Spero Therapeutics(SPRO) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q2 2022 were $2 million, a decrease from $5 million in Q2 2021, primarily due to a $1.2 million decrease in qualified expenses under the BARDA contract for tebipenem HBr and a $1 million decrease in funding under the DoD agreement related to SPR206 [43] - Research and development expenses for Q2 2022 were $8.2 million, down from $14.5 million in the same period in 2021, mainly due to reduced program activity for tebipenem HBr and decreased costs associated with SPR720 and SPR206 [44] - General and administrative expenses for Q2 2022 were $8.1 million, lower than $9.2 million reported for the same period in 2021, primarily due to a decrease in headcount and professional fees [45] - The net loss for Q2 2022 was $28.7 million or $0.87 per share, compared to a net loss of $18.6 million or $0.63 per share in Q2 2021 [46] Business Line Data and Key Metrics Changes - The company has ceased commercial activities for tebipenem HBr following FDA feedback indicating insufficient data for approval, leading to a strategic restructuring [9][10] - SPR720 is positioned as the lead asset, with plans for a Phase 2 trial expected to start in Q4 2022, targeting early-stage patients with NTM-PD [23][26] - SPR206 is being developed for multidrug-resistant gram-negative bacterial infections, with a Phase 2 study expected to initiate in Q3 2023, supported by partnerships with Pfizer and others [38][39] Market Data and Key Metrics Changes - The market for NTM-PD is significant, with approximately 95,000 patients in the US and 245,000 across the US, Europe, and Japan, highlighting a clear unmet need for effective treatments [19] - Tebipenem HBr has potential economic incentives for healthcare providers to treat patients outside of hospital settings, addressing the growing issue of antibiotic resistance [14] Company Strategy and Development Direction - The company is focusing on strategic partnerships to advance its pipeline, particularly for tebipenem HBr and SPR206, while maintaining a strong cash runway to support clinical milestones [12][17] - The restructuring aims to position the company for future growth by reallocating resources towards promising assets and reducing operational costs [10][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for SPR720 and SPR206, citing strong preclinical data and the need for effective treatments in their respective markets [28][32] - The company is committed to engaging with the FDA to clarify requirements for tebipenem's approval and is optimistic about future partnerships to expedite its development [16][60] Other Important Information - The company incurred restructuring expenses of $11.8 million in Q2 2022, primarily related to severance and contract termination costs [45] - The cash position as of June 30, 2022, was approximately $45.4 million, expected to fund operations through late 2023 [40] Q&A Session Summary Question: What slope do you think is needed for bacterial burden reduction to suggest improvements in outcomes for SPR720? - Management indicated that a negative slope relative to placebo is desired, which has been tied to approved drugs in the mycobacterial space [49] Question: Where are you with partnership discussions for tebipenem? - Management confirmed ongoing constructive discussions with potential partners, emphasizing the need for partners who share their conviction in the program [60] Question: How do you view the opportunity for SPR206? - Management expressed confidence in SPR206's potential based on existing data and the unmet need it addresses, with full funding for its Phase 2 study [62] Question: Are you concerned about the variability of treatment response in the small sample size for SPR720? - Management noted that the EBA paradigm allows for efficient data collection despite the small sample size, providing a robust dataset [68] Question: Will you explore non-dilutive funding for SPR720? - Management confirmed that they will continue to look for non-dilutive funding opportunities across all programs [73]