By Chris Wack

Spero Therapeutics Inc. said that Pfizer Inc. has made a $40 million equity investment in it as part of the Pfizer Breakthrough Growth Initiative, a program focused on funding innovative science to meet patient needs.

The two companies parties have also entered into a licensing agreement for SPR206, Spero's intravenously-administered next-generation polymyxin product candidate being developed to treat serious multi-drug resistant Gram-negative infections in the hospital setting.

Spero said it intends to use the proceeds from the equity investment to prepare for the potential approval and launch of tebipenem HBr, as well as to support the continued clinical development of SPR720 and SPR206.

Pfizer bought 2.4 million common shares of Spero at $16.93 a share. Spero has granted Pfizer the rights to develop, manufacture, and commercialize SPR206 in ex-U.S. and ex-Asia territories. In exchange for these rights, Spero is eligible to receive up to $80 million in development and sales milestones, and high single digit to low double-digit royalties on net sales of SPR206 in these territories.

Based on its current projections, Spero believes that the proceeds from the $40 million equity investment will extend its cash runway into the second half of 2022.

Spero shares were up 26%, to $17.60, in premarket trading.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

07-01-21 0723ET