This deal covers rights to tebipenem HBr, which is a late-stage antibiotic from Spero Therapeutics. With this, GSK agreed to an upfront payment of $66 million for exclusive rights to the drug.
In addition, Spero Therapeutics has several milestones in store. In total, this allows for up to an additional $225 million in payments from GSK. Investors will also notice a low single digit to low double digit royalty agreement on the sale of the asset.
The deal comes with an investment
Accordingly, GSK is investing $9 million in Spero Therapeutics through the purchase of shares. This acquired 7.45 million SPRO shares at $1.20805 each. The contract does not allow for more than a 19.99% stake in the company.
Ankit Mahadevia, MD, CEO of Spero Therapeutics, had the following to say about the news.
“The potential of tebipenem HBr as an oral home option may be very beneficial by reducing the use of hospital resources. In addition, our partnership with GSK strengthens our balance sheet and shareholder base.”
Spero Therapeutics and GSK expect the deal to close in the fourth quarter of 2022. This means that Spero Therapeutics expects the proceeds from the deal to fund its operations beyond 2024.
Strong trading in SPRO stock follows today’s licensing deal. As of this writing, more than 61 million shares of the company’s stock have changed hands. For perspective, the company’s average daily trading volume is approximately 2.8 million shares.
SPRO shares were up 136.7% Thursday morning.
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On the date of publication by William White did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are the subject of InvestorPlace.com Publishing Guidelines.