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Multi-Drug Resistance Antibiotic Developer to Issue IPO

E. coli bacteria

E. coli bacteria (National Institute of Allergy and Infectious Diseases)

24 October 2017. A three year-old company making new antibiotics to treat infections resistant to earlier antibiotics plans to raise some $75 million in its initial public stock offering. Spero Therapeutics in Cambridge, Massachusetts will trade on the Nasdaq exchange under the symbol SPRO, but shares of the stock are not yet trading.

Spero develops new treatments for treating bacterial infections becoming resistant to previous antibiotics, as microbes evolve to evade the drugs’ effects. Centers for Disease Control and Prevention today lists three resistant bacterial infections as urgent public health threats: Clostridium difficile that causes life-threatening diarrhea, carbapenem-resistant Enterobacteriaceae causing blood stream infections becoming resistant to nearly all known antibiotics, and Neisseria gonorrhoeae that causes the sexually-transmitted disease gonorrhea. Another 12 microbes are listed as serious threats.

One of Spero’s lead products, code-named SPR741, is designed to reduce gram-negative bacteria associated with conditions such as pneumonia, bloodstream infections, wound, and surgical site infections. “Gram” refers to a classification for bacteria where the microbes either retain (gram-positive) or shed (gram-negative) a test stain on their protective cell coatings.

SPR741, now in early and intermediate-stage clinical trials, is a type of drug Spero calls calls potentiators that interact with and pierce the lipopolysaccharide outer layer of gram-negative bacteria, often found difficult to penetrate with current drugs. Potentiators, says the company, are new types of chemicals that work with other antibiotics, and are active against both gram-negative and gram-positive microbes.

Another lead product, code-named SPR994, is a new type of oral beta-lactam antibiotic designed to treat complicated urinary tract infections. The immediate target of SPR994 is E. coli bacteria, which has increasingly resistant strains associated with these infections. Because SPR994 is an oral drug, it can be taken by patients at home as well as in hospitals. SPR994 is also in early and intermediate-stage trials.

In its IPO, Spero plans to issue 5 million shares of common stock at a price between $14.00 and $16.00 a share. Assuming $15.00 per share, the mid-point of that range, the company expects to gain some $75 million. Spero plans to invest $58 million of the proceeds to support current and new clinical trials of SPR994 and SPR741, as well as preclinical R&D on other products.

Spero Therapeutics is a spin-off biotechnology enterprise from Massachusetts General Hospital, first formed in April 2014 by life science venture company Atlas Venture with Partners Innovation Fund, the venture capital division of hospitals affiliated with Harvard Medical School, including Mass. General. Spero licensed the research of Laurence Rahme, a molecular biologist at Mass. General working on bacterial diseases — and scientific founder of Spero — which the company extended to design its multiple virulence factor regulators.

As reported by Science & Enterprise in March 2017, Spero Therapeutics was among the first recipients of grants from the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, or CARB-X, an initiative of Biomedical Advanced Research and Development Authority, a U.S. government agency. Spero received $1.6 million initially, and is eligible for another $5.4 million, to support development of its potentiator drugs.

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Hat tip: Fortune/Term Sheet

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