Spero Therapeutics shares fall after $105M KKR deal

Investing.com -- Spero Therapeutics Inc. shares traded about 12% lower in pre-market hours Tuesday following the company's announcement of a $105 million licensing agreement with affiliates of Healthcare Royalty, a business of KKR.

The clinical-stage biopharmaceutical company said HCRx will receive a portion of future milestone and royalty payments from sales of Utebzi, also known as tebipenem pivoxil. Spero plans to use the funds primarily to support development of SP001, its lead immunology drug candidate currently in Phase 2.

"Over the past year, in collaboration with GSK, we successfully advanced Utebzi through FDA approval, while executing on our strategy to strengthen Spero and position the Company for its next phase of growth. This transaction further strengthens our balance sheet and provides non-dilutive capital as we embark on an immunology-focused strategy," said Esther Rajavelu, President and Chief Executive Officer of Spero Therapeutics.

The financing closed at the same time as an exclusive license agreement with Innovent Biologics for the SP001 asset. The deal follows last month's U.S. approval of Utebzi for complicated urinary tract infections. Spero has granted GSK an exclusive license to develop and sell Utebzi in all territories except certain areas in Asia, where Meiji holds rights.

Under the agreement terms, HCRx will provide Spero with $105 million at closing, net of original issue discount and fees, in exchange for rights to payments from GSK related to Utebzi sales. HCRx will receive quarterly principal and interest payments from the GSK payments until the loan balance is repaid. After repayment, Spero will retain 35% of subsequent GSK payments related to Utebzi sales.

Following the transaction, Spero extended its cash runway guidance into the second half of 2029.

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