Core Viewpoint - Spero Therapeutics, Inc. (SPRO) has experienced a significant downtrend with a 17.7% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [2]. - SPRO's current RSI reading is 27.97, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound as the stock seeks to return to its previous equilibrium [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding SPRO, with earnings estimates for the current year being raised by 44.8% over the last 30 days, suggesting a positive outlook for price appreciation [7]. - SPRO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].

Financial Data and Key Metrics Changes - Total revenue for 2025 was $14.2 million, compared to $10.2 million for 2024, indicating a year-over-year increase [16] - R&D expenses for 2025 were $10.7 million, down from $23.7 million in 2024, primarily due to reduced clinical expenses related to the PIVOT PO study [17] - The company reported a net loss of $1.7 million for 2025, significantly improved from a net loss of $17.9 million in 2024, with diluted net loss per share of $0.03 compared to $0.33 for the previous year [18] Business Line Data and Key Metrics Changes - The PIVOT PO trial for tebipenem HBr successfully met its primary endpoint and was stopped early for efficacy, which is expected to lead to cost savings and extend the cash runway into 2028 [6][10] - The positive outcome from the PIVOT PO trial supports the potential of tebipenem HBr as an oral alternative to IV carbapenem therapy for complicated urinary tract infections (CUTIs) [7][8] Market Data and Key Metrics Changes - There are approximately 2.9 million episodes of complicated urinary tract infections annually in the United States, contributing to over $6 billion in healthcare costs [11][12] - The current standard of care for many infections caused by multi-drug resistant (MDR) gram-negative bacteria is IV carbapenem antibiotics, highlighting a significant gap for effective oral alternatives [12][13] Company Strategy and Development Direction - The company aims to ensure that tebipenem HBr reaches the regulatory process and approval, which is seen as a key value driver for future growth [22] - The agreement with GSK allows for potential contingent milestones of up to $351 million, including $25 million upon GSK's submission of the U.S. regulatory filing [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the positive results from the PIVOT PO trial, believing it brings tebipenem HBr closer to becoming the first commercial product from the company's pipeline [18] - The company is currently assessing the next steps for SPR720 after the phase 2A study did not meet its primary endpoint, indicating a cautious approach to future development [14] Other Important Information - The company had cash and cash equivalents of $31.2 million as of June 30, 2025, with additional milestone payments expected to fund operations into 2028 [15] - The trial's early stopping for efficacy has resulted in meaningful cost savings, which is a primary driver for the extended cash runway [10][15] Q&A Session Summary Question: Capital allocation strategy - The company indicated that the primary objective is to ensure tebipenem HBr reaches the regulatory process and approval, with future capital allocation decisions to be made once there is clarity on approval [21][22]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Spero Therapeutics, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of cash flows, and statements of stockholders' equity, along with detailed notes explaining the company's business, accounting policies, and specific financial items for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets show a significant decrease in total assets and liabilities from December 31, 2024, to June 30, 2025, primarily driven by reductions in cash and cash equivalents, collaboration receivables, and deferred revenue. Total stockholders' equity also decreased during this period Metric | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | **Assets** | | | | Cash and cash equivalents | $31,194 | $52,889 | | Collaboration receivable, current | $24,453 | $49,391 | | Total current assets | $59,402 | $107,276 | | Total assets | $62,119 | $110,543 | | **Liabilities** | | | | Accounts payable | $780 | $7,306 | | Accrued expenses and other current liabilities | $6,727 | $17,724 | | Deferred revenue, current - related party | $5,431 | $21,756 | | Total current liabilities | $14,945 | $49,074 | | Total liabilities | $29,291 | $64,420 | | **Stockholders' Equity** | | | | Total stockholders' equity | $32,828 | $46,123 | - Total assets decreased by approximately **$48.4 million** (**43.8%**) from December 31, 2024, to June 30, 2025, primarily due to a reduction in cash and cash equivalents and collaboration receivables[20](index=20&type=chunk) - Total liabilities decreased by approximately **$35.1 million** (**54.5%**) over the same period, largely driven by decreases in accounts payable, accrued expenses, and deferred revenue[20](index=20&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a reduced net loss for both the three and six months ended June 30, 2025, compared to the same periods in 2024. This improvement was driven by a significant increase in collaboration revenue and a substantial decrease in research and development expenses, despite a decline in grant revenue Metric (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $14,189 | $10,197 | $20,063 | $19,464 | | Research and development expenses | $10,672 | $23,725 | $24,278 | $41,057 | | General and administrative expenses | $5,878 | $5,533 | $12,702 | $11,450 | | Total operating expenses | $16,633 | $29,258 | $37,238 | $52,507 | | Net loss | $(1,700) | $(17,862) | $(15,566) | $(30,531) | | Net loss per share (basic and diluted) | $(0.03) | $(0.33) | $(0.28) | $(0.57) | - Net loss decreased significantly by **$16.16 million** (**90.5%**) for the three months ended June 30, 2025, compared to the same period in 2024, and by **$14.97 million** (**49.0%**) for the six months ended June 30, 2025[22](index=22&type=chunk) - Collaboration revenue (related party) increased by **$5.90 million** (**99.9%**) for the three months and **$6.93 million** (**69.6%**) for the six months ended June 30, 2025, primarily due to the adjusted service period for the GSK License Agreement[22](index=22&type=chunk)[224](index=224&type=chunk)[237](index=237&type=chunk) - Research and development expenses decreased by **$13.05 million** (**55.0%**) for the three months and **$16.78 million** (**40.9%**) for the six months ended June 30, 2025, mainly due to reduced clinical activities for tebipenem HBr and suspended development for SPR720 and SPR206[22](index=22&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities increased compared to the same period in 2024, primarily due to changes in operating assets and liabilities, despite a reduced net loss Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(15,566) | $(30,531) | | Net cash used in operating activities | $(21,695) | $(12,806) | | Cash, cash equivalents at beginning of period | $52,889 | $76,333 | | Cash, cash equivalents at end of period | $31,194 | $63,527 | - Net cash used in operating activities increased by **$8.89 million** (**69.4%**) to **$21.7 million** for the six months ended June 30, 2025, compared to **$12.8 million** in the prior year, despite a lower net loss[24](index=24&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - The increase in cash used in operating activities was primarily due to a **$16.9 million** decrease in deferred revenue and an **$11.0 million** decrease in accrued expenses, partially offset by a **$24.9 million** decrease in collaboration receivable from GSK[254](index=254&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) The Condensed Consolidated Statements of Stockholders' Equity show a decrease in total equity from December 31, 2024, to June 30, 2025, primarily due to the net loss incurred, partially offset by stock-based compensation expense and common stock issuance from RSU vesting Metric (in thousands, except shares) | Metric (in thousands, except shares) | Balances at Dec 31, 2024 | Balances at June 30, 2025 | | :----------------------------------- | :----------------------- | :------------------------ | | Common Stock Shares | 54,593,527 | 56,187,308 | | Common Stock Par Value | $55 | $56 | | Additional Paid-in Capital | $505,706 | $507,976 | | Accumulated Deficit | $(459,638) | $(475,204) | | Total Stockholders' Equity | $46,123 | $32,828 | - Total stockholders' equity decreased by **$13.295 million** from **$46.123 million** at December 31, 2024, to **$32.828 million** at June 30, 2025[27](index=27&type=chunk) - The accumulated deficit increased by **$15.566 million** due to the net loss for the six months ended June 30, 2025[27](index=27&type=chunk) - Additional paid-in capital increased by **$2.270 million**, primarily from stock-based compensation expense[27](index=27&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's business, significant accounting policies, financial instruments, accrued liabilities, equity, restructuring, commitments, government contracts, and collaboration agreements, offering crucial context to the condensed financial statements [1. Nature of the Business and Basis of Presentation](index=10&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) Spero Therapeutics is a clinical-stage biopharmaceutical company focused on treatments for rare diseases and multi-drug resistant bacterial infections. Its lead candidate, tebipenem HBr, is in Phase 3 development and met its primary endpoint, while SPR720 and SPR206 programs have been suspended or discontinued. The company has a history of losses and an accumulated deficit of $475.2 million as of June 30, 2025, but expects its current cash and GSK milestone payments to fund operations into 2028 - Spero Therapeutics is a clinical-stage biopharmaceutical company focused on novel treatments for rare diseases and multi-drug resistant (MDR) bacterial infections[29](index=29&type=chunk) - Tebipenem HBr, the most advanced clinical-stage product candidate, is in Phase 3 development for complicated urinary tract infections (cUTIs) and met its primary endpoint, leading to early trial stoppage for efficacy in May 2025[30](index=30&type=chunk) - Development of SPR720 (oral formulation) was suspended in October 2024 after its Phase 2a trial did not meet the primary endpoint, and SPR206 development was discontinued in March 2025[30](index=30&type=chunk) - The company had an accumulated deficit of **$475.2 million** as of June 30, 2025, and expects to continue generating operating losses[33](index=33&type=chunk) - Existing cash and cash equivalents, along with a final **$23.8 million** payment from GSK received in Q3 2025, are expected to fund operating expenses and capital expenditure requirements into 2028[35](index=35&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the significant accounting policies, including the use of estimates, single segment reporting, credit risk, cash equivalents, impairment of long-lived assets, fair value measurements, and detailed revenue recognition under Topic 606. It also covers research and development costs, restructuring, patent costs, stock-based compensation, comprehensive income, net income (loss) per share, income taxes, and recently issued accounting pronouncements - The Company manages its operations as a single segment, focusing on identifying and developing novel treatments for rare diseases and MDR bacterial infections[39](index=39&type=chunk) - Revenue recognition for licensing agreements follows a five-step model under Topic 606, involving identification of performance obligations, transaction price determination, allocation based on standalone selling prices (SSP), and recognition upon satisfaction of obligations[48](index=48&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[58](index=58&type=chunk) - Research and development costs are expensed as incurred, including personnel, clinical trial, manufacturing, and licensing expenses[61](index=61&type=chunk) - Stock-based compensation expense for employees and directors is measured at grant date fair value and recognized over the vesting period[65](index=65&type=chunk) - The company is evaluating ASU 2024-03 (Disaggregation of Income Statement Expenses) and OBBBA (One Big Beautiful Bill Act) for their potential impact on financial statements[72](index=72&type=chunk)[74](index=74&type=chunk) [3. Fair Value Measurements and Marketable Securities](index=16&type=section&id=3.%20Fair%20Value%20Measurements%20and%20Marketable%20Securities) The company's cash equivalents, primarily money market funds, are measured at fair value using Level 2 inputs. There were no transfers between fair value hierarchy levels during the six months ended June 30, 2025 Asset (in thousands) | Asset (in thousands) | Fair Value at June 30, 2025 (Level 2) | Fair Value at December 31, 2024 (Level 2) | | :------------------- | :------------------------------------ | :------------------------------------ | | Money market funds | $30,595 | $52,258 | | Total cash equivalents | $30,595 | $52,258 | - Cash equivalents decreased by **$21.663 million** from December 31, 2024, to June 30, 2025[77](index=77&type=chunk) [4. Accrued Expenses and Other Current Liabilities](index=16&type=section&id=4.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities significantly decreased from December 31, 2024, to June 30, 2025, primarily due to reductions in accrued external research and development expenses and accrued payroll Accrued Expense (in thousands) | Accrued Expense (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accrued payroll and related expenses | $4,184 | $5,456 | | Accrued external research and development expenses | $1,447 | $9,493 | | Accrued professional fees | $924 | $2,199 | | Accrued restructuring expenses | $83 | $456 | | Accrued other | $89 | $120 | | **Total accrued expenses and other current liabilities** | **$6,727** | **$17,724** | - **Total accrued expenses and other current liabilities** decreased by **$10.997 million** (**62.0%**) from December 31, 2024, to June 30, 2025[78](index=78&type=chunk) - The most significant decrease was in accrued external research and development expenses, which fell by **$8.046 million** (**84.8%**)[78](index=78&type=chunk) [5. Common Stock](index=16&type=section&id=5.%20Common%20Stock) The company maintains an 'at-the-market' offering program for common stock, with a new universal shelf registration statement filed in March 2024. However, no shares were sold under this agreement during the three and six months ended June 30, 2025, or 2024 - The company has a universal shelf registration statement (2024 Form S-3) for up to **$300.0 million** of securities, including up to **$75.0 million** of common stock via an 'at-the-market' offering program[80](index=80&type=chunk) - No shares of common stock were sold under the Sales Agreement during the three and six months ended June 30, 2025, or 2024[83](index=83&type=chunk) [6. Stock-Based Compensation](index=17&type=section&id=6.%20Stock-Based%20Compensation) The company's equity compensation plans include stock options and restricted stock units (RSUs). No stock options were granted in the first half of 2025, but RSUs were granted, vested, and forfeited. Total stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to 2024 - Stockholders approved an increase of **3,000,000** shares for issuance under the 2017 Stock Incentive Plan on June 12, 2025[85](index=85&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Number of Shares | Weighted Average Exercise Price | | :-------------------------------- | :--------------- | :------------------------------ | | Outstanding as of Dec 31, 2024 | 2,814,850 | $10.71 | | Forfeited or cancelled | (230,932) | $14.76 | | Outstanding as of June 30, 2025 | 2,583,918 | $10.35 | | Exercisable at June 30, 2025 | 2,533,997 | $10.33 | Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2025) | Metric | Number of RSU Shares | Weighted Average Grant Date Fair Value | | :-------------------------------- | :------------------- | :------------------------------------- | | Outstanding as of Dec 31, 2024 | 6,038,732 | $1.97 | | Granted | 3,952,047 | $0.88 | | Vested and released | (1,593,781) | $2.10 | | Forfeited or cancelled | (2,689,125) | $1.46 | | Outstanding as of June 30, 2025 | 5,707,873 | $1.42 | Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $395 | $729 | $924 | $1,419 | | General and administrative | $319 | $1,384 | $1,346 | $2,717 | | **Total** | **$714** | **$2,113** | **$2,270** | **$4,136** | - Total unrecognized compensation expense for stock options was approximately **$0.3 million**, expected to be recognized in less than a year, while for RSUs it was approximately **$6.4 million**, expected over **2.79 years**[86](index=86&type=chunk)[87](index=87&type=chunk) [7. Restructuring](index=18&type=section&id=7.%20Restructuring) In October 2024, the company implemented a strategic restructuring and workforce reduction, incurring $1.1 million in related expenses by June 30, 2025. Retention awards totaling $4.4 million for non-executive employees and $1.2 million for executives were approved, with initial payments made in May 2025 upon achieving clinical milestones for the PIVOT-PO trial - The company recognized **$1.1 million** in restructuring expense related to the October 2024 workforce reduction by June 30, 2025, with no further charges expected[91](index=91&type=chunk) Restructuring Charges (in thousands) | Charge Type | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :-------------------------- | :--------------------------- | :--------------------------- | | Severance and other employee costs | $83 | $258 | | **Total restructuring charges** | **$83** | **$258** | - Retention awards of **$4.4 million** for non-executive employees and **$1.2 million** for executives were approved in connection with the restructuring, with initial payments made in May 2025 upon achievement of clinical milestones for the PIVOT-PO trial[93](index=93&type=chunk)[96](index=96&type=chunk) [8. Commitments and Contingencies](index=19&type=section&id=8.%20Commitments%20and%20Contingencies) The company is involved in various legal proceedings, including securities class action lawsuits and derivative actions that have been dismissed, and an ongoing SEC investigation related to past disclosures. It also has obligations under license agreements, operating leases, and indemnification agreements, with no material accruals for potential contingencies as of June 30, 2025 - Securities class action lawsuits and stockholder derivative actions filed against the company and its officers were dismissed in September and October 2024, and March 2025, respectively[105](index=105&type=chunk)[106](index=106&type=chunk) - The company received a 'Wells Notice' from the SEC on January 9, 2025, indicating a preliminary determination to recommend civil enforcement action related to public disclosures from March 2022 to May 2022 concerning tebipenem HBr[108](index=108&type=chunk) - The potential SEC action could include injunctions, civil monetary penalties, disgorgement, or other equitable relief, and the company is cooperating while maintaining its disclosures were appropriate[109](index=109&type=chunk)[111](index=111&type=chunk) - The company has obligations under license agreements (see Note 10) and an operating lease for its corporate headquarters[100](index=100&type=chunk)[101](index=101&type=chunk) [9. Government Contracts](index=21&type=section&id=9.%20Government%20Contracts) Spero Therapeutics has received significant funding from BARDA for tebipenem HBr development, with committed funding increasing to $65.6 million and $61.1 million recognized as of June 30, 2025. The NIAID contract for SPR206 was terminated for convenience in April 2025 following the company's decision to discontinue the program - BARDA contract for tebipenem HBr development increased committed funding to **$65.6 million**, with the period of performance extended through October 31, 2026[113](index=113&type=chunk) Grant Revenue (in thousands) | Contract | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | BARDA | $2,387 | $4,180 | $3,150 | $9,243 | | NIAID | $0 | $0.1 | $0.1 | $0.2 | | **Total** | **$2,387** | **$4,180** | **$3,150** | **$9,243** | - As of June 30, 2025, **$61.1 million** of grant revenue has been cumulatively recognized under the BARDA agreement[114](index=114&type=chunk) - The NIAID contract for SPR206, with **$10.5 million** committed funding, was terminated for convenience by NIAID on April 4, 2025, after the company ceased pursuing a Phase 2 clinical trial for SPR206[116](index=116&type=chunk)[117](index=117&type=chunk) [10. License, Collaboration and Service Agreements](index=21&type=section&id=10.%20License%2C%20Collaboration%20and%20Service%20Agreements) Spero Therapeutics has several license and collaboration agreements, most notably with GSK for tebipenem HBr, which includes an upfront payment, development milestones, and future royalties. The PIVOT-PO trial's early success led to an update in revenue recognition. Other agreements with Meiji, Vertex, Everest, and Pfizer cover SPR720 and SPR206, with SPR206 development now terminated, impacting future milestone recognition from Everest and Pfizer - Under the GSK License Agreement for tebipenem HBr, Spero received an upfront payment of **$66.0 million**, a **$30.0 million** development milestone in Q3 2023, and four **$23.8 million** installments for a **$95.0 million** development milestone, with the final payment received in Q3 2025[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) Remaining Potential Payments under GSK License Agreement (in millions) | Contingent Event | Milestone Payment | | :------------------------------------------------ | :---------------- | | Tebipenem NDA Submission by GSK | $25.0 | | Total potential commercial milestones (first sales) | $101.0 | | Total potential sales milestone payments | $225.0 | | Royalties on annual net sales | 1% (up to $750M), high single-digit (>$750M), low double-digit (>$1,000M) | - The PIVOT-PO Phase 3 trial for tebipenem HBr met its primary endpoint and stopped early for efficacy in May 2025, leading to an update in estimated costs and timeline for performance obligations under the GSK agreement, resulting in additional revenue recognition in Q2 2025[125](index=125&type=chunk)[150](index=150&type=chunk) - Collaboration revenue from GSK (related party) was **$11.8 million** for Q2 2025 (up from **$5.9 million** in Q2 2024) and **$16.9 million** for H1 2025 (up from **$10.0 million** in H1 2024)[150](index=150&type=chunk) - The NIAID contract for SPR206 was terminated in April 2025, and the company ceased development of SPR206, impacting future milestone payments from Everest (**$34.0 million** fully constrained) and Pfizer (**$12.6 million** deferred revenue remaining)[117](index=117&type=chunk)[166](index=166&type=chunk)[181](index=181&type=chunk) [11. Segment Information](index=29&type=section&id=11.%20Segment%20Information) Spero Therapeutics operates as a single segment, focusing on treatments for MDR bacterial infections. The segment information details revenues and expenses by program, showing a consolidated loss for both the three and six months ended June 30, 2025 and 2024 - The company manages its operations as a single operating segment, with its Chief Executive Officer serving as the Chief Operating Decision Maker (CODM)[183](index=183&type=chunk) Segment Revenues and Expenses (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $14,189 | $10,197 | $20,063 | $19,464 | | Less: Tebipenem HBr expenses | $6,694 | $14,283 | $15,363 | $22,016 | | Less: SPR720 expenses | $349 | $4,839 | $797 | $9,208 | | Less: SPR206 expenses | $0 | $114 | $49 | $346 | | Consolidated loss | $(1,700) | $(17,862) | $(15,566) | $(30,531) | - Tebipenem HBr expenses decreased significantly, while SPR720 and SPR206 expenses were substantially reduced or eliminated due to program reprioritization[184](index=184&type=chunk) [12. Net Loss per Share](index=30&type=section&id=12.%20Net%20Loss%20per%20Share) The basic and diluted net loss per share attributable to common stockholders decreased for both the three and six months ended June 30, 2025, compared to the prior year, reflecting the reduced net loss. Potentially dilutive securities were excluded as their effect would be anti-dilutive Net Loss per Share (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss attributable to common stockholders | $(1,700) | $(17,862) | $(15,566) | $(30,531) | | Weighted average shares outstanding | 56,026,767 | 53,957,766 | 55,703,275 | 53,740,901 | | **Net loss per share (basic and diluted)** | **$(0.03)** | **$(0.33)** | **$(0.28)** | **$(0.57)** | - Net loss per share improved from **$(0.33)** to **$(0.03)** for the three months and from **$(0.57)** to **$(0.28)** for the six months ended June 30, 2025[186](index=186&type=chunk) - Potentially dilutive securities, including **2,583,918** stock options and **5,707,873** unvested RSUs/PSUs as of June 30, 2025, were excluded from diluted EPS calculation due to their anti-dilutive effect[186](index=186&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key business developments, financial performance drivers, and liquidity outlook. It details the shift in strategic focus to tebipenem HBr, the discontinuation of other programs, and the financial impact of these decisions [Overview](index=31&type=section&id=Overview) Spero Therapeutics is a clinical-stage biopharmaceutical company focused on MDR bacterial infections. Its lead candidate, tebipenem HBr, successfully met its primary endpoint in a Phase 3 trial. The company has suspended SPR720 development and discontinued SPR206, leading to a strategic focus on tebipenem HBr. Despite a history of net losses and an accumulated deficit of $475.2 million, current cash and a final GSK milestone payment are expected to fund operations into 2028, though substantial additional funding will be required thereafter - Spero Therapeutics is a clinical-stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and multi-drug resistant (MDR) bacterial infections[188](index=188&type=chunk) - Tebipenem HBr's pivotal Phase 3 PIVOT-PO trial met its primary endpoint and stopped early for efficacy in May 2025[189](index=189&type=chunk) - Development of SPR720 (oral formulation) was suspended in October 2024 due to not meeting its primary endpoint in a Phase 2a trial, and SPR206 development was discontinued in March 2025[189](index=189&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$475.2 million** and cash and cash equivalents of **$31.2 million**[190](index=190&type=chunk) - The company believes its cash runway, including a final **$23.8 million** GSK payment received in Q3 2025, will fund operations into 2028, but substantial additional funding will be needed for continued operations and growth[190](index=190&type=chunk) [Recent Developments](index=32&type=section&id=Recent%20Developments) Recent developments include regaining compliance with Nasdaq's bid price requirement, significant management transitions with Esther Rajavelu appointed President and CEO, positive Phase 3 results for tebipenem HBr leading to early trial stoppage and planned NDA submission, and the discontinuation of the SPR206 program [Nasdaq Deficiency Letter and Regained Compliance](index=32&type=section&id=Nasdaq%20Deficiency%20Letter%20and%20Regained%20Compliance) Spero Therapeutics received a Nasdaq deficiency letter in February 2025 for its common stock bid price falling below $1.00, but successfully regained compliance by June 12, 2025 - Received a Nasdaq deficiency letter on February 25, 2025, for non-compliance with the **$1.00** bid price requirement[194](index=194&type=chunk) - Regained compliance with the bid price requirement on June 12, 2025, and the matter is now closed[194](index=194&type=chunk) [Management Transitions and Board Composition](index=32&type=section&id=Management%20Transitions%20and%20Board%20Composition) In January 2025, Frank Thomas was appointed Chairman of the Board, and Esther Rajavelu became Interim President and CEO, later appointed President and CEO in May 2025. Former CEO Satyavrat Shukla separated from the company and stepped down from the Board in May 2025 - Frank Thomas was appointed Chairman of the Board in January 2025[203](index=203&type=chunk) - Esther Rajavelu was appointed Interim President and Chief Executive Officer in January 2025, and then permanently appointed President and Chief Executive Officer, Chief Financial Officer, and Treasurer in May 2025, also elected to the Board in June 2025[196](index=196&type=chunk)[197](index=197&type=chunk)[203](index=203&type=chunk) - Satyavrat Shukla separated from the company and stepped down from the Board of Directors, effective May 2, 2025[198](index=198&type=chunk) [Tebipenem HBr](index=32&type=section&id=Tebipenem%20HBr) The pivotal Phase 3 PIVOT-PO trial for tebipenem HBr met its primary endpoint and was stopped early for efficacy in May 2025, with GSK planning to submit data for FDA filing in the second half of 2025. Remaining potential payments under the GSK License Agreement include regulatory, commercial, and sales milestones totaling up to $351.0 million, plus royalties - The pivotal Phase 3 PIVOT-PO trial for tebipenem HBr met its primary endpoint of non-inferiority and was stopped early for efficacy in May 2025, based on an interim analysis of **1,690** patients[200](index=200&type=chunk)[201](index=201&type=chunk) - GSK plans to work with U.S. regulatory authorities to include the trial data as part of an FDA filing in the second half of 2025[201](index=201&type=chunk) Remaining Potential Payments under GSK License Agreement (in millions) | Contingent Event | Milestone Payment | | :------------------------------------------------ | :---------------- | | Tebipenem NDA Submission by GSK | $25.0 | | Total potential commercial milestones (first sales) | $101.0 | | Total potential sales milestone payments | $225.0 | | Royalties on annual net net sales | 1% (up to $750M), high single-digit (>$750M), low double-digit (>$1,000M) | [SPR206](index=33&type=section&id=SPR206) Spero Therapeutics announced in March 2025 that it is no longer pursuing a Phase 2 clinical trial for SPR206, leading to the termination of its five-year contract with NIAID for convenience in April 2025 - In March 2025, the company announced it is no longer pursuing a Phase 2 clinical trial for SPR206[206](index=206&type=chunk) - NIAID terminated its five-year contract for SPR206 development for convenience, effective April 4, 2025[206](index=206&type=chunk) [Components of Our Results of Operations](index=33&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section outlines the revenue streams from grants and collaborations, and the categories of operating expenses, including research and development, general and administrative, and restructuring costs. It also covers other income and expenses, such as interest income and net other income/expense [Sales Revenue](index=33&type=section&id=Sales%20Revenue) Spero Therapeutics has not generated any revenue from product sales to date and its ability to do so in the future depends on successful clinical development and regulatory approval of its product candidates [Grant Revenue](index=33&type=section&id=Grant%20Revenue) The company anticipates that a portion of its revenue for the next few years will continue to come from payments under active government awards and any future awards [Collaboration Revenue](index=33&type=section&id=Collaboration%20Revenue) Collaboration revenue is derived from agreements with partners such as Pfizer and GSK [Operating Expenses](index=34&type=section&id=Operating%20Expenses) Operating expenses include research and development (R&D), general and administrative (G&A), and restructuring costs. R&D expenses are expensed as incurred and tracked by program, while G&A covers executive, finance, and administrative functions. Restructuring costs relate to the October 2024 workforce reduction - Research and development expenses include employee-related costs, preclinical and clinical development expenses, government award costs, CMO/CRO fees, facilities, and third-party licensing payments, all expensed as incurred[210](index=210&type=chunk)[214](index=214&type=chunk) - General and administrative expenses primarily consist of salaries, stock-based compensation, facility costs, and professional fees for legal, patent, consulting, and accounting services[216](index=216&type=chunk) - The company incurred approximately **$1.1 million** in restructuring costs related to the October 2024 workforce reduction, with all costs associated with the reduction incurred as of June 30, 2025[217](index=217&type=chunk) [Other Income (Expense)](index=35&type=section&id=Other%20Income%20(Expense)) Other income (expense) primarily consists of interest income from cash equivalents and the significant financing component of the GSK License Agreement, along with minor miscellaneous income and foreign currency fluctuations - Interest income is derived from cash equivalents (money market accounts) and the significant financing component of the GSK License Agreement[218](index=218&type=chunk) - Other income (expense), net, includes insignificant miscellaneous income and realized/unrealized gains/losses from foreign currency-denominated balances[219](index=219&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) The company's financial statements rely on estimates and assumptions in accordance with GAAP. Management evaluates these estimates continuously, and no changes were made to existing critical accounting policies from the Annual Report on Form 10-K for the year ended December 31, 2024 - The preparation of financial statements requires management to make significant estimates and assumptions, including for revenue recognition, clinical trial costs, R&D expenses, and stock-based awards[220](index=220&type=chunk) - No changes were made to the company's critical accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2024[221](index=221&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) The company experienced a reduced net loss for both the three and six months ended June 30, 2025, compared to 2024. This was primarily driven by a significant increase in collaboration revenue from GSK and substantial decreases in research and development expenses across all programs, partially offset by a decline in grant revenue [Comparison of the Three Months Ended June 30, 2025 and 2024](index=36&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the three months ended June 30, 2025, total revenues increased by $3.99 million, driven by a $5.90 million increase in GSK collaboration revenue, despite a $1.79 million decrease in grant revenue. Total operating expenses decreased by $12.63 million, primarily due to a $13.05 million reduction in R&D expenses, leading to a net loss reduction of $16.16 million Summary of Results of Operations (in thousands) | Metric | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Total revenues | $14,189 | $10,197 | $3,992 | | Total operating expenses | $16,633 | $29,258 | $(12,625) | | Net loss | $(1,700) | $(17,862) | $16,162 | Grant Revenue (in thousands) | Contract | 2025 | 2024 | $ Change | | :--------------- | :----- | :----- | :------- | | BARDA Contract | $2,387 | $4,103 | $(1,716) | | NIAID Contract | $0 | $77 | $(77) | | **Total** | **$2,387** | **$4,180** | **$(1,793)** | Collaboration Revenue (in thousands) | Partner | 2025 | 2024 | $ Change | | :-------------- | :----- | :----- | :------- | | GSK (Tebipenem HBr) | $11,802 | $5,903 | $5,899 | | Pfizer (SPR206) | $0 | $114 | $(114) | | **Total** | **$11,802** | **$6,017** | **$5,785** | Research and Development Expenses (in thousands) | Program/Category | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Tebipenem HBr | $6,694 | $14,283 | $(7,589) | | SPR720 | $349 | $4,839 | $(4,490) | | SPR206 | $0 | $114 | $(114) | | Personnel related | $2,611 | $3,383 | $(772) | | Facility related and other | $1,018 | $1,106 | $(88) | | **Total** | **$10,672** | **$23,725** | **$(13,053)** | General and Administrative Expenses (in thousands) | Category | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Personnel related | $3,368 | $3,179 | $189 | | Professional and consultant fees | $1,986 | $1,779 | $207 | | Facility related and other | $524 | $575 | $(51) | | **Total** | **$5,878** | **$5,533** | **$345** | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=38&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the six months ended June 30, 2025, total revenues increased by $0.60 million, primarily due to a $6.93 million increase in GSK collaboration revenue, partially offset by a $6.09 million decrease in grant revenue. Total operating expenses decreased by $15.27 million, mainly from a $16.78 million reduction in R&D expenses, resulting in a net loss reduction of $14.97 million Summary of Results of Operations (in thousands) | Metric | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Total revenues | $20,063 | $19,464 | $599 | | Total operating expenses | $37,238 | $52,507 | $(15,269) | | Net loss | $(15,566) | $(30,531) | $14,965 | Grant Revenue (in thousands) | Contract | 2025 | 2024 | $ Change | | :--------------- | :----- | :----- | :------- | | BARDA Contract | $3,122 | $9,011 | $(5,889) | | NIAID Contract | $28 | $232 | $(204) | | **Total** | **$3,150** | **$9,243** | **$(6,093)** | Collaboration Revenue (in thousands) | Partner | 2025 | 2024 | $ Change | | :-------------- | :----- | :----- | :------- | | GSK (Tebipenem HBr) | $16,901 | $9,967 | $6,934 | | Pfizer (SPR206) | $12 | $254 | $(242) | | **Total** | **$16,913** | **$10,221** | **$6,692** | Research and Development Expenses (in thousands) | Program/Category | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Tebipenem HBr | $15,363 | $22,016 | $(6,653) | | SPR720 | $797 | $9,208 | $(8,411) | | SPR206 | $49 | $346 | $(297) | | Personnel related | $5,948 | $6,933 | $(985) | | Facility related and other | $2,121 | $2,554 | $(433) | | **Total** | **$24,278** | **$41,057** | **$(16,779)** | General and Administrative Expenses (in thousands) | Category | 2025 | 2024 | $ Change | | :-------------------------------- | :----- | :----- | :------- | | Personnel related | $7,486 | $6,508 | $978 | | Professional and consultant fees | $4,249 | $3,809 | $440 | | Facility related and other | $967 | $1,133 | $(166) | | **Total** | **$12,702** | **$11,450** | **$1,252** | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Spero Therapeutics has historically incurred significant operating losses and relies on license agreements, government contracts, and equity offerings for funding. As of June 30, 2025, cash and cash equivalents were $31.2 million, with a final $23.8 million GSK payment received in Q3 2025, expected to fund operations into 2028. The company will require substantial additional funding to support its growth strategy and may need to reduce spending if capital is not secured - As of June 30, 2025, cash and cash equivalents totaled **$31.2 million**[250](index=250&type=chunk) - The company received the final **$23.8 million** payment under the GSK License Agreement in the third quarter of 2025[250](index=250&type=chunk) - Based on current cash and expected milestone payments, the company believes its cash runway will fund operating expenses and capital expenditures into 2028[260](index=260&type=chunk) Cash Flows Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | | Cash used in operating activities | $(21,695) | $(12,806) | | Net decrease in cash and cash equivalents | $(21,695) | $(12,806) | - Net cash used in operating activities increased to **$21.7 million** for the six months ended June 30, 2025, from **$12.8 million** in the prior year, primarily due to changes in collaboration receivable and deferred revenue[254](index=254&type=chunk)[255](index=255&type=chunk) - The company will require substantial additional funding beyond its current runway, seeking capital through equity/debt financings, collaborations, or government grants, and may delay or reduce development programs if funding is insufficient[261](index=261&type=chunk)[263](index=263&type=chunk)[361](index=361&type=chunk)[364](index=364&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Spero Therapeutics' primary market risk exposure is interest income sensitivity due to changes in U.S. Treasury interest rates, as its cash and cash equivalents are mainly in money market accounts. The company also faces foreign currency exchange rate exposure, primarily with the Euro, British Pound, and Australian dollar, though historically, these fluctuations have not materially impacted its financial statements - As of June 30, 2025, cash and cash equivalents were **$31.2 million**, primarily in money market accounts[269](index=269&type=chunk) - The primary market risk is interest income sensitivity to changes in U.S. Treasury interest rates[269](index=269&type=chunk) - The company is exposed to foreign currency exchange rate movements, mainly involving the Euro, British Pound, and Australian dollar, but historical impact has not been material[269](index=269&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level. No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025 - Disclosure controls and procedures were evaluated by management, with CEO and CFO participation, and deemed effective at the reasonable assurance level as of June 30, 2025[272](index=272&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[273](index=273&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) This section details the company's legal proceedings, including the dismissal of securities class action and derivative lawsuits. It also discloses the receipt of a 'Wells Notice' from the SEC, indicating a preliminary determination to recommend civil enforcement action related to past public disclosures, which could have a material adverse effect on the company - Two putative securities class action lawsuits and two stockholder derivative actions filed against the company and its officers were dismissed in September and October 2024, and March 2025, respectively[276](index=276&type=chunk)[277](index=277&type=chunk) - The company received a 'Wells Notice' from the SEC on January 9, 2025, regarding a preliminary determination to recommend civil enforcement action against the company and former executives for alleged violations of federal securities laws related to disclosures from March 2022 to May 2022 concerning tebipenem HBr[279](index=279&type=chunk)[280](index=280&type=chunk) - A Wells Notice is not a formal charge but a preliminary recommendation; potential actions could include injunctions, civil monetary penalties, disgorgement, or other equitable relief[281](index=281&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially and adversely affect Spero Therapeutics' business, financial condition, results of operations, and future growth prospects. Key risks include those related to product development and commercialization, financial position and capital needs, dependence on third parties, government contracts, intellectual property, regulatory compliance, employee matters, and common stock volatility [Risks Related to Product Development and Commercialization](index=44&type=section&id=Risks%20Related%20to%20Product%20Development%20and%20Commercialization) The company's business is substantially dependent on the tebipenem HBr program and its collaboration with GSK, following the suspension of SPR720 and discontinuation of SPR206. Risks include the uncertainty of FDA approval for tebipenem HBr, potential clinical trial failures, serious adverse events, lack of market acceptance, intense competition, and the inability to establish sales and marketing capabilities. Additionally, the company faces risks from expending resources on less profitable candidates, product liability lawsuits, environmental compliance, and cybersecurity incidents - The company's business is substantially dependent on the tebipenem HBr program and the GSK collaboration, following the suspension of SPR720 development and discontinuation of SPR206[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) - FDA approval for tebipenem HBr is not guaranteed, and any approval may come with restrictive labeling or requirements that impact commercialization attractiveness[287](index=287&type=chunk) - Clinical trials may fail to produce favorable results, incur additional costs, or experience delays due to various factors, including design disagreements, slow patient enrollment, or unforeseen safety issues[289](index=289&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[296](index=296&type=chunk) - Even if approved, product candidates may not achieve market acceptance due to physician reluctance, patient preferences, competition, or inadequate reimbursement, potentially limiting commercial success[312](index=312&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and expertise[321](index=321&type=chunk)[326](index=326&type=chunk) - Cybersecurity incidents or failures of internal computer systems could disrupt product development, lead to data loss, and expose the company to liability and reputational damage[343](index=343&type=chunk)[345](index=345&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=55&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) Spero Therapeutics has a history of significant operating losses and an accumulated deficit, requiring substantial additional funding to continue operations and advance product candidates. Failure to raise capital when needed could force delays or elimination of development programs, and future equity offerings may dilute existing stockholders. The company's limited operating history makes future viability difficult to evaluate, and its ability to use net operating loss carryforwards may be limited by ownership changes - The company has not generated revenue from product sales, has incurred losses in most years since inception, and expects substantial future losses, with an accumulated deficit of **$475.2 million** as of June 30, 2025[353](index=353&type=chunk)[354](index=354&type=chunk)[357](index=357&type=chunk)[359](index=359&type=chunk) - Substantial additional funding will be needed beyond the current cash runway (expected into 2028) to support continuing operations and growth strategy[361](index=361&type=chunk)[362](index=362&type=chunk)[364](index=364&type=chunk) - Raising additional capital through equity or convertible debt securities may materially dilute existing stockholders' ownership interests and could involve restrictive covenants if debt financing is pursued[365](index=365&type=chunk)[367](index=367&type=chunk) - The company has a limited operating history and no history of commercializing pharmaceutical products, making predictions about future success or viability uncertain[370](index=370&type=chunk) - Utilization of net operating loss carryforwards (NOLs) may be limited by future ownership changes or current tax legislation restricting NOL usage to **80%** of taxable income[371](index=371&type=chunk)[372](index=372&type=chunk) [Risks Related to Our Dependence on Third Parties](index=58&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Spero Therapeutics relies heavily on third-party collaborators for development and commercialization, and on contract manufacturers for preclinical and clinical supplies. Risks include collaborators failing to meet obligations or terminating agreements, difficulties in establishing new collaborations, and manufacturing delays, quality issues, or supply chain disruptions from third-party manufacturers. Failure to comply with license agreement obligations could also lead to loss of important rights - The company's ability to generate revenue from collaboration agreements depends on partners successfully performing their functions and achieving milestones, which is not guaranteed[373](index=373&type=chunk)[374](index=374&type=chunk) - Collaborators may delay clinical trials, provide insufficient funding, abandon product candidates, or have competing priorities, potentially leading to delays or termination of development[376](index=376&type=chunk) - Reliance on third parties for all nonclinical studies and clinical trials limits control over these activities, and their failure to perform or comply with regulations could delay or prevent regulatory approval[383](index=383&type=chunk)[384](index=384&type=chunk) - Dependence on third-party contract manufacturers for product candidates carries risks such as manufacturing delays, quality control issues, termination of agreements, and supply chain disruptions, especially from facilities in Asia[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[393](index=393&type=chunk) - Failure to comply with obligations under license agreements (e.g., with Meiji, GSK) could result in termination of agreements and loss of rights to develop, manufacture, or market product candidates[397](index=397&type=chunk)[402](index=402&type=chunk) [Risks Related to Our U.S. Government Contracts and to Certain Grant Agreements](index=63&type=section&id=Risks%20Related%20to%20Our%20U.S.%20Government%20Contracts%20and%20to%20Certain%20Grant%20Agreements) Government funding for programs introduces complexities and risks, including the government's ability to terminate agreements, claim intellectual property rights, audit costs, and impose compliance requirements. Failure to comply can lead to penalties and contract termination. Government agencies' unilateral control, audit risks, and frequently changing regulations make it more expensive and difficult to conduct business, potentially affecting intellectual property rights and increasing costs - Government funding adds complexity, with the U.S. government retaining rights such as termination for convenience, claiming intellectual property, auditing costs, and imposing U.S. manufacturing requirements[403](index=403&type=chunk)[404](index=404&type=chunk)[407](index=407&type=chunk) - Non-compliance with government contract requirements (e.g., specialized accounting, financial audits, public disclosures) can lead to contract or False Claims Act liability and termination[405](index=405&type=chunk) - The business is subject to audits by agencies like DHHS and DCAA, where negative outcomes could result in civil/criminal penalties, administrative sanctions, and reputational harm[408](index=408&type=chunk)[409](index=409&type=chunk) - Compliance with numerous and frequently changing government contracting laws and regulations (e.g., FAR, business ethics) increases costs and difficulties in retaining contract rights[410](index=410&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk) - U.S. government funding may affect intellectual property rights, potentially granting the government royalty-free use of developed technologies and imposing manufacturing requirements in the U.S[414](index=414&type=chunk) [Risks Related to Our Intellectual Property](index=65&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on obtaining and maintaining robust patent protection for its technology and product candidates, which is uncertain due to complex legal and factual questions in the biotechnology industry. Patents may not issue or provide sufficient protection, and competitors could circumvent them. The company faces risks of costly and time-consuming litigation to protect its intellectual property or defend against infringement claims by third parties. Additionally, the confidentiality of trade secrets is crucial, and failure to protect them could harm the business, as could issues with trademark registration and enforcement - Failure to obtain and maintain sufficient patent protection for technology or product candidates could allow competitors to commercialize similar products, adversely affecting the company's competitive advantage and profitability[415](index=415&type=chunk)[416](index=416&type=chunk) - The patent position in biotechnology is highly uncertain; pending applications may not result in issued patents, and changes in patent laws or interpretations could diminish patent value or narrow scope[417](index=417&type=chunk)[418](index=418&type=chunk) - The company may become involved in expensive, time-consuming, and potentially unsuccessful lawsuits to protect or enforce its patents, or defend against infringement claims by third parties[424](index=424&type=chunk)[426](index=426&type=chunk)[427](index=427&type=chunk)[429](index=429&type=chunk) - Inability to protect the confidentiality of trade secrets, including unpatented know-how and proprietary information, could materially adversely affect the value of technology and harm the business[433](index=433&type=chunk) - Failure to enforce registered trademarks or secure registration of pending trademark applications could adversely affect the business, potentially requiring name changes or limiting enforcement against third parties[434](index=434&type=chunk)[435](index=435&type=chunk)[436](index=436&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=68&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) Obtaining regulatory approvals for product candidates is unpredictable, lengthy, and essential for commercialization, with no guarantee of success even with fast track or priority review designations. Post-approval, products face ongoing regulatory obligations and potential restrictions or withdrawal if compliance fails. The company's relationships with healthcare providers and payors are subject to complex anti-kickback, fraud, and abuse laws, with non-compliance risking severe penalties. Evolving healthcare policies and legislation, such as the ACA and IRA, may increase costs, reduce reimbursement, and impact drug pricing, while disruptions at government agencies could hinder timely approvals - Failure or delays in obtaining required regulatory approvals from the FDA or comparable foreign authorities will prevent commercialization and materially impair revenue generation[437](index=437&type=chunk)[439](index=439&type=chunk)[444](index=444&type=chunk) - Fast track, QIDP, or priority review designations do not guarantee faster development, regulatory review, or approval, nor do they assure FDA approval[447](index=447&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) - Even with an SPA agreement, FDA approval is not guaranteed, and the FDA retains discretion to revoke or alter its agreement, or interpret data differently, potentially delaying or preventing approval[450](index=450&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) - If approved, product candidates will be subject to ongoing regulatory requirements (labeling, manufacturing, promotion) and potential restrictions or withdrawal from the market if compliance issues or unanticipated problems arise[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) - Relationships with customers and third-party payors are subject to anti-kickback, fraud and abuse, and other healthcare laws, with non-compliance risking criminal sanctions, civil penalties, and exclusion from government programs[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk) - Recently enacted and future policies (e.g., ACA, IRA, executive orders on drug pricing) and legislation may increase the difficulty and cost of obtaining marketing approval, affect reimbursement, and introduce pricing pressures[471](index=471&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk)[474](index=474&type=chunk)[476](index=476&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk) - Disruptions at the FDA and other government agencies (e.g., funding cuts, personnel losses, government shutdowns) could hinder timely guidance and approval of product candidates[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk)[495](index=495&type=chunk)[496](index=496&type=chunk) [Risks Related to Employee Matters and Managing Growth](index=80&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20Growth) The company's future success depends on retaining key executives and attracting qualified personnel, which is challenging given high industry turnover and intense competition. The October 2024 restructuring, which reduced the workforce by 39%, could cause disruptions and further turnover. Operating in international markets, if approvals are obtained, introduces additional risks such as intellectual property protection issues, trade barriers, economic instability, and compliance with foreign regulations - Future success depends on retaining key executives and attracting, retaining, and motivating qualified personnel, which is difficult due to high industry turnover and intense competition[500](index=500&type=chunk)[502](index=502&type=chunk) - The October 2024 restructuring, which reduced the workforce by **39%**, could result in disruptions, loss of continuity, and increased turnover of key officers and employees[501](index=501&type=chunk)[503](index=503&type=chunk) - Conducting business in international markets, if foreign approvals are obtained, subjects the company to additional risks including reduced intellectual property protection, trade barriers, economic/political instability, and compliance with foreign regulations[504](index=504&type=chunk)[506](index=506&type=chunk) [Risks Related to Our Common Stock](index=81&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The company's common stock price has been and may continue to be volatile, influenced by various factors including clinical trial results, regulatory developments, and market conditions. The ongoing SEC Wells Notice could materially adversely affect the stock price. While the company recently regained Nasdaq compliance, future delisting remains a risk. Lack of analyst coverage or unfavorable research could also depress the share price. Unstable global economic conditions may impact the business and stock price. Management has broad discretion over cash reserves, and the company does not anticipate paying cash dividends. Corporate charter provisions and Delaware law could make acquisitions more difficult - The price of the common stock has been and may continue to be volatile, influenced by factors such as clinical trial results, regulatory developments, competition, and general market conditions[505](index=505&type=chunk)[506](index=506&type=chunk) - The SEC Wells Notice, contemplating a civil enforcement action, could have a material adverse effect on the business, financial condition, results of operations, prospects, and stock price[508](index=508&type=chunk)[509](index=509&type=chunk) - The company recently regained compliance with Nasdaq's **$1.00** bid price requirement, but future failure to maintain listing requirements could lead to delisting, negatively affecting market price and liquidity[513](index=513&type=chunk)[514](index=514&type=chunk) - Unstable global economic and political conditions, including interest rate volatility, inflation, and geopolitical conflicts, could adversely affect the business, financial condition, stock price, and ability to raise capital[516](index=516&type=chunk)[518](index=518&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, requiring stockholders to rely on capital appreciation for returns[525](index=525&type=chunk) - Provisions in corporate charter documents and Delaware law could make an acquisition of the company more difficult and potentially prevent attempts by stockholders to replace management[526](index=526&type=chunk)[527](index=527&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=85&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the reporting period - No unregistered sales of equity securities or use of proceeds occurred during the period[534](index=534&type=chunk) [Item 3. Defaults Upon Senior Securities](index=85&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred during the period[535](index=535&type=chunk) [Item 4. Mine Safety Disclosures](index=85&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[536](index=536&type=chunk) [Item 5. Other Information](index=85&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarterly period - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarterly period[538](index=538&type=chunk) [Item 6. Exhibits](index=86&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, employment agreements, and certifications - Exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, 2017 Stock Incentive Plan, Separation Agreement for Satyavrat Shukla, Amended and Restated Employment Agreement for Esther Rajavelu, and certifications under Sarbanes-Oxley Act[539](index=539&type=chunk) [Signatures](index=88&type=section&id=Signatures) The report is duly signed on behalf of Spero Therapeutics, Inc. by Esther Rajavelu, in her capacity as President, Chief Executive Officer, Chief Financial Officer, and Treasurer, on August 12, 2025 - The report was signed by Esther Rajavelu, President, Chief Executive Officer, Chief Financial Officer, and Treasurer, on August 12, 2025[544](index=544&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) Spero Therapeutics reported Q2 2025 results, highlighting the tebipenem Phase 3 PIVOT-PO trial's primary endpoint success for cUTI treatment [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The tebipenem Phase 3 PIVOT-PO trial met its primary endpoint, addressing a critical unmet need for oral carbapenems in cUTI - The tebipenem Phase 3 PIVOT-PO trial met its primary endpoint, marking a **significant milestone** for this program[2](index=2&type=chunk) - There remains a **critical unmet need** for an oral carbapenem to treat complicated urinary tract infections (cUTI), including pyelonephritis[2](index=2&type=chunk) - If approved, tebipenem HBr could set a **new standard of care** for these infections, with the potential to shorten hospital stays, improve patient outcomes, and reduce pressure on healthcare resources[2](index=2&type=chunk) [Business Update](index=1&type=section&id=Business%20Update) Spero Therapeutics updated on pipeline programs, with Tebipenem HBr achieving Phase 3 success and SPR720's NTM-PD program suspended [Pipeline Update](index=1&type=section&id=Pipeline%20Update) Key pipeline updates include Tebipenem HBr's successful Phase 3 trial and planned FDA filing, while the SPR720 program was suspended [Tebipenem HBr](index=1&type=section&id=Tebipenem%20HBr) Tebipenem HBr, an investigational oral carbapenem, achieved its primary endpoint in the Phase 3 PIVOT-PO trial for cUTI, with an FDA filing planned for 2H 2025 - Tebipenem HBr is an investigational oral carbapenem antibiotic being developed for the treatment of cUTI, including pyelonephritis[3](index=3&type=chunk) - The PIVOT-PO Phase 3 trial evaluating tebipenem HBr in cUTI patients was **stopped early for efficacy** following review by an independent data monitoring committee (IDMC)[4](index=4&type=chunk) - The Phase 3 PIVOT-PO trial met the primary endpoint of **non-inferiority of tebipenem HBr** compared to intravenous imipenem-cilastatin in hospitalized adult patients with cUTI[5](index=5&type=chunk) - Spero, along with its development partner, GSK, plans to submit data from the PIVOT-PO trial as part of a planned US Food and Drug Administration (FDA) filing in **2H 2025**[4](index=4&type=chunk)[5](index=5&type=chunk) [SPR720](index=2&type=section&id=SPR720) The SPR720 oral development program for NTM-PD was suspended in Q4 2024 after failing to meet its primary endpoint in a Phase 2a trial - SPR720 is an investigational prodrug that converts to SPR719, targeting the ATPase site of DNA gyrase B in mycobacteria for nontuberculous mycobacterium pulmonary disease (NTM-PD)[6](index=6&type=chunk) - The oral development program in NTM-PD was **suspended in 4Q 2024** after a planned interim analysis of the Phase 2a trial demonstrated it did not meet its primary endpoint[11](index=11&type=chunk) [Corporate Developments](index=2&type=section&id=Corporate%20Update) Spero Therapeutics announced new leadership, projected funding into 2028, and adjusted potential commercial milestone payments from GSK - Esther Rajavelu was appointed as Spero's President and Chief Executive Officer, effective May 2, 2025, and continues to serve as the Company's Chief Financial Officer and Treasurer[11](index=11&type=chunk) - Existing cash and cash equivalents, together with earned and non-contingent development milestone payments from GSK (including a final **$23.8 million payment received in August 2025**), are estimated to be sufficient to fund operating expenses and capital expenditures **into 2028**[4](index=4&type=chunk)[11](index=11&type=chunk) - Pursuant to the GSK License Agreement, aggregate potential commercial milestone payments contingent upon first sales were adjusted from up to **$150.0 million to up to $101.0 million** after PIVOT-PO was stopped early for efficacy, reducing overall costs to Spero[11](index=11&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Spero Therapeutics reported Q2 2025 financial results, showing a reduced net loss driven by increased collaboration revenue and lower R&D expenses [Second Quarter 2025 Financial Overview](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Overview) Spero Therapeutics reported a reduced net loss for Q2 2025, driven by increased GSK collaboration revenue and significantly lower R&D expenses Key Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------- | :--------------------- | :--------------------- | :----------- | | Net Loss | $(1,700) | $(17,862) | $(16,162) decrease | | Diluted Net Loss per Share | $(0.03) | $(0.33) | $(0.30) decrease | | Total Revenue | $14,189 | $10,197 | $3,992 increase | | R&D Expenses | $10,672 | $23,725 | $(13,053) decrease | | G&A Expenses | $5,878 | $5,533 | $345 increase | - The revenue increase for the second quarter of 2025 was primarily due to **collaboration revenue from GSK**[11](index=11&type=chunk) - The decrease in research and development expenses compared with the prior year period was primarily due to **reduced clinical expense related to the PIVOT-PO trial**[11](index=11&type=chunk) - The increase in general and administrative expenses compared with the prior year-period was primarily due to **increased personnel and professional service expense**[11](index=11&type=chunk) [Condensed Consolidated Balance Sheet Data](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Data) The balance sheet shows decreases in cash, total assets, liabilities, and equity as of June 30, 2025, compared to December 31, 2024 Condensed Consolidated Balance Sheet Data | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $31,194 | $52,889 | | Other assets | $30,925 | $57,654 | | Total assets | $62,119 | $110,543 | | Total liabilities | $29,291 | $64,420 | | Total stockholder's equity | $32,828 | $46,123 | | Total liabilities and stockholders' equity | $62,119 | $110,543 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations detail Q2 2025 revenues and expenses, showing increased collaboration revenue and decreased R&D, leading to a lower net loss Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Grant revenue | $2,387 | $4,180 | $3,150 | $9,243 | | Collaboration revenue - related party | $11,802 | $5,903 | $16,901 | $9,967 | | Collaboration revenue | $— | $114 | $12 | $254 | | **Total revenues** | **$14,189** | **$10,197** | **$20,063** | **$19,464** | | Research and development | $10,672 | $23,725 | $24,278 | $41,057 | | General and administrative | $5,878 | $5,533 | $12,702 | $11,450 | | Restructuring | $83 | $— | $258 | $— | | **Total operating expenses** | **$16,633** | **$29,258** | **$37,238** | **$52,507** | | Loss from operations | $(2,444) | $(19,061) | $(17,175) | $(33,043) | | Total other income, net | $744 | $1,199 | $1,609 | $2,512 | | **Net loss** | **$(1,700)** | **$(17,862)** | **$(15,566)** | **$(30,531)** | | Net loss per share, basic and diluted | $(0.03) | $(0.33) | $(0.28) | $(0.57) | | Weighted average shares outstanding | 56,026,767 | 53,957,766 | 55,703,275 | 53,740,901 | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides details on the Q2 2025 conference call, research support, company overview, forward-looking statements, and contact information [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Live%20Webcast) Spero management hosted a conference call and webcast on August 12, 2025, to discuss Q2 financial results and provide a business update - Spero management hosted a conference call and live audio webcast at **4:30 p.m. ET on August 12, 2025**, to discuss the second quarter financial results and provide a business update[10](index=10&type=chunk) - Access to the call was available via dial-in (domestic: 1-844-825-9789, international: 1-412-317-5180, conference ID 10200686) or a webcast link on the 'Investor Relations' page of the Spero Corporate Website[12](index=12&type=chunk) [Research Support](index=3&type=section&id=Research%20Support) Certain tebipenem HBr studies received federal funding from the Department of Health and Human Services and BARDA - Select tebipenem HBr studies have been funded in part with federal funds from the Department of Health and Human Services; Administration for Strategic Preparedness and Response; and Biomedical Advanced Research and Development Authority (BARDA), under contract number HHSO100201800015C[14](index=14&type=chunk) [About Spero Therapeutics](index=3&type=section&id=About%20Spero%20Therapeutics) Spero Therapeutics is a clinical-stage biopharmaceutical company focused on novel treatments for rare diseases and MDR bacterial infections - Spero Therapeutics is a clinical-stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and multi-drug resistant (MDR) bacterial infections with high unmet need[15](index=15&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) This section outlines risks and uncertainties that could cause actual results to differ materially from forward-looking projections - Forward-looking statements are subject to important risks, uncertainties, and other factors that may cause actual results to differ materially, including those related to the timing, progress, and results of Spero's Phase 3 PIVOT-PO trial[16](index=16&type=chunk) - Risks include whether tebipenem HBr will advance through clinical development, warrant FDA submission, receive approval, achieve successful commercial launch, and market acceptance[16](index=16&type=chunk) - Other factors include Spero's reliance on third parties (e.g., GSK) to manufacture, develop, and commercialize product candidates, the need for additional funding, ability to retain key personnel, leadership transitions, and sufficiency of cash resources[16](index=16&type=chunk)[17](index=17&type=chunk) [Contacts](index=4&type=section&id=Contacts) Contact information is provided for investor relations and media inquiries - Investor Relations Contact: Shai Biran, PhD, Spero Therapeutics, IR@Sperotherapeutics.com[18](index=18&type=chunk) - Media Inquiries: media@sperotherapeutics.com[18](index=18&type=chunk)

Core Viewpoint - Spero Therapeutics reported significant progress in its tebipenem HBr program, with the Phase 3 PIVOT-PO trial meeting its primary endpoint, indicating potential for a new standard of care in treating complicated urinary tract infections (cUTI) [2][6][7]. Financial Results - For Q2 2025, Spero reported a net loss of $1.7 million, a significant reduction from a net loss of $17.9 million in Q2 2024, translating to a diluted net loss per share of $0.03 compared to $0.33 in the previous year [17][20]. - Total revenue for Q2 2025 was $14.2 million, up from $10.2 million in Q2 2024, primarily driven by collaboration revenue from GSK [17][20]. - Research and development expenses decreased to $10.7 million in Q2 2025 from $23.7 million in Q2 2024, attributed to reduced clinical expenses related to the PIVOT-PO trial [17][20]. - General and administrative expenses increased slightly to $5.9 million in Q2 2025 from $5.5 million in Q2 2024, mainly due to higher personnel and professional service costs [17][20]. Pipeline Update - Tebipenem HBr is being developed as an oral carbapenem antibiotic for treating cUTI, including pyelonephritis, with the potential to reduce hospital stays and improve patient outcomes [3][6]. - The PIVOT-PO trial was stopped early for efficacy, with plans to submit data to the FDA in the second half of 2025 [6][7]. - The oral development program for SPR720 in nontuberculous mycobacterium pulmonary disease (NTM-PD) was suspended following an interim analysis that did not meet its primary endpoint [8]. Corporate Update - Esther Rajavelu was appointed as President and CEO of Spero effective May 2, 2025, and continues to serve as Chief Financial Officer [8]. - As of June 30, 2025, Spero had cash and cash equivalents of $31.2 million, with projections to fund operations into 2028 [9][19].

Core Insights - Spero Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing treatments for rare diseases and multi-drug resistant bacterial infections [1][3] - The company will host a conference call on August 12, 2025, at 4:30 p.m. ET to report its financial results for the second quarter of 2025 and provide a business update [1] Company Information - Spero Therapeutics is headquartered in Cambridge, Massachusetts [3] - The company specializes in addressing high unmet needs in the treatment of rare diseases and multi-drug resistant bacterial infections [3] - For further information, Spero Therapeutics maintains an investor relations page on their corporate website [2][3]

Tebipenem HBr (cUTI) - Tebipenem HBr is in Phase 3 clinical trials for complicated urinary tract infections (cUTI)[3] - The Phase 3 trial met its primary endpoint following a pre-specified interim analysis (IA) of data from 1,690 enrolled patients[18] - Approximately 2.9 million annual cUTI treatment episodes are attributed to $6+ billion in US healthcare costs[16] - Spero granted GSK an exclusive license for Tebipenem HBr (ex-Asia) and received $66 million upfront and $9 million in common stock investment[32] - Spero is eligible to receive up to $400 million in additional potential regulatory, commercial, and sales milestone payments, as well as royalties from GSK[32] - Spero qualified to receive $95 million in development milestones, with $23.75 million to be received in 2H 2025[33] SPR720 (NTM-PD) - The company has suspended its current development program for SPR720[6, 34] - An interim analysis of a Phase 2a oral study did not show sufficient separation from placebo, highlighting potential oral dose-limiting safety issues in subjects dosed at 1,000 mg orally once daily[37] Financial Foundation - Spero received $30 million upon SPA agreement with the FDA[33] - Spero to receive tiered low-single digit to low-double digit (if sales exceed $1 billion) tiered royalties on net product sales of Tebipenem HBr[33]

Group 1 - Spero Therapeutics has decided to stop its PIVOT-PO Phase 3 trial early, following the recommendation of the IDMC [1] - The trial's objective of non-inferiority to intravenous imipenem-cilastatin was achieved [1]

Core Viewpoint - GSK and Spero Therapeutics announced the early termination of the pivotal phase 3 PIVOT-PO trial for tebipenem HBr due to efficacy, leading to a significant increase in Spero's stock price by 245.89% [1] Group 1: Trial Results and Efficacy - The trial demonstrated non-inferiority of tebipenem HBr compared to intravenous imipenem-cilastatin in treating complicated urinary tract infections (cUTIs) [3] - The Independent Data Monitoring Committee (IDMC) found no new safety concerns, with diarrhea and headache being the most reported adverse events [3] Group 2: Market Implications and Regulatory Plans - If approved, tebipenem HBr would be the first oral carbapenem antibiotic for cUTIs in the U.S., enhancing GSK's anti-infectives portfolio and addressing antimicrobial resistance [2][4] - GSK plans to collaborate with U.S. regulatory authorities to submit data for approval in 2025 [4] Group 3: Financial and Healthcare Context - The development of tebipenem HBr is supported by federal funds from various U.S. health departments, highlighting the drug's significance in addressing drug-resistant infections [5] - An estimated 2.9 million cases of cUTIs are treated annually in the U.S., with current treatments primarily requiring intravenous administration [5] Group 4: Previous Developments - This marks GSK's second anti-infective program to be halted early for efficacy in Phase 3, following the gepotidacin trials in 2022 [6] - GSK's Blujepa (gepotidacin) was approved by the FDA for uncomplicated urinary tract infections in March [6] Group 5: Licensing Agreement - In September 2022, GSK entered an exclusive license agreement with Spero Therapeutics for the development and commercialization of tebipenem HBr, excluding certain Asian markets [7]

Group 1: Market Overview - The three major U.S. stock indices opened slightly higher on May 28, with the Dow Jones up 0.05%, S&P 500 up 0.01%, and Nasdaq down 0.03% [1] - Investor focus has shifted from trade war tensions to the latest U.S. tax reform bill, with significant attention on Nvidia's upcoming earnings report [1][10] - Major tech stocks showed mixed performance, with Nvidia down 0.2% ahead of its earnings release [1] Group 2: Trade War Developments - Recent signals indicate a de-escalation in the U.S. trade war, including President Trump's postponement of high tariffs on the EU [5] - The ASEAN leaders expressed concerns over the uncertainty brought by U.S. tariffs and emphasized the need for trade diversification [5] - Current baseline tariffs are at 10%, with potential reductions for countries providing favorable conditions [5] Group 3: Tax Reform Concerns - The latest U.S. tax reform bill is projected to increase the deficit by $3.8 trillion over the next decade, with $2.2 trillion (approximately 58%) occurring in the first five years [8] - Analysts from Deutsche Bank and Morgan Stanley highlight that the deficit will remain above 6% of GDP in the coming years, with the tax reform contributing to this increase [9] Group 4: Nvidia's Earnings Expectations - Nvidia is set to release its earnings report, with analysts expecting revenue of $43.28 billion for the quarter, a year-over-year growth of 66% [11] - The anticipated net profit is around $19 billion, reflecting a 31% increase, although this growth rate is significantly lower than the previous year's 260% [11] - Market attention is on the supply situation of Nvidia's new Blackwell chips and its performance in the Middle East and China [11]