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Spero Therapeutics, Inc. (SPRO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue of $15.0M rose sequentially and beat consensus ($6.2M), though EPS of $(0.38) missed consensus $(0.31); FY24 revenue was $48.0M and net loss $(68.6)M, driven by increased Phase 3 PIVOT-PO spend and lower collaboration revenue vs 2023 .
  • Management reaffirmed a prespecified interim analysis for tebipenem HBr’s Phase 3 PIVOT-PO in Q2 2025 and highlighted potential to be the first oral carbapenem for cUTI/AP, with GSK responsible for regulatory/commercialization post‑pivotal and ~$400M in contingent milestones, including $25M at NDA submission if pursued .
  • SPR720’s oral NTM-PD program remains under full data review after a negative interim and dose‑limiting Grade 3 hepatotoxicity; oral path deemed unlikely, while SPR206 was discontinued in Q1 2025 following a pipeline reprioritization .
  • Liquidity: $52.9M cash/equivalents at 12/31/24; runway into Q2 2026 when including earned, non‑contingent GSK development milestones ($47.5M remaining), positioning SPRO through the Phase 3 interim .

What Went Well and What Went Wrong

  • What Went Well

    • Strong top-line beat: Q4 revenue $15.0M vs $6.2M consensus, aided by grant and collaboration revenue; FY24 revenue $48.0M .
    • Clear clinical catalyst path: prespecified Phase 3 PIVOT-PO interim in Q2 2025 with defined scenarios (stop for success, futility, or continue) and NI margin of 10% on overall response at TOC .
    • Liquidity runway reaffirmed: $52.9M cash plus earned GSK milestones provide funding into Q2 2026; COO reiterated GSK will assume regulatory/commercial roles post‑pivotal if pursued .

  • What Went Wrong

    • EPS missed: Q4 diluted EPS $(0.38) vs $(0.31) consensus amid higher R&D tied to PIVOT‑PO; net loss $(20.9)M in Q4 .
    • SPR720 setback: Phase 2a interim failed its primary endpoint and raised safety concerns (three reversible Grade 3 hepatotoxicity cases at 1,000mg QD); oral NTM-PD path considered unlikely .
    • Pipeline pruning: SPR206 (Phase 2‑ready HABP/VABP) discontinued after reprioritization, removing a potential near‑term second asset .

Financial Results

Revenue, EPS and Net Income vs prior periods and estimates

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD)$73.5M $10.2M $13.5M $15.0M
Diluted EPS ($)$0.96 $(0.33) $(0.32) $(0.38)
Net Income ($USD)$51.2M $(17.9)M $(17.1)M $(20.9)M

Estimate comparison (S&P Global consensus vs actuals)

MetricQ2 2024Q3 2024Q4 2024
Revenue – Consensus$3.27M*$7.67M*$6.20M*
Revenue – Actual$10.20M $13.47M $15.04M
Revenue – Surprise+$6.93M+$5.80M+$8.84M
EPS – Consensus$(0.38)*$(0.36)*$(0.31)*
EPS – Actual$(0.33) $(0.32) $(0.38)
EPS – Surprise+$0.05+$0.04−$0.07

Values with asterisks (*) retrieved from S&P Global.

Profitability/margins (calculated from reported results; NI margin = Net Income / Revenue)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Net Income Margin %69.6% (calc from $51.2M/$73.5M) −175.1% (calc from $(17.9)M/$10.2M) −127.3% (calc from $(17.1)M/$13.5M) −138.9% (calc from $(20.9)M/$15.0M)

Operating expense detail and liquidity

KPIQ2 2024Q3 2024Q4 2024
R&D Expense ($M)$23.7 $26.9 $28.8
G&A Expense ($M)$5.5 $5.2 $7.1
Cash & Equivalents ($M)$63.5 (6/30) $76.3 (9/30) $52.9 (12/31)
Cash RunwayInto late 2025 Into mid‑2026 Into Q2 2026 (incl. earned GSK milestones)

Note: Company has no reportable operating segments.

Guidance Changes

Metric/ItemPeriodPrevious GuidanceCurrent GuidanceChange
PIVOT‑PO enrollment completionThrough 2H 2025On track for 2H 2025 completion (11/14/24) On track; >60% enrolled as of 12/31/24 (1/10/25) Maintained; progress update
PIVOT‑PO prespecified interim analysisQ2 2025Not previously datedExpected in Q2 2025 (3/27/25) New timing disclosed
Cash runwayMulti‑periodInto mid‑2026 (11/14/24; 1/10/25) Into Q2 2026 incl. earned GSK milestones (3/27/25) Essentially maintained/clarified
SPR720 (oral NTM‑PD)Program statusDevelopment suspended pending full dataset review (11/14/24) Completing full 25‑pt analysis; oral path unlikely due to dose‑limiting tox (3/27/25) Clarified downside, likely pivot
SPR206 (HABP/VABP)Program statusPhase 2‑ready; contingent on non‑dilutive funding (11/14/24) Program discontinued after reprioritization (Q1’25) (3/27/25) Lowered/terminated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
Tebipenem HBr Phase 3 PIVOT‑POEnrollment progressing; target ~2,648; completion 2H 2025 Prespecified interim in Q2 2025; NI margin 10%; IDMC to guide stop/continue Momentum building toward binary catalyst
SPR720 (NTM‑PD)Enrollment completed (25 pts); data expected 4Q24 Interim did not meet primary endpoint; 3 Grade 3 hepatotoxicity cases at 1,000mg; oral path unlikely; full dataset under review Deteriorated; strategy reassessment
SPR206 (HABP/VABP)IND cleared; Phase 2 initiation contingent on funding Program discontinued after reprioritization Removed from near‑term plan
Liquidity/RunwayCash $63.5M (Q2); runway into late 2025 Cash $76.3M (Q3) → $52.9M (YE); runway into Q2 2026 with GSK milestones Adequate through interim
Regulatory/LegalN/ALeadership changes in Jan’25 following SEC Wells Notice re 2022 disclosures Overhang; governance actions taken

Management Commentary

  • “Our top priority for this year is the continued advancement of the tebipenem program, which, if approved, has the potential to fundamentally change the treatment paradigm for complicated UTI by offering … a convenient oral treatment option.” — Interim CEO/CFO Esther Rajavelu .
  • “There are three scenarios that are likely…either the trial meets the primary endpoint with this prespecified interim… and we stop the trial…or we stop the trial for futility or…continue enrolling.” — Rajavelu on interim outcomes .
  • “We have determined that an oral path for NTM‑PD is unlikely given the dose‑limiting Grade 3 tox at the 1,000 mg dose…” — Rajavelu on SPR720 .
  • “Following completion of the tebipenem HBr Phase III trial, GSK is expected to assume responsibility for regulatory and commercialization efforts…Spero could qualify for about $400 million in contingent milestones including $25 million when GSK submits an NDA…” .

Q&A Highlights

  • Interim analysis mechanics and bar: Small alpha spend pre‑accounted in sample size; three‑path decision at interim (success/stop, futility/stop, or continue) with 10% NI margin on overall response; unblinding if IDMC recommends stopping .
  • SPR720 next steps: Complete full 25‑patient analysis; oral approach unlikely due to dose‑limiting Grade 3 hepatotoxicity at 1,000mg; reformulation strategy may be considered .
  • Timing: Company reiterated Q2 2025 interim analysis update and intends to communicate next steps thereafter .

Estimates Context

  • Q4 2024: Revenue beat ($15.04M vs $6.20M*); EPS missed ($(0.38) vs $(0.31)*) as R&D stepped up for PIVOT‑PO .
  • Q3 2024: Revenue beat ($13.47M vs $7.67M*); EPS beat ($(0.32) vs $(0.36)*).
  • Q2 2024: Revenue beat ($10.20M vs $3.27M*); EPS beat ($(0.33) vs $(0.38)).
    Values with asterisks (    ) retrieved from S&P Global.

Where estimates may need to adjust:

  • Near‑term revenue modeling should reflect ongoing collaboration/grant variability; expense forecasts should embed sustained higher R&D into interim; pipeline changes (SPR206 discontinued; SPR720 likely pivot) reduce non‑tebipenem near‑term spend and potential funding inflows .

Key Takeaways for Investors

  • Tebipenem PIVOT‑PO interim in Q2 2025 is the critical binary catalyst; positive NI outcome could stop the trial early and trigger GSK‑led regulatory actions and a $25M milestone at NDA submission if pursued .
  • Q4 delivered a meaningful top‑line beat but an EPS miss, consistent with heavier Phase 3 investment; trajectory shows sequential revenue growth as grants/collaborations recognized .
  • Liquidity into Q2 2026 (with earned GSK milestones) provides a bridge through the interim; further capital needs depend on interim outcome and GSK decisions .
  • SPR720’s oral NTM‑PD path is unlikely given safety; await full dataset and potential reformulation strategy, lowering medium‑term optionality outside tebipenem .
  • Discontinuation of SPR206 narrows focus, concentrates execution risk on tebipenem, and simplifies OpEx allocation .
  • An SEC Wells Notice over 2022 disclosures is a governance/legal overhang; interim leadership changes enacted, but potential outcomes/timing remain uncertain .
  • Trading setup is catalyst‑driven: pre‑interim positioning and subsequent GSK actions will likely dominate stock reaction; watch for any enrollment/intrims timing updates and clarity on NDA path .

References: Q4 2024 8‑K and press release ; Q4 2024 earnings call transcripts ; Q3 2024 press release ; Jan 10, 2025 business update . Values with asterisks (*) retrieved from S&P Global.