Q4 2023 Spero Therapeutics Inc Earnings Call and Business Update

Operator: www.globalonenessproject.org www.youtube.com or www.facebook.com or www.instagram.com www.youtube.com or www.instagram.com www.globalonenessproject.org Good afternoon, and welcome to the Spero Therapeutics Full Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Yeah.

[music].

Good afternoon, and welcome to the school therapies at full year 2020 financial results Conference call. At this time, all participants are in a listen only mode.

Operator: Following the company's formal remarks, we will open the call for questions. Please be advised that this call is being recorded and a replay will be available. You can find information on the replay and further information related to today's announcement on the Spero Therapeutics website at www.sperotherapeutics.com. At this time, I would like to turn the call over to Michael Wood, Managing Director at Lifesci Advisors. Mr. Wood, please go

Following the company's formal remarks, we will open the call for questions. Please.

Please be advised that this call is being recorded.

It will be about.

You can find information on the replay and further information related to todays announcements on the Spero Therapeutics website W.

E W E jobs Spiro therapy dotcom.

At this time I would like to turn the call over to Michael Wood.

Managing director at lifestyle Advisors. Mr. Wood. Please go ahead.

Thank you operator, and thank you all for participating in today's conference call.

Michael Wood: Thank you, Operator, and thank you all for participating in today's conference call. This afternoon, Spero Therapeutics released financial results and provided a business update for the fourth quarter and full year 2023. The press release is available on the investors page of Spero Therapeutics' website. Before I begin, I'd like to remind you that some of the information presented in this conference call contains forward-looking statements based on our current expectations, including statements about the future development and commercialization of Pedopenem HBR, SBR 720, and SBR 206 and the design, initiation, timing, progress, and results of the company's preclinical studies Management's assessment of the results of such pre-clinical studies and clinical trials, the company's cash-forward and anticipated expenses, and the deficiency of the cash resources.

And then bear out Therapeutics released financial results and provided a business update fourth quarter full year of 2023.

This release is available on my back to page <unk>.

Fear on Therapeutics website.

Before I begin I'd like to remind you that some of the information presented in this conference call contains forward looking statements based on our current expectations, including statements about future development and commercialization of 10 dependent H B R. S. P.

That'd be our choice and the design initiation timing progress and results of the company preclinical studies and clinical trials and research Department program.

Managements assessment of the results.

Okay.

Trials.

Cash for unanticipated expenses.

You shouldn't be able to calculate the watches such.

Michael Wood: 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' SEC filing, including in the risk factor section of its annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC today. These four forward-looking statements speak only as of the date of this conference call, March 13, 2024, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the company after the date of this call. Participating in today's conference call are Satya Shukla, Chief Executive Officer. Dr. Kamal Hamed, Chief Medical Officer, and Esther Rejovalo, Chief Financial and Chief Business Officer. With that, I'd like to turn the call over to Spero's CEO, Satyavrat Shukla. Sat, please go ahead. Thanks, Michael.

Such forward looking statements are not a guarantee of performance and the company's actual adult could differ materially from those contained in such statements.

Several factors that could cause or contribute to such differences are described in detail.

But he got to see including in the risk factors section of its annual report on Form 10-K for the year ended December 31, 2020 pre filed with each day.

These forward looking statements speak only as of the date of this conference call March 13th.

And the company undertakes no obligation to publicly update any forward looking statements or supply do you information regarding the company. After the date of this call.

Participating in today's conference call of our South shore class.

Chief Executive Officer.

Dr Cabell cheap.

<unk> Medical officer.

And that's a ratio below chief financial and cheap it.

With that I'd like to turn the call of parents C E O stop ship that he'd.

Please go ahead.

Thanks, Michael.

Satyavrat Shukla: And I thank you all for joining us this afternoon. Spero had a very productive 2020, with progress across its portfolio of development-stage assets. SPR 720 is now in the latest stages of a proof of concept study in NTMPD, and we are looking forward to reporting top line data, which we expect to do in the second half of this year.

Thank you all for joining us this afternoon.

But chip 'twenty two 'twenty three it progress across its portfolio of development stage assets.

S. P. R 20, its now in the later stages.

Proof of concept study in N T M. P D and we are looking forward to reporting topline data, which we expect to do in the second half of this year.

Satyavrat Shukla: The phase 3 clinical trial for cheripenem HPR is up and running. We recently received ING clearance for SPR 206 for the treatment of patients diagnosed with hospital-acquired or ventilator-associated pneumonia. The company has a strong balance sheet with the financial flexibility to execute on its plan.

The phase III clinical trials for taping them H B R is up and running.

We recently received <unk> clearance for Spi two six for the treatment.

Treatment of patients diagnosed with hospital acquired ventilator associated pneumonia.

The company has a strong balance sheet.

Financial flexibility to execute on its plan.

But me personally. Thank you 23 was a particularly exciting year.

Satyavrat Shukla: For me personally, 2023 was a particularly exciting year, as I was honored to take on the CEO role and to be provided with the opportunity to lead a world-class team who share a vision to develop innovative therapies to help patients suffering from serious infections and rare diseases. Let me begin with SPR720, which we are developing for non-tuberculous mycobacterial pulmonary disease, or NTM. We are developing SPR-720 to be a first-line oral agent and believe it has exactly the right profile to address the unmet needs in NTMP. And GMPG is a rare disease, but it has a very well-identified patient population of approximately 245,000 diagnosed patients in developed markets.

This honor to take on D. C E O world and to be provided with the opportunity to lead it was class team.

We shared a vision to develop innovative therapies to help patients suffering from serious infections and orphan diseases.

Let me begin with S. P. R. Seven 'twenty, which we are developing for non tuberculous mycobacteria pulmonary disease.

N T M P T.

Yeah, Jeff flipping SPR seven 'twenty to be a first line oral agent and believe it has exactly the right profile to address the unmet need in T. M. P. J.

And G. M. P. D is a rare disease, but with a very very identified patient population of approximately 245000 diagnosed patients in developed markets.

S. P. R. Seven 'twenty is an oral drug with a novel mechanism of action that just not exploited by other associations are those and develop meant for N T. M. P. G.

Satyavrat Shukla: SPR-720 is an oral drug with a novel mechanism of action that is not exploited by other SOC agents or those in development for NTMP, from the data we have seen so far from completed in vitro and in vivo studies. There has been no evidence of cross-resistance against marketed antibiotics, and SPR 720 has demonstrated a low propensity for selection of residents. We have shown that it has potency against multiple NTM pathogens, and data support its potential for efficacy, safety, and tolerability, and macrophage penetration. SPR 720 has also been granted Orphan Drug, QIGP, and Fast-Track designation. The goal of our phase two, a proof of concept clinical trial, is to understand SBR 720's activity in NTMPD patients and to inform the design of a later stage and longer-term trial evaluating SPR720 in combination with current standard of care agents. As a potential first-line oral agent, we believe the commercial opportunity for SPR-720 is compelling. Kamal will provide further details on this program in a few minutes. Joining now to our partner program. Let me begin with Chaby Penum HVR, which is partnered with GS.

N D HIV have seen so far from completed in vitro and in vivo studies. There has been no evidence of cross resistance against marketed antibiotics.

S. P. R. Seven 'twenty has demonstrated a low propensity for selection of resistance.

We have shown that it has but tennessee against my support and T M pathogen.

And data support its potential for efficacy.

Safety and Tolerability of cheap and macrophage penetration.

S. P. R. 720 has also been granted orphan drug <unk> G P and fast track designation.

It goes off our phase Iia proof of concept clinical trial.

To understand S. P. R. Seven twenties activity in N T M. P D patients.

And to inform the design of our later stage and longer term trial evaluating SPR 720 in combination with current standard of care agents.

As a potential first line oral agent do you believe the commercial opportunity for S. P. R. Seven 'twenty is compelling.

Tomorrow to provide further details on this program in a few minutes.

Turning now to our partnered programs.

Let me begin with Chubb depend on H B R. They just partnered with GSK.

Satyavrat Shukla: We are developing Trebi as potentially the first oral carbapenem antibiotic for the treatment of complicated urinary tract infections, or CUTI. We were pleased to announce in January of this year that the Phase III PIVOT-PO clinical trial is now underway, with the first patient, first visit, having occurred in the fourth quarter of 2020. During 2023, Spero received written agreement from the US FDA with a Special Protocol Assessment, or SPA, on the design and size of PIVX. SBA typically represents a very high level of concordance on the overall protocol design between the FDA and a sponsor. So we believe the regulatory aspect with respect to the design of the program has been de-risked substantially.

Yeah, Jeff Limping chubby as potentially the first oral cobre, Panama antibiotic, but he treatment of complicated urinary tract infections or C. O G I.

We were pleased to announce in January of this year.

If they see finished your clinical trial is now underway.

The first patient first visit having occurred in the fourth quarter of 2023.

During 'twenty two 'twenty three.

We received written agreement from the U S F D a special.

Special protocol assessment or SBA on the design and size of parallel appeal.

S. P. A typically represents a very high level of concordance on the overall protocol design.

I mean, the F D and a sponsor.

So we believe the regulatory aspect.

With respect to the design of the program had been Derisked substantially.

Satyavrat Shukla: Moving on to SPR 206, which is partnered with Pfizer for European markets. We submitted an ING for a Phase II clinical trial in HapBapB and recently announced that the ING has been cleared with the FDA. With that, I would now like to hand the call over to Dr. Kamal Hamed, who will provide more details on the clinical program. Thank you, Seth.

Moving on to S. P. A to a six which is partnered with Pfizer for European markets.

Mr Mitchell and I N G for a phase II clinical trial and have that patient.

And recently announced that the I N T has been cleared but the ft.

With that I would now like to hand, the call over to Dr. <unk> to come out of her met.

Bill will provide more details on the clinical progress.

Thank you Seth.

Kamal Hamed: I will begin with our SPR 720 program, which we hope will deliver the first oral, first-line treatment for NTMPD. SPR 720 is currently being evaluated in a phase 2a proof of concept clinical trial. And, as Seth mentioned, we are looking forward to sharing top-line data, which we expect to do in the second half of this year. NTMPD is a debilitating rare infectious lung disease.

I will begin with our S. P. R 720 program, which we hope will deliver the first of all the first line treatment for N. P. M. P D.

S. P. Also in 'twenty is currently being evaluated in a phase two a proof of concept clinical trial and as Beth mentioned, we are looking forward to sharing top line data, which we expect to do in the second half of this year.

N T M. P. D is a debilitating grad infectious disease.

Kamal Hamed: There are currently no approved first-line therapies, and the current standard of care is a prolonged combination regimen of antibiotics, including azithromycin, efambutol, and rifampicin, which have serious vulnerability issues and limited effect.

The country No approved first line therapies and the current standard of care is it prolonged combination regimen of antibiotics.

Including Azithromycin, F&B tool and or something.

These have serious tolerability issues and limited effectiveness.

Kamal Hamed: The unmet need is for a treatment that has better tolerability and effectiveness, fewer drug-drug interactions, as well as a shorter treatment duration. We believe that SPR-720 will meet these criteria and, if approved, has the potential to establish a new standard of care in NTM-PD. The phase 2a clinical trial compares SPR 720 monotherapy versus placebo. It is designed to enroll up to 35 patients who are either treatment naive or treatment experienced but do not have treatment refractory. We currently have 27 active sites that are screening and enrolling patients. The primary endpoint is the microbiological response.

The unmet need is for the treatment that has better tolerability and effectiveness.

Drug drug interactions as well as shorter treatment duration.

We believe that S. P. All of a sudden it's funny well meet these criteria and if approved has the potential to establish a new standard of care and anti M. P D.

The phase Iia clinical trial compares S. P. R 720 monotherapy versus placebo.

It's designed to enroll up to 35 patients.

What are the treatment naive or treatment experienced but do not have treatment refractory disease.

We currently have 27 active sites, that's all screening and enrolling patients.

The primary endpoint is microbiological response, specifically, we are measuring the slope change and sputum bacterial burden from baseline to day 56.

Kamal Hamed: Specifically, we are measuring the slope change in sputum bacterial burden from baseline to day 56. Success on this endpoint would make SPR720 the only agent in development we are aware of to demonstrate early bactericidal activity in patients with NTMPD. We believe that the positive result, with supportive evidence from the trial's secondary endpoints, will enable us to move confidently into late-stage development. We are working on additional development activities needed to support SPR720's advancement into late-stage clinical studies. These include ongoing toxicology work, CMC initiatives, and two Phase I clinical studies in healthy volunteers currently underway, the first to assess the intrapulmonary pharmacokinetics of SPR 719, the active moiety of the prodrug SPR 720, and bronchoalveolar liposuction.

Success on this endpoint would make S. P. All 720, the only agent in development, we all the way at all to demonstrate early back to cyber activity and patience with N T. M. P D.

We believe that the positive result, with supportive evidence from the 12 secondary endpoints will enable us to move confidently into late stage development. We are working on additional development activities needed to support the SPR seven twenties advancement into late stage clinical studies.

These include ongoing toxicology work P. M C initiatives and two phase one clinical studies in healthy volunteers country underway.

First to assess and trouble movie pharmacokinetics of S. P. R 719, the active moiety of the prodrug S. P. R. Seven 'twenty any bronchoalveolar lavage study.

Kamal Hamed: This should give us a better understanding of the extent of drug penetration into the lungs. The second study is to evaluate the effect on the pharmacokinetics of SPR-720 when it is co-administered with azithromycin and ethambutol. We expect to have results from these studies in the second half of this year as well. Overall, the ongoing studies are expected to provide us with a robust dataset that may inform the registrational path for SPR720 as first-line treatment for NTM-PD. Now moving on to tebipenem HBR. On January 2nd, we announced the first patient, first visit, and pivot PO. The global pivotal phase three clinical trial evaluating tebipenem HBR in hospitalized adult patients with complicated urinary tract infections, including acute pyelonephritis.

This should give us a better understanding of the extent of drug penetration into the lungs. The second is to evaluate the effect on the pharmacokinetics of S. P. R. Seven 'twenty when co administered with Azithromycin and F&B at school we.

We expect to have results from these studies in the second half of this year as well.

Over all the ongoing studies are expected to provide us with a robust dataset that may inform the registrational path for S. P. R. Seven 'twenty as first line treatment for M. T M. P D.

Now moving on to Tel Aviv kind of H B R. On January 2nd we announced first patient first visit and pivots T O. The global pivotal phase III clinical trial evaluating <unk> Pan am H B R and hospitalized adult patients with complicated urinary tract infections, including acute Paul.

During the fight it.

Kamal Hamed: Patients are being randomized one-to-one to receive Cebipenem HBR at a dose of 600 milligrams orally every 6 hours or imipenem filostatin 500 milligrams intravenously every 6 hours for a total of 7 to 10 days. The primary efficacy endpoint is overall response, which is a composite of clinical and microbiological response at the test of cure risk. The primary analysis for the trial will be an assessment of non-inferiority in the microbiological intention-to-treat population based on a 10% non-inferiority margin. Target enrollment will be approximately 2,648 patients, with randomization stratified by age and baseline diagnosis, i.e. CUTI or acute pyelonephritis and the presence or absence of urinary tract instrumentation.

Patients are being randomized one to one two to see that'd be Pan am H B all at a dose of 600 milligrams orally every six hours or Emmy Pan Am Cilastatin and 500 milligram intravenously every six hours.

Total of seven to 10 days.

The primary efficacy end point is overall response, which is a composite of clinical and microbiological response.

The test of cure visit.

The primary analysis for the trial will be an assessment of non inferiority in the microbiological intention to treat population based on a 10% non inferiority margin.

Target enrollment will be approximately 2600 48 patients.

With randomization stratified by age.

Baseline diagnosis I E C T I or acute pyelonephritis, and the presence or absence of any track instrumentation and.

Kamal Hamed: Enrollment is expected to be completed in the second half of 2025. Spero is responsible for the execution of the Phase C clinical trial, and GSK will be responsible for submitting the NDA. If approved, Tebipenem HVR would allow for treatment of CUTI in the outpatient setting. It is well established that patients and physicians generally prefer all treatments.

Enrollment is expected to be completed in the second half of 'twenty or 'twenty five.

Federal is responsible for the execution of the phase <unk> clinical trial, and GSK will be responsible for submitting the NDA.

If approved to be Pan am H B, all with a law for treatment of C. U T. I in the outpatient setting it is well established that patients and physicians generally prefer all treatments. So we see <unk>, Panama as a potentially new and unique paradigm shift from the current IP Cobre Panama.

Kamal Hamed: So, we see Tebipenem as a potentially new and unique paradigm shift from the current IV carbapenem standard of care for hard-to-treat pathogens associated with CUTI. Finally, to our SPR 206 program. SPR 206 is an investigational next-generation polymyxin antibiotic we are developing to treat multidrug-resistant gram-negative infections. SPR-206 is designed to disrupt the lipopolysaccharides, outer membrane, and gram-negative bacteria, while reducing the nephrotoxicity potential of polymycetes.

Standard of care for hard to treat pathogens associated with the U T I.

Finally to our S. P. R. Two six program S. P. R. Two six is an investigational next generation polymyxin ample Baltic we are developing to treat multi drug resistant gram negative infections.

S. P. R. Two six is designed to disrupt the lipopolysaccharide outer membrane and Gram negative bacteria.

Reducing then that's what toxicity potential off probably makes sense.

Kamal Hamed: Based on microbiological and in vivo testing, we believe that SPR26 has the potential to offer a broad spectrum of activity, including against multi-drug resistant and extensively drug resistant strains. It also has the potential for an improved safety profile of reduced methotoxicity compared to currently available polymers. As Seth mentioned, we announced FDA clearance of the R&D on February 28th. With that, I'll turn the call over to Esther to review our quarterly financial results. Thank you, Kamal, and good afternoon or evening to all of you joining us on the call today. Spero is well capitalized with $76.3 million in cash and cash equivalents as of December 31, 2023.

Based on microbiological and in vivo testing, we believe that S. P. R. Two six has the potential to offer a broad spectrum of activity, including against smallpox drug resistance and extensively drug resistant strain.

It also has potential for an improved safety profile of reduced toxicity compared to currently available probably makes sense.

As Vas mentioned, we announced FDA clearance of the IMT on February 28.

With that I'll turn the call over to Esther.

Are you at a quarterly financial result.

Thank you come out and good afternoon or evening to honestly is joining us on the call today.

<unk> is well capitalized with $76 3 million in cash and cash equivalents as of December 31, 2023.

Esther Rejovalo: As Thoth mentioned, in December, upon dosing the first patient in the Phase III Pivot PO clinical trial, Spero qualified for $95 million in development milestones from GSK. It will be payable in four equal installments during 2024 and 2025, beginning with the first tranche of $23.8 million that we received in the first quarter of 2024. We estimate that our cash and cash equivalents, together with other non-dilutive funding commitments, will be sufficient to fund our operating expenses and capital expenditure requirements into late 2025. Now, moving on to summarize our GAP financials. Total revenue for the fourth quarter of 2023 was $73.5 million, compared with total revenue of $47.4 million for the fourth quarter of 2022. Total revenue for the year ended December 31, 2023, was $103.8 million, compared to $53.5 million for the year ended December 31, 2022. The revenue increase for the year ended December 31, 2023, was primarily due to 96.7 million of collaboration revenue recognized related to our agreements with GSK and Pfizer during 2023. Research and development expenses for the fourth quarter of 23 were $16.6 million compared to $15.1 million of R&D expenses for the same period in 22.

That's mentioned in December upon dosing the first patient in the phase three pivotal clinical trial.

They are qualified for 95 million in development milestone from GSK.

It is payable in four equal installments during 'twenty 'twenty, four and 'twenty 'twenty five.

With the first tranche of $23 8 million that we received in the first quarter of 'twenty 'twenty four.

We estimate that our cash and cash equivalents together with other non dilutive funding commitment.

Will it be sufficient to fund, our operating expenses and capital expenditure requirements into late 'twenty or 'twenty five.

Now moving on to summarize our GAAP financial.

Total revenue for the fourth quarter of 2023 with $73 5 million compared with total revenue of $47 4 million for the fourth quarter of 2022.

Total revenue for the year ended December 31, 23, whereas the Huntington 3.8 million compared to $53 5 million for the year ended December 31 2022.

The revenue increase for the year ended December 31, 2023 was primarily due to $96 7 million of collaboration revenue recognized related to our agreement with GSK and Pfizer during 'twenty three.

Yeah.

Research and development expenses for the fourth quarter of 'twenty three.

$16 6 million compared to $15 1 million of R&D expenses for the same period in 'twenty two.

Esther Rejovalo: Research and development expenses for the year ended December 31-23 were $51.4 million compared to $47.6 million for the year ended December 31-22. The increases in research and development expenses were primarily due to increased clinical activity during the period related to our ongoing Phase IIa clinical trial of SPR-720. G&A expenses for the fourth quarter of 23 were $6.4 million compared to $6.5 million for the same period in 22. This year-over-year decrease was primarily due to changes in personnel-related costs, offset partially by increased professional and consulting fees during the period. G&A expenses for the year ended December 31, 23, were $25.6 million compared to $36.5 million for the year ended December 31, 22, primarily as a result of decreases in both personnel costs and professional and consulting fees.

Research and development expenses for the year ended December 31, 23, with 51 4 million compared to 47 6 million for the year ended December 31 22.

The increases in research and development expenses was primarily due to increased clinical activity during the period related to our ongoing phase two clinical trial of S. P. R 720.

G&A expenses for the fourth quarter of 23.

$6 4 million compared to $6 5 million of G&A expenses for the same period in 'twenty two.

This year over year decrease was primarily due to changes in personnel related costs.

Offset partially by increased professional and consulting fees.

During the period.

G&A expenses for the year ended December 31, 22, with $25 6 million compared to $36 5 million for the year ended December 31 22.

Primarily as a result of decreases in both personnel costs and professional and consulting fees.

Esther Rejovalo: Spero reported net income of $51.2 million for the fourth quarter of 2023 and a full year net income of $22.8 million for the year ended December 31, 2023, for diluted earnings per share of $0.96 and $0.43, respectively. This compares with net income in the fourth quarter of 22 of $26.8 million or $0.55 of diluted earnings per share of common stock. And a net loss for the full year ended December 31-22 of $46.4 million, for a $1.23 loss per share of common stock. For further details on our financials, please refer to our 10-K filed with the SEC today. With that, we will now open the call for questions. Operator?

Reported net income of 51.2 million for the fourth quarter of 'twenty, three and the full year net income of $22 8 million for the year ended December 31 23.

Diluted earnings per share of 96% and 43 cents respectively.

This compares with a net income in the fourth quarter of 20 to $26 8 million or 55 cents of diluted earnings per share of common stock.

And our net loss for the full year ended December 31, 22, 46 4 million.

Yeah.

$1 23 loss per share of common stock.

For further details on our financials. Please refer to our 10-K filed with the SEC today.

With that we will now open the call for questions.

Operators.

Thank you well now be conducting a question and answer session.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handphone before pressing start.

If you'd like to ask a question. Please 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 you'd 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 star keys.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Ritu Baral with TD Cowan. Please proceed with your question. Hi guys, thanks for taking the question. Just a couple for me, but one of them, of course, is a little complicated and may have a few parts.

One other place while we poll for questions.

Thank you. Our first question is from Richard barrel with TV Cowen. Please proceed with your question.

Hi, guys. Thanks for taking the question just a couple from me, but one of them of course, it's a little complicated and May have a few parts. One simple one how is enrollment Oh I'm sorry.

Satyavrat Shukla: One simple one: how is enrollment in 720 going, especially with the halt to enrollment? My second question also has to do with 720. Specifically, I'm interested to know more about the 719 LAVAGE study in healthy volunteers. Talking to KOLs, one of the concerns around oral NTM compounds is, https://centerforautism.com. How do you guys think of perfusion and access through the biofilm and sort of just location and activity? Thank you. Ritu, thanks for the question. For your first item on enrollment, we have said in the past that sites have been open, all 27 of them, and they continue to dose patients, and we are continuing to work towards our guidance for top-line data in the second half of this year. For your second question, I'll pass it on to Kamal.

From 'twenty, telling them, especially.

Especially with the halt enrollment in a companion program and my second question also has to do with seven 'twenty, specifically I'm interested to know more about the 719 lavage study in healthy volunteers.

Talking to Kols.

One of the concerns around.

Oral MTM compound is access to the site and two of them.

Infection, especially when a patient has catheter Harrington.

How do you guys think perfusion.

Who the buyer film and sort of just.

Location and that somebody else.

Thanks.

Hey, Richard Thanks for the question for you first I, Tim on enrollment we.

We have said that in the past that our sites have been open our 27 of them and they continue to dose patients and we are continuing to work towards our guidance of topline data in the second half of this year.

For your second question I'll pass it on to come off Yeah, Hello, Ritu and thank you for the question in terms of access of the drug to the site of infection.

Kamal Hamed: Hello Ritu, and thank you for the question. In terms of access of the drug to the site of infection, of course, these patients also have pulmonary hygiene as part of the management of this disease. And this also applies to inhaled therapy because inhaled therapy may have a problem with spreading to the site of infection. However, we have demonstrated in the hollow fiber infection model, as well as in non-human primates, in monkeys, but we have not disclosed these data in non-human primates, lung penetration.

Of course these patients also have pull more of the hygiene as part of the management of this disease and this also applies to inhaled therapy, because inhaled therapy may have problem with distributing to the site of infection. However, we have.

<unk> demonstrated and then for hollow fiber infection model as well as in nonhuman primate and in monkeys, but we have not disclosed these data in nonhuman primates.

Lung penetration and of course, we look forward to having long penetration data in humans from the phase one Bronchoalveolar lavage study that you have cited.

Kamal Hamed: And, of course, we look forward to having lung penetration data in humans from the phase one bronchoalveolar lavast study that you have cited. Do you feel that the data may be, or the access may be different with patients that have cavitary MAC versus, I guess, less large cavitary disease? Is that a consideration for oral therapy? No, that's certainly a good question.

How do you feel that.

The data on the Navy or the access maybe different with patients that have cavitary back versus I guess less large cavitary diseases, that's a consideration.

Oral therapy.

No. That's certainly a good question and honestly this applies to both the portal as well as inhaled forms of therapy. So typically speaking in clinical path today patients with large cavities E cabinetry disease with cavity cabinetry size larger than Tucson meters have been excluded from the connect.

Kamal Hamed: And honestly, this applies to both oral as well as inhaled forms of therapy. So, typically speaking, in clinical trials to date, patients with large cavities, i.e., cavitary disease with a cavity size larger than two centimeters have been excluded from clinical trials because these patients would require a much longer treatment duration, one. And they may also require surgical treatment besides medical treatment.

Pause because these patients would they quad much longer treatment duration, one and they may also require surgical treatment. Besides the medical treatment.

Kamal Hamed: So this is a challenge for both oral as well as inhaled forms of therapy, and these patients are excluded again for these reasons. But the data that we have so far certainly suggests that the drug penetrates to where it needs to get, i.e., the lungs.

This is a challenge for both our oral as well as inhaled forms of therapy and these patients all exclude the again for these reasons, but the data that we have so far.

Certainly suggests that the drug penetrate to where it needs to get I E. The lungs and of course, we expect to have data from the Bronchoalveolar lavage in the second half of this year only to call, but what we know from the hollow fiber in vitro data as well as the nonhuman.

Kamal Hamed: And, of course, we expect to have data from the bronchovial lavage in the second half of this year, only to corroborate what we know from the hollow fiber in vitro data as well as the non-human primate data. Great. Thanks for taking all the questions. I'll hop back.

Primate data.

Great. Thanks for taking all the questions I'll hop back in the queue.

Yeah.

Operator: Thank you. Our next question is from Louise Chen, who has cancer. Please proceed with your question.

Thank you. Our next question is from Louise Chen with Cantor. Please proceed with your question.

Louise Alesandra Chen: Hi, congratulations on the progress this quarter and thank you for taking my questions here. So the first question I had for you was, given some of the recent developments in the space, I think one of your competitors reported some data, has your thoughts on the market opportunity for SPR 720 changed at all? And if it's approved, where do you expect it to fit into the treatment paradigm as the space gets a little bit more crowded with development assets? And then the second question I had for you was about the market opportunity for SPR 206. Do you actually plan to move this forward? And if so, you know, what are the next steps here?

Hi, congratulations on the progress this quarter and thank you for taking my questions. Here. So first question I had for you was given some of the recent developments in the space I think one of your competitors reported some data.

Has your thoughts on the market opportunity for S. P. A 700000 changed at all and if it's approved where do you expect it to fit into the treatment paradigm as the space gets a little bit more crowded with development assets and then the second question I had for you was in the market opportunity for S parents, who are sick do you actually plan to move this forward and if so.

What are the next steps here. Thank you.

Satyavrat Shukla: Thank you. Thanks for asking, Luis, and great to hear from you. I'll take the first half of your first question and then defer to Kamal on the second half of your first question. And I can pick up the two or six questions as well.

Yeah, Thanks for asking that hey, there isn't great to hear from you I'll take the first half of your first question and then definitely took them all on the second half of your first question and I can pick up the two six question as well, it's a far I four recent developments you know our inflammation disease.

Satyavrat Shukla: For recent developments, you know, our information is the same as your information, so we can't really comment on what actually has been the case for another player in the space. But for the size of the market, we haven't actually seen them as competitors per se because, as you know, we were in first line, which has a different market size than refractory, which is where they were progressing their assets. So what we used to say before some of these recent data was that we were very excited about the size of the market. And what we say about these recent developments is that we continue to be very excited about the size of the market. What we have communicated internally and externally in light of these recent developments is that our program is potentially the first oral therapy out there, and certainly in first-line patients, it is going to be under greater evaluation and scrutiny, arguably, than ever before. And that's a great challenge and an opportunity for the organization as we move this forward. Just on that SPR 720 question, if you wouldn't mind rephrasing the second part of your question, and I'll pass that on to Kamal. The, oh, sorry, the 206 question, the one about the market.

As you are information so I can't really comment on what actually has been the case you know far another player in the space.

But for the size of the market, we haven't actually seen them as competitive sports say because as you know you know veeva in first line because they're different markets.

Yeah market size than refractory versus where they were progressing their assets.

So what do you used to say before some of these recent data was that we were very excited about the size of the market and what do we say about these recent developments is that they continue to be a really excited about the size of the market, what we have communicated internally and externally.

These recent developments is that it's a program that's potentially the first oil to be out there certainly in first line patients is going to be under a greater evaluation and scrutiny arguably than ever before.

And that's a great challenge and an opportunity for the organization as the progress I just followed them just on that just be our 720 question. If you wouldn't mind rephrasing. The second part of your question and I'll pass it onto come off.

Oh, sorry, the 206 question the one about the Mark out there. There's no question about 722 right are on the that it sits in the lineup treatment I believe yes that is correct. Yes. If you if you were to get it approved.

Operator: No, you had another question about 722, right? On where it fits in the line of treatment, I believe. Yes, that is correct. Yes, if you were to get it approved.

Okay no. Thank you. Thank you Louise.

Kamal Hamed: Okay, no, thank you. Thank you, Louise. So, I mean, the recent news is certainly unfortunate for patients because patients need newer combination agents that have better tolerability and effectiveness. But having said that, we are targeting a different patient population than the patient population that's targeted by the other ongoing trial with oral therapy. We aim to develop 720, as Seth said, as a first-line therapy for treatment-naive patients or treatment-experienced patients with non-refractive disease. And as we know, this patient segment comprises the majority of patients, about 75% of the patient population. And I should note that 720 demonstrated potent activity against MAC and a low propensity for selection of resistance in an in vitro resistance development study. We've also proceeded with a Phase IIa study, which is the ongoing clinical trial at this time, with the aim to assess the biological effect of SPR720 before we combine it with standard care agents and later stage Phase IIb-III programs. Okay, and anything on the market opportunity for two... Yes, maybe I'll take that, Luis.

So I mean, the recent news certainly unfortunate for patients because patients need new world combination agents that have battled tolerability and effectiveness.

Having said that we are targeting a different patient population than the patient population, that's a targeted by the although the ongoing.

Trial with oral therapy. So we aim to develop seven plenty as Seth said as a first line therapy for treatment naive patients or treatment experienced patients with non refractory disease and as we know this patient segment comprises the majority of patients about 70 part.

Percent of the patient population.

And I should note that 720 demonstrated potent activity against Mac low propensity for selection of resistance and in in vitro as since the Balkan study. We have also proceeded with a phase two study, which is the ongoing clinical Paul at this time with the.

Aim to assess the biological effect of S. T O seven 'twenty before we combine it with standard of care agents and later stage phase two B C program.

Okay and anything on the market opportunity for choice.

Yes, maybe I'll take that lease I think two mistakes you know presents an interesting opportunity for patients because there is a high degree of unmet need in that patient population. However, we've always commented that we would.

Satyavrat Shukla: I think 206, you know, presents an interesting opportunity for patients because there is a high degree of unmet need in that patient population. However, we've always commented that we would continue developing that program contingent on non-dilutive sources of funding. As you know, we have a partnership with Pfizer for European markets and with Everest for China. And we also collaborate with government agencies to obtain funding.

Continued developing that program contingent on non dilutive sources of funding as you know we have a partner with partnership with Pfizer for European markets and with average for China, and we also collaborate with government agencies to obtain funding and so were looking at and he and all of those thoughts that support continued funding for that.

Satyavrat Shukla: So we're looking at any and all of those sources for continued funding for that program. Thank you. Thank you. There are no further questions at this time. I would like to hand the call back to Mr. Shukla for any closing comments. So I'd just like to thank everyone for dialing in today and have a wonderful day. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Brian.

Thank you.

Thank you.

No further questions at this time.

I would like to hand, the call back to Mr. Hu Clark for any closing comments.

So I'd just like to thank everyone for dialing in today and.

Have a wonderful day.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.