Q1 2023 Spero Therapeutics Inc Earnings Call
Speaker 1: And.
Speaker 2: Good afternoon and welcome to the Sparrow Therapeutics first quarter 2023 financial results conference call. At this time all participants are in listen only mode.
Speaker 2: Following the company's formal remarks, we will open up the call for questions. To join the question queue, please press star then 1. Please be advised that this call is being recorded and replay will be available. You can find information on the replay and further information related to today's announcements on the Sparrow Therapeutics website at www.sparrowtherapeutics.com.
Speaker 2: At this time, I would like to turn the call over to Ted Jenkins, Vice President Investor Relations and Strategic Finance at Sparrow Therapeutics. Mr. Jenkins, please go ahead.
Speaker 3: Thank you, operator, and thank you all for participating in today's conference call.
Speaker 3: This afternoon, Sparrow Therapeutics released financial results and provided a pipeline update for the first quarter of 2023. Our press release is available on the investor page of the Sparrow Therapeutics website. Before we begin, I'd like to remind you that some of the information presented on this conference call contains four different statements based on our current expectations, including statements about the future development.
Speaker 3: and commercialization of SPR 720, SPR 206, and Tevye Penham HBR. The design, initiation, timing, progress, and results of the company's preclinical studies and clinical trials and its research and development programs.
Speaker 3: management's assessment of the results of such preclinical studies and clinical trials. The company's cash forecast and anticipated expenses and the sufficiency of its cash resources.
Speaker 3: Such four 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 spare of the therapeutics filed with the SEC, including in the risk factor section of our quarterly report on Form 10Q for the quarter ended March 31, 2023, filed with the SEC today.
Speaker 3: These four-adulking statements speak only as the date of this conference call and the company undertakes no obligation to publicly update any four-adulking statements or supply new information regarding the company after the date of today's call. With that, I'd like to turn the call over to Sparroth, Chief Executive Officer Dr. Ankit Maidevia. Please go ahead, Ankit.
Speaker 3: Thanks, Ted, and thanks to all who are listening. We continue to make strong progress across each of our three late-stage clinical programs last quarter, and believe we have the key components in place to sustainably create value for the advancement of our pipeline. These components include an experienced and talented management team.
Speaker 3: Premier partners across our industry and government, a strong balance sheet, and differentiated investigational medicines designed to address clear medical needs and indications with strong commercial prospects. We outlined our clinical programs in detail only six weeks ago on our last earnings call. Given this, we will keep our prepared remarks today brief.
Speaker 3: After the prepared remarks, we'll move on to a Q&A session with myself, our Chief Financial Officer, South Shukla, and our Chief Medical Officer, Dr. Kamal Hamid.
Speaker 3: oral treatment for non-tuberculous mycobacterial disease, or NTMPD for short, serving first-line patients. I'm pleased to report that the program continues to advance according to plan. Our phase 2 proof of concept trial is enrolling with more than 15 active sites currently.
Speaker 3: and top-line data anticipated in the first half of 2024. A key goal of the trial is to show SPS-720 driving and early microbiological response as a standalone age at versus placebo, with the primary endpoint evaluating changes in bacterial load and sputum samples from baseline. We believe pairing a positive result on this primary endpoint with supportive evidence and learning from the trial's secondary endpoints
Speaker 3: will enable us to substantially de-risk the program and move confidently to late-stage development.
Speaker 3: In late stage development, we plan to evaluate SPR 720's part of a combination regimen.
Speaker 3: Given the limitations of the off-label combinations that are currently standard of care and first-line NTMPD, we believe our program has the potential to address a clear unmet need.
Speaker 3: Alongside the progress of our Phase 2 trial, we remain on track with the entire SPR-720 program as you perform additional development activities needed to support 720's advancement towards pivotal late-stage studies. As noted on our last earnings call, these activities include ongoing toxicology work, CMC and quality initiatives.
Speaker 3: engagement with FDA in efforts to expand the 720 development program in Japan, where NTMPD has a sharply increased prevalence relative to other territories.
Speaker 3: In addition, we continue to execute on the steps needed to develop and validate relevant patient reported outcomes for NT&PD. This is to ensure that our primary efficacy endpoints within our future clinical studies are conducted in line with the FDA's published guidance on developing drugs for this indication.
Speaker 3: Next, I'll speak briefly about TABY PENOMHPR, which is partnered with GSK and being developed as potentially the first oral carburetid antibiotic for the treatment of complicated urinary tract infections or CUTI. We remain engaged with the FDA regarding a special potential special protocol assessment agreement
Speaker 3: for a planned phase 3 trial. Per a type A meeting with the FDA conducted last year, positive results from this planned trial, together with confirmatory non-clinical evidence of efficacy, could be sufficient to support the type of FUNHBR as approval. We would like to thank the FDA for its constructive engagement and expect to provide an update on the status.
Speaker 3: of the special protocol assessment agreement by mid-year 2023. At that time, we also intend to outline the details of the Plan Phase III Trials Design and the specific regulatory development activities that make trigger milestones from our GSK agreement.
Speaker 3: You can include my section of today's call. I'll very briefly touch on SPR 206, which is an investigational next-generation polymix and antibiotic being developed to treat multi-drug-resistant gram negative infections. Efforts to advance SPR 206 into a phase-tree trial in participants with hospital acquired or ventilator associated.
Speaker 3: bacterial pneumonia are proceeding in line with prior guidance with submission of an ID application expected in the fourth quarter of the year. I'll remind those listening that the plan phase two trial will be funded entirely by external laundry of sources highlighting the capital-efficient approach being employed to advance our pipeline. With that, I'll turn over the call to South to review our quarterly financial results.
Speaker 4: So
Speaker 5: Thank you, Ankit, and good evening to all joining us on the call. It's my pleasure to report that Federal remains well-capitalized and in a strong financial position that $96.3 million in cash and cash-economic problems as of March 31, 2021-23.
Speaker 5: Based on our current operating plan, we believe our cash and cash equivalents together with other non-dilutive funding commitments.
Speaker 5: to be sufficient to fund our operating expenses and capital expenditure requirements beyond 2024.
Speaker 5: Turning our attention to our remaining financial results, total revenues for the first quarter of 2023 were 2.1 million dollars compared with revenues of 2.1 million in the first quarter of 2022.
Speaker 5: Although total revenues for the year-over-year comparisons are the same, grant revenue was approximately $493,000 lower for 2023, while collaboration revenue was $493,000 higher due to recognition of revenue related to the GSK transaction. Research and development expenses for the first quarter of 2020.
Speaker 5: clinical activity related to the SBR 206 program and decreased R&D head down associated with the strategic restructuring announced in May 2022.
Speaker 5: General and administrative expenses for the first quarter of 2023 of $7.3 million were lower than the 15.3 million reported in the same period in 2022. Primarily as a result of decreased personnel related costs.
Speaker 5: associated with a reduction in headcount in commercial, general, and administrative function, arising from the May 2022 strategic re-structuring and a decrease in professional and consultant fees.
Speaker 5: Federal reported a net loss for the first quarter ended March 31, 2023 of $13.3 million or 25 cents per share of common stock compared to a net loss of $32.8 million or $1.01 per share of common stock reported for the same period in 2022.
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Speaker 3: Hi, congratulations on all the progress of quarter and thanks for taking my questions. So I wanted to ask you about SPR 720. What you think the competitive advantages are of your products and what gives you confidence in a positive readout. And then second question I wanted to ask you is if you could remind us again of some upcoming potentially positive inflection points where you could receive payment from GSK, that would be helpful. Thank you. Great. Thanks, Louise, for the questions. I can start with the SPR 720 landscape and then Southkin cover the inflection points that come from our GSK collaboration.
Speaker 3: 75% of the time, and in fact, when they're diagnosed, half of them choose not to go on therapy at all. So 720 provides an opportunity. One, it's oral where current approved therapies for NTM patients are not. Second is that our phase one data, as well as our tox data to date, suggests it's a well tolerated drug, and that has the potential to be a preferred option for these patients. And then finally, in our in vivo and in vitro models, we've demonstrated that 720 has the potency to address a large range of NTM pathogens, which is what these patients need. And I'll pass it to Saf to answer your question about GSK inflection points.
Speaker 5: Yeah, thanks for asking Louise. So as we get into the SVA process and then expect to report that out in the middle of the year, along with details on the trial design, we'll be able to give you much greater clarity on the milestones from GSK.
Speaker 5: But I would just lay the groundwork by re-thrating that we expect the $150 million in development milestones to come through as we've put in our external communication through the duration of the Phase 3 and the NDS submission process. So if you were to assume that VX...
Speaker 2: Thank you. Our next question comes from Rita Burrell of TD Cowan. Please go ahead. Good afternoon, guys. Thanks for taking the question. I wanted to ask about the secondary endpoints on your 720 ongoing phase 2 trial. Can you review for us what you think the most important secondary endpoints are? And specifically, how they might feed into what you're thinking about for the pivotal endpoint, especially given the pandemic?
Speaker 2: additional, I wouldn't call it clarity, but the additional information on how error case may be approaching its front line, PRO, primary employment. Thanks.
Speaker 3: Thanks for the question, Ruthie. I'll pass that one to come all to address.
Speaker 6: Yeah, thank you, Ankit. Thanks, Vitu, for the question. So just as a reminder, I mean, this is a Phase 2a proof of concept study. The primary objective of the study is to demonstrate the activity of SPR720. So secondary objectives include safety, tolerability, PK, and the
Speaker 6: And again, first things first, this is study to demonstrate the activity of SPR 720. And while we in parallel continue to develop our PR-O for to be used in the Phase 2-B3 program, we are exploring some domains of well-established PR-O instruments.
Speaker 6: with the PRO constant validations body.
Speaker 6: can be relevant in that three months or later timeframe. And so it sort of puts into frame some additional validation that the measures we're looking at are going to be relevant as we build them into a PRO. No, absolutely. I'm sorry. No, I mean, this would be part of the validation spotty, as Ankit mentioned. And again, as Ankit said, there were differences at the three month time point and these differences between treatment and no treatment were well sustained at month six. So some of these domains again are being considered in RPRO.
Speaker 6: That's correct me too. I mean, if when patients were patients and clinicians are like when they were surveyed in terms of what's important in terms of feel and function signs symptoms. So three things stand out cough, shortness of breath and the third one is fatigue.
Speaker 3: frontline treatment as the highest unmet need in NTM, and that's for two reasons. One is just from a numbers perspective, there are more frontline NTM patients that have no approved therapies than there are refractory. Second, as well, if you look at how patients behave there, half of them choose not to be treated, not because they're not symptomatic, but because the agents that exist do not work for them. And finally, as we think about the pathophysiology of the disease, if we're trying to measure feel and function type of endpoints, it's physiologically more relevant for patients who can recover that lung function relative to those who have.
Speaker 3: say two things. One is that, you know, EriKase is a different drug. And number two, you know, there's no guarantees on how fulsome the disclosures from our colleagues will be. And so we'll take what we can get and we'll certainly incorporate that into our learnings as we do our own PRO development work within the context of the Phase IIa, but also in the context of other clinical work that we aim to do ahead of starting pivotal studies.
Speaker 7: Yeah, that makes sense. Thanks.
Speaker 8: Once again, if you have a question, please press star then one.
Speaker 8: Our next question comes from Bubalon Pachupayan of HC Wainwright. Please go ahead.
Speaker 9: Hi, this is Boubalan, Diling Inferra, Ramso Raja, and thanks for taking our questions. So firstly, with respect to 720, can you provide any additional color to respect to enrollment progress and when you'd expect this to be completed?
Speaker 6: All right, clear. And then with respect to Tobi, then I'm SV Agreement. Are there any details of the pivotal phase free protocol that you can disclose at this time, maybe on a high level? Some of the maybe notable differences in this protocol and the one that used in AdaptPO trial. Yeah, big picture, but thanks for the question. We, as we stated before, that the sequence will be that we'll be working to receive the SP agreement. Then we'll disclose details of the trial as well with that as SOF mentioned, we'll disclose the details of the milestones that are due to us at GSK. Okay, and then maybe one final question.
Speaker 8: to turn the conference back over to Dr. Ankit Madhavith for closing remarks.
Thanks operator, we appreciate the opportunity to provide an update on our recent progress. And we look forward to the continued advancement of all of our programs. Thanks to all listening for your participation today. Have a great evening.