Spero Therapeutics, Inc. Q4 FY2023 earnings call

• SPR720 is in the latest stages of a proof-of-concept study in NTMPD with top-line data expected in H2 2023; it's an oral drug with novel mechanism, granted orphan drug, QIDP, and Fast Track designations.
• Tebipenem HBr's Phase 3 PIVOT-PO clinical trial is underway, with first patient dosed in Q4 2023; received FDA SPA on protocol design.
• SPR206 received IND clearance for HAPMap patients; partnered with Pfizer for European markets.
• Strong balance sheet with $76.3 million cash/cash equivalents as of Dec 31, 2023; $95 million in development milestones from GSK received, payable in installments.
• 2023 was productive with progress across development assets, including clinical trials and regulatory milestones.

Total revenue for the fourth quarter of 2023 was $73.5 million, compared with $47.4 million in the fourth quarter of 2022. Total revenue for the year ended December 31, 2023 was $103.8 million, versus $53.5 million in 2022. The revenue increase was primarily due to $96.7 million of collaboration revenue from agreements with GSK and Pfizer in 2023. Research and development expenses for the fourth quarter of 2023 were $16.6 million compared to $15.1 million in the same period of 2022; for the year, R&D expenses were $51.4 million vs $47.6 million in 2022. G&A expenses in Q4 2023 were $6.4 million vs $6.5 million in 2022; full year 2023 G&A was $25.6 million vs $36.5 million in 2022. Net income in Q4 2023 was $51.2 million vs $26.8 million in 2022; full year 2023 net income was $22.8 million vs a net loss of $46.4 million in 2022.

• SPR720 top-line data expected in the second half of 2023.
• PIVOT-PO enrollment expected to complete in the second half of 2025.
• Cash and cash equivalents, plus non-dilutive funding, sufficient to fund operating expenses and capital expenditures into late 2025.

Forward-looking statements are subject to risks of actual results differing from expectations; factors detailed in SEC filings, including risk factors in Form 10-K filed on 3/13/2024.

Q: How is enrollment in SPR720 going, especially with a competitive program on hold, and about the SPR719 lavage study in healthy volunteers?

A: Sath Shukla said 27 sites are open and enrolling patients towards top-line data in H2 2023; Kamal Hamed mentioned hollow fiber infection model and non-human primate lung penetration, with Phase 1 bronchoalveolar lavage study to provide lung penetration data in humans.

Q: Thoughts on access of SPR720 to site of infection in patients with different MAC cavitary conditions?

A: Sath Shukla noted patients with large cavitary disease are typically excluded from trials due to treatment duration and surgical needs; data so far suggests drug penetrates lungs, with bronchoalveolar lavage data expected in H2 2023.

Q: Market opportunity for SPR720 and SPR206?

A: Sath Shukla and Kamal Hamed discussed SPR720 targeting treatment naive or non-refractory NTMPD patients, majority of the patient population; Esther Rajavelu mentioned SPR206 has unmet need but development contingent on non-dilutive funding sources, with partnerships and government funding considered