Q2 2022 Spero Therapeutics Inc Earnings Call
Operator: At this time, all participants are in a listen-only mode.
At this time all participants are in a listen only mode. Following the company's formal remarks, we will open up the call for questions.
Unknown Executive: Following the company's formal remarks, we will open up the call for questions.
Unknown Executive: Please be advised that this call is being recorded and a replay will be available.
Please be advised that this call is being recorded and a replay will be available.
Unknown Executive: You can find information on the replay and further information related to today's announcements
You can find information on the replay in further information related to todays announcements on the spirit there therapeutics website at Www Dot Spiro Therapeutics dotcom.
Unknown Executive: on the Spero Therapeutics website at www.sperotherapeutics.com.
Unknown Executive: At this time, I would like to turn the call over to Ted Jenkins, Vice President, Investor
At this time I would like to turn the call over to Ted Jenkins, Vice President Investor Relations and strategic finance at Spiro Therapeutics. Mr. Jenkins. Please go ahead.
Unknown Executive: Relations and Strategic Finance at Spero Therapeutics.
Ted Jenkins: Mr. Jenkins, please go ahead.
Ted Jenkins: Thank you, Operator, and thank you all for participating in today's conference call.
Thank you operator, and thank you all for participating in today's conference call.
Ted Jenkins: This afternoon, Spero Therapeutics released financial results and provided a pipeline
Afternoon, Spero Therapeutics released financial results and providing a pipeline update for the second quarter of 2022 press release is available on the Investor page of the Spirit Therapeutics website.
Ted Jenkins: update for the second quarter of 2022.
Ted Jenkins: Our press release is available on the investor page of the Spero Therapeutics website.
Ted Jenkins: Before we begin, I would like to remind you that some of the information contained in
Before we begin I'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements based on our current expectations, including statements about the potential review status and prospects of approval for <unk> and the timing thereof.
Ted Jenkins: the news release and on this conference call contains forward-looking statements based
Ted Jenkins: on our current expectations, including statements about the potential review, status, and prospects
Ted Jenkins: of approval for tebupenem-HBR and the timing thereof, potential value of tebupenem-HBR
Potential value of <unk>, if approved in the prospects of partnership or other opportunities for the W. Pattern H B R program. The plans for the Companys ongoing development of <unk>, <unk> and 'twenty and SPR two O six the design initiation timing progress and the results of the company's preclinical studies and clinical trials and its research and development programs management.
Ted Jenkins: if approved, and the prospects of partnership or other opportunities for the tebupenem-HBR
Ted Jenkins: program, the plans for the company's ongoing development of SPR-720 and SPR-206, the design,
Ted Jenkins: initiation, timing, progress, and the results of the company's preclinical studies in the
Ted Jenkins: clinical trials and its research and development programs, management's assessment of the
Managements assessment of the results of preclinical studies and clinical trials.
Ted Jenkins: results of such preclinical studies and clinical trials, the company's cash forecast and anticipated
The company's cash forecast and anticipated expenses and the sufficiency of cash resources.
Ted Jenkins: expenses, and the sufficiency of its cash resources.
Ted Jenkins: Such forward-looking statements are not a guarantee of performance, and the company's
Such forward looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in spero therapeutics filings with the SEC, including in the risk factors section of our annual report on Form 10-K on Form 10-K, excuse me 10-Q filed today.
Ted Jenkins: actual results could differ materially from those contained in such statements.
Ted Jenkins: Several factors that could cause or contribute to such differences are described in detail
Ted Jenkins: in Spero Therapeutics' filings with the SEC, including in the risk factors section of our
Ted Jenkins: annual report on Form 10-Q filed today.
Ted Jenkins: These forward-looking statements speak only as of the date of this conference call, and
These forward looking statements speak only as of the date of this conference call and the company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the company. After the date of todays release and call.
Ted Jenkins: the company undertakes no obligation to publicly update any forward-looking statements or supply
Ted Jenkins: new information regarding the company after the date of today's release and call.
Participating in today's call are Dr. <unk>, <unk>, Chief Executive Officer, Seth Shukla, Chief Financial Officer, and Dr. David Melnick consultant and senior clinical adviser with that I'd like to turn the call over to Dr. Art Kit might deviate. Please go ahead.
Ted Jenkins: Participating in today's call are Dr. Ankit Mahadevia, Chief Executive Officer, Seth Shukla,
Ted Jenkins: Chief Financial Officer, and Dr. David Melnick, Consultant and Senior Clinical Advisor.
Ted Jenkins: With that, I'd like to turn the call over to Dr. Ankit Mahadevia.
Ankit Mahadevia: Please go ahead, Ankit.
Ankit Mahadevia: Thank you, Ted, and good afternoon to everyone listening to our call today.
Thank you Ted and good afternoon to everyone listening to our call today are those who have followed the sparrow over the past few months know about the company's decision during the second quarter to restructure and pursue a new strategic direction, where that'd be our 720 is our lead asset and Tempe panned on H B R and SPR two O six is our <unk>.
Ankit Mahadevia: Those who have followed Spero over the past few months know about the company's decision
Ankit Mahadevia: during the second quarter to restructure and pursue a new strategic direction, with SPR-720
Ankit Mahadevia: as our lead asset and Tepipanem-HBR and SPR-206 as our designated partnership-directed programs.
Ignited partnership directed programs.
Ankit Mahadevia: We made this decision promptly following our FDA late-cycle meeting, during which the
We made this decision promptly following our F D. A late cycle meeting during which the agency suggested the data from sparrows, new drug application seeking approval for tab dependent H B R for the treatment of complicated urinary tract infections.
Ankit Mahadevia: agency suggested that the data from Spero's new drug application, seeking approval for
Ankit Mahadevia: Tepipanem-HBR for the treatment of complicated urinary tract infections, would likely be
Ankit Mahadevia: insufficient to support approval during the first review cycle.
It would likely be insufficient to support approval during the first review cycle. A subsequent complete response letter confirmed that this was the Fda's view, while also indicating additional clinical study would be required to support an approval.
Ankit Mahadevia: A subsequent complete response letter confirmed that this was the FDA's view, while also indicating
Ankit Mahadevia: additional clinical study would be required to support an approval.
Ankit Mahadevia: While ceasing Tepipanem's commercial activities and restructuring was difficult, our swift
While ceasing that'd be patents commercial activities and restructuring was difficult our Swiss decision to do so almost immediately after the late cycle meeting set us on a path that leaves us well positioned for future growth. We have strong data that clearly differentiates our three clinical stage assets cash runway that takes us through key clinical milestones and world class partners.
Ankit Mahadevia: decision to do so almost immediately after the late-cycle meeting set us on a path that
Ankit Mahadevia: leaves us well-positioned for future growth.
Ankit Mahadevia: We have strong data that clearly differentiates our three clinical-stage assets, cash runway
Ankit Mahadevia: that takes us through key clinical milestones, and world-class partners to help us advance
Ankit Mahadevia: We have made progress this quarter against our core objectives to foster this growth.
To help us advance these assets.
We have made progress this quarter against our core objectives to foster this growth.
Ankit Mahadevia: First, we continue to progress toward key clinical and regulatory milestones in our pipeline within our capital runway.
First we continue to progress towards key clinical and regulatory milestones in our pipeline within our capital runway and David will speak further about our progress on both S. P. R. Seven 'twenty and two O six.
Ankit Mahadevia: And David will speak further about our progress on both SPR 720 and 206.
Ankit Mahadevia: Second, we have requested and completed a Type A meeting with the FDA to gain further insights as to the pathway forward towards a potential regulatory approval for tebupenem HBR.
We have requested and completed a type a meeting with the F. D. A to gain further insights as to the pathway forward towards a potential regulatory approval for Debbie Dunnam H B R. We believed the meeting was constructive and we expect to receive written minutes during the third quarter of 2022.
Ankit Mahadevia: We believe the meeting was constructive, and we expect to receive written minutes during the third quarter of 2022.
Ankit Mahadevia: Finally, we continue to employ good stewardship of capital and continue to seek kinds of creative partnerships that have been a hallmark of our history.
Finally, we continue to employ good stewardship of capital and continue to seek kind of creative partnerships that have been a hallmark of our history.
Ankit Mahadevia: With that as an introduction, I'd like to give a brief overview of today's call.
With that as an introduction I'd like to give a brief overview of today's call.
Ankit Mahadevia: I'll begin with additional commentary on tebupenem HBR.
I'll begin with additional commentary on tabby tenant H B R. Following that Dr. David Melnick, our senior clinical adviser will provide an update on our progress advancing S. P. R 720 S. P. R. Two O six finally, our Chief Financial Officer, South Shukla will then close with a discussion of our current financials and cash runway and then we'll follow up.
David Melnick: Following that, Dr. David Melnick, our senior clinical advisor, will provide an update on our progress advancing SPR 720 and SPR 206.
Ankit Mahadevia: Finally, our chief financial officer, Saf Shukla, will then close with a discussion of our current financials and cash runway, and then we'll follow up with Q&A.
Ankit Mahadevia: So let's shift gears briefly to tebupenem.
With Q&A.
So let's shift gears briefly to tabby panel.
Ankit Mahadevia: The core components of tebupenem's value proposition have not changed.
The core components tabby panama's value proposition have not change there remain millions of patients with complicated urinary tract infections, who would benefit from an oral therapy that could replace IV treatments and allowed them to potentially return home from the hospital sooner or possibly avoid hospitalization altogether.
Ankit Mahadevia: There remain millions of patients with complicated urinary tract infections who would benefit from an oral therapy that could replace IV treatments and allow them to potentially return home from a hospital sooner or possibly avoid hospitalization altogether.
Ankit Mahadevia: There's substantial economic incentives for healthcare providers and payers to treat patients out of a hospital.
Theres substantial economic incentives for health care providers and payers to treat patients out of the hospital.
Ankit Mahadevia: And tebupenem continues to have intellectual property protection extending into at least 2038.
And heavy Panama continues to have intact electoral property protection extending into at least 2038.
Ankit Mahadevia: Additionally, tebupenem's potential to solve the challenges posed by the increasing prevalence of fluoroquinolone-resistant and ESBL-producing gram-negative bacteria has been thoroughly demonstrated by data from dozens of clinical studies as well as surveillance efforts in Japan where it has been marketed for over a decade.
Additionally, tabby panama's potential to solve the challenges posed by the increasing prevalence of floor quinolone resistant and E. L. E. S. B all producing gram negative bacteria has been thoroughly demonstrated by data from dozens of clinical studies as well as surveillance efforts in Japan, where it has been marketed for over a decade. These data have been thorough.
Ankit Mahadevia: These data have been thoroughly vetted by leading experts and the peer review process of prestigious journals, including the New England Journal of Medicine, which published the results of the Phase III ADAPT-PO trial in the second quarter.
That had by leading experts and the peer review process, a prestigious journals, including the New England Journal of Medicine, which published the results of the phase III adapt P O trial in the second quarter.
Ankit Mahadevia: Accordingly, a key objective for us this quarter was clarifying the outstanding requirements for potential regulatory approval through continued engagement with the FDA.
Accordingly, our key objective for us this quarter was clarifying the outstanding requirements for potential regulatory approval through continued engagement with the F. D. A yeah as I mentioned earlier, we've completed our type a meeting, which we believe was constructive.
Ankit Mahadevia: As I mentioned earlier, we've completed our type A meeting, which we believe was constructive.
Ankit Mahadevia: Upon receipt of the type A meeting minutes that will confirm our discussion, we plan to advance additional Phase III clinical development and eventual commercialization through external partnership.
Upon receipt of the type a meeting minutes that will confirm our discussion we plan to advance additional phase II clinical development and eventual commercialization through external partnership.
Ankit Mahadevia: We believe gaining clarity on the requirements for tebupenem's approval will leave us well-positioned as we seek to work with existing and potentially new partners to chart its best course forward.
We believe gaining clarity on their requirements for type dependents approval will leave us well positioned as we seek to work with existing and potentially new partners to charge. Its best course forward. We believe that this will allow us to work towards unlocking value in a capital efficient manner that provides a runway through key anticipated milestones across our pipeline.
Ankit Mahadevia: We believe that this will allow us to work towards unlocking tebupenem's value in a capital-efficient manner that provides a runway through key anticipated milestones across our pipeline.
Ankit Mahadevia: Our strong track record of establishing partnerships with premier organizations adds to our optimism on tebupenem's outlook, and we look forward to this program's continued advancement.
Our strong track record of establishing partnerships with Premier organization adds to our optimism on turbine bantams outlook and we look forward to this program's continued advancement.
Ankit Mahadevia: With that, let's shift gears to 720 and 206 and the call to David.
With that let's shift gears to seven in 'twenty and two O six and I'll hand, the call to David David.
David Melnick: David?
David Melnick: Thank you very much, Ankit.
Thank you very much I'll get.
Yeah sure well as you may recall S. P. R seven isn't.
Orphan drug designation oral agent as is being developed for non tuberculosis mycobacteria pulmonary disease or M. P. M. P D N.
David Melnick: As you may recall, SPR-720 is an orphan drug-designated oral
David Melnick: agent that is being developed for non-tuberculosis mycobacterial pulmonary disease, or NTM-PD.
N T M. P. D is estimated to affect approximately 95000 patients in the U S and a total of approximately 245000 patients across the U S Europe and Japan.
David Melnick: NTM-PD is estimated to affect approximately 95,000 patients in the U.S. and a total of
Due to the limitations of the current treatment regimens. There is a substantial gap in the therapeutic paradigm for N. P. M. P. P. D patients most of whom have underlying lung disease, a compromised immune system or our of advanced age. These limitations stemmed from the suboptimal efficacy.
David Melnick: approximately 245,000 patients across the U.S., Europe, and Japan.
David Melnick: Due to the limitations of the
And the Tolerability <unk> toxicity issues associated with the off label antibiotic combinations that are currently employed for treatment.
This creates a poor risk benefit profile that discourages physicians and patients from beginning pharmacotherapy ruling in disease and to what pause until the diseases at an advanced stage, even with the current treatments, which are generally given continuously for one to two years many patients eventually progress.
So late stage refractory pulmonary disease. This is often accompanied by permanent lung damage and disabling symptoms that can negatively impact a patient's ability to carry out daily activities, such as shopping or walking.
Looking at the current therapeutic paradigm printing MPD, one can conclude that there is a clear unmet need for effective and well tolerated treatment for patients who are early in their disease journey, namely those who are treatment naive or treatment and experience.
David Melnick: current treatment regimens, there is a substantial gap in the therapeutic paradigm for NTM-PD
This most agents currently in development focus on treatment refractory patients who may already have irreversible lung injury. In contrast, the goal of our S. P. R. 720 program remains to develop a treatment for early stage patients that can prevent progression to refractory disease.
David Melnick: patients, most of whom have underlying lung disease, a compromised immune system, or are
David Melnick: of advanced age.
David Melnick: These limitations stem from the suboptimal efficacy and the tolerability and or
Which we believe will lead to significant improvements in clinical outcomes and quality of life.
David Melnick: toxicity issues associated with the off-label antibiotic combinations that are currently
The next step on our path to achieve this goal.
David Melnick: employed for treatment.
With the expected initiation of a phase two trial of S. P. R 720 in the fourth quarter of 2022.
David Melnick: This creates a poor risk-benefit profile that discourages physicians
David Melnick: and patients from beginning pharmacotherapy early in disease and to pause until the disease is at an
This innovative trial will be a dose ranging placebo controlled monotherapy study in treatment naive and treatment experienced patients with M. T. M. P. D caused by M Avium complex.
David Melnick: advanced stage.
Congress is expected to enroll approximately 35 patients across four cohorts. These will include a blinded placebo cohort blinded STR 720 cohorts, receiving 500 milligrams or 1000 milligrams of study drug daily and an open label S. P. R. Seven.
20 cohort that will allow us to assess the plasma PK and the clinical pharmacodynamics of S. P. R 720 inpatients.
The primary endpoint of the trial will evaluate changes in bacterial load in sputum samples from baseline to the end of the treatment period, which will last 56 days.
Our assessment will examine the slope of the change in the MTM bacterial burden in sputum over multiple time points measured during the study.
This methodology is based on the really bad serious seidel activity assessment paradigm EPA studies have traditionally been used over many years to assess with the single agent activity of anti micro bacterium treatments, including the recently approved drugs for drug resistant might go back to into the Colossus.
Key secondary endpoints will include multiple assessments of clinical response quality of life study drug pharmacokinetics as well as safety and Tolerability.
For details on the trial design. The SPR 720 phase two protocol will be available for review on clinical trials that Gov in the coming weeks.
Interim data from the S. P. R 720 phase two trial are expected in mid 2023 with topline results expected ruling in 2024.
Positive. These data would demonstrate S. P. R. Seven twenties ability to drive early microbiological response, as a monotherapy versus placebo. A result that has not been accomplished with any other agent.
These upcoming Readouts, therefore represent key potential catalysts for our lead program, especially when appreciating the strong link between early microbiological response and patient outcomes in Pryor observational clinical studies. They will also inform plans for S. P. R. Seven twenties long term development.
<unk> is an integral component of effective combination therapies for MTM pulmonary disease.
As we move toward S. P. R. Seven twenties anticipated interim data readout next year, we are highly encouraged by the strength of the data set supporting the program. This includes in vitro data demonstrating its potent activity against the range of clinically important N T. M species is lowest.
Data from a nearing chronic infection model that demonstrates its activity against pulmonary disease caused by both M. Avium and M. Abscesses. The two most prevalent strains of N T M.
Additionally, phase one clinical studies have shown 720 to be well tolerated at exposures above the predicted therapeutic levels together these clinical and preclinical data provide a strong scientific foundation for our lead program. They importantly demonstrate SPR seven points.
As potential to provide early stage M. T M. P D patients with a well tolerated therapy that can prevent disease progression and the associated decline in quality of life.
Next I'd like to discuss S. P. R to US six this is a novel phase II ready IV polymyxin antibiotic candidate that we are developing to treat multi drug resistant gram negative bacterial infections in the hospital setting.
Oh, well tolerated and effective treatments for these infections are long standing unmet need as the physiology of Gram negative bacteria renders them resistant to most clinically useful antibiotics.
David Melnick: Even with the current treatments, which are generally given continuously for one to
David Melnick: two years, many patients eventually progress to late-stage refractory pulmonary disease.
As a result, the current treatment paradigm calls for combination regimens that generally include the older. Currently mixes that are associated with different toxicity, resulting in poor risk benefit profiles.
David Melnick: This is often accompanied by permanent lung damage and disabling symptoms that can negatively impact
David Melnick: a patient's ability to carry out daily activities such as shopping or walking.
David Melnick: Looking at the
David Melnick: current therapeutic paradigm for NTM-PD, one can conclude that there is a clear unmet need
David Melnick: for effective and well-tolerated treatment for patients who are early in their disease journey,
David Melnick: namely those who are treatment naive or treatment inexperienced.
The resistance of many Gram negative pathogens to currently available agents is conferred by the biochemical makeup of the VAT curious outer membrane, which is comprised primarily of phospholipid at the inner surface and negatively charged lipopolysaccharide at the outer leaflet.
David Melnick: Despite this, most agents currently
David Melnick: in development focus on treatment refractory patients who may already have irreversible
This lipopolysaccharide layer of the membrane effectively limits the activity of many current antibiotics utilized against with Gram negative gram positive bacteria.
Adding to the problem has been the inability of medicinal chemists to successfully all through the traditional antimicrobials in a way that allows her to king infants integrate them negative bacteria, while still retaining antibacterial activity.
David Melnick: lung injury.
Using our potentiate or platform, we developed SPR two O six to disrupt the organization of the lipopolysaccharide layer on the outer membrane and also to ask directly on multi drug resistant gram negative pathogens in vitro preclinical data suggests that we have been successful in these efforts.
David Melnick: In contrast, the goal of our SPR 720 program remains to develop a treatment for
David Melnick: early-stage patients that can prevent progression to refractory disease, which we believe will lead
David Melnick: to significant improvements in clinical outcomes and quality of life.
David Melnick: The next step on our path
S. S. P. R. Two O six has shown potent broad spectrum activity against difficult Gram negative pathogens, including car broken them resistant enterobacter, Alice antibiotic resistant acinetobacter down many aren't and Pseudomonas aeruginosa.
S. P. R. Two of <unk> activity against these carpet 10 of resistant bacteria is quite noteworthy S infections caused by corporate payment resistant acinetobacter down Manny I have a mortality rate of 40% to 50%, while the mortality rate for carbon kind of resistant enterobacter Alice infections is two to four two.
<unk> set of Cobre, Panama susceptible infections.
Adding to the promise of the SPR two of six program our phase one data that show a lack of nephrotoxicity. When <unk> is administered at predicted therapeutic dose levels. This demonstrates the potential of SPR two O six to overcome the key limitations of appalling mixes.
And that is their nephrotoxicity, providing clear differentiation. In addition, a phase one bronchoalveolar lavage 12 showed S. P. R. Two O six long exposures continuously exceeding the minimum inhibitory concentrations for the key targeted gram negative pathogens for the entire day.
OC interval in contrast, colistin one of the most widely used probably nixon's was shown to be earned detectable in the lungs in a prior P. A L study this.
This provides another important point of differentiation for SPR two of six, especially when you consider that approximately half of patients infected with these multi drug resistant gram negative pathogens suffered from lung infections.
David Melnick: is to achieve this goal with the expected initiation of a Phase II trial of SPR 720
Looking forward, we are now working to advance S. P O to O six towards a phase two cross indication resistant pathogen study in patients with complicated urinary tract infections, both hospital acquired and ventilator associated bacterial pneumonia and bloodstream infections.
David Melnick: in the fourth quarter of 2022.
We're doing this with support from several noteworthy partners, including Pfizer.
<unk> medicines, the department of Defense and the National Institute of allergy and infectious diseases. In fact partner support is allowing us to fully fund S. P. Artur six through phase two with external non dilutive sources.
<unk> recently completed a pre IND meeting with the FDA.
Precipitating a $5 million milestone payment under our license agreement with Pfizer and we expect to initiate the phase II study.
David Melnick: This innovative trial will be a dose-ranging, placebo-controlled,
David Melnick: monotherapy study in treatment-naive and treatment-inexperienced patients with NTM-PD
In the third quarter of 2023.
David Melnick: caused by M. avium complex.
With that I'll now turn this over to our Chief Financial Officer, Seth shipper to discuss our financial results.
David Melnick: The trial is expected to enroll approximately 35 patients
David Melnick: across four cohorts.
Okay.
Thank you David.
David Melnick: These will include a blinded placebo cohort, blinded SPR 720 cohorts
As of June 32022, spiral hedge approximately $45 $4 million in cash cash equivalents and marketable securities.
David Melnick: receiving 500 milligrams or 1,000 milligrams of steady drug daily, and an open-label SPR 720
Given the cost savings achieved data expected from our restructuring and the cessation of <unk> commercial activities.
We believe our existing cash cash equivalents and marketable securities together with other non dilutive funding commitments.
It would be sufficient to fund our planned operating expenses and capital expenditures.
Pursuant to the priorities of our strategic refocusing into late 2023.
We believe that this anticipated runway, which does not account for any new potential business development for any of our assets.
David Melnick: cohort that will allow us to assess the plasma PK and the clinical pharmacodynamics of SPR 720
We will take us through key clinical milestones, including interim phase two data Readouts for S. P. R 720 <unk>.
David Melnick: in patients.
And the initiation of a phase II trial of Spi two effects in Q3 2023.
Before detailing the rest of our Q2 financial results I remind you are listening that the decision to restructure our operations was made halfway into the second quarter.
We therefore expect our total spend to further decrease in the quarters ahead compared to Q2.
Total revenues for the second quarter of 2022 were <unk> 2 million.
Paired with revenues of $5 million in the second quarter of 2021.
The revenue decrease was primarily due to a $1 2 million dollar decrease in qualified expenses incurred under our BARDA contract, but can be found on HBO.
A $1 million decrease in funding under our <unk> agreement relating to <unk>.
And a decrease in collaboration revenues related to our Pfizer license agreement.
I have set by an increase of <unk> three.
$3 million.
Agreement related to <unk>.
Research and development expenses for the second quarter of 2022 were $8 2 million compared with $14 5 million of R&D expenses for the same period in 2021.
This year over year decrease was primarily due to reduced program activity for <unk> as a result of our strategic restructuring announced in May 2022.
As well as reduced costs associated with our SPR 720, and Spi two of six programs and a decrease in research and development head count costs.
After our restructuring.
General and administrative expenses for the second quarter of 2022 of $8 $1 million were lower than the $9 2 million reported for the same period in 2021.
Primarily a result of a decrease in head count in our commercial general and administrative functions due to our strategic restructuring.
As well as a decrease in professional and consulting fees.
Restructuring expenses of $11 $8 million were incurred during the quarter. These.
These expenses were primarily comprised of $8 7 million of <unk>.
Severance and other employee costs and $2 6 million of discontinuation costs, such as contract termination fees.
And <unk> 6 million of lease impairment expenses.
We reported a net loss for the second quarter ended June 32022 of $28 7 million.
Our 87 cents per common share compared to a net loss of $18 6 million or <unk> 63 per common share reported for the same period in 2021.
For further details on our financials. Please refer to our quarterly report on Form 10-Q filed with the SEC today.
We will now open the call for questions operator.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session.
If you'd like to ask a question you May press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You May press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the starkey.
Our first question comes from the line of Ritu barrel with Cowen. Please proceed with your question.
David Melnick: The primary endpoint of the trial will evaluate changes in bacterial load in sputum samples
Sure.
David Melnick: from baseline to the end of the treatment period, which will last 56 days.
Good afternoon guys.
Thanks for the detail on the 722.
Wanted to ask about.
That that slope.
Im sorry bacterial burden redemption.
Endpoint analysis.
What what flows do you think with negative slope do you think.
You would need to achieve.
Could be suggestive of improvements in outcomes I know I know you mentioned that there have been studies associated with outcomes.
What are you what are you looking for and then what will we get with the interim data.
You mentioned in mid 2023 is that the flow data alone or could there be clinical end points on that thanks.
David Melnick: Our assessment will examine the slope of the change in the NTM bacterial burden in sputum
Hi, Richard Thanks, a lot for the question, yeah, and so to dive into that that kind of E. B a slope phenomenon. It's it's a trial paradigm. That's been used for years in other micro bacterial diseases like TB and the benefit is that in a focused study you can get a lot of information about how a single.
Agent is doing to affect the bacterial burden.
In a patient and it's been tied to approve drugs and the micro bacterial space as well and so to that effect, you've seen drugs like <unk> and predominant and others that have shown really what we're looking for is relative to placebo a negative slope. So in other words relative to placebo were seeing in a can.
David Melnick: over multiple time points measured during the study.
David Melnick: This methodology is based on the early bactericidal activity assessment paradigm.
System basis, a reduction in the bacterial burden in the patient over time and in the EPA paradigm. When you do that that's consistent with an agent being additive to an overall treatment regimen and what's been used in those paradigms to advance a drug to pivotal combination studies. So so that's the.
David Melnick: EBA studies have traditionally been used over many years to assess the single-agent activity
First point and to your second point of the interim analysis.
David Melnick: of antimicrobacterial treatments, including the recently approved drugs for drug-resistant
No two things one is that we will see the natural history data in MTM, including with Clarithromycin shows that when you have an intervention that's effective on the bugs you will see reduction in bacterial burden earlier in patients treatment lifecycle.
David Melnick: mycobacterium tuberculosis.
The clinical outcomes typically come a little bit later and so what were the interim will show us is the.
The bacterial D E b a slope phenomenon for the subset of patients that we've enrolled and have gone through this study.
We won't commit at this time to whether we'll be able to see clinical outputs in those patients, but certainly we will see the quantitative effect of of what a 720 is doing.
David Melnick: Key secondary endpoints will include multiple assessments of clinical response, quality
Got it and then what are the most important clinical.
Outcomes clinical endpoints that are part of the study.
David Melnick: of life, study drug pharmacokinetics, as well as safety and tolerability.
David Melnick: For details on the trial design, the SPR 720 Phase 2 protocol will be available for review
David Melnick: on clinicaltrials.gov in the coming weeks.
David Melnick: Interim data from the SPR 720 Phase 2 trial are expected in mid-2023, with top-line results
David Melnick: response as a monotherapy versus placebo, a result that has not been accomplished with
So that I will pass to David in terms of the clinical outcomes that we're looking for.
David Melnick: expected early in 2024.
David Melnick: If positive, these data would demonstrate SPR 720's ability to drive early microbiologic
David Melnick: any other agent.
Okay.
I'm sorry, I was on mute. This is an important question because FDA has made it clear that they are they are quite interested in clinical outcomes. We will be piling piloting four separate PRA type scales in the phase one study looking for an early signal of which may be most helpful.
David Melnick: These upcoming readouts therefore represent key potential catalysts for our LEAD program,
There is.
Bronchia bronchiectasis type scale, which has been.
Amended to account for MTM severity of symptoms scales change from baseline scale. So there are four separate clinical measures that had been built into this this phase one protocol.
Again, two months of therapy, what we see clinical change hard to tell we certainly would expect to see changes in bacterial.
David Melnick: especially when appreciating the strong link between early microbiologic response and patient
Sputum bacterial load over that period of time.
David Melnick: outcomes in prior observational clinical studies.
Great. Thanks.
Our next question comes from the line of Louise Chen with Cantor. Please. Please proceed with your question.
David Melnick: They will also inform plans for SPR 720's long-term development as an integral component
David Melnick: of effective combination therapies for NTM pulmonary disease.
Hi, Thank you for taking my questions here. So I had a few for you first one I wanted to ask you is where are you with your partnership discussions.
With heavy paradigm in a potential partner or when do you think we might hear something would be as early as this year.
And then what kind of partner ideally are you looking for.
And then on S. P R a chiller sex.
How do you view this opportunity each year.
And what gives you confidence that you'll establish proof of concept here when you start the studies and why not start the studies sooner. Thank you.
Oh, Thanks Louise for the for the great questions and so as we noted on the call <unk> has a lot of great attributes going forward patent life until 2038 full clinical and commercial supply in a very large addressable patient need and so shouldn't be a surprise to you that we've been.
David Melnick: As we move toward SPR 720's anticipated interim data readout next year, we are highly encouraged
David Melnick: by the strength of the data sets supporting the program.
David Melnick: This includes in vitro data demonstrating its potent activity against the range of clinically
David Melnick: important NTM species, as well as data from a murine chronic infection model that demonstrates
David Melnick: its activity against pulmonary disease caused by both M. avium and M. abscessus, the two
David Melnick: most prevalent strains of NTM.
David Melnick: Additionally, Phase 1 clinical studies have shown 720 to be well-tolerated at exposures
David Melnick: above the predicted therapeutic levels.
David Melnick: Together, these clinical and preclinical data provide a strong scientific foundation for
<unk> and constructive dialogues with partners and throughout the journey of Panama.
Of course, we're not going to be able to give you any any explicit guidance as to how or when will potentially consummate any of those discussions and in terms of the ideal partners. We're looking for we're certainly looking for a partner that shares our conviction and the program has the same conviction in terms of delivering <unk>.
Panama patients as efficiently as possible.
And ideally has the type of resources to enable us to move turbine kind of expeditiously towards approval. So that's always been our our criteria and we will continue to prosecute that.
Maybe shifting gears to your question on on <unk> six.
Yes, it's close to our sector has been quite an asset for US number one it meets a need there for patients that's not addressed by current standard of care and that is for patients that are resistant to the current medications. We have when they have highly resistant infections further as David had mentioned.
It's fully financed for us beyond a major inflection point, which is excellent and what gives us confidence about its ability to do something positive for patients is that is all the data we built up to date.
And for those that are interested as it's in the corporate presentation number one we can kill bugs that other standard of care agents can number two is we see that in the right in vivo models and then number three when you take the doses that seem to make those effects happen and put them into people, we see is safe and well tolerated drug and that's really the cascade of data.
Thats gotten us excited and our partners excited and in terms of the timing of the study as you heard from our other medicines, we're always trying to move things as expeditiously as we can in this case, we've made the conscious decision to use outside funding to advance 206 to be good stewards of our resources that means that certain things like the CMC.
You did for clinical supply happened in cereal rather than parallel and that's really the long pole in the tent.
So as we the funding becomes available we will get underway and and.
And we'll go from there.
Thank you.
Okay.
Our next question comes from the line of Iran. Sullivan Salvo, Roger with H C. Wainwright. Please proceed with your question.
Hi, This is <unk> dialing in for Ron Silverado and thanks for taking our question. So couple of a couple of questions from us.
With respect to SCS, Kevin Hester.
Phase two trial design. So you stated that you will enrolled 35 patients. So given the small sample size are you concerned about the variability of treatment response.
Yeah. So thanks for the question I'll note that the EPA paradigm lets us be more efficient with patients because realize that.
Although that's the number of patients will be taking data points in terms of a patient's microbiological trajectory six times alright, and so as you think about the number of observations overall that design allows you to get a lot more out of the study size that you have and so we believe that that will give us a good ability to think about it.
Tight dataset that's number one number two is that the quantitative culture methods, we're using to assess bacterial burden continued to evolve and precision and speed and that allows us to get a fairly tight measure of where a patient is as well.
Okay. Thanks for the clarity.
With respect to 790 again, so has the clinical hold is three 7% many mid anyone's nervous about the prospects for the drug going forward.
She has been put to bed with the lifting of the clinical hold by the FDA and the fact that this is a monkey studies show another human safety problem.
Yeah. Thanks for the question I think you answered part of the question, which is that as we did our investigations on the whole it was clear that what we saw in large.
Large nonhuman primates was an artifact of the way, we dose those primates and not related to the drug itself and in submitting those data FDA agreed with us they lifted the hold the protocol you see to date is consistent with their lifting of the hold and the lack of restrictions that we have on the study and so we've been <unk>.
At work engaging our key sites and investigators and people are excited about the trial and are making preparations to help us execute on it.
Yeah.
I'd just add that the FDA based on the results of that study has approved an extension in the duration of this phase II study from 28 days to 56 days, so they're actually quite comfortable with the safety readout at this point.
Great. One final question from me. So you mentioned about non diluted funding for 206.
Do you intend to explore a similar mechanism for 720 down the road.
Yes.
I'll, let Seth answer that question, yes, just historically.
<unk> looked for non dilutive funding across all our programs. So certainly it's something we will continue to look opportunistically.
See if it makes sense.
Okay. Thanks for taking my questions.
Thank you.
There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.
David Melnick: our LEAD program.
Thank you operator, and thanks to everyone. That's listening we look forward to our company's continued advancement and I wish everyone a nice evening.
David Melnick: They importantly demonstrate SPR 720's potential to provide early-stage NTM PD patients with
David Melnick: a well-tolerated therapy that can prevent disease progression and the associated decline
David Melnick: in quality of life.
David Melnick: Next, I would like to discuss SPR 206.
David Melnick: This is a novel Phase 2 ready IV polymyxin antibiotic candidate that we are developing
David Melnick: to treat multidrug-resistant gram-negative bacterial infections in the hospital setting.
David Melnick: Well-tolerated and effective treatments for these infections are a long-standing unmet
Operator: Ladies and gentlemen, at this time, we will be conducting a question and answer session.
David Melnick: need, as the physiology of gram-negative bacteria renders them resistant to most clinically
Operator: If you'd like to ask a question, you may press star 1 on your telephone keypad.
Okay.
David Melnick: useful antibiotics.
Operator: A confirmation tone will indicate your line is in the question queue.
David Melnick: As a result, the current treatment paradigm calls for combination regimens that generally
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Operator: You may press star 2 if you would like to remove your question from the queue.
David Melnick: include the older polymyxins that are associated with nephrotoxicity, resulting in poor risk-benefit
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
David Melnick: profiles.
Ritu Baral: Our first question comes from the line of Ritu Barrow with Cowen.
David Melnick: The resistance of many gram-negative pathogens to currently available agents is conferred
Ritu Baral: Please proceed with your question.
David Melnick: by the biochemical makeup of the bacteria's outer membrane, which is comprised primarily
Ritu Baral: Good afternoon, guys.
David Melnick: of phospholipid at the inner surface and negatively charged lipopolysaccharide at the outer leaflet.
Operator: You may disconnect your lines at this time, and have a wonderful day.
Ritu Baral: Thanks for the detail on the 720 phase 2.
David Melnick: This lipopolysaccharide layer of the membrane effectively limits the activity of many current
Ritu Baral: I wanted to ask about that slope reduction, I'm sorry, bacterial burden reduction slope endpoint analysis.
David Melnick: antibiotics utilized against both gram-negative and gram-positive bacteria.
Ritu Baral: What negative slope do you think that you would need to achieve to be suggestive of improvements in outcomes?
David Melnick: Adding to the problem has been the inability of medicinal chemists to successfully alter
Ritu Baral: I know you mentioned that there have been studies associating slope with outcomes.
David Melnick: the traditional antimicrobials in a way that allows them to gain entrance into gram-negative
Ritu Baral: What are you looking for?
David Melnick: bacteria while still retaining antibacterial activity.
Ritu Baral: And then what will we get with the interim data that you mentioned in mid-2023?
David Melnick: Using our potentiator platform, we developed SPR-206 to disrupt the organization of the
Ritu Baral: Is that the slope data alone or could there be clinical endpoints on that?
David Melnick: lipopolysaccharide layer on the outer membrane and also to act directly on multidrug-resistant
Ritu Baral: Thanks.
David Melnick: gram-negative pathogens.
David Melnick: Hi, Ritu.
David Melnick: In vitro preclinical data suggests that we have been successful in these efforts as SPR-206
David Melnick: Thanks a lot for the question.
David Melnick: has shown potent broad-spectrum activity against difficult gram-negative pathogens, including
David Melnick: Yeah, and so to dive into that EBA slope phenomenon, it's a trial paradigm that's been used for years in other mycobacterial diseases like TB, and the benefit is that in a focused study, you can get a lot of information about how a single agent is doing to affect the bacterial burden in a patient, and it's been tied to approved drugs in the mycobacterial space as well.
David Melnick: carbapenem-resistant Enterobacterialis, antibiotic-resistant Acinetobacter bound manii, and Pseudomonas
David Melnick: And so to that effect, you know, you've seen drugs like Bedaquiline and Pertamidin and others that have shown really what we're looking for is relative to placebo a negative slope.
David Melnick: aeruginosa.
David Melnick: So in other words, relative to placebo, we're seeing in a consistent basis a reduction in the bacterial burden in a patient over time.
David Melnick: SPR-206's activity against these carbapenem-resistant bacteria is quite noteworthy.
David Melnick: And in the EBA paradigm, when you do that, that's consistent with an agent being additive to an overall treatment regimen and what's been used in those paradigms to advance a drug to pivotal combination studies.
David Melnick: As infections caused by carbapenem-resistant Acinetobacter bound manii have a mortality
David Melnick: So that's the first point.
David Melnick: rate of 40 to 50 percent, while the mortality rate for carbapenem-resistant Enterobacterialis
David Melnick: And to your second point of the interim analysis, note two things.
David Melnick: infections is two to four times that of carbapenem-susceptible infections.
David Melnick: One is that we'll see the natural history data in NTM, including with clarithromycin, shows that when you have an intervention that's effective on the bugs, you will see reduction in bacterial burden earlier in a patient's treatment lifecycle.
David Melnick: Contributing to the promise of the SPR-206 program are our Phase I data that show a lack
David Melnick: The clinical outcomes typically come a little bit later.
David Melnick: of nephrotoxicity when SPR-206 is administered at predicted therapeutic dose levels.
David Melnick: And so what the interim will show us is the bacterial, the EBA slope phenomenon for the subset of patients that we've enrolled and have gone through to study.
David Melnick: This demonstrates the potential of SPR-206 to overcome the key limitation of the polymyxins,
David Melnick: We won't commit at this time to whether we'll be able to see clinical outputs in those patients, but certainly we'll see the quantitative effect of what 720 is doing.
David Melnick: that is their nephrotoxicity, providing clear differentiation.
David Melnick: What are the most important clinical outcomes or clinical endpoints that are part of this
David Melnick: In addition, a Phase I bronchoalveolar lavage trial showed SPR-206 lung exposures continuously
David Melnick: study?
David Melnick: exceeding the minimum inhibitory concentrations for the key targeted gram-negative pathogens
David Melnick: Thanks for taking the call.
David Melnick: for the entire dosing interval.
David Melnick: So that I'll pass to David in terms of the clinical outcomes that we're looking for.
David Melnick: In contrast, colistin, one of the most widely used polymyxins, was shown to be undetectable
David Melnick: I'm sorry, I was on mute.
David Melnick: in the lungs in a prior BAL study.
David Melnick: This is an important question because FDA has made it clear that they're quite interested
David Melnick: This provides another important point of differentiation for SPR-206, especially when
David Melnick: in clinical outcomes.
David Melnick: you consider that approximately half of patients infected with these multidrug-resistant gram-negative
David Melnick: We will be piloting four separate PRO-type scales in the Phase I study, looking for an
David Melnick: pathogens suffer from lung infections.
David Melnick: early signal of which may be most helpful.
David Melnick: Looking forward, we are now working to advance SPR-206 towards a Phase II cross-indication
David Melnick: There is a bronchiectasis-type scale, which has been amended to account for NTM severity
David Melnick: resistant pathogen study in patients with complicated urinary tract infections, both
David Melnick: of symptom scales, change from baseline scales.
David Melnick: hospital-acquired and ventilator-associated bacterial pneumonia and bloodstream infections.
David Melnick: So there are four separate clinical measures that have been built into this Phase I protocol.
David Melnick: We are doing this with support from several noteworthy partners, including Pfizer, Everest
David Melnick: You know, again, two months of therapy, will we see clinical change?
David Melnick: Medicines, the Department of Defense, and the National Institute of Allergy and Infectious
David Melnick: Hard to tell.
David Melnick: Diseases.
David Melnick: We certainly would expect to see changes in bacterial, speed of bacterial load over that
David Melnick: In fact, partner support is allowing us to fully fund SPR-206 through Phase II with external
David Melnick: period of time.
David Melnick: non-dilutive sources.
David Melnick: Great.
David Melnick: Spero recently completed a pre-IND meeting with the FDA, precipitating a $5 million milestone
David Melnick: Thanks.
David Melnick: payment under our license agreement with Pfizer, and we expect to initiate the Phase
Louise Chen: Our next question comes from the line of Louise Chen with Canter.
David Melnick: II study in the third quarter of 2023.
Louise Chen: Please proceed with your question.
Saath Shukla: With that, I'll now turn this over to our Chief Financial Officer, Saath Shukla, to
Louise Chen: Hi.
Saath Shukla: discuss our financial results.
Louise Chen: Thank you for taking my questions here.
Saath Shukla: Saath?
Louise Chen: So I had a few for you.
Saath Shukla: Thank you, David.
Louise Chen: First one I wanted to ask you is, where are you with your partnership discussions with
Saath Shukla: As of June 30, 2022, Spero had approximately $45.4 million in cash, cash equivalents, and
Louise Chen: tebupenem and a potential partner?
Saath Shukla: marketable securities.
Louise Chen: When do you think we might hear something?
Saath Shukla: Given the cost savings achieved and expected from our restructuring and the cessation of
Louise Chen: Would it be as early as this year?
Saath Shukla: tebupenem HBR's commercial activities, we believe our existing cash, cash equivalents,
Louise Chen: And then what kind of partner, ideally, are you looking for?
Saath Shukla: and marketable securities, together with other non-dilutive funding commitments, will be
Louise Chen: And then on SPR-206, you know, how do you view this opportunity to you?
Saath Shukla: sufficient to fund our planned operating expenses and capital expenditures pursuant
Louise Chen: And what gives you confidence that you'll establish proof of concept here when you start
Saath Shukla: to the priorities of our strategic refocusing into late 2023.
Louise Chen: the studies?
Saath Shukla: We believe that this anticipated runway, which does not account for any new potential business
Louise Chen: And why not start the studies sooner?
Saath Shukla: development for any of our assets, will take us through key clinical milestones, including
Louise Chen: Thank you.
Saath Shukla: interim Phase II data readouts for SPR 720, and the initiation of a Phase II trial of
Ankit Mahadevia: Thanks, Louise, for the great questions.
Saath Shukla: SPR 206 in Q3 2023.
Ankit Mahadevia: And so, you know, as we noted on the call, tebupenem has a lot of great attributes going
Saath Shukla: Before detailing the rest of our Q2 financial results, I remind all listening that the decision
Ankit Mahadevia: for it.
Saath Shukla: to restructure our operations was made halfway into the second quarter.
Ankit Mahadevia: Patent life until 2038, you know, full clinical and commercial supply, and a very large addressable
Saath Shukla: We therefore expect our total spend to further decrease in the quarters ahead compared to Q2.
Ankit Mahadevia: patient need.
Saath Shukla: Total revenues for the second quarter of 2022 were $2 million, compared with revenues of
Ankit Mahadevia: And so, you know, it shouldn't be a surprise to you that we've been engaging in constructive
Saath Shukla: $5 million in the second quarter of 2021.
Ankit Mahadevia: dialogues with partners kind of throughout the journey of tebupenem.
Saath Shukla: The revenue decrease was primarily due to a $1.2 million decrease in qualified expenses
Ankit Mahadevia: Of course, we're not going to be able to give you any, you know, explicit guidance as to,
Saath Shukla: incurred under our BARDA contract for tebupenem HBR, a $1 million decrease in funding under
Ankit Mahadevia: you know, how or when we'll potentially consummate any of those discussions.
Saath Shukla: our DOD agreement relating to SPR 206, and a decrease in collaboration revenues related
Ankit Mahadevia: And in terms of the ideal partners we're looking for, you know, we're certainly looking
Saath Shukla: to our Pfizer license agreement, offset by an increase of $0.3 million under our NIAID
Ankit Mahadevia: for a partner that shares our conviction in the program, you know, has the same conviction
Saath Shukla: agreement related to SPR 206.
Ankit Mahadevia: in terms of delivering tebupenem to patients as efficiently as possible, and, you know,
Saath Shukla: Research and development expenses for the second quarter of 2022 were $8.2 million, compared
Ankit Mahadevia: ideally has the type of resources to enable us to move tebupenem expeditiously towards
Saath Shukla: with $14.5 million of R&D expenses for the same period in 2021.
Ankit Mahadevia: approval.
Saath Shukla: This year-over-year decrease was primarily due to reduced program activity for Tebipenem HBR as a result of our strategic restructuring announced in May 2022, as well as reduced costs associated with our SPR 720 and SPR 206 programs, and a decrease in research and development headcount costs after our restructuring.
Ankit Mahadevia: So, that's always been our criterion, and we'll continue to prosecute that.
Saath Shukla: General and administrative expenses for the second quarter of 2022 of $8.1 million were lower than the $9.2 million reported for the same period in 2021, primarily a result of a decrease in headcount in our commercial, general, and administrative functions due to our strategic restructuring, as well as a decrease in professional and consultant fees.
Ankit Mahadevia: I'm going to be shifting gears to your question on SPR-206.
Saath Shukla: Restructuring expenses of $11.8 million were incurred during the quarter. These expenses were primarily comprised of $8.7 million of severance and other employee costs, and $2.6 million of discontinuation costs, such as contract termination fees, and $0.6 million of lease impairment expenses.
Ankit Mahadevia: Yes, it's because 206 has been quite an asset for us.
Saath Shukla: We reported a net loss for the second quarter ended June 30, 2022 of $28.7 million, or $0.87 per common share, compared to a net loss of $18.6 million, or $0.63 per common share reported for the same period in 2021.
Ankit Mahadevia: Number one, it meets a need for patients that's not addressed by current standard of care,
Saath Shukla: For further details on our financials, please refer to our quarterly report on Form 10-Q filed with the SEC today.
Ankit Mahadevia: and that is for patients that are resistant to the current medications we have when they
Operator: We will now open the call for questions.
Ankit Mahadevia: have highly resistant infections.
Operator: Operator?
Ankit Mahadevia: Further, as David had mentioned, it's fully financed for us beyond a major inflection
Operator: Thank you.
Ankit Mahadevia: point, which is excellent.
Ankit Mahadevia: And what gives us confidence about its ability to do something positive for patients is all
Ankit Mahadevia: the data we've built up to date, you know, and, you know, for those that are interested,
Ankit Mahadevia: it's in the corporate presentation.
Ankit Mahadevia: Number one, we can kill bugs that other standard of care agents can't.
Ankit Mahadevia: Number two is we see that in the right in vivo models, and then number three, when you
Ankit Mahadevia: take the doses that seem to make those effects happen and put them into people, we see a
Ankit Mahadevia: safe and well-tolerated drug.
Ankit Mahadevia: And that's really the cascade of data that's gotten us excited and our partners excited.
Ankit Mahadevia: And in terms of the timing of the study, you know, as you heard from our other medicines,
Ankit Mahadevia: we're always trying to move things as expeditiously as we can.
Ankit Mahadevia: In this case, we've made the conscious decision to use outside funding to advance 206 to be
Ankit Mahadevia: good stewards of our resources.
Ankit Mahadevia: That means that certain things like the CMC needed for clinical supply happen in serial
Ankit Mahadevia: rather than parallel, and that's really the long pole in the tent.
Ankit Mahadevia: So, you know, as we, the funding becomes available, we'll get underway, and we'll go
Ankit Mahadevia: from there.
Ankit Mahadevia: Thank you.
Ram Selvaraju: Our next question comes from the line of Ram Selvaraju with HC Wainwright.
Boobalan Pachaiyappan: Please proceed with your question.
Boobalan Pachaiyappan: Hi, this is Boobalan dialing in for Ram Selvaraju, and thanks for taking our question.
Boobalan Pachaiyappan: So a couple of questions from us.
Boobalan Pachaiyappan: With respect to SPR 720 Phase II trial design, so you stated that you'll enroll 35 patients.
Boobalan Pachaiyappan: Given the small sample size, are you concerned about the variability of treatment response?
David Melnick: Yeah, so thanks for the question.
David Melnick: I'll note that the EBA paradigm lets us be more efficient with patients because realize that,
David Melnick: you know, although that's the number of patients, we'll be taking data points in terms of a
David Melnick: patient's microbiological trajectory six times, right?
David Melnick: And so as you think about the number of observations overall,
David Melnick: that design allows you to get a lot more out of the study size that you have.
David Melnick: And so we believe that that'll give us a good ability to think about a tight data set.
David Melnick: That's number one.
David Melnick: Number two is that the quantitative culture methods we're using to assess bacterial burden,
David Melnick: you know, continue to evolve in precision and speed.
David Melnick: And that allows us to get a fairly tight measure of where a patient is as well.
Boobalan Pachaiyappan: Okay, thanks for the clarity.
Boobalan Pachaiyappan: With respect to 720 again, so has the clinical hold history with 720 made anyone nervous about
Boobalan Pachaiyappan: the prospects for the drug going forward?
Boobalan Pachaiyappan: Or has the issue has been put to bed with the lifting of the clinical hold by the FDA
Boobalan Pachaiyappan: and the fact that this is a monkey study issue and not a human safety problem?
Boobalan Pachaiyappan: Yeah, thanks for the question.
David Melnick: I think you answered part of the question, which is that as we did our investigation,
David Melnick: on the whole, it was clear that what we saw in large, large non-human primates was an
David Melnick: artifact of the way we dose those primates and not related to the drug itself.
David Melnick: And in submitting those data, FDA agreed with us, they lifted the hold.
David Melnick: The protocol you see to date is consistent with their lifting of the hold and the lack
David Melnick: of restrictions that we have on the study.
David Melnick: And so, you know, we've been hard at work, you know, engaging, you know, our key sites
David Melnick: and investigators, and people are excited about the trial and are making preparations
David Melnick: to help us execute on it.
David Melnick: You know, I'd just add that FDA, based on the results of that study, has approved an extension
David Melnick: in the duration of this phase two study from 28 days to 56 days.
David Melnick: So they're actually quite comfortable with the safety readout at this point.
David Melnick: Great.
David Melnick: One final question from me.
Boobalan Pachaiyappan: So you mentioned about non-dilutive funding for 206.
Boobalan Pachaiyappan: Do you intend to explore a similar mechanism for 720 down the road?
Boobalan Pachaiyappan: Yeah, I'll let Saf answer that question.
Saath Shukla: Yeah, just historically, we have looked for non-dilutive funding across all our programs.
Saath Shukla: So, certainly, it's something to consider.
Boobalan Pachaiyappan: Okay, thanks for taking my questions.
Boobalan Pachaiyappan: Thank you.
Operator: There are no further questions in the queue.
Ankit Mahadevia: I'd like to hand the call back to management
Ankit Mahadevia: for closing remarks.
Ankit Mahadevia: Thank you, Operator, and thanks to everyone that's listening.
Ankit Mahadevia: We look forward to our company's
Ankit Mahadevia: continued advancement, and I wish everyone a nice evening.
Operator: Ladies and gentlemen, this does conclude today's teleconference.
Operator: Thank you for your participation.