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Spero Therapeutics Announces Fourth Quarter and Full Year 2018 Operating Results and Provides Pipeline Review

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Anticipated 2019 Events include Enrollment in the Planned SPR994
Pivotal Phase 3 Clinical Trial and Top-Line Data from SPR720 and SPR206
Phase 1 Clinical Trials in 2H19

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 (MDR) bacterial infections and rare diseases, today announced
financial results for the fourth quarter and full year ended December
31, 2018 and provided a pipeline review.

"In 2018, we made significant progress advancing our pipeline
candidates, all of which are designed to address serious unmet needs of
multi-drug resistant infections," said Ankit Mahadevia, M.D., Chief
Executive Officer of Spero Therapeutics. "SPR994 is now entering a
single pivotal Phase 3 clinical trial required for regulatory approval
in cUTI, after we successfully identified a dose based on a completed
Phase 1 clinical trial of SPR994 in 2018 and filed an IND with the FDA
in early 2019. Additionally, we advanced SPR720 and SPR206 into Phase 1
clinical trials based on successful preclinical testing conducted in
2018. We look forward to an eventful 2019 with enrollment into our
planned SPR994 Phase 3 trial, as well as Phase 1 data from SPR720 and
SPR206 clinical trials expected in the second half of 2019."

Recent Clinical Highlights and Upcoming Milestones

SPR994:

Spero's lead product candidate, SPR994, is designed to be the first oral
carbapenem antibiotic approved for use in adults to treat MDR
Gram-negative infections. In February 2019, Spero announced the FDA's
acceptance of the IND application for SPR994 in cUTI, enabling Spero to
initiate U.S. enrollment in its planned global, single pivotal Phase 3
clinical trial of SPR994 in cUTI entitled ADAPT-PO. The pivotal Phase 3
clinical trial is designed as a double-blind, double-dummy trial to
compare oral SPR994 with an existing standard of care intravenous (IV)
antibiotic, ertapenem, in approximately 1,200 patients randomized 1:1 in
each arm. Spero has begun start-up activities for the ADAPT-PO clinical
trial and anticipates opening trial sites around the end of March 2019
to support study enrollment. The trial will incorporate a lead-in cohort
of 70 patients with an intensive pharmacokinetics assessment to confirm
the dose and exposure in the cUTI patient population. Spero expects to
receive pharmacokinetic data from the lead-in cohort in the second half
of 2019.

SPR720:

SPR720 is an orally administered antimicrobial agent being developed for
the treatment of a rare, orphan disease, non-tuberculous mycobacterial
(NTM) infections. Pre-clinical in vitro and in
vivo
 studies have demonstrated the potency of SPR720 against a range
of bacteria that cause pulmonary NTM infections, including Mycobacterium
avium
 complex and Mycobacterium abscessus. The
collective data to date suggest that SPR720 has an acceptable safety
profile, encouraging target pathogen efficacy, drug distribution to key
sites of infection, such as the lung, and a wide therapeutic margin.
Spero initiated a SPR720 Phase 1 clinical trial in January 2019 designed
as a double-blind, placebo-controlled clinical trial to assess the
safety, tolerability and pharmacokinetics of SPR720 in healthy
volunteers. Spero expects to receive top-line data from the Phase 1
clinical trial in the second half of 2019.

SPR206:

SPR206 is an IV-administered product candidate from Spero's Potentiator
Platform being developed as an innovative option to treat MDR
Gram-negative bacterial infections. In preclinical studies, SPR206
showed activity as a single agent against MDR and extensively drug
resistant (XDR) bacterial strains, including isolates of Pseudomonas
aeruginosa
, Acinetobacter baumannii and carbapenem-resistant Enterobacteriaceae,
in both in vitro and in vivo models of infection. Spero
initiated a Phase 1 clinical trial of SPR206 in December 2018, designed
as a double-blind, placebo-controlled, ascending dose, multi-cohort
study in healthy subjects. Spero expects to receive top-line data from
this trial in the second half of 2019.

Fourth Quarter and Full-year 2018 Financial Results

Spero reported a net loss for the fourth quarter and year ended December
31, 2018 of $10.6 million and $41.7 million, or $0.60 and $2.60 per
common share, respectively. Net loss for the fourth quarter and year
ended December 31, 2017 was $14.8 million and $46.1 million, or $1.59
and $17.82 per common share, respectively.

Grant revenue for the fourth quarter and year ended December 31,
2018 totaled $1.7 million and $4.0 million, respectively, and was
comprised of reimbursement for all of the pipeline programs. Grant
revenue for the year ended December 31, 2018 was $2.0 million higher
than the same period of 2017 due to an increase in available awards,
such as the BARDA award of up to $44.2 million announced in July 2018,
as well as a greater spend on our product candidates that was
reimbursable under the awarded grants.

Research and development expenses for the fourth quarter 2018 of $9.1
million were lower than $12.5 million for the same period of 2017 due to
lower direct clinical trial expense in the fourth quarter 2018 and the
addition of milestone payments payable in the fourth quarter 2017.
Research and development expenses for the year ended December 31,
2018 were $33.9 million compared to $32.9 million for the year
ended December 31, 2017, with increased expenses in 2018 versus 2017 due
to greater spend on SPR994 and SPR720 program expenses partially offset
by lower spend on the Potentiator Platform product candidates. The
Company expects that its research and development expenses will increase
throughout 2019 due to greater planned clinical spend associated with
the SPR994 pivotal ADAPT-PO trial, as well as the SPR720 and SPR206
Phase 1 clinical trials, along with increased personnel spend to support
such programs.

General and administrative expenses for the fourth quarter 2018 of $3.6
million were higher than $2.5 million for the same period of 2017,
primarily due to increased headcount and greater costs associated with
operating as a public company. General and administrative expenses for
the year ended December 31, 2018 were $12.9 million compared to $10.8
million for the year ended December 31, 2017, with the increased
expenses in 2018 versus 2017 primarily due to an increase in headcount
partially offset by lower professional and consultant fees. The Company
expects general and administrative expenses to increase in 2019 due to
additional headcount and professional fees to support the advancement of
its lead asset SPR994 towards regulatory approval.

As of December 31, 2018, the Company had cash and cash equivalents
of $115.4 million. Spero believes that its existing cash, cash
equivalents and marketable securities, together with the initial funding
committed under its BARDA award, will enable funding of operating
expenses and capital expenditure requirements into the second half of
2020, including through the top-line data readout of the planned pivotal
ADAPT-PO clinical trial of SPR994.

Upcoming Scientific and Investor Presentations

  • Corporate presentation at the Oppenheimer 29th Annual
    Healthcare Conference on March 20, 2019 in New York, New York
  • Corporate presentation at the H. C. Wainwright Annual Global Life
    Sciences Conference on April 8-9, 2019 in London, England
  • Multiple scientific presentations at the 29th European Congress of
    Clinical Microbiology and Infectious Diseases from April 13-16,
    2019 in Amsterdam, Netherlands
  • Corporate presentation at the 2019 Bank of America Merrill
    Lynch Health Care Conference from May 14-16, 2019 in Las Vegas, Nevada
  • Multiple scientific presentations at American Society of Microbiology
    (ASM) Microbe 2019 from June 20-24, 2019 in San Francisco, California

About Spero

Spero Therapeutics, Inc. is a multi-asset, clinical-stage
biopharmaceutical company focused on identifying, developing and
commercializing novel treatments for multidrug-resistant (MDR) bacterial
infections and rare diseases.

Spero's lead product candidate, SPR994, is designed to be the first oral
carbapenem-class antibiotic for use in adults to treat MDR Gram-negative
infections.

Spero is also advancing SPR720, its novel oral therapy product candidate
designed for the treatment of rare, orphan disease caused by pulmonary
non-tuberculous mycobacterial (NTM) infections.

Spero also has a platform technology known as its Potentiator Platform
that it believes will enable it to develop drugs that will expand the
spectrum and potency of existing antibiotics, including formerly
inactive antibiotics, against Gram-negative bacteria. Spero's lead
product candidates generated from its Potentiator Platform are two
IV-administered agents, SPR741 and SPR206, designed to treat MDR
Gram-negative infections in the hospital setting.

For more information, visit https://sperotherapeutics.com.

Forward Looking Statements

This press release may contain forward-looking statements. These
statements include, but are not limited to, statements about Spero's
expectation that positive results from a single pivotal Phase 3 clinical
trial of SPR994 and ancillary supportive studies to be conducted in
parallel with the planned Phase 3 trial will support the approval of
SPR994; the initiation, timing, progress and results of Spero's
preclinical studies and clinical trials and its research and development
programs, including the anticipated timing of the opening of sites to
support enrollment into the planned pivotal Phase 3 clinical trial of
SPR994; statements regarding management's assessment of the results of
such preclinical studies and clinical trials; the timing of clinical
data, including the availability of pharmacokinetic data from the
lead-in cohort in the planned Phase 3 clinical trial of SPR994 and
top-line data from the Phase 1 clinical trial of SPR206 and the Phase 1
clinical trial of SPR720; and Spero's cash 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 whether the FDA will accept a single pivotal study for
approval of SPR994; whether results obtained in preclinical studies and
clinical trials will be indicative of results obtained in future
clinical trials; whether Spero's product candidates will advance through
the preclinical development and clinical trial process on a timely
basis, or at all, taking into account the effects of possible regulatory
delays, slower than anticipated patient enrollment, manufacturing
challenges, clinical trial design and clinical outcomes; whether the
results of such trials will warrant submission for approval from
the U.S. Food and Drug Administration or equivalent foreign regulatory
agencies; 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 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.

         

Spero Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(unaudited, amounts in thousands, except share and per share data)

 

Three Months Ended
December 31,

Twelve Months Ended
December 31,

  2018         2017     2018         2017  
       
Grant revenue $ 1,692   $ 993   $ 3,966   $ 1,979  
Operating expenses:
Research and development 9,127 12,503 33,885 32,869
General and administrative   3,649     2,490     12,887     10,840  
Total operating expenses   12,776     14,993     46,772     43,709  
Loss from operations (11,084 ) (14,000 ) (42,806 ) (41,730 )
Other income (expense)   485     (770 )   1,144     (4,367 )

Net loss attributable to common stockholders of Spero
Therapeutics,
Inc.

$ (10,599 ) $ (14,770 ) $ (41,662 ) $ (46,097 )
 

Net loss per share attributable to common stockholders per share,
basic
and diluted

$ (0.60 ) $ (1.59 ) $ (2.60 ) $ (17.82 )
 
Weighted average shares outstanding, basic and diluted: 17,736,996 9,273,783 16,001,832 2,586,865
 
     

Spero Therapeutics, Inc.

Condensed Consolidated Balance Sheet Data

(unaudited, amounts in thousands)

 

 

As of December 31,
  2018       2017
Cash, cash equivalents and marketable securities $ 115,443 $ 87,288
Other assets   13,563   6,191
Total assets $ 129,006 $ 93,479
 
Total liabilities 13,151 8,522
Total stockholder's equity   115,855   84,957
Total liabilities and stockholders' equity $ 129,006 $ 93,479
 

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