Investment expected to extend Spero Therapeutics’ cash runway into 2H 2023
CAMBRIDGE, Mass., Sept. 30, 2021 (GLOBE NEWSWIRE) -- Spero Therapeutics, Inc. (Nasdaq: SPRO), a multi-asset clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing treatments in high unmet need areas involving multi-drug resistant bacterial infections and rare diseases, today announced that it has entered into a revenue interest financing agreement with HealthCare Royalty Partners® for up to $125 million. Spero intends to use the proceeds from the agreement and existing cash on hand to prepare for the anticipated launch of tebipenem HBr, as well as to support the continued clinical development of SPR720 and SPR206.
Under the terms of the agreement, Spero will receive $50 million from HealthCare Royalty Partners® by October 21, 2021. Spero is also entitled to receive an additional $50 million upon the U.S. Food and Drug Administration (FDA) approval of tebipenem HBr (Tebi) for a complicated urinary tract infection (cUTI) indication, and an additional $25 million upon the attainment of a prespecified commercial milestone and mutual agreement between Spero and HealthCare Royalty Partners®.
In exchange for the total investment amount received by Spero, HealthCare Royalty Partners® will receive a tiered royalty on applicable revenue generated by tebipenem HBr, SPR720 and SPR206 and other products marketed by Spero until the aggregate amount paid to HealthCare Royalty Partners® is two and a half times the total investment amount funded. The tiered royalty will begin in the low double digits and decrease to the low single digits upon the achievement of certain annual revenue thresholds. Applicable revenue includes net sales made by Spero (but not its licensees) worldwide and any payments received by the Company from its licensees on net sales outside the United States.
“HealthCare Royalty Partners® is a premier investment firm, and we are thrilled with our newly announced partnership,” said Ankit Mahadevia, M.D., Chief Executive Officer of Spero Therapeutics. “It provides both validation for tebipenem HBr’s commercial opportunity and non-dilutive capital that preserves our financial flexibility. As we move toward an anticipated NDA submission in the fourth quarter and prepare for tebipenem HBr’s expected launch, these funds will enable the efficient execution of our objectives.”
Clarke Futch, Chairman and Chief Executive Officer of HealthCare Royalty Partners® commented; “Our extensive due diligence process has given us confidence in Spero’s commercial prospects. The company has a highly talented management team and impressive Phase 3 data. These data demonstrate tebipenem HBr’s ability to address a critical unmet need in cUTI, which represents an attractive market opportunity with a concentrated prescriber base. We look forward to tebipenem HBr’s anticipated NDA filing and regulatory review, along with the advancement of Spero’s broader clinical-stage pipeline.”
Based on its current projections, and assuming approval of Tebi in 2022, Spero believes that the $50 million in upfront proceeds from the revenue interest financing and the $50 million approval milestone payment will extend its cash runway into 2H 2023, without accounting for the addition of a potential milestone payment.
Ladenburg Thalmann & Co. Inc. and Royalty/Revenue Interest Capital Advisors LLC served as financial advisors and placement agent, and Gibson, Dunn & Crutcher LLP served as legal counsel to Spero. Cadwalader, Wickersham & Taft LLP served as legal counsel to HealthCare Royalty Partners®.
Spero Therapeutics, Inc. is a multi-asset, clinical-stage biopharmaceutical company focused on identifying, developing and commercializing novel treatments for multi-drug-resistant (MDR) bacterial infections and rare diseases.
Spero’s lead product candidate, tebipenem HBr (tebipenem pivoxil hydrobromide; formerly SPR994), is being developed as the first oral carbapenem antibiotic for use in complicated urinary tract infections (cUTI) and acute pyelonephritis (AP). In September 2020, Spero announced positive top-line results from its Phase 3 ADAPT-PO clinical trial of tebipenem HBr in cUTI and AP.
Spero is also developing SPR720 as a novel oral therapy product candidate for the treatment of rare, orphan pulmonary disease caused by non-tuberculous mycobacterial (NTM) infections.
Spero also has an IV-administered next generation polymyxin product candidate, SPR206, developed from its potentiator platform, which is being developed to treat MDR Gram-negative infections in the hospital setting.
For more information, visit https://sperotherapeutics.com.
About HealthCare Royalty Partners®
HealthCare Royalty Partners® purchases royalties and uses debt-like structures to invest in commercial or near-commercial stage life science assets. HealthCare Royalty Partners® has $5.9 billion in cumulative capital commitments with offices in Stamford (CT), San Francisco, Boston and London. HealthCare Royalty Partners® is a registered trademark of HealthCare Royalty Management, LLC in the U.S. and a trademark in other countries. For more information, visit www.healthcareroyalty.com.
Forward Looking Statements
This press release may contain forward-looking statements. These statements include, but are not limited to, statements about the initiation, timing and submission to the FDA of a NDA for tebipenem HBr and the potential approval of tebipenem HBr by the FDA; the ability of Spero to receive a milestone payment under the HealthCare Royalty Partners® financing facility; and Spero’s cash runway forecast and anticipated expenses, the sufficiency of its cash resources and the availability of additional non-dilutive funding from governmental agencies beyond any initially funded awards. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intent,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including Spero’s ability to timely complete the NDA submission to the FDA for tebipenem HBr; Spero’s need for additional funding; the lengthy, expensive, and uncertain process of clinical drug development; whether results obtained in preclinical studies and clinical trials will be indicative of results obtained in future clinical trials; Spero’s reliance on third parties to manufacture, develop, and commercialize its product candidates, if approved; the ability to develop and commercialize Spero’s product candidates, if approved; the potential impact of the COVID-19 pandemic; Spero’s ability to retain key personnel and to manage its growth; whether Spero’s cash resources will be sufficient to fund its continuing operations for the periods and/or trials anticipated; and other factors discussed in the “Risk Factors” set forth in filings that Spero periodically makes with the U.S. Securities and Exchange Commission. The forward-looking statements included in this press release represent Spero’s views as of the date of this press release. Spero anticipates that subsequent events and developments will cause its views to change. However, while Spero may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Spero’s views as of any date subsequent to the date of this press release.
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Source: Spero Therapeutics, Inc.