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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights several concerns: missed EPS expectations, financial constraints, and regulatory risks. Although there is optimism about FDA approval pathways and potential market size, the lack of a shareholder return plan and financial uncertainty weigh heavily. The Q&A session did not alleviate concerns, as management's responses were vague about financial planning and patient identification. Given these factors, the sentiment leans negative, with a likely stock price decline of -2% to -8% over the next two weeks.
Reported EPS $-0.57 EPS, down from $-0.21 year-over-year due to higher operational costs and ongoing development expenses.
Cash and cash equivalents $38.8 million as of December 31, 2024, reflecting a decrease due to funding ongoing development of TA-ERT.
Shares outstanding 42.2 million shares of common stock outstanding, with 60.7 million on a fully diluted basis, reflecting an increase in shares due to financing activities.
Milestone payments to BioMarin Up to $22.5 million upon achievement of certain developmental and regulatory milestones, and up to $100 million upon achievement of certain sales milestones, reflecting the acquisition of TA-ERT.
Royalty payments to BioMarin Tiered royalties on annual worldwide net sales ranging from high single digits to low teens, reflecting the ongoing partnership and commercialization strategy.
New Product Acquisition: Spruce has acquired Tralesinidase Alfa (TA-ERT) for the treatment of MPS IIIB, a rare pediatric neurodegenerative disease.
BLA Submission Timeline: Spruce anticipates making a BLA submission for TA-ERT in the first half of 2026.
FDA Designations: TA-ERT has received fast track designation, rare pediatric disease designation, and orphan drug designation in the US and EU.
Market Expansion: Spruce plans to commercialize TA-ERT throughout developed markets including North America, the EU, UK, and other international markets.
Patient Population: There are approximately 3,000 MPS patients in the US, with an estimated 135 prevalent cases of MPS IIIB potentially addressable with TA-ERT.
Cash Position: As of December 31, 2024, Spruce had cash and cash equivalents of $38.8 million, expected to fund operations through the end of 2025.
Development Obligations: Spruce is obligated to pay BioMarin up to $22.5 million upon achieving certain developmental milestones and up to $100 million upon achieving sales milestones.
Corporate Strategy Shift: Spruce unveiled a new corporate strategy focused on developing first-in-class therapies for neurological disorders, moving away from previous efforts in CAH.
Earnings Expectations: Spruce Biosciences missed earnings expectations with a reported EPS of $-0.57, compared to expectations of $-0.21.
Regulatory Risks: The company is pursuing a Biologics License Application (BLA) submission for TA-ERT, which is subject to FDA approval. There are inherent risks in meeting regulatory requirements and timelines.
Developmental Milestones: Spruce is obligated to pay BioMarin up to $22.5 million upon achieving certain developmental and regulatory milestones, which poses financial risks if these milestones are not met.
Financial Constraints: The previous sponsor of TA-ERT discontinued the study due to financial constraints, highlighting potential funding challenges for Spruce.
Market Risks: The commercial success of TA-ERT depends on effective patient identification and market access, which may be influenced by competition and market dynamics.
Clinical Trial Risks: The Phase 3 confirmatory trial must be initiated prior to potential accelerated approval, introducing risks related to trial design, patient enrollment, and outcomes.
Supply Chain Challenges: The company may face supply chain challenges in the production and distribution of TA-ERT, particularly given the specialized nature of the therapy.
Economic Factors: Economic conditions may impact funding availability and the overall market environment for rare disease therapies.
Corporate Strategy: Spruce unveiled a new corporate strategy focused on developing and commercializing first-in-class therapy for neurological disorders with significant unmet medical needs.
Acquisition of TA-ERT: Spruce acquired Tralesinidase Alfa (TA-ERT) for the treatment of MPS IIIB, a pediatric neurodegenerative disease.
BLA Submission: Anticipated BLA submission for TA-ERT in the first half of 2026.
FDA Alignment: Achieved alignment with the FDA on key design elements for the Phase 3 confirmatory trial and the use of a specific biomarker for accelerated approval.
Fast Track Designation: TA-ERT has received fast track designation, rare pediatric disease designation, and orphan drug designation in the US and EU.
Commercial Strategy: Plans to build a specialized commercial organization to support the launch of TA-ERT, focusing on patient identification and support.
Cash Runway: Spruce expects its cash runway to fund operations through the end of 2025.
Development Milestones: Spruce is obligated to pay BioMarin up to $22.5 million upon achieving certain developmental and regulatory milestones.
Sales Milestones: Spruce is obligated to pay BioMarin up to $100 million upon achieving certain sales milestones.
Market Potential: Estimates approximately 135 prevalent cases of MPS IIIB in the US, with at least half potentially addressable with TA-ERT therapy.
Commercial Organization Size: Plans to establish a commercial team of 5 to 10 people to effectively launch TA-ERT in the US.
Shareholder Return Plan: Spruce Biosciences has not announced any share buyback program or dividend program during this earnings call.
The earnings call highlights several concerns: missed EPS expectations, financial constraints, and regulatory risks. Although there is optimism about FDA approval pathways and potential market size, the lack of a shareholder return plan and financial uncertainty weigh heavily. The Q&A session did not alleviate concerns, as management's responses were vague about financial planning and patient identification. Given these factors, the sentiment leans negative, with a likely stock price decline of -2% to -8% over the next two weeks.
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