Spero Therapeutics, Inc. (NASDAQ:SPRO) has entered into a $105 million non-recourse, non-dilutive royalty financing agreement with affiliates of HealthCare Royalty (HCRx), a company majority owned by KKR & Co. Inc. (NYSE:KKR), providing fresh capital to support its clinical pipeline without issuing new shares.
Financing Backed by Future Utebzi Royalties
The agreement gives HCRx the right to receive a portion of future milestone and royalty payments linked to Utebzi (tebipenem pivoxil), the antibiotic recently approved by the U.S. Food and Drug Administration for the treatment of complicated urinary tract infections.
Spero previously granted GSK exclusive rights to develop and commercialise Utebzi across most global markets, while Meiji retains commercial rights in selected Asian territories.
At closing, HCRx will provide Spero with $105 million, less the original issue discount and applicable transaction fees. The financing will be repaid through quarterly principal and interest payments sourced exclusively from future payments that GSK makes to Spero under the licensing agreement.
Once the financing has been fully repaid, Spero will continue to receive 35% of future GSK milestone and royalty payments generated by Utebzi.
Capital to Support SP001 Clinical Programme
The company said the proceeds will primarily be used to fund the Phase 2 clinical development of SP001, an anti-CD40L monoclonal antibody licensed from Innovent Biologics for the treatment of immune-mediated diseases.
The financing transaction was completed alongside Spero’s execution of an exclusive licensing agreement with Innovent Biologics covering the SP001 programme.
“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.
Cash Runway Extended Into 2029
Following completion of the transaction, Spero updated its financial guidance, stating that its available cash resources are now expected to fund operations into the second half of 2029.
J. Wood Capital Advisors served as Spero’s exclusive financial adviser, while WilmerHale acted as legal counsel to the company. Sidley Austin LLP advised HCRx on the transaction.
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