Okay, good. Okay, thank you for joining us here today for our fireside chat with Spero Therapeutics. We have the CEO, Sath Shukla, with us today, Sath from the company. And so, Sath, to start, do you have any opening comments before I get into the Q&A?
My comment would be, thanks for having us here today, Louise, and that's it.
Okay. So wanted to ask you about the company's strategic vision. Where are you now, and where do you want to be over the next three-to-five years?
Yeah, thanks for asking. Our strategic vision is to be a leader in the rare and infectious disease space. Our name, Spero, means hope, so one of the objectives is to bring hope to patients in therapeutic areas with high unmet need. Combining that focus is also innovation that enables us to achieve strong economics as well. Where we are today is a diversified late-stage portfolio that I'll cover in a moment. That is, again, focused on not being in a space where there are many generics or follow-ons. So, SPR720, which is our lead asset in NTM, that if approved could be the first oral therapy in first-line NTM, where there are currently no oral therapies, period, and we are the only oral therapy in late-stage development.
Tebipenem, which is being progressed for treatment of complicated urinary tract infections, currently faces a landscape where carbapenems, that are used to treat these difficult infections, are all IV. So a oral therapy could be potentially transformative in that space. Then finally, SPR206 is our next-generation polymyxin for the treatment of very difficult-to-treat Gram-negative infections. The current standard of care there, unfortunately, has high degrees of nephrotoxicity. So many therapies there will kill the infection, but they will, unfortunately, also kill patient kidney cells. SPR206 could potentially be a transformative therapy there by removing that nephrotoxicity profile. So that is the state of play today. As we go forward, not only will we have the option to progress these programs, but the company has been historically very active in BD, and we expect to continue to be active in BD.
So as long as they fit our mandate, high unmet need, strong economic opportunity, we will continue to focus on those areas.
Okay, great. So from a high-level perspective, can you give some timing behind some of your key catalysts that are coming up in the near term?
Absolutely. So SPR 720, our NTM asset, is poised for data in the fourth quarter of this year. We believe that that will be really meaningful and a decisive data set that will lay out the progression for the program, as we go forward. Early, next year, or certainly in the second half of next year, we expect to have completed enrollment for Tebipenem. Our partners at GSK have guided to a target NDA filing date, also next year. So next year could be very eventful for Tebipenem as well. So, 720 data coming up by the end of the year, and major data for Tebipenem coming next year.
Okay, great. So let's start by talking about SPR720 here. So for some people that are new to the story, can you tell us what NTM is and how it impacts a patient's life?
NTM is a debilitating infectious lung disease. So right now, it is a space where, for first-line patients, which are roughly somewhere between 3/5 and 3/4 of patient population, there are no approved therapies. NTM pathogens are these, pathogens that all of us probably inhaled this morning, in shallow water and other spaces. But for most of us, we cleared that infection. But for patients with structural lung damage or in immunocompromised situations or pre-existing conditions, when they get exposed to these pathogens, the disease takes root in their lungs. So it's not a, it's not a silent disease. For many of these patient, the symptoms are debilitating: fatigue, a loss of sleep, a fever, weight loss. And in addition to those signs and symptoms, there's also progressive lung damage.
Currently, for first-line patients, the standard of care are mainly off-label TB drugs. Those usually involve somewhere between six to up to 18 months of therapy, and they have very unfavorable safety and tolerability profiles. Many prescribers will tell their patients, watchful waiting, the side effects for these profiles are so poor that let's not start you on therapy. That's not a great outcome either, because lung damage continues to accrue. For many patients who start therapy, most of them drop off. Many patients who continue through their period of therapy, up to half of them end up with a recurrence in that infection because the susceptibility profile doesn't go away. If you're infected once, you will likely, you know, half of them will likely get infected again, so the landscape is extremely challenging today.
The only approved therapy is for refractory patients, which is much later in the disease progression, and by that point, the ability to intervene early for that progression has been lost, and that's why SPR720 is so exciting for us, because if approved, it could be that novel oral therapy for first-line patients.
Okay, great. And what kind of data have you seen thus far that really supports a positive proof of concept for this drug in NTM?
Indeed. So, historically, we saw very strong in vitro data. So when we saw the efficacy and potency for SPR720, the degree of drug required to reduce bacterial burden by 90% was smaller for SPR720 than it was for inhaled amikacin, which is the foundation of ARIKAYCE, and many other drugs that are used currently. In vivo, chronic murine standard mouse models showed a similar efficacy for SPR720, both as a monotherapy, when we saw a reduction in bacterial burden, and an even stronger impact with the combo therapy. Those data, along with SAD/MAD healthy volunteer safety studies, which showed a clean tolerability profile, led us to progress SPR720, and now the proof of concept data we are awaiting. We saw the drug kill bugs, we saw it well-tolerated in people, and now we want to see it kill bugs in patients.
Okay, great. So when you report your data, what are you going to report? Is this just top line, or are you going to have more in-depth data? What are your thoughts here?
For the full package, I should lay the groundwork a bit. The leading data will indeed be the data from that phase IIa data. We haven't disclosed exactly the depth of data, but obviously, we will want to share efficacy, tolerability, and PK coming out of that data. We have disclosed 25 patients enrolled, 56 days of treatment, and that will be the most relevant data. In addition to that study, we are also conducting a couple of PK studies. There's a BAL study and a co-administration study to evaluate PK, along with some hollow fiber work we are conducting as well. Then finally, also in the fourth quarter, at IDWeek, actually, which is now about a month away, we expect to be releasing some resistance data.
And for people who follow NTM, you may know, resistance is a top-of-mind issue for prescribers and patients because the bacteria tend to develop resistance to therapies. So when you progress these assets, you want to make sure that they are not going to reduce that profile for reduction of resistance. And so that data is coming out at IDWeek, and we'll be excited to share that, too.
Okay. And how do you compare and contrast your SPR720 with some of these other products that are in development for NTM, and how do you think about the peak sales potential of your product?
Right now, to our knowledge, we are the only oral potential therapy in late clinical stage for NTM. What is in the market for SOC, as you mentioned earlier, are these off-label TB drugs. The only inhaled therapy right now for refractory is ARIKAYCE, which is in phase III development for first line as well, with an expected data readout in 2026. From a differentiation perspective, we believe that a efficacious, well-tolerated oral therapy would have the same, and potentially better, market opportunity than a inhaled therapy. With that said, the patient need is so high that only a small number of years after launch, within the refractory space, ARIKAYCE is on a target for reaching somewhere between $350 million-$400 million of sales this year.
Consensus is that even within that small refractory space, they will become a blockbuster drug at some point. The first-line opportunity is substantially larger, and therefore, the overall market opportunity for a strong regimen, we feel very confident about.
Okay, great. So I wanted to switch gears to tebipenem and ask you how enrollment is going in the phase III PIVOT study, and how its trial is progressing in general.
So we are very excited about that program as well, and enrollment, the enrollment speed is something that we are also very pleased about. It's a large trial, 2 600 plus patients that are enrolling globally, and that is still, we will reiterate our guidance of a completion of enrollment in the second half of next year. And GSK are holding firm to their target NDA for that next year as well. So, all systems go at this moment in time, and, like everyone else, we are very excited to see that, that data.
Okay, and what does the trial design look like?
... It is a blinded global trial, randomized. It is a comparison of oral tebipenem to IV imipenem-cilastatin. It's usually 600 milligrams of tebi versus 500 milligrams of imipenem, and the dosage is every six hours. The top-line data for that will be a composite clinical outcome at the TOC site, and the measure will be a non-inferiority margin to the current IV standard of care. A 10% NI margin is where we landed on our agreement with the FDA. In addition, the trial is being run subject to a Special Protocol Assessment agreement we reached with the FDA, that we feel has ensured that the outcomes and what we are shooting for are very clear to all parties, and we feel has minimized regulatory risk for that program.
Okay, and what are your economics of your partnership with GSK here?
We entered into that partnership with our colleagues at GSK in late 2022. At that time, we disclosed that this was a transaction that's $600 million, up to $600 million of milestones, plus royalties, that could climb to low double-digit royalties. To date, GSK have already funded the company. Either we have qualified for or already received $200 million from that transaction, and that supports our cash guidance that is into late 2025. The $400 million of additional milestones come from regulatory, commercial, and sales milestones. That could potentially, if the data are positive, also be imminent. Upon filing of the NDA, the transaction enables us to receive another $25 million, and upon first sale, we have disclosed a commercial milestone of up to $150 million.
We say up to $150 million because there is a U.S. and an ex-U.S. component to that. But what we have also disclosed is that the large amount of that, up to $150 million, would be on that first sale in the United States, which could be within the next couple of years if the program shows positive data. And finally, royalties and sales milestones kick in as well. At lower levels of sales, Spero is eligible to receive $25 million as certain sales thresholds are achieved. On higher levels, reaching up to $1 billion and beyond, the sales milestone die out, but early double-digit royalties make sure that substantial economics continue to flow to Spero through the commercialization of that product.
Okay, and why do you think tebipenem will gain traction, whereas a lot of other antibiotics have not?
Many antibiotics face two challenges. One is that they play in an area where there's a lot of generics, whereas, again, by tebipenem, we have the ability to be the first, and as far as we are aware of, the only oral carbapenem for cUTI. The second challenge that many antibiotics have faced in their launches is that, by their nature, many of them are IV, and they end up being subject to the hospital reimbursement system, so that puts a cap on economics. The great proposition of tebi for bringing a benefit both to patients and to the hospital healthcare system is that patients could basically avoid hospitalization and get treated outside the hospital system at community centers. Or if they are already in the hospital, they can leave the hospital sooner.
For the hospital system to avoid the $7,000-$10,000 that is usually spent in holding these patients, on IV for 7-10 days, is a process that this drug could entirely avoid. With the FDA, we have achieved an agreement that if the data are positive, tebipenem, along with supportive studies, could be eligible for that limited use label. But the benefit of this space, 3.4 million annual incidences of cUTI, you don't have to have very aggressive assumptions for either market penetration or pricing to see the path to substantial economic success. And that was, in addition to the great patient need, a great incentive for partners to come and speak to Spero for funding this trial, and we are very excited that GSK landed with us to progress it.
Okay, and we don't wanna forget about SPR206. So wanted to ask you what that product means for you, and what you've seen so far, and what do you hope to see from data timing on that?
So SPR206 is our next-generation polymyxin. And what it does is it disrupts cell membranes for the bacterial cell that leads to cell death. It is a drug that potentially... It's an IV drug, so it doesn't have quite the market potential of either tebipenem or SPR720. But I would have to tell you, Louise, that our scientific teams are extremely excited about it, because right now, the patient need is huge for CRPA cases right now, the all-cause mortality for patients for 30 days is up to 25%. You know, these are really unacceptable statistics, and this drug, if it progresses, could be potentially extremely meaningful. We have progressed it as a monotherapy, either as monotherapy or as combo, it could be clinically very meaningful.
With that said, we have always progressed it on non-dilutive funding. So historically, it is partnered with Everest Medicines in China and Pfizer, who are also leading shareholders in Spero for ex-U.S., ex-China. And it has received funding from the National Institutes of Health, NIAID, and other government agencies as well. So that was cleared for an IND HAP/VAP study that is ready to go. And but it will again progress on that non-dilutive funding.
Okay, great. And how do you differentiate yourself from other products?
For SPR206?
Yes.
These current SOC, it's easy to differentiate itself from, because of, again, that nephrotoxicity profile, or more specifically, the lack thereof for SPR206. There are not many other agents in development. For next generation polymyxins, you could count them on one hand. Right now, we believe that we are clinically a bit ahead of other agents, and, historically, we've also had success in progressing them, whereas because of the nature of that particular therapeutic space, it is difficult to fund. If we can continue to progress it, we will continue to be ahead of the competition as it exists and potentially be the next evolution within that space.
Okay, great. And what are your next steps for this product?
It will be indeed a progression of that phase II study upon the achievement of non-dilutive funding, and that is a process where we continue to work with our partners who have contributed to its progress in the past.
Okay. Do you plan to expand your pipeline beyond what we've discussed today? I know you have a lot on your plate right now.
Biotech moves fast, so we have a lot on our plate now this year. With any positive data on some really high-profile programs, either for SPR720 in the upcoming months, and/or tebipenem next year, we expect to be in a very strong place, not only to progress these therapies. Tebipenem, if approved, GSK will take out and hopefully have great success, and we would see economics from it. SPR720 would move on to potentially a pivotal trial, if the data from the proof of concept study are positive. Those will drive a lot of our work. With that said, we fully hope to grow as long as that focus continues to be only in areas of high unmet need, combined with strong economic opportunity and bringing hope to patients in need.
So if we can meet those three criteria, we would certainly very much look forward to continuing to grow.
Okay, great. What's your cash balance, cash runway, and the pushes and pulls on your cash right now?
We disclosed a cash balance at the end of second quarter of $63.5 million. Our target guidance that we have laid out for cash runway is into late 2025. We expect to get another $70-some million from GSK on milestones we have already qualified for. They show up in our accounts receivable right now. They will come through within the next few quarters to continue to fund the company. So, those will continue to come in. Our cash runway includes potential startup activities for a pivotal for SPR720, so no time would be lost if we see the proof-of-concept data. But within that runway, we expect to see the data from SPR720 this year, if those are positive, to lay the groundwork for a potential pivotal.
We expect to complete enrollment for, and ideally, if we are successful with GSK, file an NDA for tebi. And so these are multiple milestones for us to be continuing to strengthen that cash runway within the period we have disclosed.
Okay. Now, we have a few minutes left, so wanted to see if there are any questions from the audience. Okay, no questions. So then let me ask you, any closing comments? Anything we didn't touch upon?
No, this is a great time for Spero. At the company, there are fewer than 50 of us progressing multiple late-stage medicines, and the reason that we have met our timelines and deliverables is because we are really excited about these therapies and potentially similar and more therapies we would look to bring in as the company grows. So it's a great time to be at the company. People are working night and day because we want to have a great outcome. And for today, thank you for this opportunity to present, and thank you all for your time.
All right, Sath, thank you very much.
Thank you.