SPRO 8-K
Spero Therapeutics, Inc. (SPRO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On October 30, 2023, the Board of Directors (the “Board”) of Spero Therapeutics, Inc. (the “Company”) appointed Esther Rajavelu as the Company’s Chief Financial Officer and Chief Business Officer.
Ms. Rajavelu, age 45, served as chief financial officer of Fulcrum Therapeutics, Inc. (“Fulcrum”) from January 2022 to April 2023. Prior to joining Fulcrum, Ms. Rajavelu’s career in the biotechnology sector includes her time as an equities research analyst, investment banker, and strategy consultant. She served as a senior equities research analyst at UBS Securities (“UBS”) from July 2020 to December 2021. Prior to joining UBS, Ms. Rajavelu served as a senior equities research analyst at Oppenheimer & Co. Inc. (“Oppenheimer”) from June 2018 to July 2020. Prior to joining Oppenheimer, Ms. Rajavelu served as an equities research analyst at Deutsche Bank from June 2014 to June 2018. Prior to joining Deutsche Bank, she served as vice president, life sciences M&A and capital & debt advisory at Ernst & Young Capital Advisors, LLC (“EY Capital Advisors”) from 2011 to 2014. Prior to joining EY Capital Advisors, she worked at Bank of America Merrill Lynch from 2006 to 2011 in the healthcare investment banking group where she focused on financing and strategic transactions in the biotechnology and medical devices sectors. Ms. Rajavelu received a MBA from The Wharton School of the University of Pennsylvania and a B.A. in Economics and International Relations from Wesleyan University.
In connection with Ms. Rajavelu’s appointment, she entered into an executive employment agreement (the “Agreement”) with the Company, effective as of November 6, 2023 (the “Effective Date”), setting forth her compensation and certain other terms. Pursuant to the Agreement, Ms. Rajavelu is entitled to receive an annual base salary of $475,000, a one-time sign-on bonus of $50,000, and an annual cash bonus commencing in fiscal year 2024 of up to 40% of her then-current base salary (the “Annual Performance Bonus”). The Annual Performance Bonus, if any, will be determined by the Company’s Board of Directors and will be based upon the achievement of corporate and individual performance objectives. Pursuant to the Agreement, on November 13, 2023, Ms. Rajavelu will be granted 300,000 restricted stock units (“RSUs”) (each RSU relating to one share of the Company’s common stock, par value $0.001 per share) under the Spero Therapeutics, Inc. 2019 Inducement Equity Incentive Plan, as amended (the “2019 Inducement Plan”). The RSUs will be granted as an inducement material to Ms. Rajavelu becoming an employee of the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The RSUs will vest in four equal annual installments beginning on the first anniversary of the Effective Date, subject to Ms. Rajavelu’s continued employment with the Company on such vesting dates. The RSUs are subject to the terms and conditions of the 2019 Inducement Plan and the terms and conditions of a RSU agreement covering the grant.
The Agreement also provides for the following severance payments upon termination by the Company without Cause (as defined in the Agreement) or by Ms. Rajavelu for Good Reason (as defined in the Agreement): (i) payment of her then-current base salary for a period of nine months following termination; (ii) a pro-rated target bonus for the period during which Ms. Rajavelu was employed in the year of termination; and (iii) continued coverage under the Company’s group health insurance plan until the earlier of 12 months from termination or the date Ms. Rajavelu becomes eligible for medical benefits with another employer. Further, the Agreement provides that upon termination by the Company without Cause or by Ms. Rajavelu for Good Reason within 90 days prior to the earlier to occur of a Change of Control (as defined in the Agreement) or the execution of a definitive agreement the consummation of which would result in a Change of Control or one year following a Change of Control (a “Change of Control Termination”), Ms. Rajavelu will be entitled to receive: (i) a lump sum payment equal to 12 months of her then-current base salary plus her then-current target performance bonus; (ii) acceleration of all unvested equity awards as of the date of termination; and (iii) continued coverage under the Company’s group health insurance plan until the earlier of 12 months from termination or the date Ms. Rajavelu becomes eligible for medical benefits with another employer. Payment in each case is subject to Ms. Rajavelu’s execution of a release satisfactory to the Company following such termination. In addition, if Ms. Rajavelu’s employment terminates as a result of disability or death, she shall be entitled to receive a pro-rated target bonus for the period during which Ms. Rajavelu was employed in the year of termination.
The foregoing is only a summary of the Agreement and is qualified in its entirety by reference to the Agreement, which the Company intends to file as an exhibit to its Annual Report on Form 10-K for the year ending December 31, 2023.
The selection of Ms. Rajavelu to perform the functions of Chief Financial Officer and Chief Business Officer was not pursuant to any arrangement or understanding between Ms. Rajavelu and any other person. There are no family relationships between Ms. Rajavelu and any director or executive officer of the Company, and there are no transactions between Ms. Rajavelu and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
Ms. Rajavelu will enter into an indemnification agreement, which will be effective as of the Effective Date, in the form the Company has entered into with its other executive officers, which form is filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1, as amended (File No. 333-220858), filed by the Company on October 6, 2017 and is incorporated herein by reference.
While Ms. Rajavelu’s employment is effective as of November 6, 2023, she will not formally assume the role of Chief Financial Officer until the day after the Company files its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. Through the date of that filing, the Company’s current Interim Chief Financial Officer, Stephen DiPalma, will continue in his capacity, with Ms. Rajavelu succeeding to those duties thereafter. Mr. DiPalma may continue to consult with the Company as needed during the transition after Ms. Rajavelu assumes the Chief Financial Officer role.
| Item 8.01 | Other Events. |
On November 1, 2023, the Company issued a press release announcing the appointment of Ms. Rajavelu as the Company’s Chief Financial Officer and Chief Business Officer. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Press Release dated November 1, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 1, 2023 | SPERO THERAPEUTICS, INC. | |||||
| By: | /s/ Tamara Joseph | |||||
| Tamara Joseph | ||||||
| Chief Legal Officer | ||||||
Exhibit 99.1
Spero Therapeutics Appoints Esther Rajavelu as Chief Financial Officer and
Chief Business Officer
Ms. Rajavelu brings over two decades of experience in the life sciences sector focused on
strategic growth, financing, M&A, and investor relations.
CAMBRIDGE, Mass., November 1, 2023 — Spero Therapeutics, Inc. (Nasdaq: SPRO), a multi-asset clinical-stage biopharmaceutical company, focused on identifying, developing, and commercializing treatments in high unmet need areas involving rare diseases and multi-drug resistant (MDR) bacterial infections, today announced the appointment of Esther Rajavelu as Chief Financial Officer and Chief Business Officer. Ms. Rajavelu will succeed Stephen DiPalma, who has served as the company’s Interim CFO since August 1, 2023.
“We are thrilled to welcome Esther to the executive leadership team as our new CFO and CBO. Esther brings a proven track record in corporate finance, from both industry and Wall Street, bringing expertise in life science growth strategies, investor relations, financing, and M&A,” said Sath Shukla, Spero’s Chief Executive Officer. “This expertise will play an important role in the company’s success, as we advance our pipeline and prepare Spero for multiple important upcoming clinical, regulatory and financial milestones.”
Esther Rajavelu commented, “I am honored to join Spero Therapeutics and its experienced team, dedicated to developing therapies for patients suffering from serious rare orphan diseases and life-threatening infections. With a differentiated clinical pipeline in areas of high unmet need, Spero Therapeutics is well positioned to achieve its vision of bringing innovative medicines to patients and driving shareholder value. At this pivotal time, I look forward to working with Sath, the Board of Directors, and the entire team at Spero Therapeutics to further the strategic growth of the Company.”
Ms. Rajavelu brings to Spero Therapeutics more than two decades of life sciences sector experience combining equities research, investment banking, strategy consulting, and most recently CFO operating experience. She has deep expertise in strategy, investor relations, financing, and M&A in the pharmaceuticals and biotechnology sectors. Most recently, serving as the CFO at Fulcrum Therapeutics, a clinical stage biopharmaceutical company focused on rare genetic diseases she led equity financings, and developed and executed a strategic plan to realign internal investments and operations to prioritize capital deployment towards key near-term value drivers and extend cash runway. Prior to her transition as a biotech operating executive, Ms. Rajavelu had a successful career on Wall Street, serving as a Senior Equities Research Analyst covering SMID-cap biotechnology companies at UBS, Oppenheimer, and Deutsche Bank. Prior to her career in sell-side equities research, she spent several years as a healthcare investment banker at Bank of America Merrill Lynch and EY Capital Advisors executing on M&A and financing transactions. Prior to investment banking, Ms. Rajavelu was a strategy consultant at Towers Perrin focused on U.S. large pharmaceutical companies. The breadth of her company experiences includes Fortune 500, mid-cap companies, and startups in the life sciences sector. Ms. Rajavelu holds an MBA in Finance and Health Care Management from The Wharton School at the University of Pennsylvania, and a BA from Wesleyan University.
Spero’s Interim CFO, Steve DiPalma, will continue to serve in his capacity as Principal Financial Officer through the filing of the Form 10-Q for the quarter ended September 30, 2023. Ms. Rajavelu will formally assume the role of Principal Financial Officer on the day after the filing of such Form 10-Q.
Inducement Award
In connection with Ms. Rajavelu joining Spero, the Compensation Committee of Spero’s Board of Directors authorized the grant to Ms. Rajavelu on November 13, 2023 (the “Grant Date”) of 300,000 restricted stock units (“RSUs”) under the Spero Therapeutics, Inc. 2019 Inducement Equity Incentive Plan, as amended (the “2019 Inducement Plan”). The RSUs are being granted as an inducement material to Ms. Rajavelu becoming an employee of Spero in accordance with Nasdaq Listing Rule 5635(c)(4). The RSUs will vest in four equal annual installments beginning on November 6, 2024, subject to Ms. Rajavelu’s continued employment with Spero on such vesting dates. The RSUs are subject to the terms and conditions of the 2019 Inducement Plan and the terms and conditions of the RSU agreement covering the grant.
About Spero Therapeutics
Spero Therapeutics, headquartered in Cambridge, Massachusetts, is a multi-asset, clinical-stage biopharmaceutical company focused on identifying, developing, and commercializing novel treatments for bacterial infections, including multi-drug resistant bacterial infections and rare diseases.
| • | Spero Therapeutics is developing SPR720 as a novel oral therapy candidate for the treatment of a rare, orphan pulmonary disease caused by non-tuberculous mycobacterial infections. |
| • | Tebipenem HBr is an investigational drug in the United States being developed for the treatment of cUTI, including pyelonephritis, caused by certain bacteria, in adult patients who have limited treatment options; tebipenem HBr is not FDA-approved. |
| • | Spero Therapeutics also has an IV-administered next generation polymyxin product candidate, SPR206, developed from its potentiator platform, which is in development to treat MDR Gram-negative infections in the hospital setting. |
For more information, visit www.sperotherapeutics.com
Forward Looking Statements
This press release may contain forward-looking statements. These statements include, but are not limited to, statements about the design, initiation, timing, progress and results of Spero’s preclinical studies and clinical trials and its research and development programs, as well as the regulatory path forward for tebipenem HBr and potential FDA approval, and management’s assessment of the results of such preclinical studies and clinical trials. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intent,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including whether tebipenem HBr, SPR720 and SPR206 will advance through the clinical trial process on a timely basis, or at all, taking into account the effects of possible regulatory delays, slower than anticipated patient enrollment, manufacturing challenges, clinical trial design and clinical outcomes; whether the results of such trials will warrant submission for approval from the FDA or equivalent foreign regulatory agencies; whether the FDA will ultimately approve tebipenem HBr and, if so, the timing of any such approval; whether the FDA will require any additional clinical data or place labeling restrictions on the use of tebipenem HBr that would delay approval and/or reduce the commercial prospects of tebipenem HBr; whether a successful commercial launch can be achieved and market acceptance of tebipenem HBr can be established; whether results obtained in preclinical studies and clinical trials will be indicative of results obtained in future clinical trials; Spero’s reliance on third parties to manufacture, develop, and commercialize its product candidates, if approved; Spero’s need for additional funding; the ability to commercialize Spero’s product candidates, if approved; Spero’s ability to retain key personnel; Spero’s ongoing leadership transitions; whether Spero’s cash resources will be sufficient to fund its continuing operations for the periods and/or trials anticipated; and other factors discussed in the “Risk Factors” set forth in filings that Spero periodically makes with the SEC. The forward-looking statements included in this press release represent Spero’s views as of the date of this press release. Spero anticipates that subsequent events and developments will cause its views to change. However, while Spero may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Spero’s views as of any date subsequent to the date of this press release.
Investor Relations Contact:
Ted Jenkins
Vice President, Investor Relations and Strategic Finance
(617) 798-4039
Media Inquiries:
Lora Grassilli, Health Media Relations
Zeno Group
646-932-3735