Spero Therapeutics, Inc.

Good afternoon and welcome to the Spiro Therapeutics Fourth Quarter and Year End 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the company's formal remarks, we will open the call up 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 announcements on the Sparrow Therapeutics website at www.sparrotherapeutics.com. At this time, I would like to turn the call over to Ted Jenkins, Vice President, Investor Relations at Sparrow Therapeutics. Mr. Jenkins, please go ahead.

Thank you, operator, and thank you all for participating in today's conference call. This afternoon, Sparrow Therapeutics released financial results and provided a pipeline update for the fourth quarter and full year of 2021. Our press release is available on the investor page of the Sparrow Therapeutics 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 potential approval of tepipenem-HBR by the FDA and the timing thereof, the timing of the launch of tepipenem-HBR, future commercialization, the potential number of patients who could be treated by tepipenem-HBR, and market demand for tepipenem-HBR generally. Also, expected broad access across payer channels for tepipenem-HBR, The expected pricing of tepipenum HBR and the anticipated shift in treating patients from intravenous to oral administration. The plans for the company's ongoing development of SPR 720, statements about the future development and commercialization of SPR 206, and the potential receipt of milestone payments as well as royalties on potential future sales of SPR 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 and the company's cash forecast and anticipated expenses. The sufficiency of its cash resources and the availability of additional non-dilutive funding from governmental agencies beyond any initially 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 Sparotherapeutic filings with the SEC, including in the risk factor section of our annual report on Form 10-K 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 calls are Dr. Amkit Mahadevia, Chief Executive Officer, Dr. David Melnick, Chief Medical Officer, Christina Larkin, Chief Operating Officer, and Sas Shukla, our Chief Financial Officer. 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 fourth quarter and full year 2021 financial results and corporate highlights. We'll start with our first lead product candidate, Teddy Penham, HBR. We received a notice from the FDA stating that as part of its ongoing review of our NDA, as identified deficiencies that preclude the discussion of labeling and post-marketing commitments at this time. This notice is clear that it does not reflect a final decision on FDA's ongoing review. We also note that this comes at the midpoint of the scheduled six-month review period, which was the planned date to initiate discussions on proposed labeling, and if necessary, any post-marketing requirements and or commitment requests. There are three months remaining before the application's PDUFA date of June 27th. We continue to have an active dialogue with FDA and will continue to collaborate with them on the best path forward for tebupenem as quickly as we can. If this can be done to the FDA's satisfaction, we believe there would be sufficient time to progress labeling and PMC-PMR discussions within the existing PDUFA timeframe, given how early in the review period those discussions were originally scheduled to occur. We expect a late cycle review meeting to occur in the coming weeks where we will have the opportunity for these continued discussions. Please know that there isn't additional detail regarding the review of an NDA that we can share beyond what we've disclosed today. We seek to understand any issues in greater depth and also since discussions with FDA are ongoing. Given the timing of our ongoing discussions with the FDA, we will provide an update on or before our next earnings call and we look forward to doing that as soon as we're able. As a reminder, the NDA package is seeking approval for tebipenem HBR oral tablets for the treatment of complicated urinary tract infections, including pyelonephritis caused by certain microorganisms in adult patients who have limited oral treatment options. We were pleased that FDA decided to grant this NDA a priority review designation. Upon NDA acceptance, we were initially informed that FDA may hold an advisory committee as part of the review. As part of our ongoing discussions, FDA has informed us an advisory committee meeting is not needed. Tepipenem, if approved, has the potential to address a significant unmet need, alleviate infections, and help appropriate COTI patients avoid hospitalizations or transition home faster after IV therapy. We continue to believe in the strength of our application. The foundation of that is our previously announced data from the Phase III ADAPT-PO trials. These data showed the trial meeting its primary endpoint as specified in the protocol by demonstrating that oral tebupenem HBR was statistically non-inferior to intravenous vertapenem in the treatment of patients with complicated urinary tract infections, or CUTI, and patients with acute pyelonephritis, or AP. We are expecting the publication of the ADAPT-PO trial results in a high-impact peer-reviewed journal in early Q2. ADAPT-TO was designed as the first head-to-head comparison of an oral versus IV regimen in CUTI. We believe it shows that tebupenem can provide the benefits of an oral therapy without making any compromises on clinical response, safety, or tolerability. We believe data from the trial not only supports our NDA, but if approved by the FDA, it will potentially provide physicians with the confidence needed to prescribe oral tebupenem HBR to appropriate patients at the place of IV therapy. This could be beneficial to patients, healthcare providers, and payers alike by shifting care to the outpatient setting. This, in turn, would free up capacity for those patients with no viable alternatives to hospital treatment, a need that was underscored during the COVID-19 pandemic. An approval for tebupenem HBR would make it the only oral carbapenem available for the treatment of CETI. We are encouraged by the responses we have received to date from physicians presented with tebupenem's value proposition and by feedback from payers who have expressed their willingness to cover tebupenem HDR, which would notably occur outside of a hospital diagnosis-related group. This bodes well for the CUTI patients who could benefit from an oral carbapenem therapeutic. Now let's turn our attention to SPR 720. I'd like to now briefly recap the program's growing momentum. As you may recall, SPR-720 phase 2A clinical trial in patients with non-tuberculous mycobacterial disease, or NTM, was placed on hold by the FDA in February 2021 following review of data from a non-humid primate toxicology study in which mortalities with inclusive causality to treatment were observed. At the start of 2022, we announced that the FDA lifted that clinical hold following the submission of a comprehensive study report with detailed analyses from the NHP toxicology study These analyses supported our hypothesis that observed mortalities were not drug-related. We are very pleased by the FDA's decision to lift the hold, and we've engaged with the agency to finalize the design and protocol of an upcoming phase two trial, which we expect to begin in the second half of the year. David will speak more about the plans for this study shortly. SPR206, our next generation product candidate, also received significant milestones last year. We were pleased to engage with Pfizer entering into a licensing agreement to which Pfizer received the rights to develop, manufacture, and commercialize SPR-206 in ex-U.S. and ex-Asia territories. In tandem with the licensing agreement, Pfizer also made a $40 million equity investment in Sparrow as part of the Pfizer Breakthrough Growth Initiative. We also announced positive top-line results from SPR-206's Phase I Bronco-Alveolar Lavage Study. Finally, we completed our trial successfully of SPR206 in renally impaired patients. With the bowel and renal impairment data in hand, the program can move forward with ongoing FDA engagement and further clinical development. I would now like to highlight some recent appointments we've made to support the progress we're making in our pipeline. We're thrilled to welcome these individuals who are industry leaders with diverse and complementary skill sets. One of these industry leaders is David Musselman, who joined Sparrow as SVP Sales and Market Access this past October. David has over two decades of experience in the biotech industry and was most recently responsible for building and executing Eurovent's first product launch as their VP of Specialty Sales. We also recently brought on Jamie Brady as our Chief Human Resource Officer. Jamie has spent over 30 years working in senior human resource positions in the life science space. He's been deeply involved in guiding companies through their transition to commercial organizations. Alongside these additions to our leadership team, we also appointed Cerebell Therapeutics Chief Corporate Affairs Officer Kathleen Tregonic to our board of directors. Kathleen has previous experience working at Sanofi, Biogen, and is a professional staff member for the U.S. Congress. We believe this experience, together with her deep understanding of external engagement strategies in the global payer environment, will add important depth and a valuable perspective to our board. We're fortunate to have the support of high-quality investors and a strong financial foundation. This is due in part to our two successful capital raises in 2021, both of which added cash to our balance sheet while also providing external validation for our strategy and for our pipeline. The first of these raises was the $40 million equity investment from Pfizer, as previously mentioned, which was made at a premium and came alongside a licensing agreement for SBR 206. A couple of months after receiving this equity investment, we further strengthened our balance sheet by entering into a non-volatile revenue interest financing agreement with healthcare royalty partners. This agreement, which is worth up to $125 million, provides $50 million upfront, $50 million on approval of Tebby Penham HBR and TTI, and $25 million upon the completion of pre-specified milestones and mutual agreement with healthcare royalty partners. With this transaction, we believe we've preserved significant financial flexibility and upside, while securing revenue streams to support Tubby Penham's HBR anticipated launch and the advancement of the SPR 720 and SPR 206 programs. Lastly, I'd like to acknowledge our employees, partners, investigators, and importantly, the patients we serve who've made considerable contributions to Sparrow in the midst of the ongoing COVID-19 pandemic. Despite the old cron wave that came and went during Q4, we continued to achieve significant milestones during the past number of months. With that, I'll hand it now over to David to provide a more detailed update on our clinical progress and on our pipeline.