Spero Therapeutics, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial information and the notes thereto included appearing elsewhere in this Quarterly Report on Form 10-Q, and the audited financial information and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial information and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, and the audited financial information and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Previous wording

We are a clinical-stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and diseases caused by multi-drug resistant (“MDR”) bacterial infections with high unmet need.

Current wording

We are a clinical-stage biopharmaceutical company focused on identifying and developing novel treatments for rare diseases and diseases caused by MDR bacterial infections with high unmet need.

Previous wording

Our most advanced clinical stage product candidate, tebipenem HBr, is in Phase 3 development, with the potential to be the first broad-spectrum oral carbapenem to treat adult patients with complicated urinary tract infections (“cUTIs”), including acute pyelonephritis, caused by certain microorganisms. The other program in our pipeline is SPR720, a product candidate for first-line treatment of nontuberculous mycobacterial (“NTM”) pulmonary disease (“NTM-PD”). In October 2024, we announced that results from a planned interim analysis of our Phase 2a clinical trial for SPR720 demonstrated the oral agent did not meet its primary endpoint and we elected to suspend development of SPR720 in its oral formulation. We are currently completing analysis of remaining data from all 25 patients dosed in the trial ahead of determining next steps.

Current wording

Our most advanced clinical-stage product candidate, tebipenem HBr, is in Phase 3 development, with the potential to be the first broad-spectrum oral carbapenem to treat adult patients with cUTIs, including pyelonephritis, caused by certain microorganisms. In May 2025, we and GSK announced that the pivotal Phase 3 PIVOT-PO trial evaluating tebipenem HBr met its primary endpoint and had stopped early for efficacy. The other program in our pipeline is SPR720, a product candidate for first-line treatment of nontuberculous mycobacterial (“NTM”) pulmonary disease (“NTM-PD”). In October 2024, we announced that results from a planned interim analysis of our Phase 2a clinical trial for SPR720 demonstrated the oral agent did not meet its primary endpoint and we elected to suspend development of SPR720 in its oral formulation. We are currently determining next steps for SPR720. Additionally, in March 2025, following a reprioritization of our programs, we announced that we are no longer pursuing a Phase 2 clinical trial for SPR206, which was previously included in our pipeline.

Previous wording

We have experienced mostly net losses and significant cash outflows from cash used in operating activities since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. As of March 31, 2025, we had an accumulated deficit of $473.5 million, and cash and cash equivalents of $48.9 million. We expect to continue to incur significant expenses and operating losses for at least the next year. Based on our cash and cash equivalents as of March 31, 2025, together with earned and non-contingent development milestone payments from GSK, we believe that our cash runway will be sufficient to fund our operating expenses and required capital expenditures into the second quarter of 2026. During this period, we plan to prioritize advancing the Phase 3 clinical trial activities for tebipenem HBr under our GSK License Agreement and completing our analysis of the full dataset from the 25 treated patients in the Phase 2a proof-of-concept trial of SPR720. Beyond this point we will need additional funding, which we expect will primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations or additional grant funding. If we are not able to secure adequate additional funding, we plan to make further reductions in spending. In that event, we may have to delay, scale back, or eliminate some or all of our planned development activities. The actions necessary to reduce spending under this plan at a level that mitigates the factors described above is not considered probable, as defined in the accounting standards and therefore, the full extent to which management may extend our funds through these actions may not be considered in management’s assessment of our ability to continue as a going concern. As a result, management has concluded that substantial doubt exists about our ability to continue as a going concern.

Current wording

We have experienced mostly net losses and significant cash outflows from cash used in operating activities since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. As of June 30, 2025, we had an accumulated deficit of $475.2 million, and cash and cash equivalents of $31.2 million. We expect to continue to incur significant expenses and operating losses for at least the next year. Based on our cash and cash equivalents as of June 30, 2025, together with earned and non-contingent development milestone payments from GSK, including the final payment under the GSK License Agreement of $23.8 million received in the third quarter of 2025, and the decrease in clinical expense as a result of the PIVOT-PO Phase 3 trial for tebipenem HBr stopping early for efficacy following positive interim analysis results, we believe that our cash runway will be sufficient to fund our operating expenses and required capital expenditures into 2028. During this period, we plan to prioritize finalizing the Phase 3 clinical trial activities for tebipenem HBr under our GSK License Agreement. Beyond this point, or in the event we change our current operating plan, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, government funding arrangements, collaborations, strategic alliances and marketing, distribution or licensing arrangements. If we are not able to secure adequate additional funding, we plan to make further reductions in spending. In that event, we may have to delay, scale back, or eliminate some or all of our planned development activities. The actions necessary to reduce spending under this plan at a level that mitigates the factors described above is not considered probable, as defined in the accounting standards and therefore, the full extent to which management may extend our funds through these actions may not be considered in management’s assessment of our ability to continue as a going concern.

Previous wording

On February 25, 2025, we received a deficiency letter from the Listing Qualifications Department informing us that we were not in compliance with the continued listing requirements of the Nasdaq GS because the bid price for our common stock had closed below $1.00 per share for 30 consecutive business days. We have until August 25, 2025, to regain compliance with the bid price requirement. If we do not regain compliance with the bid price requirement, our common stock will be subject to delisting. Any potential delisting of our common stock could have a material adverse effect on the market for, and liquidity and price of, our common stock and would adversely affect our ability to raise capital on terms acceptable to us, or at all.

Current wording

On February 25, 2025, we received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC informing us that we were not in compliance with the continued listing requirements of the Nasdaq GS because the bid price for our common stock had closed below $1.00 per share for 30 consecutive business days. On June 12, 2025, we received a letter from the Listing Qualifications Department informing us that we had regained compliance with the bid price requirement and the matter is now closed.

Previous wording

In January 2025, the independent directors of our Board of Directors approved the following actions as a matter of corporate governance best practices and to enable us to maintain focus on pursuing our business objectives pending resolution of a “Wells Notice” received from the staff of the Boston Regional Office (the “Staff”) of the SEC, as further described in Part II, Item 1 “Legal Proceedings” of this Quarterly Report on Form 10-Q.

Current wording

In January 2025, the independent directors of our Board of Directors approved the following actions as a matter of corporate governance best practices and to enable us to maintain focus on pursuing our business objectives pending resolution of a “Wells Notice” received from the Staff of the SEC, as further described in Part II, Item 1 “Legal Proceedings” of this Quarterly Report on Form 10-Q.

Previous wording

Effective May 2, 2025, Ms. Rajavelu was appointed as our President and Chief Executive Officer. She continues to serve as our Chief Financial Officer and Treasurer. In connection with the foregoing, Ms. Rajavelu has also been nominated for election to serve as a member of our Board of Directors at our 2025 annual meeting of stockholders. In connection with the foregoing, we and Ms. Rajavelu entered into an Amended and Restated Employment Agreement, dated April 28, 2025.

Current wording

Effective May 2, 2025, Ms. Rajavelu was appointed as our President and Chief Executive Officer. She continues to serve as our Chief Financial Officer and Treasurer. In connection with the foregoing, Ms. Rajavelu was nominated for election to serve as a member of our Board of Directors at our 2025 annual meeting of stockholders and was elected to the Board of Directors in June 2025. In connection with the foregoing, we and Ms. Rajavelu entered into an Amended and Restated Employment Agreement, dated April 28, 2025.

Previous wording

In March 2025, following a reprioritization of its programs, we announced that we are no longer pursuing a planned Phase 2 clinical trial for SPR206. On April 4, 2025, U.S. National Institute of Allergy and Infectious Diseases (“NIAID”) informed us that it was canceling the five-year contract, awarded in May 2021, under the Agency’s Omnibus Broad Agency Announcement No. HHS-NIH-NIAID-BAA2020-1 award mechanism to support further development of SPR206, effective immediately, for its convenience.

Current wording

In March 2025, following a reprioritization of its programs, we announced that we are no longer pursuing a Phase 2 clinical trial for SPR206. On April 4, 2025, NIAID informed us that it was canceling the five-year contract, awarded in May 2021, under the Agency’s Omnibus Broad Agency Announcement No. HHS-NIH-NIAID-BAA2020-1 award mechanism to support further development of SPR206, effective immediately, for its convenience.

Previous wording

Collaboration revenue relates to our agreements with Pfizer Inc. (“Pfizer”) and GSK.

Current wording

Collaboration revenue relates to our agreements with Pfizer and GSK.

Previous wording

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

Current wording

Research and development expenses consist primarily of costs incurred for our research activities, including the development of our product candidates, and are comprised of:

Previous wording

employee-related expenses, including salaries, related benefits, travel and share-based compensation expense for employees engaged in research and development functions;

Current wording

employee-related expenses, including salaries, related benefits, travel and stock-based compensation expense for employees engaged in research and development functions;

Previous wording

obtainment and maintenance of patent, trade secret protection and regulatory exclusivity, both in the United States and internationally, including our ability to maintain our license agreement with Meiji Seika Pharma Co. Ltd. (“Meiji”) with respect to tebipenem HBr;

Current wording

obtainment and maintenance of patent, trade secret protection and regulatory exclusivity, both in the United States and internationally, including our ability to maintain our license agreement with Meiji with respect to tebipenem HBr;

Previous wording

General and administrative expenses consist primarily of salaries and related costs, including share-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services. We also anticipate that we will continue to incur accounting, audit, legal, regulatory, compliance, infrastructure and director and officer insurance costs, as well as investor and public relations expenses associated with our continued operation as a public company.

Current wording

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services. We also anticipate that we will continue to incur accounting, audit, legal, regulatory, compliance, infrastructure and director and officer insurance costs, as well as investor and public relations expenses associated with our continued operation as a public company.

Previous wording

In light of our decision to suspend planned development activities for our oral SPR720 program and our strategic restructuring, we expect that our future expenses relating to development activities with respect to SPR720 will be substantially reduced as we evaluate potential paths forward for SPR720 and implement our restructuring. In connection with our restructuring, we estimated that we would incur approximately $1.1 million of costs in connection with the reduction in workforce related to severance pay and other related termination benefits of which we incurred $0.9 million during the year ended December 31, 2024 and $0.2 million during the quarter ended March 31, 2025. We anticipate the remaining costs to be incurred in the second quarter of 2025. We may incur additional costs not currently contemplated due to events associated with or resulting from the workforce reduction; however, the majority of the costs associated with our workforce reduction were incurred during the quarters ended December 31, 2024 and March 31, 2025.

Current wording

In light of our decision to suspend planned development activities for our oral SPR720 program and the strategic restructuring implemented in October 2024, we expect that our future expenses relating to development activities with respect to SPR720 will be substantially reduced as we determine next steps for SPR720. In connection with our restructuring, we estimated that we would incur approximately $1.1 million of costs in connection with the reduction in workforce related to severance pay and other related termination benefits of which we incurred $0.9 million during the year ended December 31, 2024, $0.2 million during the quarter ended March 31, 2025, and less than $0.1 million during the quarter ended June 30, 2025. We have incurred all of the costs associated with our workforce reduction as of June 30, 2025.

Previous wording

Interest income (expense) during the three months ended March 31, 2025 and 2024 consists of interest income related to the significant financing component related to the GSK License Agreement and interest earned on our cash equivalents, which are primarily invested in money market accounts, as well as interest earned on our investments in marketable securities.

Current wording

Interest income (expense) during the three and six months ended June 30, 2025 and 2024 consists of interest income related to the significant financing component related to the GSK License Agreement and interest earned on our cash equivalents, which are primarily invested in money market accounts, as well as interest earned on our investments in marketable securities.

Previous wording

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Previous wording

We have made no changes to our existing critical accounting policies, as described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

Our critical accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements. We have made no changes to our existing critical accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Grant revenue recognized during the three months ended March 31, 2025 and 2024 consisted of the reimbursement of qualifying expenses incurred in connection with our various government awards. The decrease in grant revenue during the three months ended March 31, 2025 was primarily due to a decrease of $4.2 million of committed funds remaining available under our BARDA contract for tebipenem HBr, and a decrease of $0.1 million under our NIAID agreement relating to SPR206.

Current wording

Grant revenue recognized during the three months ended June 30, 2025 and 2024 consisted of the reimbursement of qualifying expenses incurred in connection with our various government awards. The decrease in grant revenue during the three months ended June 30, 2025 was primarily due to a decrease of $1.7 million under our BARDA contract for tebipenem HBr, and a decrease of $0.1 million under our NIAID agreement relating to SPR206.

Previous wording

During the three months ended March 31, 2025, we recognized $5.1 million in collaboration revenue related to our agreement with GSK and less than $0.1 million in collaboration revenue related to our agreement with Pfizer. During the three months ended March 31, 2024, we recognized $4.1 million in collaboration revenue related to our agreement with GSK and $0.1 million in collaboration revenue related to our agreement with Pfizer.

Current wording

During the three months ended June 30, 2025, we recognized $11.8 million in collaboration revenue related to our agreement with GSK and no revenue related to our agreement with Pfizer. During the three months ended June 30, 2024, we recognized $5.9 million in collaboration revenue related to our agreement with GSK and $0.1 million in collaboration revenue related to our agreement with Pfizer. The increase in revenue under the GSK License Agreement was directly related to the adjusted service period due to the pivotal Phase 3 PIVOT-PO trial stopping early for efficacy in the first half of 2025 following the pre-specified interim analysis.

Previous wording

Direct costs related to our tebipenem HBr program increased by $0.9 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to continued clinical activities related to our pivotal Phase 3 clinical trial of tebipenem HBr, which we initiated in the fourth quarter of 2023.

Current wording

Direct costs related to our tebipenem HBr program decreased by $7.6 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, due to a decrease in clinical activities related to our pivotal Phase 3 PIVOT-PO trial, which met its primary endpoint and was stopped early for efficacy during the first half of 2025.

Previous wording

Direct costs related to our SPR720 program decreased by $3.9 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to decreased clinical activity during the period related to our Phase 2a clinical trial of SPR720, which completed enrollment in the second quarter of 2024. Subsequently, in October 2024, we announced that we would suspend current development activities for SPR720 based on an interim analysis of the Phase 2a proof-of-concept study of SPR720 for the treatment of NTM-PD not meeting its primary endpoint.

Current wording

Direct costs related to our SPR720 program decreased by $4.5 million during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, due to decreased clinical activity during the period related to our Phase 2a clinical trial of SPR720, which completed enrollment in the second quarter of 2024. Subsequently, in October 2024, we announced that we would suspend current development activities for SPR720 based on an interim analysis of the Phase 2a proof-of-concept study of SPR720 for the treatment of NTM-PD not meeting its primary endpoint.

Previous wording

Direct costs related to our SPR206 program decreased by $0.2 million during the three months ended March 31, 2025, primarily due to decreased preclinical activity. In March 2025, following a reprioritization of our programs, we announced that we are no longer pursuing a planned Phase 2 clinical trial for SPR206.

Current wording

Direct costs related to our SPR206 program decreased by $0.1 million during the three months ended June 30, 2025, primarily due to decreased preclinical activity. In March 2025, following a reprioritization of our programs, we announced that we are no longer pursuing a planned Phase 2 clinical trial for SPR206.

Previous wording

The decrease in personnel-related costs of $0.2 million was primarily a result of increased retention program costs in our research and development functions offset by reduced headcount costs as a result of the previously announced restructuring in the fourth quarter of 2024. Personnel-related costs for the three months ended March 31, 2025 and 2024 included share-based compensation expense of $0.5 million and $0.7 million, respectively.

Current wording

The decrease in personnel-related costs of $0.8 million was primarily a result of increased retention program costs in our research and development functions offset by reduced headcount costs as a result of the previously announced restructuring in the fourth quarter of 2024. Personnel-related costs for the three months ended June 30, 2025 and 2024 included stock-based compensation expense of $0.4 million and $0.7 million, respectively.

Previous wording

The increase in personnel-related costs of $0.8 million was primarily a result of retention program costs in our general and administrative functions during the period offsetting reduced headcount costs as a result of the previously announced restructuring in the fourth quarter of 2024. Personnel-related costs for the three months ended March 31, 2025 and 2024 included share-based compensation expense of $1.0 million and $1.3 million, respectively.

Current wording

The increase in personnel-related costs of $0.2 million was primarily a result of retention program costs in our general and administrative functions during the period, offsetting reduced headcount costs as a result of the previously announced restructuring in the fourth quarter of 2024. Personnel-related costs for the three months ended June 30, 2025 and 2024 included stock-based compensation expense of $0.3 million and $1.4 million, respectively.

Previous wording

The increase in professional and consultant fees of $0.2 million was primarily due to varying legal and consulting expenses incurred in the three months ended March 31, 2025.

Current wording

The increase in professional and consultant fees of $0.2 million was primarily due to an increase in legal and consulting expenses incurred in the three months ended June 30, 2025.

Previous wording

Other income (expense), net was $0.9 million for the three months ended March 31, 2025, compared to $1.3 million for the three months ended March 31, 2024. Total other income for the three months ended March 31, 2025, included $0.9 million of interest income, of which $0.4 million related to the significant financing component recognized under the GSK License Agreement, offset by immaterial fluctuations in unrealized foreign currency. Total other income for the three months ended March 31, 2024, included $1.3 million of interest income, of which $0.4 million related to the significant financing component recognized under the GSK License Agreement, offset by immaterial fluctuations in unrealized foreign currency.

Current wording

Other income (expense), net was $0.7 million for the three months ended June 30, 2025, compared to $1.2 million for the three months ended June 30, 2024. Total other income for the three months ended June 30, 2025, included $0.7 million of interest income, of which $0.4 million related to the significant financing component recognized under the GSK License Agreement, offset by immaterial fluctuations in unrealized foreign currency. Total other income for the three months ended June 30, 2024, included $1.2 million of interest income, of which $0.4 million related to the significant financing component recognized under the GSK License Agreement, offset by immaterial fluctuations in unrealized foreign currency.

Previous wording

Since our inception, we have incurred significant operating losses. We have recognized revenue to date from funding arrangements with the U.S. Department of Defense, NIAID, CARB-X and BARDA, the GSK License Agreement and our license agreements with Everest and Pfizer. We have not yet commercialized any of our product candidates and we may not generate revenue from sales of any product candidates. To date, we have funded our operations with payments received under license and collaboration agreements and funding from government contracts, and from the proceeds of multiple common stock offerings. As of March 31, 2025, we had cash and cash equivalents of $48.9 million.

Current wording

Since our inception, we have incurred significant operating losses. We have recognized revenue to date from funding arrangements with the U.S. Department of Defense, NIAID, CARB-X and BARDA, the GSK License Agreement and our license agreements with Everest and Pfizer. We have not yet commercialized any of our product candidates and we may not generate revenue from sales of any product candidates. To date, we have funded our operations with payments received under license and collaboration agreements and funding from government contracts, and from the proceeds of multiple common stock offerings. As of June 30, 2025, we had cash and cash equivalents of $31.2 million. In the third quarter of 2025, we received the final payment under the GSK License Agreement of $23.8 million.

Previous wording

We filed a universal shelf registration statement on Form S-3 with the SEC on March 15, 2024 (the “2024 Form S-3”), which became effective on March 22, 2024, and pursuant to which we registered for sale up to $300.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, including up to $75.0 million of our common stock available for issuance pursuant to a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”). Under the Sales Agreement, Cantor may sell shares of our common stock by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), subject to the terms of the Sales Agreement. During the three months ended March 31, 2025, we did not sell any shares of our common stock under the Sales Agreement.

Current wording

We filed the 2024 Form S-3 on March 15, 2024, which became effective on March 22, 2024, and pursuant to which we registered for sale up to $300.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, including up to $75.0 million of our common stock available for issuance pursuant to the Sales Agreement with Cantor. Under the Sales Agreement, Cantor may sell shares of our common stock by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act, subject to the terms of the Sales Agreement.

Previous wording

The following table summarizes our sources and uses of cash for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes our sources and uses of cash for the six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025, was $4.0 million, primarily resulting from our net loss of $13.9 million, adjusted for non-cash items of $1.8 million (primarily stock-based compensation). Net cash provided by changes in our operating assets and liabilities was $8.0 million and consisted primarily of a $25.8 million decrease in our related party collaboration receivable, primarily due to the receipt of the third installment payment from GSK (see Note 10 - License, Collaboration and Service Agreements), a $5.1 million decrease in deferred revenue, a $9.5 million decrease in accrued expenses, a $5.5 million decrease in accounts payable, a $0.4 million decrease in prepaid expenses and a $2.4 million net decrease in other receivables.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025, was $21.7 million, primarily resulting from our net loss of $15.6 million, adjusted for an increase to non-cash items of $2.8 million (primarily stock-based compensation). Net cash used by changes in our operating assets and liabilities was $9.0 million and consisted primarily of a $24.9 million decrease in the collaboration receivable-related party, due to the receipt of the third installment payment from GSK (see Note 10), a $16.9 million decrease in deferred revenue, a $11.0 million decrease in accrued expenses, a $6.5 million decrease in accounts payable, a $0.6 million increase in prepaid expenses, a $0.6 million net increase in other receivables, and a $0.7 million decrease in operating lease liability.

Previous wording

Net cash provided by changes in operating activities for the three months ended March 31, 2024, was $5.9 million, primarily resulting from our net loss of $12.7 million, adjusted for a net decrease in non-cash items of $2.3 million (primarily stock-based compensation). Net cash provided by changes in our operating assets and liabilities was $16.3 million and consisted primarily of a $23.3 million decrease in our related party collaboration receivable, due to the receipt of the first installment payment from GSK (see Note 10 - License, Collaboration and Service Agreements), a $4.2 million increase in deferred revenue, a $3.5 million net increase in receivables, a $1.7 million increase in accounts payable and a decrease of $1.2 million in accrued expenses.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024, was $12.8 million, primarily resulting from our net loss of $30.5 million, adjusted for an increase to non-cash items of $4.7 million (primarily stock-based compensation). Net cash provided by changes in our operating assets and liabilities was $13.1 million and consisted primarily of a $21.4 million decrease in our related party collaboration receivable, due to the receipt of the first installment payment from GSK (see Note 10), a $10.2 million decrease in deferred revenue, a $3.2 million net decrease in receivables, a $1.3 million increase in accounts payable, an increase of $3.5 million in accrued expenses, and a $0.6 million decrease in operating lease liability.

Previous wording

We did not undertake any investing activities during the three months ended March 31, 2025 or 2024.

Current wording

We did not undertake any investing activities during the six months ended June 30, 2025 or 2024.

Previous wording

We did not undertake any financing activities during the three months ended March 31, 2025 or 2024.

Current wording

We did not undertake any financing activities during the six months ended June 30, 2025 or 2024.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $48.9 million. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we are required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern from the issuance date of our financial statements. Based on the Company’s current operating plan and existing cash and cash equivalents, the Company has determined that there is substantial doubt regarding its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. Based on our cash and cash equivalents as of March 31, 2025, together with earned and non-contingent development milestone payments from GSK, we believe that our cash runway will be sufficient to fund our operating expenses and capital expenditure requirements into the second quarter of 2026.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $31.2 million. In accordance with ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we are required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern from the issuance date of our financial statements. Based on such cash and cash equivalents as of June 30, 2025, together with earned and non-contingent development milestone payments from GSK, including the final payment under the GSK License Agreement of $23.8 million received in the third quarter of 2025, and the decrease in clinical expense as a result of the PIVOT-PO Phase 3 trial for tebipenem HBr stopping early for efficacy following positive interim analysis results, we believe that our cash runway will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the issuance of the financial statements included in this report and into 2028.

Previous wording

This timeline is subject to uncertainty as to the timing of future expenditures. We have developed plans to mitigate this risk, which primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations and/or reducing cash expenditures. If we are not able to secure adequate additional funding, we plan to make reductions in spending. In that event, we may have to delay, scale back, or eliminate some or all of our planned clinical trials, and research stage programs. The actions necessary to reduce spending under this plan at a level that mitigates the factors described above is not considered probable, as defined in the accounting standards and therefore, the full extent to which management may extend our funds through these actions may not be considered in management’s assessment of our ability to continue as a going concern. As a result, management has concluded that substantial doubt exists about our ability to continue as a going concern.

Current wording

This timeline is subject to uncertainty as to the timing of future expenditures. We have developed plans to mitigate this risk, which primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations and/or reducing cash expenditures. If we are not able to secure adequate additional funding, we plan to make reductions in spending. In that event, we may have to delay, scale back, or eliminate some or all of our planned clinical trials, and research stage programs. The actions necessary to reduce spending under this plan at a level that mitigates the factors described above are not considered probable, as defined in the accounting standards and therefore, the full extent to which management may extend our funds through these actions may not be considered in management’s assessment of our ability to continue as a going concern.

Previous wording

During the three months ended March 31, 2025, there have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

During the three and six months ended June 30, 2025, there have been no material changes to our contractual obligations and commitments from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2024.