patents and patent applications covering its product candidates.
• The company has a joint development committee with GSK to coordinate development activities for tebipenem HBr.

• Spero has a history of losses and expects to incur substantial future losses.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• Spero is subject to an SEC investigation regarding certain public disclosures made in 2022.
• The company is dependent on its collaboration with GSK for tebipenem HBr, and any termination or failure to earn milestone payments could adversely affect the business.
• Spero has suspended development of SPR720 and discontinued SPR206.
• The company faces substantial competition from other pharmaceutical and biotechnology companies.

• Spero's ability to realize the value of tebipenem HBr depends on GSK obtaining FDA approval.
• Clinical trials may fail to produce favorable results, leading to additional costs and delays.
• Serious adverse events or undesirable side effects of product candidates may delay or prevent regulatory approval.
• Product candidates may not achieve market acceptance even if approved.
• Spero may be unable to raise capital when needed, forcing it to delay or eliminate product development programs.
• The company may not achieve milestones triggering payments in license and collaboration agreements.
• Spero relies on third parties for manufacturing and clinical supplies, which increases the risk of insufficient quantities or unacceptable costs.
• The company may be sued for infringing intellectual property rights of third parties.
• Spero's internal computer systems may fail or suffer cybersecurity incidents, disrupting operations and potentially leading to liability.
• The price of Spero's common stock has been and may continue to be volatile.
• Spero's shares of common stock could be delisted from the Nasdaq GS.

Spero expects to continue to incur significant expenses and operating losses for the foreseeable future and will need substantial additional funding to support its continuing operations and pursue its growth strategy.

• Management has concluded that substantial doubt exists about the company's ability to continue as a going concern.
• Management believes that the re-prioritized strategic focus is the best way to optimize financial and other resources to advance the goal of developing and commercializing product candidates to address the unmet need for solutions to antibiotic resistant pathogens.

The biopharmaceutical industry is characterized by intense competition and rapid innovation, with many companies pursuing the development of treatments for resistant infections.

• Spero faces competition from major pharmaceutical companies like Allergan, Pfizer, Merck & Co., and Shionogi & Co. Ltd., which market products for the treatment of Gram-negative infections.
• The company's tebipenem HBr, if approved, would compete with available oral therapies for cUTIs such as levofloxacin, ciprofloxacin, and trimethoprim/sulfamethoxazole.
• SPR206, if approved, would compete with IV-administered products like ceftazidime-avibactam (Avycaz), ceftolozane-tazobactam (Zerbaxa), and cefiderocol (Fetroja).
• SPR720 would potentially compete with Arikayce from Insmed, an inhaled version of amikacin, for the treatment of NTM pulmonary disease.

• Shareholders face the risk of stock price volatility and potential dilution from future equity offerings.
• Employees have been affected by workforce reductions as part of the company's restructuring.
• Patients may experience delays in the development and availability of new treatments due to program suspensions.
• Suppliers and creditors may be impacted by the company's financial challenges and potential need to reduce spending.

• Advance the Phase 3 clinical trial activities for tebipenem HBr under the GSK License Agreement.
• Complete analysis of the full dataset from the 25 treated patients in the Phase 2a proof-of-concept trial of SPR720.
• Seek additional funding through equity or debt financings, potential new collaborations or additional grant funding.

• Spero is subject to securities class action lawsuits and derivative actions related to disclosures concerning the New Drug Application (NDA) for tebipenem HBr.
• Spero has received a Wells Notice from the SEC contemplating a civil enforcement action related to certain public disclosures made in 2022.

• The company has a licensing agreement with GSK for tebipenem HBr, which includes potential milestone payments and royalties.
• The company has a share purchase agreement with GSK.
• The company has a licensing agreement with Everest Medicines II Limited.
• The company has a licensing agreement with Pfizer Inc.

• December 2013: Spero Therapeutics, LLC was formed.
• May 2016: Spero entered into an agreement with Vertex Pharmaceuticals Incorporated.
• June 2016: Spero entered into a stock purchase agreement with Pro Bono Bio PLC.
• June 30, 2017: Spero Therapeutics, LLC merged with and into Spero Therapeutics, Inc.
• July 2018: Spero was awarded a contract from BARDA.
• January 4, 2019: Spero entered into a license agreement with Everest Medicines II Limited.
• June 30, 2021: Spero entered into a License Agreement and a Share Purchase Agreement with Pfizer, Inc.
• September 21, 2022: Spero entered into an Exclusive License Agreement with GlaxoSmithKline Intellectual Property (No. 3) Limited.
• November 7, 2022: Spero closed the transactions contemplated by the GSK License Agreement.
• July 4, 2023: Spero entered into Amendment 1 to the GSK License Agreement.
• December 20, 2023: Spero entered into Amendment 2 to the GSK License Agreement.
• March 4, 2024: Spero entered into Amendment 3 to the GSK License Agreement.
• October 28, 2024: Spero entered into Amendment 4 to the GSK License Agreement.
• October 29, 2024: Spero announced a restructuring plan and suspended development activities for its SPR720 oral program.
• January 9, 2025: Spero responded to a Wells Notice from the SEC.
• March 20, 2025: The Second Derivative Complaint was voluntarily dismissed by the plaintiff.
• March 21, 2025: There were 55,900,641 shares of common stock outstanding.