Spero Therapeutics 2025 Q1 Earnings Misses Targets as Net Loss Widens 9.4%

Spero Therapeutics (SPRO) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The company posted a quarterly loss of $0.25 per share, which surpassed the Zacks Consensus Estimate of a loss of $0.55 per share, representing an earnings surprise of 54.55%. Despite this, the total revenue for the quarter was $5.87 million, falling short of the expected $11 million, primarily due to decreased grant revenue. Spero's guidance indicates that current cash reserves and forthcoming milestone payments will support operations through Q2 2026.

Revenue

Spero Therapeutics reported a decline in total revenue for its fiscal 2025 Q1, reaching $5.87 million, a 36.6% decrease from the previous year's $9.27 million. Grant revenue contributed $763,000, while collaboration revenue from related parties amounted to $5.10 million. Additionally, collaboration revenue added $12,000 to the total, highlighting the impact of decreased grant funding on overall revenue.

Earnings/Net Income

Spero Therapeutics experienced a deeper net loss in 2025 Q1, with losses increasing to $0.25 per share from $0.24 per share in 2024 Q1. The company's net loss expanded to $-13.87 million, up 9.4% from the previous year's loss of $-12.67 million, indicating ongoing financial challenges. The EPS performance was disappointing given its wider loss compared to the previous year.

Price Action

The stock price of Spero Therapeutics climbed 6.32% during the latest trading day, surged 16.95% over the past week, and rose 19.48% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Spero Therapeutics shares after a revenue drop on the earnings release date and holding for 30 days has historically yielded mixed results. Over the past five years, this approach resulted in a total return of approximately -80%, significantly underperforming the market due to high volatility. The stock experienced drastic price fluctuations, with a closing high of $15.50 in May 2020 and a low of $2.97 in May 2025. The buy signal driven by revenue drops often indicated negative market reactions, leading to substantial losses for investors employing this strategy. The beta coefficient was notably high, reflecting the stock's sensitivity to market movements and underscoring the strategy's exposure to downside risk. This suggests that the approach may not be effective for SPRO or similar stocks, where the market tends to react negatively to earnings misses.

CEO Commentary

“At Spero, our top priority remains the successful execution of the tebipenem HBr clinical program as we prepare for the pre-specified interim analysis of the PIVOT-PO trial during the second quarter,” said Esther Rajavelu, President and Chief Executive Officer. The CEO emphasized the urgent need for an oral carbapenem treatment for complicated urinary tract infections, underscoring the potential for tebipenem HBr to enhance patient outcomes and reduce hospitalization requirements. Despite a net loss increase year-over-year, the company is strategically positioned to leverage its partnership with GSK to drive growth.

Guidance

Spero anticipates the completion of the interim analysis for the PIVOT-PO clinical trial in Q2 2025. The company expects that its current cash reserves, combined with approximately $23.75 million in forthcoming milestone payments from GSK, will sufficiently cover operating expenses and capital expenditures through Q2 2026. Spero's financial outlook reflects a focus on sustaining operations while advancing key clinical programs.

Additional News

Spero Therapeutics recently appointed Esther Rajavelu as President and Chief Executive Officer, effective May 2, 2025. This leadership transition is accompanied by her nomination for election to the Board of Directors at Spero’s 2025 annual meeting of stockholders, where she will continue serving as Chief Financial Officer and Treasurer. The company has also suspended its SPR720 program for non-tuberculous mycobacterial pulmonary disease (NTM-PD) as of Q4 2024, following a Phase 2a study failing to meet its primary endpoint. Spero is currently analyzing the complete data of 25 patients dosed in the study to determine the next steps for the program. Additionally, Spero's collaboration with GSK remains a pivotal aspect of its strategic focus, with milestone payments expected to fund operations through Q2 2026.