Spero Therapeutics, Inc.

Good day, everyone, and thank you for standing by. Welcome to the Sparrow Therapeutics Second Quarter 2021 earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Ted Jenkins, Vice President, Head of Investor Relations at Sparrow Therapeutics. Mr. Jenkins, please go ahead, sir.

Thank you, Operator, and thank you all for participating in today's conference call. Earlier today, Sparrow Therapeutics released financial results and provided a pipeline update for the second quarter of 2021. Our press release is available on the investor's page of the Sparrow Therapy's website. Before we begin, I'd like to remind you that some of the information contained in the news release and on this conference call contain forward-looking statements based on our current expectations, including statements about the initiation, timing, and submission to the FDA of an NDA for tebupenem HBR and the potential approval of tebupenem HBR by the FDA. Future commercialization, the potential number of patients who could be treated by tebupenem HBR, and market demand for tebupenem HBR generally. Expected broad access across payer channels for Teddy Penham HBR. The expected pricing of Teddy Penham HBR and the anticipated shift in treating patients from intravenous to oral administration. The plans for the company's ongoing development of SBR 720. Statements about the future development and commercialization of SBR 206 and the potential receipt of milestone payments as well as royalties on potential future sales of SBR 206. The design, initiation, timing, progress, and results of the company's preclinical studies and clinical trials and its research and development programs. Management's assessment of the results of such preclinical studies and clinical trials. The impact of the COVID-19 pandemic on the company's business and operations. The company's cash forecasts and anticipated expenses, the sufficiency of its cash resources, and the availability of additional non-dilutive funding from governmental agencies beyond any initial funded awards. 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 Sparrow Therapeutics' filings with the SEC, included in the Risk Factors section of our quarterly report on 410Q filed today. These forward-looking statements speak only as of the date of this conference call, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information. regarding the company after the date of today's release and call. Participating in today's call are Dr. Ankit Mahadevia, Chief Executive Officer, Dr. David Melnick, Chief Medical Officer, Christina Larkin, Chief Operating Officer, and our Chief Financial Officer, Seth Shukla. With that, I'd like to turn the call over to Dr. Ankit Mahadevia. Please go ahead, Ankit.

Thank you, Ted, and thanks to all for joining us today to discuss our financial results and corporate highlights. As we continue to progress through the back half of 2021, we remain focused on preparing for the upcoming Tevipedem HBR NDA filing and executing on our corporate strategy as we work to transition to a commercial organization. I'm pleased to say that our efforts around these interrelated goals have continued to advance on track. On our last call, we shared that we had accumulated all of the data necessary for our NDA submission for TepiPenem. Since then, we have been performing all of the required analyses and drafting sections of the NDA, both at the study and summary levels. We've seen sustained progress on these fronts, and we're confident that we'll submit the NDA in the fourth quarter. This is in line with the guidance provided on our last earnings call for an expected NDA submission during the second half of this year. Our efforts around tebupenem HBR are supported both by our strong clinical data and our positive regulatory interactions with FDA. The positive Phase III ADAPT-PO trial results reported late last year showed that the trial's primary endpoint was met, with data demonstrating that an all-oral regimen of tebupenem HBR is non-inferior to an all-IV regimen of ertapenem for the treatment of complicated urinary tract infection, or CUTI, and acute pyelonephritis, or APN. Now, our previous FDA interactions and written communication indicate that positive results from a single well-controlled pivotal trial, such as ADAPTO, could be sufficient to support the approval of an NDA for TAB-dependent HBR in the treatment of CUTI and AP. Additionally, through feedback we received from our pre-NDA meeting, the FDA endorsed the structure and form of our planned NDA submission and indicated that the data set and CMC plan that we intend to submit in the NDA package meet their standards. We are confident that our tebupenem HBR program will continue to advance as planned as we move through the second half of 2021 and into 2022. Based on our positive clinical data and ADAPT-PO's rigorous design, we believe that, if approved, tebupenem HBR will be an important physician treatment option for possibly over 2 million CUTI and AP patients in the U.S. alone who are resistant to currently available oral therapies. ADAPT-PO was designed as the first head-to-head comparison of an all-oral, versus an all-IV regimen in CUTI specifically to provide a robust result that would give physicians confidence to prescribe tebupenem HBR to CUTI and AP patients who would otherwise be required to receive IV therapy. We believe we have done just that as our data show that tebupenem HBR can provide the convenience of an oral therapy without any compromises on clinical response, safety, or tolerability. If approved, tebupenem HBR would become the only oral carbapenem available for the treatment of CUTI and AP. Its ability to effectively replace IV therapy for these patients could prevent and shorten unnecessary hospitalizations, delivering value to the patient and economics benefits to the healthcare providers and payers. This has led payers to express their willingness to cover a tebupenem HBR, which bodes well as we work towards potential launch. I would now like to provide some updates on the SPR720 clinical program. As a reminder, SPR720 advanced into a phase two clinical trial in patients with non-tuberculous mycobacterial disease, or NTM, at the end of last year. The initiation of this trial was supported by positive data from phase one, single and multiple ascending dose trials, as well as non-clinical toxicology studies in non-human primates and rodents. Within these studies, Multiple subjects were dosed, and no severe or serious adverse events were observed. As the Phase IIa trial was being conducted, however, we also simultaneously engaged in an additional, longer-term toxicology study in nine human primates. Surprisingly, and in contrast to the positive Phase I, sad, mad human experience, unexplained NHP mortalities were observed. This led us to prudently pause the Phase IIa clinical trial and promptly notify the FDA of this important dynamic. We then subsequently received a clinical hold letter in which the FDA requested additional information from the non-human primate study, including a study report. As we discussed in our last call, we have since completed the non-human primate study and continue to analyze the data. We expect to complete the requested study report in the third quarter as planned. With this information in hand, we will continue to engage the FDA on a full response to their clinical hold letter in early Q4. We will give an update on these discussions following FDA's written comment and direction as to our specific findings from the non-human primate study. Until then, I will reiterate the data we have seen to date that support the hypothesis that the observed mortalities were not drug-related, but rather dosing and species-specific. This gives us confidence that there is a path forward for the SPR720 clinical program, but of course, we must complete our interactions with FDA before a final determination can be made. I would also now like to briefly highlight the recent exciting developments that occurred around SPR-206, our next generation polymix and product candidate. And then David can speak in more detail about the program. We were thrilled to announce that we entered into a licensing agreement with Pfizer around this asset, pursuant to which Pfizer receives the rights to develop, manufacture, and commercial SPR-206 in ex-US and ex-Asia territories. In exchange for these rights, Sparrow is eligible to receive up to $80 million in development and sales milestones with high single-digit to low double-digit royalties on net sales. In tandem with the licensing agreement, Pfizer also made a $40 million equity investment in Sparrow as part of the Pfizer Breakthrough Growth Initiative, a program focused on funding innovative science to meet patient needs. This investment, which was made at a premium to market, provides important capital, which we intend to use in preparation for the potential approval of and launch of TepiPen and HBR, as well as to support ongoing clinical development of SPR 720 and SPR 206. The equity investment and licensing agreement provide important external validation from an industry leader and support our broader corporate strategy and pipeline development of anti-infectants for patients with unmet need. Further, the prize of transaction speaks to our ability to execute on our business development objectives. It is also representative of a recent uptick in interest and investment activity around product candidates with the potential to address the rising rate of antimicrobial resistance, or AMR. For instance, Pfizer, along with more than 20 leading pharmaceutical companies, contributed to the formation of the AMR Action Fund, which aims to invest over a billion dollars in antibiotic development by 2030. Pfizer has also already committed $100 million to this fund and recently acquired Amflix Pharmaceuticals and Ericsson Pharmaceuticals, both of which have been focused on anti-infectives. This activity, along with the efforts of other major pharmaceutical companies, government agencies, and policymakers, is increasing the dynamism of the antimicrobial development ecosystem. Sparrow continues to remain active in the collaborative efforts of this ecosystem, as shown by our recent deal with Pfizer and our relationships with other corporate partners and private foundations, and our partnerships with several government agencies, including BARDA, the U.S. Department of Defense, the Defense Threat Reduction Agency, and the National Institutes of Allergies and Infectious Disease. Before handing the call off to David, I'd like to reiterate Sparrow remains well-equipped to continue executing on our objectives, even amongst the ever-evolving circumstances of the COVID-19 pandemic. While our business has not been materially impacted by COVID-19 in 2021, the pandemic is highlighting the value of replacing IV therapies that are often administered in the hospital setting with an at-home oral option. We believe that Tevipenem HBR, if approved, could provide such an option and enable a shift in care to the outpatient setting. This would provide value to patients, healthcare providers, and payers alike as it would reduce patient exposure to COVID-19 and other secondary infections. Further, Hospital would also see a financial benefit and free up capacity for seriously ill patients with no viable alternatives to hospitalization. I will now hand it over to David to provide a more detailed update on our clinical progress and our pipeline.