Spero Therapeutics, Inc. (SPRO) Q2 2020 Earnings Report, Transcript and Summary

Greetings, and welcome to the Spero Therapeutics Second Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sharon Klahre. Thank you. You may begin.

Great. Thank you, operator, and thank you all for participating in today’s conference call. Earlier today, Spero Therapeutics released financial results and provided a pipeline update for the second quarter ended June 30, 2020. If you have not yet seen the press release, it’s available on the Investor page of Spero Therapeutics’ website. Before we begin, I’d like to remind you that some of the information contained in the news release and on this conference call contain forward-looking statements based on our current expectations. Such forward-looking statements are not a guarantee of performance and the company’s actual results may differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in Spero Therapeutics’ filing with the SEC. These forward-looking statements speak only as of the date of the press release and conference call, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the company after the date of today’s release and call. Participating in today’s call from Spero are Dr. Ankit Mahadevia, Chief Executive Officer; Dr. David Melnick, Chief Medical Officer; Cristina Larkin, Chief Operating Officer; and Steve DiPalma, Interim Chief Financial Officer. With that, I’d like to go ahead and turn the call over to Dr. Ankit Mahadevia. Please go ahead, Ankit.

Thank you, Sharon, and good afternoon, everyone. We appreciate you joining us today. Spero continues to make significant progress in advancing its pipeline. We are pleased to announce that we remain on track to report top line data from our Phase III trial for tebipenem HBr in complicated urinary infections called ADAPT-PO in the third quarter. The ADAPT-PO trial is a head-to-head evaluation of oral tebipenem versus IV ertapenem, and it’s designed to give physicians the confidence to prescribe tebipenem HBr based on robust evidence of its positive patient outcomes. In the second quarter, we were happy to complete patient enrollment and follow-up in the trial, which remains blinded at this point. If successful, the trial, together with supporting Phase I trials that we are completing, will enable us to file for regulatory approval of tebipenem HBr for cUTI in the U.S. which, if approved, will facilitate our evolution to a commercial stage company. While I’ll leave it to Dr. Melnick to give more detail on our ADAPT-PO trial and our broader pipeline progress, I will comment on how we’re managing the business during the ongoing COVID-19 pandemic. Our top concern during this time is the safety of our patients, partners and employees and to that end, conducting trials in the COVID-19 setting has been an industry-wide challenge. While the incredible work of Spero’s employees and partners have allowed us to effectively navigate these challenges and remain on track to deliver data for ADAPT-PO within our third quarter 2020 guidance, our ongoing assessment of the situation suggests an impact to certain future timelines. Specifically, we now expect to begin a rolling submission of a tebipenem HBr new drug application to the FDA in the first quarter of 2021, pending positive Phase III data and the FDA’s agreement, with the completion of submission expected in the second quarter of 2021. This represents an incremental modification of our previous guidance of completing the NDA submission in the first quarter of 2021. Additionally, due to COVID-19-related reductions to clinical research organization and clinical trial site capacity, we now plan to initiate a Phase I bronchoalveolar lavage clinical trial assessing the penetration of SPR206 and into the pulmonary compartment in the first half of 2021 rather than the second half of 2020 as stated previously. While COVID-19 has had an impact on some of our clinical timelines, it’s also emphasized the need for our medicines. In the setting of COVID-19, the importance of preventing hospital admission through treatment in the community setting has never been greater. Now more than ever, physicians would prefer to treat a complicated urinary tract infection outside of the hospital if there was an effective oral option available. Timely outpatient treatment reduces exposure to infectious disease, including COVID-19, and offers a meaningful financial benefit to the hospital. Further, over the course of the pandemic, physicians have become more comfortable using telemedicine and are looking for additional and complementary methods to streamline and expand access to care for their patients. Oral medicines that are reimbursed outside of the hospital DRG and shift care to the outpatient setting are an attractive option to meet these goals. The pandemic also highlights the need for a comprehensive approach to developing medicines to address current and future infectious threats. The role of antibiotics in this strategy is a major focus of governments around world, and recently we’ve seen make pharmaceutical companies increasing their long-term commitment to this area, such as with the recent announcement of the AMR Action Fund. Importantly, while we aren’t reliant on such incentives to further develop our medicines, we do continue to benefit from our partnership with several agencies, including BARDA, the U.S. Department of Defense and DTRA as well as from our relationships with corporate partners. On the financial front, we ended the second quarter with $71.4 million in cash, which takes us into the first quarter of 2021 beyond the ADAPT-PO top line data announcement this quarter and the expected initiation of our SPR720 Phase IIa clinical trial in the second half of 2020. Now to provide some more in-depth discussion on Spero’s pipeline and clinical trials, I’ll hand it over to our Chief Medical Officer, Dr. David Melnick.

Thank you very much, Ankit, and good afternoon, everybody. We’ve continued to make significant progress on our pipeline programs throughout the second quarter and into what is now the early part of the third quarter. I’ll begin with our lead candidate, tebipenem HBr, an oral carbapenem that is currently being evaluated in our ADAPT-PO Phase III clinical trial. ADAPT-PO is a noninferiority trial comparing oral tebipenem head-to-head versus intravenously administered ertapenem, the carbapenem that is most commonly used for complicated UTI. The trial has completed enrollment of 1,372 patients in May, and all patient follow-up is now complete. Trial participants were randomized on a 1:1 basis and received either oral tebipenem or IV ertapenem for seven to 10 days. The primary endpoint of the trial is overall clinical and microbiologic response, and that includes eradication of the infecting pathogen at test of cure in the microbiological intent-to-treat population. We continue to anticipate reporting top line results from the trial in the third quarter of 2020. While we do not believe that the ongoing COVID-19 pandemic will impact our ability to report the ADAPT-PO top line data by the end of the third quarter, we announced today that our clinical research organizations, or CROs, are experiencing a reduced capacity to conduct, validate and analyze trials, which impact ongoing and planned Phase I trial timelines. As this relates to the tebipenem NDA submission, we expect this reduced CRO capacity to impact the Phase I trials that are required for NDA submission. Therefore, we now anticipate initiating a rolling NDA submission to the FDA for tebipenem HBr in complicated UTI in the first quarter of 2021 with completion of that submission in the second quarter, which is a change from our previous guidance of a completed NDA submission in the first quarter. We believe patients, payers and physicians alike would significantly benefit from the addition of an effective oral agent that keeps patients out of the hospital and restores the option to treat serious urinary tract infections caused by antibiotic-resistant uropathogens. Microbial surveillance data demonstrates that the prevalence of fluoroquinolone- and cephalosporin-resistant enterobacteriaceae continue to rise in both the hospital and community settings, and this severely limits the activity of the currently available oral antibiotics. ADAPT-PO does not include an IV lead-in the oral tebipenem arm, which is important because it will build the confidence of physicians to prescribe an oral antibiotic for complicated UTI as a replacement for IV therapy. Several recent clinical studies have demonstrated that substitution of oral antibiotic therapy in the place of IV antibiotic therapy has been an effective strategy treating serious infections, including endocarditis, skeletal infections and Gram-negative bacteremia. With approximately 60% bioavailability for tebipenem, an extensive pharmacokinetic and pharmacodynamic data derived from our Phase I studies, we feel confident that we’ll have sufficient drug onboard and at the site of infection to allow for treatment with an oral agent alone. This is further supported by Phase II data, which was previously generated by our Japanese partner, Meiji Seika, as well as an interim PK read in the ADAPT-PO trial that confirmed the PK/PD models supporting the dosing of tebipenem HBr. I would also highlight that tebipenem as a powder form has been marketed in Japan for over 10 years, so we were fortunate to have a significant safety database to add to the body of knowledge on this molecule. Moving on from 994 or tebipenem to SPR720, our oral drug candidate for the treatment of nontuberculous mycobacterial or NTM infections. We previously announced Phase I data in healthy patients demonstrating that repeated doses of 1,000 milligrams administered once daily were safe and well tolerated, and these are doses which we believe will produce clinical efficacy in patients. Following these results, we spoke with the FDA to review SPR720’s development pathway in NTM. Importantly, the FDA confirmed that our planned Phase IIa trial is the appropriate next step in development. Longer term, the development of SPR720 will be in combination with other antimicrobials, and trials would be designed to measure patient-reported outcomes. Subject to FDA acceptance of the IND for 720, which we expect in the second half of 2020, we plan to initiate a 28-day dose-ranging Phase IIa clinical trial, evaluating SPR720 as a monotherapy in NTM patients who are treatment-inexperienced. The goal of the trial is not only to assess the safety, tolerability and pharmacokinetics of SPR720 but also to assess the early microbiologic response to the drug candidate, an outcome that, if positive, will highlight the activity of SPR720 as a single agent in comparison to placebo. We continue to expect to initiate that Phase IIa trial in the second half of this year. On SPR206, our IV next-generation polymyxin agent that was developed as part of our potentiator platform, we continue to work towards advancing this compound in conjunction with our partners at the Department of Defense and Everest Medicines. We are advancing SPR206 based on previous Phase I data that demonstrated that the drug was well tolerated at a dose of 300 milligrams daily for 14 consecutive days in healthy volunteers, with no reported severe or serious adverse events as well as no evidence of nephrotoxicity or clinically significant changes in laboratory tests. The absence of nephrotoxicity at/or above the predictive therapeutic dose clearly differentiates SPR206 from earlier generation polymyxins. We announced in our press release that we are delaying the initiation of our Phase I bronchoalveolar lavage, or BAL, clinical trial from the second half of 2020 into the first half of 2021 due to COVID-19-related delays at our CROs. We continue to expect to initiate a renal impairment study for SPR206 in 2021. I will now turn the call over to Cristina Larkin, our Chief Operating Officer, who will provide you with a review of the market opportunity for our pipeline products.

Well, thank you, David, and good afternoon, everyone. While the development teams have been really hard at work on our Phase III and NDA planning, the commercial and medical affairs teams have been interacting with our future customers, including providers and payers, as we really prepare tebipenem HBr to advance towards NDA and launch if the data are positive. These interactions continue to highlight the unmet need for an oral option for cUTI. In fact, it’s been highlighted by our health care providers as the largest unmet need and really the largest opportunity in the antibiotic market today. Ankit mentioned earlier that COVID-19 has reinforced this push to keep patients out of the hospital, especially for patients suffering from complicated urinary tract infections that don’t require IV therapy. It’s really unfortunate that there is this growing number of complicated UTI patients that present with resistant or reoccurring infections and have failed prior therapies. And this trend has translated into more hospitalizations and longer durations in the hospital since there are currently no effective oral options to treat these patients. Resistance to the most commonly used class of oral antibiotics for cUTI, the fluoroquinolone, continues to rise, and this has become especially true in the community setting, where our most recent 2019 data now show greater than 20% resistance to E.coli, which is the most common bacteria in cUTI. And these rates are quickly catching up to the resistance that we’ve seen in the hospital, where rates are as high as 30%. It is really our estimation that over two million patients a year would benefit from the convenience of a new oral therapy for cUTI. And our interactions to date with some of our key customers have further highlighted that tebipenem HBr has the potential to benefit all of our stakeholders, including health care providers, payers and importantly our patients. Health care providers have relied on the IV carbapenems as a standard of care in treating patients that have resistance or who have failed prior therapy for cUTI for more than 40 years. And the usage of IV carbapenems in the hospital and in the community setting have more than doubled over the last decade. However, the lack of an oral formulation has created a challenge in helping these patients transition out of the hospital with UTI or to prevent unnecessary hospitalizations. And this is more important than ever in era of COVID as hospitals are already at reduced capacity and are really preserving these beds for the seriously ill. Further, payers do see the benefits to cover an oral alternative for cUTI because they will now have the opportunity to reduce the total cost of care by keeping these patients out of the hospital. It’s important to remember that tebipenem HBr will be primarily reimbursed in the retail sector and paid as a pharmacy benefit and not under that hospital DRG. The benefits of a new oral therapy to potentially treat the growing number of patients who resisted infection, coupled with the limitations of IV treatments in the outpatient setting, provides this great value foundation for the commercial launch of tebipenem HBr that, if approved, really, as I mentioned, has the benefit to the – benefit all of our key stakeholders. I’m going to now turn the call over to Steve, who’s going to provide you with a financial update.

Thank you, Cristina. Good afternoon, everyone. I will provide an overview of Spero’s financial results for the quarter ended June 30, 2020. In the second quarter, total revenue was $1.7 million compared to revenues of $2.2 million in the second quarter of 2019. Reimbursement on Spero’s contract with Biomedical Advanced Research and Development Authority, BARDA, for qualified tebipenem HBr expenses was slightly higher in the second quarter of 2020 compared to the same period in 2019. But this increase was offset by a decrease in SPR206 funding from the U.S. National Institute of Allergy and Infectious Diseases. As a reminder, BARDA has committed to provide a total of nondilutive funding of $44 million to Spero, inclusive of $10 million in funding from the Defense Threat Reduction Agency. We’ve received $16.3 million of the committed funding from BARDA as of the end of June of 2020 and have a second option for $12.7 million in additional nondilutive funding that remains exercisable by BARDA. For the second quarter of 2020, R&D expenses were $15.7 million compared to $12 million in the same period of 2019. The increase in the second quarter of 2020 was due to greater spending on the tebipenem HBr program. Research and development expenses declined quarter-over-quarter this year due to completion of enrollment in the ADAPT-PO trial that we announced in early May. We continue to expect that R&D expenses will increase in 2020 relative to 2019 due to greater expense associated with progressing our pipeline candidates. In the second half of 2020, we expect to recognize research and development expenses associated with tebipenem HBr Phase I clinical trials and ADAPT-PO clinical trial wind down as well as SPR720 Phase IIa clinical trial initiation. General and administrative expenses for the second quarter of 2020 were $4.5 million, which is higher than the $3.8 million reported in the same period of 2019, primarily due to increased headcount. We expect G&A expenses to increase through 2020 due to additional headcount, professional fees and infrastructure required to support tebipenem HBr through a potential regulatory approval as well as support Spero’s other product candidates. Our net loss for the second quarter ended June 30, 2020, was $17.5 million or $0.85 per common share compared to a net loss of $13.2 million or $0.74 per common share reported for the same period in 2019. The increase was largely attributable to greater clinical development activity. As of June 30, 2020, Spero had cash and cash equivalents of $71.4 million. We believe that our existing cash, cash equivalents and marketable securities, together with committed funding from the BARDA contract and other nondilutive funding commitments, will be sufficient to fund our operations into the first quarter of 2021. For further details on our financials, including comparisons of the quarters ended June 30, 2020 and June 30, 2019, please refer to our 10-Q filed with the SEC today. We’d now like to open the call for questions. Operator?

[Operator Instructions] Our first question is from Ritu Baral from Cowen. Please proceed with your questions.

Hi, guys, thakns for taking the question. I’ve got a couple. The first one is, can you list for us the outstanding tebipenem Phase I needed if Phase I is needed for the NDA submission? And also as a follow-up, can you take us through your most current thoughts on potential pricing?

Thanks, Ritu, for the question, and it’s nice to hear from you. I will take the first question, and I will pass the second question on pricing to Cristina. So as it relates to our ongoing Phase I studies, we published those on clinicaltrial.gov, and I would note that not all of the studies published there are critical path or necessary for the NDA. The Phase I studies that are ongoing that you’ll see there are the bioequivalent study, the drug-drug interaction study that David mentioned in last quarter’s call as well as a study in renally impaired patients. And then to the second question – go ahead please, Ritu.

The pricing question, yes.

And that I’ll pass to Cristina.

Thanks, Ankit. I think you know, Ritu, we haven’t really spoken about the pricing publicly yet. And I know that as we advance forward, we’re going to make that publicly available at a later date. But I can give you some book-ins of some of the work that we’ve done so far that guides us to the way our payers are thinking about pricing. And they’re looking at the adjudication of how to think about pricing for us is what we’re relieving them in the medical expense or cost of either outpatient IV therapy or the prevention of a hospitalization, so that’s really great news that we have that further guidance from the payers. And through some of the initial data work, what we’ve seen is that potentially treatment cost up to about $5,000 for treatment cost could be the higher end of the way that they’re viewing that pricing model. So it does give us some level of flexibility to think about on $5,000 per course of treatment, not per day, just to give you some idea. I think in our corporate deck, we used $350 as price per day as a placeholder, given that’s where some of the branded Gram-positive agents have landed.

Got it. And I’m going to squeeze one last question in. For 720, can you describe what microbiological endpoint you’d like to use for the Phase II and when we might see data from that study?

Thanks for the questions. So that is a two-part question. On the second component of that in terms of when we might see data, we haven’t committed to that in a public forum. And as we get closer to the initiation of the trial, we’ll find the appropriate public venue to communicate that. As to the first part of your question in terms of microbiological measurements, I’ll pass that question to David.

Yes. The study is designed, first and foremost, to look at safety and pharmacokinetics in patients. In terms of microbiologic endpoints, we will be looking at change in bacterial burden as measured by quantitative sputum cultures. So it will be change in sputum bacterial burden over time.

Great. Thanks.

The next question is from Louise Chen with Cantor. Please proceed with your question.

Hi, thanks for taking my questions here. So my first question is, given the impact of COVID-19, do you think the government will eventually stockpile antibiotics? And then where are you with the hiring of your sales force? Is it still too early to bring the reps actually in? Just any color you could provide there would be helpful. And then last question I have here is we get asked this a lot, but why did prior antibiotic launches not gain a lot of traction? And how will your product be different?

Thanks, Louise, for the questions, we appreciate it. So to the first part of your question, as we noted, given the obvious impact that infection has had on every aspect of our life, there certainly is quite a bit of heightened focus from governments around the world in terms of preventing and defending against the next infection. And so we’ve seen BARDA take a prominent role in planning ahead for the nation’s defense, both against the coronavirus but also bacterial threats. And even prior to COVID-19, we’ve seen an example of a fairly comprehensive and robust stockpile agreement and we would expect that based on the way federal funding has gone, that we’ll see that continue. Certainly, from our part, we’re pleased to have a development relationship with BARDA that allows us to really demonstrate not only what the medicine can do for patients suffering from complicated urinary tract infection, but also downstream will help us demonstrate the wherewithal this agent has to be able to treat other threats, including the microbial defense threats that are BARDA’s focus. On the second point, looking ahead, we take a stepwise approach to thinking about building the company. Certainly, first is that we want to deliver this quarter on the ADAPT-PO trial to note to be able to demonstrate what this medicine can do. And then going forward from there towards NDA, we’ll take a stepwise approach and a capital-efficient and prudent approach to developing. And we won’t have to be bringing on – and to that point, we’ll take sort of a staged approach to bringing on reps. And as you’d note, I wouldn’t expect them to be onboard in the near term. In terms of the third question and this is a macro question that really has been the foundational principle around building Spero in the pipeline. And it’s our philosophy, and we’ve been consistent about this for many years, that the hallmark of effective and sustainable antibiotics has two primary components. The first is true unmet need, and what we mean by that is a population of infection prevalence today. Secondly is no alternative generic therapies. And in our case, with tebipenem, there are no alternative generic or branded therapies that could meet the need. The second component addresses where we deliver these medicines to patients. And it’s our philosophy that delivering medicines to patients outside of the hospital and outside of hospital DRG is the hallmark for successful launches, whether they’re recent, such as Arikayce, or more historical.

Thank you.

Our next question is from Stephen Willey, Stifel. Please proceed with your question.

Yes. Thanks for taking question. Looking forward to the data later this quarter. Can you maybe just speak to a little bit about how the extension on the NDA filing impacts the pace of commercial build-out and just kind of payer and, I guess, prescriber engagement, if at all? And then on the NTM study, I know you talked about looking at patient-reported outcomes perhaps as part of this Phase IIa. What are your thoughts just around, I guess, the current PRO instrument that has been used thus far for clinical development? And I think there’s still a little bit of a debate as to how well that captures patient outcomes and just curious if you have any thoughts as to how you would like to see that improved.

Thanks, Steve, for the questions. We appreciate it. As to your first question, the way that we think about delivering tebipenem to patients is in two parts. The first part, as Cristina mentioned, is engaging our customers, and that’s patients, physicians and payers. Early and often, just to – what we’ve heard from them is just an incredible amount of demand for an effective oral agent for complicated UTI. And it’s important for us to engage with these customers and continue to develop the market for tebipenem now going forward and even beyond an NDA filing and potential acceptance. And so that will continue on its pace and in the setting of a successful ADAPT-PO will certainly accelerate. The second component of getting tebipenem to our patients is building the infrastructure and mechanics and the boots on the ground to be able to deliver tebipenem once approved. As you might imagine, that’s geared towards our PDUFA date. And so the ultimate PDUFA date will guide how we start to temporize that buildup. And what we’ve heard from customers is really exciting and heartening in terms of the true unmet need for an oral carbapenem. As it relates to your second question, on 720 there, we have been pleased to interact with the FDA, as we’ve noted in prior press releases, about the opportunity to think about how we can develop 720 for patients. We see the opportunity in the setting of having a clinical and patient-reported outcome to be able to drive readouts faster and also in a way that’s more consistent with how physicians and patients ultimately look at NTM. The sea change in NTM is that it’s more important, as we’ve heard from the FDA Adcom, to show that a patient feels better and one can manage the disease as opposed to trying to simply clear the microbiology. The paradigm shift nears what we’ve seen with HIV in the past, whereby now there’s a paradigm of long-term disease management versus disease eradication. As you’ve noted, we’re taking a stepwise approach to developing that PRO. And we’ll be using some of the learnings from our ongoing Phase II as well as continued dialogue with the patient and physician community to develop that. And it’s our view that with an oral agent that has a good safety and tolerability profile as well as effectiveness, we have a very wide range of options to demonstrate what 720 can do in that setting.

Okay. That’s helpful. And then maybe just a quick follow-up on the 720 front. Presumably, if the Phase IIa trial goes, I guess, well or as planned, the next study would involve presumably something with a bit longer treatment duration. Can you just remind us kind of what your current tox package allows you in terms of coverage? And is that preclinical data, it’s something that you would be generating in parallel to the Phase IIa, such that the transition time into the longer duration study wouldn’t necessarily be constrained by the need for greater tox coverage?

Yes, thanks. Great question, Steve. What I’ll note is both in the setting of our primate and other species toxicology data as well as our Phase I, we’ve been pleased to see that we have a very safe and well tolerated compound that we’re excited to go demonstrate what it can do in a patient study in Phase II. To your specific question, we’ll be taking an approach on understanding the longer-term exposures for 720 such that we’ll be able to really drive the Phase IIb in a timely fashion.

Great. Thanks for taking questions.

Our next question is from Ram Selvaraju with H.C. Wainwright. Please proceed with your question.

Thanks very much for taking my questions. I was wondering if you could just verify for me. I believe there should not be any data integrity issues for the ADAPT-PO study just because of COVID-19, but I just wanted you to verify that if you could.

Thanks, Ram. Credit to our team, the short answer is no. We’re confident about the data set we’ll deliver this quarter.

Fantastic. And then secondly, I was wondering if you could talk a little bit about the scenario analysis you’ve been running internally regarding the kind of market environment you might have to negotiate in introducing tebipenem HBr. So we don’t really know what the COVID-19 situation is going to be like months from now, six months from now, one year from now. I don’t think anybody can really predict for sure. But maybe you can talk through a few of the scenarios that you’re modeling and how you intend to potentially overcome some of the challenges and curve balls that might be thrown your way as you execute the commercialization part of the strategy.

Thanks for the question, Ram. I’ll pass that one over to Cristina.

Yes. Thank you, Ram, so much. Yes, we’ve definitely been closely monitoring what other companies have been doing facing this pandemic with access into clinicians’ offices. I think the one great thing that we’ve been – we have the opportunity to do is kind of have an opportunity to learn from what’s been going on in the marketplace today. It does appear that doctors’ offices are opening up across the country, which I do think that, that signals – some good signals about us is this one scenario planning of still gaining access in the doctors’ offices. Simultaneous and parallel to that process, we’ve also been developing a great digital strategy, and so that’s part of what we’ve been doing. We have seen and followed the literature about how physicians are accessing digital means and contacting back to the company. So those are some of the scenarios that we are actively looking and exploring and monitoring those that have been successful.

Okay. Great. And then lastly, it was just a general question kind of if we look at your pipeline of innovative antibiotics. I think we’ve all seen some of the developments that have been occurring within the context of big pharma and the stance that some of them have been taking, suggesting that there should be alternative funding mechanisms established specifically to address the dearth of novel antibiotics and make it economically worthwhile for innovators in that space. Can you talk a little bit about how that picture has changed, how potentially it might be relevant specifically to some of your development-stage programs and what the perspective might be going forward and from an economic standpoint, how that might allow Spero to benefit?

Yes. Thanks for the question, Ram. I’ll make the – I’ll separate the question in two parts. I would say, first, I’d make the statement that our philosophy all along has been to develop medicines in market opportunities that are large and sustainable with or without the benefit of additional incentives. That all said, we have seen the same trends that you note that both in terms of activity in the United States as well as in Europe in developing robust incentives for antimicrobial development as well as the AMR Action Fund that was unveiled in the second quarter that would commit $1 billion to the investment and development of further antimicrobials. We see that as a welcome development, and certainly, pipeline medicines such as SPR206 and others will be excellent candidates for that fund and others. So we’re heartened by that. We see that as another way to win for Spero, though I would reiterate that we’ve explicitly chosen the pipeline medicines and markets we have to be able to succeed no matter what the landscape looks like outside of our walls.

Great. Thank you very much.

[Operator Instructions] Our next question is with Jason Gerberry with Bank of America. Please proceed with your question.

Hi, good afternoon. This is Chi on for Jason. Thanks for taking my questions. A few, if I may. Can you elaborate what would the clinical package of the NDA entail? And second would be, do you have a spot with the FDA that a single Phase III can support approval? And you talked about earlier on the call about your Phase I studies. It looks like you talked about three of them, the structural, interaction, renal. It looks like those may be focusing more on the safety side. Can you talk about the Phase I bioequivalents? What are you trying to achieve? It seems that you’ve already done some studies in terms of showing PK data of the oral versus the IV, so it does seem you’d be doing that. So are you still trying to bridge some sort of formulation? And what are you trying to achieve there? And how important is that to the overall NDA package?

Yes. Thanks for the questions, appreciate it. So to your first question, as we mentioned, the studies that are on clinicaltrials.gov, not all of them that are there are required for the NDA package. But as you’ve already listed, those are the studies we’re focused on to be able to deliver on the NDA. On the second question, as we’ve noted in our public comments, we’ve had multiple interactions with FDA confirming that the ADAPT-PO trial is the single pivotal trial that’s required for FDA approval for the treatment of complicated urinary tract infections. And as it relates to the studies, the focus of the bioequivalent study is that some of the incremental modifications we’ve made in terms of the commercial supply of tebipenem match up to the clinical supply. And again, we’re fortunate to have a significant and long-standing experience on the behavior of tebipenem in different formulations, both in our hands as well as from our partner, Meiji Seika.

And is the box – so is the formulation that was used – being used in Phase III, is it the same or different than the final commercial embodiment?

No. As I mentioned, and as is typical, we’ll make some minor modifications, including the visual presentation of the tablet as we go to commercial.

Okay. Thank you.

It appears there are no further questions at this time. I would like to turn the floor back over to management for concluding comments.

Thank you, operator. And as you can probably tell, we are excited about the prospects for our drug candidates, and we’re looking forward to reporting tebipenem HBr Phase III data this quarter. I invite everyone to join us at our next webcast presentation at the Cantor Virtual Healthcare Conference beginning on September 15. I wish everyone a very happy and safe summer. Thank you very much.

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.