(Reuters) -British drugmaker GSK said on Thursday it would take a stake in Spero Therapeutics as part of a licensing agreement for the U.S.-based drug developer's experimental antibiotic for complicated urinary tract infections (cUTI).
GSK will pay $66 million upfront for the oral antibiotic tebipenem HBr and buy $9 million of Spero shares as part of the deal.
"Tebipenem HBr complements GSK's infectious disease strategy and is consistent with our commitment to find value-enhancing opportunities to build a strong late-stage portfolio," GSK's chief commercial officer Luke Miels said in a statement.
In June, the U.S. Food and Drug Administration declined to approve tebipenem, saying a late-stage study testing it was insufficient and an additional study would be required. Spero has said it plans a new late-stage trial for 2023.
The treatment has a fast track designation from the U.S. drug agency for cUTI and acute pyelonephritis.
GSK agreed to purchase 7.45 million Spero shares at about $1.20805 per share, which will not exceed 19.99% ownership of Spero by GSK and its affiliates, the companies said.
Spero's shares closed down 6.7% at 82 cents on Wednesday, while GSK was marginally down in early trade on Thursday amid broader market weakness.
Spero developed tebipenem HBr with Japan's Meiji Seika Pharma Co Ltd and is part of a subclass of antibiotics deemed to be effective in treating drug-resistant bacterial infections and is intended for adults with limited treatment options.
(Reporting by Amna Karimi and Pushkala Aripaka in Bengaluru; Editing by Sriraj Kalluvila)