Spero Therapeutics secures $105M royalty-backed financing deal

Spero Therapeutics, Inc. (Nasdaq: SPRO) announced a $105 million non-recourse, non-dilutive royalty financing transaction with affiliates of HealthCare Royalty (HCRx), a business majority owned by KKR & Co. Inc. (NYSE: KKR).

Under the agreement, HCRx will receive a portion of future milestone and royalty payments associated with sales of Utebzi (tebipenem pivoxil), an antibiotic recently approved by the U.S. Food and Drug Administration for complicated urinary tract infections. Spero has granted GSK an exclusive license to develop and commercialize Utebzi in most territories, with Meiji holding rights in certain parts of Asia.

HCRx will provide Spero with a $105 million payment at closing, net of original issue discount and applicable fees. HCRx will receive quarterly principal and interest payments derived solely from GSK payments due to Spero until the loan balance is repaid. After repayment, Spero will retain 35% of subsequent GSK payments related to Utebzi sales.

Spero said proceeds will primarily fund Phase 2 development of SP001, an anti-CD40L monoclonal antibody in-licensed from Innovent Biologics, targeting immune-mediated diseases. The financing was completed alongside the execution of an exclusive license agreement with Innovent Biologics for the SP001 asset.

"By unlocking immediate value from a portion of future Utebzi milestone and royalty streams, we are well positioned to execute on the clinical development for SP001 and continue building a differentiated pipeline for patients with immune-mediated diseases," said Esther Rajavelu, President and Chief Executive Officer of Spero Therapeutics.

Following the transaction, Spero updated its cash runway guidance, extending it into the second half of 2029.

J. Wood Capital Advisors acted as Spero's exclusive financial adviser, and WilmerHale served as legal advisor to Spero. Sidley Austin LLP acted as legal advisor to HCRx.

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