- GSK has acquired most of the rights to an experimental antibiotic from Spero Therapeutics, and will invest in the biotechnology company as well, the two drugmakers announced Thursday.
- The British drugmaker will pay Spero $66 million in cash for rights, outside of certain Asian countries, to a treatment known as tebipenem that is in late-stage testing for drug-resistant bacterial infections. Spero could receive another $525 million in additional payments if the drug hits certain regulatory and sales milestones.
- GSK is also buying $9 million in Spero stock at about $1.21 per share, a roughly 48% premium to the struggling biotech’s closing price on Thursday. The deal will give Spero, which had about $45 million in the bank at the end of June, enough cash to survive “beyond 2024,” the company said.
While a small bet for GSK, the deal is a lifeline for Spero, which has seen most of its value wiped out following a series of regulatory setbacks for tebipenem.
Spero has been developing tebipenem for the “gram-negative” bacterial infections that are particularly resistant to antibiotics. As an oral treatment, the drug could be a more convenient alternative to the intravenous treatments patients usually get for complicated urinary tract infections or acute pyelonephritis. Spero originally aimed to bring the drug to market on its own.
The company claimed success in a Phase 3 trial in 2020, and the FDA accepted an approval application in January. But the regulator later found “deficiencies” in its filing, concluding the drug had actually failed its key trial after performing a separate analysis.
The FDA formally rejected the drug in June, by which time Spero shares had lost nearly all of their value and the company had laid off most of its workforce. The company had a market value of $29 million before the deal, and shares traded at less than $1 apiece. Cash reserves were running low, too, giving it little room to advance other early-stage programs.
“[W]ith finite resources and early stage anti-infectives, it’s no longer a name we can recommend owning,” Evercore ISI analyst Josh Schimmer wrote earlier this year.
In early September, Spero said the FDA had agreed on the design of a new Phase 3 trial that could help support approval. That gave Spero “clarity” on the regulatory path forward, CEO Ankit Mahadevia said in a statement at the time. But the company now needs a partner to get the drug to the finish line.
GSK is filling that role with a deal that both “strengthens our balance sheet and shareholder base,” Mahadevia said in Thursday’s statement. The drug “has a clear U.S. FDA regulatory path to potential approval” and complements the British drugmaker’s infectious disease strategy, added GSK chief commercial officer Luke Miels. The new Phase 3 trial will begin in 2023 and be bankrolled by Spero. GSK will cover regulatory and commercial costs.
Per deal terms, GSK could pay Spero another $300 million in development milestones and up to $225 million more if tebipenem hits certain sales targets. GSK also acquired 7.45 million Spero shares, though it’s barred from acquiring a stake of more than 19.99%, the companies said.
Spero shares more than doubled in value during pre-market trading Thursday. The company went public at $14 per share in 2014.
Meiji Seika Pharma holds rights to tebipenem in Japan and certain other Asian territories.