SPRUCE BIOSCIENCES, INC. (SPRB)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was a transition quarter: no collaboration revenue ($0.00) as Kaken revenue recognition concluded in FY2024; net loss widened to $14.0M on higher clinical development costs tied to asset acquisitions; diluted EPS was $(0.32) .
• Management advanced a strategic pivot to TA-ERT for MPS IIIB with plans to submit a BLA in 1H 2026 and to initiate a confirmatory study before potential accelerated approval; TA-ERT holds Fast Track, Rare Pediatric Disease, and Orphan designations .
• Cash and cash equivalents were $25.6M at quarter-end; company disclosed substantial doubt about going concern without additional financing and later implemented a 55% workforce reduction to prioritize TA-ERT, estimating ~$0.9M in severance costs in Q2 2025 .
• Against S&P Global consensus, Q1 revenue missed ($0 vs $0.125M*) and EPS came in below expectations (actual $(0.32) vs $(0.195)); limited analyst coverage underscores estimate volatility (2–4 estimates) .
• Trading moved to OTC Pink on April 29, 2025 following Nasdaq delisting for minimum bid non-compliance, raising liquidity and financing risks but setting a catalyst path tied to TA-ERT regulatory milestones .

What Went Well and What Went Wrong

What Went Well

• Strategic focus sharpened: acquisition of TA-ERT and clear U.S. accelerated approval path with FDA alignment on HS‑NRE as a surrogate biomarker; BLA targeted for 1H 2026. “TA‑ERT has the potential to be a groundbreaking advancement for patients and families impacted by this devastating disease” — CEO Javier Szwarcberg .
• Operational discipline: G&A decreased YoY to $3.655M (from $4.318M) driven by lower stock‑based compensation; total operating expenses flat YoY ($14.492M vs $14.635M) despite strategic asset purchases .
• Pipeline rationalization: HMNC fully funding Phase 2 TAMARIND for tildacerfont in MDD, lowering near-term cash needs for that program; topline results expected 1H 2026 .

What Went Wrong

• Topline financials deteriorated: collaboration revenue dropped to $0 following completion of Kaken revenue recognition; net loss widened to $14.041M as the company absorbed $5.7M in SPR202 acquisition-related costs within R&D .
• Going concern and listing risks: substantial doubt disclosed without additional financing; subsequent Nasdaq delisting moved shares to OTC, potentially constraining liquidity and investor base .
• Estimate underperformance: missed S&P Global consensus on both revenue and EPS amid low coverage (2–4 estimates*), highlighting near-term uncertainty as the company transitions focus to TA‑ERT (ultra-rare indication) .

Financial Results

Segment reporting: Single operating segment focused on developing and commercializing novel therapies; CODM evaluates on consolidated results .

KPIs

Guidance Changes

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available. Management hosted a Corporate Update Call on April 15, 2025.

Management Commentary

• “With no FDA-approved treatments currently available to treat MPS IIIB, TA‑ERT has the potential to be a groundbreaking advancement for patients and families impacted by this devastating disease.” — Javier Szwarcberg, CEO .
• “Alignment has been achieved with the U.S. Food and Drug Administration (FDA) that HS‑NRE could be used as a biomarker that may reasonably predict clinical benefit and serve as a basis for accelerated approval… we anticipate submitting a BLA for TA‑ERT to the FDA in the first half of 2026.” — Corporate Strategy Update .
• Finance update: “Cash and cash equivalents as of March 31, 2025 were $25.6 million… expected to allow the company to fund its current operating plan through the end of 2025.” .
• FY context: YE 2024 cash was $38.8M; runway communicated through 2025 .

Q&A Highlights

Note: No Q1 2025 earnings call; highlights reflect the April 15 Corporate Update Call.

• Commercial approach: management outlined a modest U.S. launch footprint (5–10-person team) focusing on centers of excellence for MPS diseases and high-touch patient support .
• Market scope: estimated ≥135 prevalent U.S. MPS IIIB cases with at least half potentially addressable at launch; broader global commercialization anticipated .
• Financial posture: HMNC funding TAMARIND Phase 2 for MDD reduces Spruce’s near-term cash burden; operational focus on TA‑ERT .
• Note: The call primarily delivered prepared remarks; detailed Q&A on guidance/financials was limited in available transcript excerpts .

Estimates Context

Implications:

• Collaboration revenue fell to zero post-Kaken recognition completion, driving a revenue miss vs consensus.
• EPS underperformance stems from increased clinical development spending and acquisition-related R&D costs, overwhelming G&A savings .

Key Takeaways for Investors

• Near-term catalyst path is regulatory, not P&L: confirmatory study initiation and BLA submission for TA‑ERT in 1H 2026 are likely stock drivers; monitor FDA interactions and any Breakthrough Therapy Designation submission .
• Liquidity is tight: $25.6M cash with going concern risk; expect financing/out-licensing moves (potential dilution/terms constraints), especially after OTC transition; size and timing will be pivotal .
• Operating focus shift: R&D mix now favors TA‑ERT; watch for manufacturing scale-up and confirmatory trial start, along with HMNC-funded TAMARIND progress to preserve cash .
• Commercial readiness: ultra-rare launch blueprint is plausible (small field force, concentrated centers); payer access and newborn screening adoption will impact uptake trajectory .
• Estimates are thin and volatile: consensus breadth is low; be cautious interpreting quarter-to-quarter “beats/misses” during the strategic pivot; prioritize regulatory milestones over near-term quarterly variance [GetEstimates above].
• Governance/listing risk: OTC trading reduces liquidity; a reverse split plan is contemplated to regain Nasdaq compliance—track shareholder votes and panel outcomes .
• Execution priorities: finalize confirmatory trial design/start; maintain cash discipline; communicate convertible/royalty obligations from acquired programs to frame future COGS and margin profiles .

References:
- Q1 2025 press release and financials: **[1683553_2612446ee80345499ad32f1755bfd36f_0]** **[1683553_2612446ee80345499ad32f1755bfd36f_2]** **[1683553_2612446ee80345499ad32f1755bfd36f_4]**
- Q1 2025 10-Q: liquidity, financials, risk factors, subsequent events: **[1683553_0000950170-25-064463_sprb-20250331.htm:3]** **[1683553_0000950170-25-064463_sprb-20250331.htm:4]** **[1683553_0000950170-25-064463_sprb-20250331.htm:5]** **[1683553_0000950170-25-064463_sprb-20250331.htm:10]** **[1683553_0000950170-25-064463_sprb-20250331.htm:19]** **[1683553_0000950170-25-064463_sprb-20250331.htm:20]**
- Corporate Strategy press release (TA-ERT, BLA timing): **[1683553_effbe5d237724f5f85a44cdf2cd878b9_0]** **[1683553_effbe5d237724f5f85a44cdf2cd878b9_1]** **[1683553_effbe5d237724f5f85a44cdf2cd878b9_2]**
- Q3 2024 8-K press release (trend context): **[1683553_0000950170-24-124436_sprb-ex99_1.htm:0]** **[1683553_0000950170-24-124436_sprb-ex99_1.htm:1]** **[1683553_0000950170-24-124436_sprb-ex99_1.htm:2]** **[1683553_0000950170-24-124436_sprb-ex99_1.htm:3]**
- Corporate Update conference call excerpts (commercial strategy, market sizing): **[1683553_SPRB_3422334_0]** **[1683553_SPRB_3422334_6]** **[1683553_SPRB_3422334_1]**
- S&P Global consensus estimates: GetEstimates outputs above (values marked with *).