Item 1.01 Entry into a Material Definitive Agreement.

Tebipenem HBr License Agreement with GSK

On September 21, 2022, Spero Therapeutics, Inc. (the "Company" or "Spero") entered into a license agreement (the "License Agreement") with GlaxoSmithKline Intellectual Property (No. 3) Limited ("GSK"). Pursuant to the terms of the License Agreement, the Company granted GSK an exclusive royalty-bearing license, with the right to grant sublicenses, under the Company's intellectual property and regulatory documents and a sublicense under certain intellectual property of Meiji Seika Pharma Co., Ltd. ("Meiji") and Meiji's regulatory documents to develop, manufacture and commercialize tebipenem pivoxil and tebipenem HBr and products that contain tebipenem pivoxil and tebipenem HBr (the "GSK Licensed Products") in all territories, except certain Asian countries previously licensed to Meiji (Japan, Bangladesh, Brunei, Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam, or the "Meiji Territory") (the "GSK Territory"). If Spero's license with Meiji is terminated, or if Meiji forfeits or loses its rights to develop, manufacture and commercialize tebipenem HBr and products that contain tebipenem HBr in any countries in the Meiji Territory, then GSK will have an exclusive first right to negotiate with Spero to add any such countries to the GSK Territory.

Under the terms of the License Agreement, Spero will receive an upfront payment of $66 million for GSK to secure rights to the medicine. Remaining potential payments are milestone based, and are as follows:



Event                                                 Milestone payments (up to)
Delivery of phase III programme                       $150m
Total commercial milestone
payments based on first sale
(US/EU)                                               $150m

Sales milestone events
Net sales greater than $200m                          $25m
Net sales greater than $300m                          $25m
Net sales greater than $400m                          $25m
Net sales greater than $500m                          $50m
Net sales greater than $750m                          $50m
Net sales greater than $1,000m                        $50m
Total sales milestone payments:                       $225m
Royalties                                             Low-single digit to low-double digit (if
                                                      sales exceed $1bn) tiered royalties
                                                      on net product sales.

Royalties are subject to reduction in the event of third-party licenses, entry of a generic product or expiration of patent and regulatory exclusivity prior to the tenth (10th) anniversary of the first commercial sale of a GSK Licensed Product in a particular country.

Spero will be responsible for the execution and costs of the follow-up Phase III clinical trial of tebipenem HBr. GSK will be responsible for the execution and costs of additional further development, including Phase III regulatory filing and commercialization activities for tebipenem HBr in the balance of the GSK Territory outside of the United States. Spero will also be responsible for providing and paying for the clinical supply of tebipenem HBr while GSK will be responsible for the costs of the commercial supply of tebipenem HBr. A joint development committee will be established between GSK and Spero to coordinate and review development activities for tebipenem HBr in the United States.

Unless earlier terminated due to certain material breaches of the License Agreement or by GSK for convenience, or otherwise, the License Agreement will expire on a jurisdiction-by-jurisdiction and GSK Licensed Product-by-GSK Licensed Product basis on the latest to occur of (i) loss of patent exclusivity, (ii) loss of regulatory exclusivity or (iii) ten (10) years following the date of the first commercial sale of such licensed product in such country (the "Royalty Term"). During the Royalty Term, Spero has agreed not to develop, manufacture or commercialize any oral carbapenem for any indication or any oral antibiotic for cUTI; this restriction does not apply to any third party which acquires control of Spero after the date of the License Agreement if certain conditions are met.

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The Company has the right to terminate the License Agreement upon a material breach by, or bankruptcy of, GSK. GSK has the right to terminate the License Agreement at any time upon a specified number of days' notice or upon a material breach by, or bankruptcy of, Spero. In addition, in the event that GSK has the right to terminate the License Agreement due to a breach by Spero, GSK may elect not to terminate the License Agreement and in lieu thereof may assume the responsibility and expense of development of tebipenem HBr in the United States, in which event GSK's obligation to make further development payments to Spero would cease, and/or to reduce all subsequent commercial and sales milestone payments and royalty payments otherwise due by GSK to Spero under the License Agreement by fifty percent (50%).

The License Agreement contains representations and warranties, other covenants, indemnification provisions and other terms and conditions customary for transactions of the type contemplated by the License Agreement. In support of certain of its rights to indemnification, GSK also has certain rights to suspend payments otherwise owed to Spero, as well as the right to offset payments otherwise owed to Spero against certain indemnifiable claims.

The consummation of the transactions under the License Agreement is subject to the satisfaction of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); provided, that either Spero or GSK may terminate the License Agreement if expiration or termination of the applicable waiting period under the HSR Act has not occurred by March 21, 2023. The parties expect the transactions contemplated by the License Agreement and the SPA (as described below) to close in the fourth quarter of 2022.

Share Purchase Agreement

Concurrently with the execution of the License Agreement, on September 21, 2022 (the "Effective Date"), the Company entered into a stock purchase agreement (the "SPA") with Glaxo Group Limited ("GGL"), an affiliate of GSK, pursuant to which GGL will purchase, at the closing of the transactions contemplated by the SPA (the date thereof, the "Closing Date"), 7,450,000 shares (the "Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"), at a purchase price of approximately $1.20805 per share, for an aggregate purchase price of $9.0 million. In the event that the number of Shares to be purchased by GGL, when taken together with shares of Common Stock beneficially owned by GGL and its affiliates, would exceed 19.99% of the outstanding shares of Common Stock following such purchase, then GGL shall only be required to purchase such number of Shares that would result in GGL and its affiliates beneficially owning of 19.99% of the outstanding shares of Common Stock. . . .

Item 3.02 Unregistered Sales of Equity Securities.

The description set forth in the section titled "Share Purchase Agreement" in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02. The Shares sold and issued in connection with the SPA have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements.

Item 8.01 Other Events.

On September 22, 2022, the Company issued a press release announcing the matters reported herein. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated into this Item 8.01 by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



99.1      Press Release, dated September 22, 2022

104     Cover Page Interactive Data File (embedded within the Inline XBRL document)

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