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With $30M, Spero Broadens Fight Against Drug-Resistant Bugs

Xconomy Boston — 

It’s no secret that there’s a huge need for more effective antibiotics. The number of bacteria evolving and evading current treatments continues to grow, and government agencies are trying to lend a helping hand. Spero Therapeutics has taken notice, and that’s why it’s thinking more broadly these days about the company it aims to become.

Cambridge, MA-based Spero today is announcing a $30 million Series A round from a group of new investors—Lundbeckfond Ventures (an evergreen fund and subsidiary of the Lundbeck Foundation), Merck Research Ventures, and The Kraft Group—and existing backers Atlas Venture, SR One (the VC arm of GlaxoSmithKline), and Partners Innovation Fund.

With the new cash, Spero is becoming a more diverse enterprise than the company that launched last year. It started out with one program in place—a method of essentially disarming bacteria, rather than killing them—but is now on the lookout for more opportunities as well. Today, for instance, it says it’s announcing that it has grabbed rights to a group of different bacteria-fighting drugs, so-called “potentiators,” from a privately held company in Finland, Northern Antibiotics Ltd. Spero co-founder, CEO, and president (and Atlas venture partner) Ankit Mahadevia says to expect more such deals.

“Like every great company that starts, you start with a plan and then you sort of roll with things,” he says. “A good portion of our time going forward is scouring the globe for new ideas in anti-infectives.”

The reason is that the environment for innovative antibiotics developers is quickly changing for the better, Mahadevia says. The need, for one, is massive. Drug-resistant bacteria kill 23,000 Americans every year, according to the Centers for Disease Control and Prevention, and their ranks are only increasing.

While the biggest problem for antibiotics developers—lack of pricing power, compared with other life-saving drugs—hasn’t changed, the regulatory environment has. The Generating Antibiotic Incentives Now (GAIN) Act, a 2012 initiative to spur antibiotics R&D, has helped by shortening approval timelines and adding years of market exclusivity for new antibiotics. And Mahadevia says that more recently, regulatory agencies have “put their money where their mouth is” by making more efficient decisions, and enabling companies to develop antibiotics on more “manageable” trial sizes.

Spero acting president Ankit Mahadevia

Ankit Mahadevia, CEO of Spero Therapeutics

He pointed, for instance, to the FDA recently giving ceftazidime-avibactam (Avycaz, from Actavis) immediate approval on a limited label for specific types of infections, without making the company do broader testing on more patients first.

“For us, what that means is that in this environment, a biotech that has a strong team and a good sense about how to develop drugs can really make a huge impact,” he says. “So we made the decision to scale and take a comprehensive approach to the space.”

That means accumulating assets, either internally or via deals. The first drugs Spero has added are through a deal with Northern, a company that a member of Spero’s team had insight into but wasn’t particularly well known. Mahadevia isn’t saying how much Spero paid, only that it used some of its $3 million in seed cash to get a group of molecules that Northern didn’t have the “capital or expertise” to move forward. (Spero won’t owe Northern any payments in the future if those molecules progress, he says).

These drugs are meant to help already-approved antibiotics handle gram-negative bacteria, which have a cellular membrane that other bacteria don’t, and that existing drugs have trouble penetrating through. Spero’s potentiators are supposed to open up this barrier and make other antimicrobial drugs more effective against these shifty bacteria—including drugs that currently only work on easier-to-treat, gram-positive bacteria. (Mahadevia won’t explain exactly how these mechanisms work as of yet, noting that it’s part of Spero’s intellectual property.)

Spero will combine a variety of approved drugs with these potentiators, and test them against a range of infections, like complicated urinary tract infections and intra-abdominal infections. (Although there are approved antibiotics for these infections, Mahadevia notes that they don’t work for everyone—there are a variety of microbes that are still resistant to current treatments). The first trials should begin next year.

Spero’s other program, the one it launched with last year, is a small molecule aimed at MvfR, a molecular target that serves as a communication system for bacteria, controlling functions like an ability to secrete harmful proteins, or stay dormant and hide from the immune system. By blocking MvfR, the thinking goes, bacteria should be rendered harmless, and a physician could “buy time” until finding the right antibiotic to clear it out, Mahadevia says.

That approach caught the eye of Roche, which has an option to buy the drug from Spero at a predetermined price before a Phase 1 trial that could begin in 2017, Mahadevia says. Roche is paying the drug’s development costs.

As part of the financing, Lundbeckfond’s Casper Breum and Merck’s Josh Resnick are joining Spero’s board, which already includes Jean-Francois Formela (Atlas), Vikas Goyal (SR One), Milind Deshpande (Achillion Pharmaceuticals), and Mahadevia.

Spero will likely double in size—from 10 to 20 employees—over the course of the year, he says.

Photo courtesy of the National Institute of Allergy and Infectious Diseases via Creative Commons.