SPRO
Spero Therapeutics, INC
NASDAQ
10-Q: Spero Therapeutics Reports First Quarter 2024 Financial Results and Provides Business Update
Sentiment:
Quarterly Report
15 May 2024 4:02 PM
Spero Therapeutics reports a net loss of $12.7 million for the first quarter of 2024, while advancing its clinical programs and receiving a $23.8 million milestone payment from GSK.
Worse than expected
The company reported a net loss of $12.7 million, which is a significant loss for the quarter, although slightly better than the $13.3 million loss in the same period last year.
Capital raise
The company expects to need additional funding beyond late 2025, which they anticipate will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or additional grant funding.
Spero has filed a new universal shelf registration statement on Form S-3 with the SEC, registering for sale up to $300.0 million of any combination of its common stock, preferred stock, debt securities, warrants, rights and/or units.
Summary
- Spero Therapeutics reported a net loss of $12.7 million for the first quarter of 2024, compared to a net loss of $13.3 million for the same period in 2023.
- The company's total revenue for the quarter was $9.3 million, a significant increase from $2.1 million in the first quarter of 2023, primarily driven by increased grant and collaboration revenue.
- Research and development expenses increased to $17.3 million, up from $9.0 million in the prior year, due to increased clinical trial activities for SPR720 and tebipenem HBr.
- General and administrative expenses decreased to $5.9 million from $7.3 million in the same period last year, mainly due to reduced personnel costs.
- Spero received a $23.8 million milestone payment from GSK related to the development of tebipenem HBr.
- The company's cash and cash equivalents stood at $82.3 million as of March 31, 2024, which they believe will fund operations into late 2025.
- Spero is prioritizing advancing SPR720 to key Phase 2 milestones, progressing the Phase 3 clinical trial for tebipenem HBr, and advancing SPR206 Phase 2 activities contingent on non-dilutive financing.
Sentiment
Score: 5
Explanation: The document presents a mixed picture. While there is positive progress in revenue and collaboration, the company continues to incur significant losses and relies on future funding. The risks associated with clinical trials and regulatory approvals also temper the overall sentiment.
Positives
- Spero's revenue increased significantly year-over-year, driven by higher grant and collaboration revenue.
- The company received a substantial milestone payment from GSK, bolstering its financial position.
- Spero has a cash runway that is expected to fund operations into late 2025.
- The company is actively advancing its key clinical programs, including SPR720 and tebipenem HBr.
Negatives
- Spero continues to incur significant operating losses, with a net loss of $12.7 million in Q1 2024.
- Research and development expenses have increased substantially, reflecting the high cost of clinical trials.
- The company is dependent on additional funding to continue its operations beyond late 2025.
Risks
- Spero's ability to realize the value of tebipenem HBr depends on FDA approval and the terms of that approval.
- Clinical trials may not produce favorable results, leading to delays or failure in product development.
- The company faces substantial competition from other pharmaceutical and biotechnology companies.
- Spero may not achieve market acceptance for its products even if they receive regulatory approval.
- The company is dependent on third-party manufacturers and may face supply chain disruptions.
- Spero is subject to legal proceedings, including class action and derivative lawsuits, which could result in substantial costs and divert management's attention.
- The company's use of government funding adds complexity and may impose requirements that increase costs.
- Spero may not be able to obtain and maintain sufficient patent protection for its technology.
- The company may need to raise additional capital, which could dilute existing stockholders' ownership.
Future Outlook
Spero plans to prioritize advancing SPR720 to key Phase 2 milestones, progressing the Phase 3 clinical trial for tebipenem HBr, and advancing SPR206 Phase 2 activities contingent on non-dilutive financing. The company expects to need additional funding beyond late 2025.
Management Comments
- Management believes that existing cash and cash equivalents will enable the company to fund operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements.
- Management plans to prioritize advancing SPR720 to key Phase 2 milestones, advancing the Phase 3 clinical trial activities for tebipenem HBr under the GSK License Agreement and advancing SPR206 Phase 2 activities contingent on obtaining non-dilutive financing.
Industry Context
The announcement reflects the ongoing challenges and opportunities in the biopharmaceutical industry, particularly in the development of novel treatments for drug-resistant infections. The company's focus on rare diseases and multi-drug resistant bacterial infections aligns with the growing need for new therapeutic options in these areas.
Comparison to Industry Standards
- Spero's increased R&D spending is typical for a clinical-stage biotech company, as they advance their pipeline.
- The reliance on collaboration agreements, such as the one with GSK, is a common strategy in the biotech industry to share development costs and commercialization risks.
- The company's cash runway into late 2025 is a critical metric, as it indicates the time available to achieve key milestones before needing additional funding.
- Compared to other companies in the sector, Spero's revenue is primarily driven by grants and collaboration agreements, which is common for companies without approved products.
- The net loss is consistent with other clinical-stage companies that are investing heavily in R&D and have not yet generated product revenue.
- The company's focus on specific indications and partnerships is a common strategy to manage resources and maximize potential.
Stakeholder Impact
- Shareholders face the risk of dilution from potential future capital raises.
- Employees may be affected by potential reductions in spending if additional funding is not secured.
- Patients may benefit from the development of new treatments for drug-resistant infections.
- Creditors face the risk of non-payment if the company is unable to secure additional funding.
Next Steps
- Advance SPR720 to key Phase 2 milestones.
- Progress the Phase 3 clinical trial activities for tebipenem HBr under the GSK License Agreement.
- Advance SPR206 Phase 2 activities contingent on obtaining non-dilutive financing.
- Seek additional funding through equity or debt financings, potential new collaborations, or additional grant funding.
Legal Proceedings
- Two putative class action lawsuits were filed against the company and certain of its current and former executive officers.
- Two stockholder derivative actions were also filed against the company and certain of its current and former officers.
Related Party Transactions
- The company has collaboration revenue and receivables related to its agreement with GSK.
Key Dates
- July 2018: Spero was awarded a contract from BARDA to develop tebipenem HBr.
- May 2021: Spero was awarded a contract from NIAID to support further development of SPR206.
- September 21, 2022: Spero entered into the GSK License Agreement.
- November 7, 2022: Spero closed the transactions contemplated by 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.
- March 15, 2024: Spero filed a new universal shelf registration statement on Form S-3 with the SEC.
- March 22, 2024: Spero's new universal shelf registration statement on Form S-3 became effective.
- March 31, 2024: End of the reporting period for the first quarter of 2024.
- May 6, 2024: Spero had 53,986,639 shares of common stock outstanding.
Keywords
Tebipenem HBr, SPR720, SPR206, Clinical Trials, FDA Approval, Antibiotics, Infections, Biopharmaceutical, Milestone Payment, Research and Development, Government Contracts, Collaboration Agreements
SPRO
Spero Therapeutics, INC
NASDAQ
Sector: TBD
Filings with Classifications
Better than expected
28 May 2025 7:12 AM
Clinical Trial Results
- The Phase 3 PIVOT-PO trial met its primary endpoint of non-inferiority.
- The trial was stopped early for efficacy, indicating stronger-than-anticipated positive results.
- No new safety concerns were identified, reinforcing the drug's safety profile.
Worse than expected
13 May 2025 4:49 PM
Earnings Release
- The company reported a higher net loss compared to the same quarter last year.
- The company reported lower revenue compared to the same quarter last year.
Capital raise
13 May 2025 4:15 PM
Quarterly Report
- The company expects that it will need substantial additional funding.
- The company will seek additional funding through public or private financings, debt financing, collaboration agreements, government grants or other sources.
- The company has a universal shelf registration statement on Form S-3 with the SEC on March 15, 2024, which became effective on March 22, 2024, and pursuant to which the company registered for sale up to $300.0 million of any combination of its common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that the company may determine, including up to $75.0 million of its common stock available for issuance pursuant to a Controlled Equity Offering Sales Agreement (the Sales Agreement) with Cantor Fitzgerald & Co. (Cantor).
Worse than expected
13 May 2025 4:15 PM
Quarterly Report
- The company's net loss increased compared to the same period last year.
- There is substantial doubt about the company's ability to continue as a going concern.
- The company received a Nasdaq deficiency letter due to its stock price falling below $1.00.
Worse than expected
27 March 2025 5:19 PM
Earnings Release and Business Update
- The company reported a net loss of $(20.9) million for Q4 2024 compared to a net income of $51.2 million for Q4 2023.
- Total revenue for Q4 2024 was $15.0 million, compared with total revenue of $73.5 million for the fourth quarter of 2023.
- The company discontinued the SPR206 program following a pipeline review in Q1 2025.
Worse than expected
27 March 2025 4:30 PM
Annual Results
- The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
- The company has suspended development of SPR720 and discontinued SPR206.
- The company is subject to an SEC investigation regarding certain public disclosures made in 2022.
Capital raise
27 March 2025 4:30 PM
Annual Results
- Spero expects to need additional funding beyond the second quarter of 2026.
- The company expects that additional funding will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or additional grant funding.
Worse than expected
28 February 2025 5:11 PM
8-K Filing
- The company's stock price falling below the Nasdaq minimum bid price requirement is worse than expected.
Worse than expected
10 January 2025 7:00 AM
Corporate Update
- The company is facing an SEC investigation, which is a negative development.
- The company has made interim leadership changes, which can create uncertainty.
- The company has suspended development of SPR720 after a Phase 2a trial did not meet its primary endpoint and showed potential safety issues.
Worse than expected
14 November 2024 4:05 PM
Quarterly Report
- The company reported a significantly larger net loss in Q3 2024 compared to Q3 2023.
- The company's revenue decreased substantially in Q3 2024 compared to Q3 2023.
- The company suspended the development of SPR720 after a Phase 2a trial failed to meet its primary endpoint.
Capital raise
14 November 2024 4:02 PM
Quarterly Report
- The company expects to need additional funding beyond mid-2026, which will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations, additional grant funding and/or reducing cash expenditures.
- The company has a universal shelf registration statement on Form S-3, which allows it to sell up to $300 million of securities, including up to $75 million of common stock through an at-the-market offering program.
Delay expected
14 November 2024 4:02 PM
Quarterly Report
- The suspension of the SPR720 program will delay the development of a potential treatment for NTM-PD.
Worse than expected
14 November 2024 4:02 PM
Quarterly Report
- The company suspended the development of SPR720 due to the Phase 2a trial not meeting its primary endpoint and potential safety issues.
Worse than expected
29 October 2024 5:01 PM
Business Update
- The Phase 2a trial of SPR720 failed to meet its primary endpoint, leading to the suspension of the program.
- The company is undergoing a restructuring and workforce reduction due to the disappointing trial results.
Worse than expected
5 August 2024 4:18 PM
Quarterly Report
- The company reported a net loss of $30.5 million for the first half of 2024, indicating ongoing financial challenges.
Capital raise
5 August 2024 4:18 PM
Quarterly Report
- The company expects to need additional funding beyond late 2025, which will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations, or additional grant funding.
- The company has a universal shelf registration statement on Form S-3, which allows for the sale of up to $300 million of securities, including common stock.
Worse than expected
5 August 2024 4:13 PM
Quarterly Report
- The company's net loss increased significantly compared to the same quarter last year, indicating worse than expected financial performance.
Capital raise
15 May 2024 4:02 PM
Quarterly Report
- The company expects to need additional funding beyond late 2025, which they anticipate will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or additional grant funding.
- Spero has filed a new universal shelf registration statement on Form S-3 with the SEC, registering for sale up to $300.0 million of any combination of its common stock, preferred stock, debt securities, warrants, rights and/or units.
Worse than expected
15 May 2024 4:02 PM
Quarterly Report
- The company reported a net loss of $12.7 million, which is a significant loss for the quarter, although slightly better than the $13.3 million loss in the same period last year.
Better than expected
13 March 2024 4:07 PM
Annual Results
- The company reported a net income of $22.8 million for 2023, a significant improvement from the $46.4 million loss in 2022.
- Revenue increased substantially to $103.8 million in 2023, compared to $53.5 million in 2022.
- The company's cash runway is expected to extend into late 2025, providing financial stability.
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