SPRO

Business Context and Reporting Period

Spero Therapeutics, Inc. (SPRO) is a clinical-stage biopharmaceutical company focused on developing novel treatments for rare diseases and diseases with high unmet need. This Form 10-K covers the fiscal year ended December 31, 2025. The company has ceased development of its SPR206 and SPR720 programs to reallocate resources toward its lead candidate, tebipenem HBr, an oral carbapenem for complicated urinary tract infections (cUTIs). In December 2025, partner GlaxoSmithKline (GSK) resubmitted the New Drug Application (NDA) for tebipenem HBr, which was accepted by the FDA with a PDUFA decision date set for June 18, 2026.

Key Financial Metrics

Note: The company reported a net income of $8.6 million in 2025, reversing a significant loss in 2024, primarily driven by collaboration revenue recognition and reduced R&D spend following program discontinuations.

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased by $18.8 million (39%) year-over-year. Collaboration revenue from GSK rose to $47.0 million (from $27.0 million), and collaboration revenue from Pfizer increased to $12.6 million (from $0.4 million) due to the termination of the Pfizer agreement in December 2025, which triggered the recognition of remaining deferred revenue.
• Expense Reduction: Operating expenses decreased by $60.9 million. R&D expenses dropped by $58.3 million, largely due to the cessation of the SPR206 and SPR720 programs and the completion of the pivotal Phase 3 PIVOT-PO trial for tebipenem HBr.
• Program Status: The company discontinued the SPR206 program in March 2025 and the SPR720 program in November 2025. Consequently, the business is now substantially dependent on the tebipenem HBr program and the GSK collaboration.
• Liquidity: Cash and cash equivalents decreased by $12.6 million during the year, primarily due to net cash used in operating activities, though the company received a $25.0 million milestone payment from GSK in February 2026 (post-period).

Guidance, Outlook, and Risks

Outlook and Guidance: Management believes cash and cash equivalents as of December 31, 2025, are sufficient to fund operations into 2028. The company is focused on supporting GSK through the FDA approval process for tebipenem HBr. No specific financial guidance was provided beyond the liquidity runway.

Key Risks and Contingencies:

• Regulatory Approval: The company's future is heavily dependent on FDA approval of tebipenem HBr. While the NDA was accepted, approval is not guaranteed, and the FDA could impose labeling restrictions.
• Collaboration Dependence: The business relies on GSK for commercialization. GSK has the right to terminate the agreement or reduce milestone payments by 50% in the event of a material breach by Spero.
• SEC Investigation Resolution: The SEC concluded its investigation into the company in January 2026 and does not intend to recommend an enforcement action against the company at this time. However, former executives Ankit Mahadevia and Satyavrat Shukla settled with the SEC regarding disclosures made in 2022.
• Capital Needs: Beyond 2028, the company will require additional funding through equity, debt, or new collaborations to continue operations.

Investor Verification Checklist

• FDA Decision Date: Verify the PDUFA date of June 18, 2026, for the tebipenem HBr NDA and monitor for any FDA requests for additional information.
• GSK Milestone Payments: Confirm the receipt of the $25.0 million NDA filing milestone (received Feb 2026) and track future commercial milestone triggers.
• Liquidity Runway: Monitor quarterly cash burn rates to validate the management assertion that funds will last into 2028.
• Legal Proceedings: Review the status of the settled SEC investigation and ensure no new litigation arises from the 2022 disclosure issues.
• Program Discontinuation: Confirm that no hidden costs or liabilities remain from the terminated SPR206 and SPR720 programs.