Spero Therapeutics, Inc. (NASDAQ:SPRO) Q1 2023 Earnings Conference Call May 11, 2023 4:30 PM ET Company Participants Ted Jenkins – Vice President, Investor Relations and Strategic Finance Ankit Mahadevia – Chief Executive Officer Sath Shukla – Chief financial Officer Kamal Hamed – Chief Medical Officer Conference Call Participants Louise Chen – Cantor Ritu Baral – TD Cowen Gavin Clark-Gartner – Evercore ISI Boobalan Pachaiyappan – H.C. Wainwright Operator Good afternoon, and welcome to the Spero Therapeutic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38266 SPERO THERAPEUTICS, INC. (Registrant's telephone number, including area code) Securities registered pursuant to Section 1 ...

Spero Therapeutics, Inc. (NASDAQ:SPRO) Q4 2022 Earnings Conference Call March 30, 2023 4:30 PM ET Company Participants Ted Jenkins - VP & Head, IR Ankit Mahadevia - Co-Founder, President, CEO & Director Kamal Hamed - Chief Medical Officer Satyavrat Shukla - CFO & Treasurer Conference Call Participants Louise Chen - Cantor Fitzgerald & Co. Operator Good afternoon, and welcome to Spero Therapeutics Fourth Quarter and Year-End 2022 Financial Results Conference Call. [Operator Instructions]. Please be advised t ...

Product Development and Regulatory Approval - The company currently has no products approved for sale and has invested a significant portion of its resources in the development of tebipenem HBr for treating bacterial infections causing cUTI[218]. - The timeline for obtaining FDA approval for tebipenem HBr may impact its commercialization attractiveness through the partnership with GSK[218]. - Clinical trials are expensive and can take many years to complete, with inherent uncertainties regarding outcomes[219]. - The company may face significant setbacks in clinical trials, even after promising results in earlier studies[220]. - Variability in safety and efficacy results can occur between different trials of the same product candidate due to various factors[222]. - Delays in patient enrollment for clinical trials could significantly increase development costs and slow down the approval process[228]. - The company may incur additional unplanned costs and face delays in obtaining marketing approval for its product candidates[225]. - Serious adverse events or undesirable side effects could lead to interruptions or halts in clinical trials, affecting regulatory approval[232]. - The company may need to abandon product development or limit it to specific uses if unexpected adverse events occur during trials[233]. - Regulatory authorities may impose additional requirements or withdraw approvals if serious adverse events are identified post-marketing[235]. - The lengthy review process and unpredictability of clinical trial results may result in failure to obtain regulatory approval, significantly harming the company's business and financial condition[358]. - The company has limited experience in filing applications for marketing approvals and relies on third-party contract research organizations for assistance[354]. - The FDA's approval policies and requirements for clinical data may change during the development of product candidates, impacting the approval process[355]. - The company has not obtained regulatory approval for any product candidate to date, and it is possible that none of its future candidates will receive approval[356]. - The company faces challenges in obtaining marketing approvals in international jurisdictions, which may delay or prevent the marketing of product candidates abroad[369]. - Regulatory approvals, if granted, will require ongoing compliance and could lead to significant additional expenses for the company[370]. - Marketing approvals may come with limitations on indicated uses and may require costly post-marketing testing and surveillance[371]. - The FDA imposes stringent regulations on post-approval marketing and promotion, and non-compliance could lead to enforcement actions[372]. Financial Condition and Capital Requirements - The company reported a net loss of $46.4 million for the year ended December 31, 2022, with no revenue generated from product sales since its inception in 2013[272]. - The company expects to incur significant expenses and increasing operating losses for the foreseeable future as it advances product candidates through preclinical and clinical development[274]. - The company believes its existing cash and cash equivalents will fund operating expenses for at least 12 months from the issuance of the financial statements, with a cash runway sufficient to extend beyond 2024[273][279]. - The company has a history of losses and anticipates substantial future losses, which could adversely affect stockholders' equity and working capital[276]. - The company may need to raise additional capital through equity or debt financings, collaborations, or grant funding to continue operations[273][278]. - The company has not maintained insurance for environmental liability or toxic tort claims, which may expose it to significant costs[260]. - The company has received an upfront payment of $66 million from GSK for securing rights to tebipenem HBr, with potential milestone payments totaling approximately $150 million for development milestones[316]. - The company is obligated to pay future milestone payments of up to $1 million upon achieving specified regulatory milestones for tebipenem HBr[315]. - As of December 31, 2022, the company had net operating loss carryforwards (NOLs) of $291.9 million federally, $282.9 million at the state level, and $4.6 million internationally[284]. - The federal NOLs of $73.0 million will expire between 2033 and 2037, while approximately $218.9 million can be carried forward indefinitely[284]. - The company filed a universal shelf registration statement with the SEC for the sale of up to $300.0 million in various securities, including $75.0 million of common stock available for issuance[281]. - The company may seek additional capital through public or private equity offerings, debt financings, collaborations, and government funding arrangements[282]. - The company has broad discretion in the use of cash reserves, which may not be applied effectively, risking financial losses and impacting stock price[407]. - The company does not anticipate paying any cash dividends in the foreseeable future, relying on capital appreciation for stockholder returns[413]. Market Competition and Commercialization Challenges - The company may face challenges in achieving market acceptance for its product candidates, which could adversely affect commercial success and revenue generation[236]. - Competition from major pharmaceutical and biotechnology companies is significant, with competitors potentially developing more effective or less costly products[243]. - Tebipenem HBr, if approved, may face competition from established therapies like Levaquin and Cipro, which could impact its market position[244]. - The company anticipates that some product candidates will be administered in hospital settings, where reimbursement challenges may affect adoption[249]. - Coverage and reimbursement from government programs and third-party payors are critical for the commercial success of outpatient products[250]. - The emergence of bacterial resistance to product candidates could significantly impact their revenue potential[252]. - The company aims to discover and develop a portfolio of therapeutics for drug-resistant infections, which is essential for its growth strategy[254]. - Product liability lawsuits could divert resources and limit commercialization efforts, posing a significant risk to the company[256]. Operational Risks and Compliance - The company is subject to numerous environmental, health, and safety laws, and non-compliance could result in substantial fines or penalties[259][261]. - The company faces risks related to cybersecurity threats that could disrupt product development programs and lead to liability[262][263]. - The COVID-19 pandemic has adversely impacted the company's operations, including preclinical studies and clinical trials, with ongoing monitoring of its effects[270][271]. - The company relies on third parties for conducting all nonclinical studies and clinical trials, which poses risks if these parties do not meet their obligations[300]. - The company may face significant competition in securing collaborations for product development and commercialization[293]. - The company is subject to audits by U.S. government agencies, and negative outcomes could impact its business operations[327]. - The company must register clinical trials and post results on ClinicalTrials.gov, with non-compliance potentially leading to fines and adverse publicity[1]. - The company faces potential civil and criminal penalties, including contract termination and fines, if audits reveal improper cost allocations or illegal activities[328]. - Changes in government contracting laws and regulations could adversely affect the company's ability to maintain existing contracts and secure new ones, impacting operational results[331]. - The company may lose profits and face suspension of payments if contracts are terminated due to violations of laws or regulations[332]. - The company is exposed to risks of misconduct by employees and third parties, which could lead to regulatory sanctions and harm its reputation[387]. - The company has undertaken internal restructuring activities that may disrupt its business and adversely affect its financial condition[394]. - The company is at risk of losing key executives, which could significantly harm its ability to implement its business strategy[393]. Intellectual Property and Legal Risks - The company’s intellectual property rights may be affected by government contracts, particularly those funded by BARDA, which could grant the government certain rights to patents[334]. - The company’s ability to protect its proprietary technology through patents is uncertain, with potential challenges from competitors leading to loss of competitive advantage[335]. - The patent application process is costly and time-consuming, and the company may not be able to secure necessary patent protections in a timely manner[335]. - The company may face litigation regarding its patents, which could be expensive and time-consuming, potentially affecting its competitive position[342]. - The company could be forced to cease development or commercialization of products if found to infringe third-party intellectual property rights[346]. - Claims of misappropriation of intellectual property by the company or its employees could lead to costly litigation and distract management[347]. - The company may struggle to enforce ownership of intellectual property if agreements with employees and contractors are not successfully executed[348]. Corporate Governance and Stockholder Matters - The company reduced its workforce from 146 full-time employees as of December 31, 2021, to 41 full-time employees by the end of Q2 2022 following a restructuring[392]. - The company received a deficiency letter from Nasdaq on August 8, 2022, due to the closing bid price of its common stock being below the $1.00 requirement for 30 consecutive trading days[400]. - The company regained compliance with the Nasdaq Bid Price Requirement on October 6, 2022, after the closing bid price was at least $1.00 per share for a minimum of 10 consecutive trading days[400]. - The company is subject to increased costs and compliance requirements as a public entity, impacting operational efficiency[409]. - The market value of the company's common stock held by non-affiliates must remain below $250 million to qualify as a smaller reporting company, affecting disclosure requirements[408]. - The company has issued a total of 3,215,000 shares of Series D Convertible Preferred Stock, convertible on a one-to-one basis into common stock[406]. - The exclusive forum provision in the corporate charter may limit stockholder rights in certain legal actions, creating uncertainty[416]. - Provisions in the corporate charter may hinder beneficial acquisitions and complicate management changes, potentially depressing stock price[414]. - The company has not declared or paid cash dividends historically, indicating a focus on reinvestment rather than shareholder payouts[413].

Spero Therapeutics, Inc. (NASDAQ:SPRO) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET Company Participants Ted Jenkins - Vice President, Investor Relations & Strategic Finance Ankit Mahadevia - Chief Executive Officer Kamal Hamed - Chief Medical Officer Sat Shukla - Chief Financial Officer Conference Call Participants Gavin Clark-Gartner - Evercore ISI Louise Chen - Cantor Ritu Baral - Cowen Operator Good afternoon and welcome to the Spero Therapeutics' Third Quarter 2022 Financial Results C ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38266 SPERO THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) ( State or other jurisdiction of inco ...

Spero Therapeutics, Inc. (NASDAQ:SPRO) Q2 2022 Earnings Conference Call August 10, 2022 4:30 PM ET Company Participants Ted Jenkins - Vice President-Investor Relations & Strategic Finance Ankit Mahadevia - Chief Executive Officer David Melnick - Consultant & Senior Clinical Advisor Sath Shukla - Chief Financial Officer Conference Call Participants Ritu Baral - Cowen Louise Chen - Cantor Boobalan Pachaiyappan - H.C. Wainwright Operator Good afternoon, and welcome to the Spero Therapeutics Second Quarter 2022 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38266 SPERO THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) ( State or other jurisdiction of incorpora ...

Spero Therapeutics, Inc. (NASDAQ:SPRO) Q1 2022 Earnings Conference Call May 16, 2022 4:30 PM ET Company Participants Ted Jenkins - Vice President-Investor Relations Ankit Mahadevia - Chief Executive Officer David Melnick - Chief Medical Officer Sath Shukla - Chief Financial Officer Conference Call Participants Louise Chen - Cantor Ram Selvaraju - H.C. Wainwright Kevin DeGeeter - Oppenheimer Elaine Kim - Berenberg Operator Good afternoon, and welcome to the Spero Therapeutics First Quarter of 2022 Financial ...

[PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section details the unaudited financial statements, key notes, management's discussion, and market risk disclosures for the quarter ended March 31, 2022 [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This chapter presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2022, including balance sheet, statements of operations, and cash flows, with key accompanying notes [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $72,111 | $112,584 | | Total current assets | $132,704 | $157,872 | | Total assets | $145,830 | $171,072 | | Liability related to the sale of future royalties, current | $50,902 | $0 | | Total current liabilities | $69,199 | $18,670 | | Total liabilities | $83,357 | $82,783 | | Total stockholders' equity | $62,473 | $88,289 | Condensed Consolidated Statements of Operations (in thousands) | Account | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Total revenues | $2,069 | $7,300 | | Research and development | $16,971 | $18,404 | | General and administrative | $15,305 | $8,299 | | Loss from operations | $(30,207) | $(19,403) | | Net loss | $(32,829) | $(19,423) | | Net loss per share, basic and diluted | $(1.01) | $(0.66) | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(28,223) | $(15,479) | | Net cash (used in) provided by investing activities | $(16,064) | $3,003 | | Net cash provided by financing activities | $3,814 | $4,309 | | Net decrease in cash and cash equivalents | $(40,473) | $(8,167) | [Key Notes to Financial Statements](index=11&type=section&id=Key%20Notes%20to%20Financial%20Statements) - The company's product pipeline includes tebipenem HBr for complicated urinary tract infections (cUTIs), SPR720 for non-tuberculous mycobacterial (NTM) infections, and SPR206 for multi-drug resistant (MDR) Gram-negative infections[29](index=29&type=chunk) - The company entered into a Revenue Interest Agreement with HealthCare Royalty Management (HCR), receiving **$50.0 million** upfront, with a requirement to repay the **$50.0 million** plus interest at a **13.5% annual rate** if tebipenem HBr is not approved by the FDA by December 31, 2022, which is accounted for as debt[138](index=138&type=chunk)[140](index=140&type=chunk) - The liability related to the sale of future royalties to HCR stood at **$50.9 million** as of March 31, 2022, with an effective interest rate of **20.8%**[143](index=143&type=chunk)[145](index=145&type=chunk) - The company has various government contracts, including a BARDA award for tebipenem HBr development, which was increased by **$12.9 million** in January 2022 to a total committed funding of approximately **$46.9 million**[102](index=102&type=chunk) - On May 3, 2022, following FDA feedback, the company suspended commercialization activities for tebipenem HBr, initiated a restructuring, and reduced its workforce by approximately **75%** to focus on its SPR720 and SPR206 programs[31](index=31&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Management has determined that there is substantial doubt regarding the company's ability to continue as a going concern within one year, citing recurring losses and uncertainty surrounding the approval of tebipenem HBr[34](index=34&type=chunk)[154](index=154&type=chunk)[290](index=290&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic restructuring, financial performance for Q1 2022, and liquidity, highlighting the going concern uncertainty and future funding outlook - The company announced a strategic restructuring on May 3, 2022, to reduce costs and reallocate resources to its clinical programs for SPR720 and SPR206, while continuing dialogue with the FDA on a path forward for tebipenem HBr[159](index=159&type=chunk)[160](index=160&type=chunk) - Existing cash, cash equivalents, and marketable securities of **$122.0 million** as of March 31, 2022, are expected to fund the restructured operating plan through late 2023, though this projection is subject to uncertainty and assumes the repayment of the HCR debt[154](index=154&type=chunk)[204](index=204&type=chunk) Comparison of Operating Results (in thousands) | Line Item | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $2,069 | $7,300 | $(5,231) | | R&D Expenses | $16,971 | $18,404 | $(1,433) | | G&A Expenses | $15,305 | $8,299 | $7,006 | | Loss from Operations | $(30,207) | $(19,403) | $(10,804) | | Net Loss | $(32,829) | $(19,423) | $(13,406) | - The decrease in grant revenue was primarily due to a **$5.6 million** reduction in qualified expenses under the BARDA contract for tebipenem HBr as related activities concluded[181](index=181&type=chunk) - General and Administrative expenses increased by **$7.0 million** year-over-year, mainly due to higher personnel costs and professional fees to support the potential commercialization of tebipenem HBr prior to the decision to suspend these activities[188](index=188&type=chunk)[189](index=189&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's primary market risk exposures, focusing on interest rate sensitivity and foreign currency fluctuations affecting its financial instruments - As of March 31, 2022, the company held **$122.0 million** in cash, cash equivalents, and marketable securities[213](index=213&type=chunk) - The primary market risk is interest rate sensitivity, where a **50 basis point** increase in rates would hypothetically decrease the portfolio's fair value by **$0.1 million**[213](index=213&type=chunk) [PART II – OTHER INFORMATION](index=39&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section outlines various other information, including significant risk factors impacting the company's operations, financial position, and future prospects [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This chapter details significant risks related to product development, financial position, dependence on third parties, government contracts, and regulatory compliance [Risks Related to Product Development and Commercialization](index=39&type=section&id=Risks%20Related%20to%20Product%20Development%20and%20Commercialization) - The company has suspended commercialization efforts for tebipenem HBr based on FDA feedback suggesting the data package may be insufficient for approval during the current review cycle, making the timing and terms of any potential approval uncertain[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The strategic shift to focus on earlier-stage programs, SPR720 and SPR206, carries significant risk, as clinical trials may fail to produce favorable results, encounter delays, or ultimately not lead to commercial products[219](index=219&type=chunk)[222](index=222&type=chunk) - The company faces substantial competition for tebipenem HBr from established oral therapies like Levaquin and Cipro, as well as other product candidates in development[255](index=255&type=chunk)[256](index=256&type=chunk) [Risks Related to Financial Position and Need for Additional Capital](index=49&type=section&id=Risks%20Related%20to%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) - The Revenue Interest Agreement with HCR requires repayment of the **$50.0 million** initial investment plus **13.5%** annual interest if tebipenem HBr does not receive FDA approval for cUTI by December 31, 2022[284](index=284&type=chunk) - The company has a history of losses and its auditor's report expresses substantial doubt about its ability to continue as a going concern, indicating additional funding will be necessary but may not be available on acceptable terms[289](index=289&type=chunk)[290](index=290&type=chunk)[295](index=295&type=chunk) - The company's ability to use its **$303.7 million** in federal net operating loss (NOL) carryforwards may be limited by Section 382 ownership change rules[303](index=303&type=chunk) [Risks Related to Dependence on Third Parties and Government Contracts](index=54&type=section&id=Risks%20Related%20to%20Dependence%20on%20Third%20Parties%20and%20Government%20Contracts) - The company relies entirely on third-party contract research organizations (CROs) to conduct all nonclinical studies and clinical trials, limiting control over these critical activities[318](index=318&type=chunk) - Manufacturing of all product candidates is outsourced to a small number of third-party contract manufacturers (CMOs), primarily in Asia, creating supply chain, quality control, and geopolitical risks[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Government contracts, such as the BARDA award, are subject to unilateral termination or modification by the government and may grant the government 'march-in' rights to intellectual property developed with federal funds[336](index=336&type=chunk)[341](index=341&type=chunk)[348](index=348&type=chunk) [Risks Related to Regulatory and Legal Compliance](index=63&type=section&id=Risks%20Related%20to%20Regulatory%20and%20Legal%20Compliance) - The company must navigate a complex, lengthy, and unpredictable regulatory approval process with the FDA and foreign authorities, where failure to obtain approval will prevent commercialization[369](index=369&type=chunk)[371](index=371&type=chunk) - Special designations like Fast Track (for tebipenem HBr and SPR720) and Priority Review (for tebipenem HBr) do not guarantee or necessarily lead to a faster approval process[378](index=378&type=chunk)[379](index=379&type=chunk) - Even if approved, products will be subject to extensive ongoing regulatory requirements, including for manufacturing (cGMPs), labeling, promotion, and potentially costly post-marketing studies or Risk Evaluation and Mitigation Strategies (REMS)[387](index=387&type=chunk)[388](index=388&type=chunk)