CAMBRIDGE, Mass. - Spero Therapeutics , Inc. (NASDAQ:SPRO), a biopharmaceutical company specializing in treatments for rare diseases and drug-resistant infections, has announced interim leadership changes in response to a Securities and Exchange Commission (SEC) Wells Notice concerning public disclosures made between March 31, 2022, and May 3, 2022. Esther Rajavelu has been appointed as Interim President and CEO, with Frank Thomas stepping in as Chairman of the Board. According to InvestingPro analysis, the company appears undervalued with strong financial health metrics, maintaining a healthy balance sheet with more cash than debt and a current ratio of 2.68x.
The company's Board has implemented these changes following its receipt of the Wells Notice, which is a preliminary determination by the SEC staff recommending enforcement action but is not a formal charge or final determination of wrongdoing. The Board asserts that the company and its officers acted in good faith, and it is cooperating with the SEC in this matter. The stock has experienced significant pressure, declining 9% in the past week and 33% over the last year. InvestingPro subscribers can access 8 additional key insights about SPRO's financial position and market performance through the comprehensive Pro Research Report.
In parallel, Spero Therapeutics reported progress on its Phase 3 PIVOT-PO trial for Tebipenem HBr, an investigational oral antibiotic for complicated urinary tract infections. The trial has surpassed 60% enrollment and is expected to be fully enrolled by the second half of 2025. The company maintains a cash balance sufficient to fund operations into mid-2026. Recent financial data from InvestingPro shows the company achieved profitability over the last twelve months with a gross profit margin of 52%, though analysts anticipate a sales decline in the current year.
The interim appointments come as the company continues to focus on its clinical programs, including the development of Tebipenem HBr. Esther Rajavelu, the new interim leader, joined Spero as Chief Financial and Business Officer in November 2023, and Frank Thomas has been a Board member since July 2017.
The company also provided updates on other pipeline projects. A Phase 2a trial of SPR720 for Non-Tuberculous Mycobacterial-Pulmonary Disease did not meet its primary endpoint, and SPR206, aimed at treating bacterial pneumonia, is poised for a Phase 2 trial pending non-dilutive funding.
Spero Therapeutics has emphasized that the information is based on a press release statement and that its audited financial statements for the year ended December 31, 2024, are not yet available, implying that the preliminary financial results may be subject to change upon audit completion.
In other recent news, Spero Therapeutics has been the subject of several key developments. The company has reported Q2 2024 revenues of $10.2 million, alongside a net loss of $17.9 million. In response to the discontinuation of its Phase 2 program for a drug candidate, the company has reduced its workforce by approximately 39%. Despite this, Spero Therapeutics is making progress on its Phase 3 trial for tebipenem HBr in partnership with GlaxoSmithKline (NYSE:GSK).
H.C. Wainwright has reiterated its Buy rating for Spero Therapeutics, emphasizing the company's ongoing enrolment in its PIVOT-PO trial, which is evaluating the efficacy of tebipenem HBr for complicated urinary tract infections. The completion of enrolment is expected in the second half of 2025, with results potentially released in early 2026. Conversely, TD Cowen has downgraded the company from Buy to Hold due to uncertainties in the timeline of upcoming catalysts.
Spero Therapeutics has also suspended its SPR720 development program following an interim analysis that showed the drug did not meet its primary endpoint in a Phase 2a study. Despite this, the company continues to advance other programs, including a planned Phase 2 trial for SPR206, contingent on non-dilutive funding. The company's financial position remains strong with a cash reserve of $76.3 million, anticipated to fund its operational expenses into mid-2026. These are among the recent developments for Spero Therapeutics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.