Market Overview

Seres Therapeutics Reports Second Quarter Financial Results and Provides Operational Updates


- Company preparing to initiate SER-287 Phase 2b study for ulcerative
colitis -

- Initiation of SER-401 clinical study expected in patients with
metastatic melanoma treated with checkpoint inhibitors by year end -

- Recent Seres R&D event highlighted microbiome scientific leadership
across several clinical and preclinical programs -

- Conference call at 8:30 a.m. ET today -

Therapeutics, Inc.
(NASDAQ:MCRB) today reported second quarter 2018
financial results and provided an operational update.

"Seres has made excellent progress across our deep pipeline of early and
late, clinical and preclinical stage microbiome programs, and we were
pleased to demonstrate the depth of our scientific leadership in this
new therapeutic modality at our recent investor R&D event highlighting
how we can change immunological tone using microbiome drugs." said Roger
J. Pomerantz, M.D., President, CEO and Chairman of Seres. "We continue
to execute our SER-109 Phase 3 clinical study in patients with
multiply-recurrent C. difficile infection. Following constructive
meetings with the FDA, we are nearing initiation of a SER-287 Phase 2b
clinical study in patients with active mild-to-moderate ulcerative
colitis. Based on our FDA interactions, we expect the SER-287 Phase 2b
study could be a pivotal trial that may serve as one of two required
studies for product registration. We are also advancing work with our
collaborators at MD Anderson Cancer Center and the Parker Institute for
Immunotherapy to begin a Phase 1b study with SER-401 by year end to
assess the potential for this microbiome therapy to augment clinical
responses to checkpoint inhibitors in patients with metastatic melanoma."

Recent Highlights and Events

  • New analysis of clinical samples and preclinical data presented at
    May 24
    th R&D event: Seres provided an
    overview of its R&D approach to developing novel microbiome
    therapeutics and presented new scientific data regarding its
    scientific platform and its clinical and preclinical stage programs.
    Data were presented highlighting two bacterial pathways involving bile
    acid and tryptophan metabolism that modulate the immune system and
    were correlated with clinical outcome in the SER-287 Phase 1b study.
    Recent transcriptomic data from mucosal biopsies taken before and
    after SER-287 administration provides additional clinical evidence
    linking SER-287 administration to the modulation of host pathways,
    including innate immune signaling, epithelial barrier integrity,
    antibacterial defenses, and short chain fatty acid metabolism. Seres
    remains the only company with human clinical microbiome data sets,
    which are critical in determining mechanism of action, and the
    rational design of follow-on drugs. Seres also provided an overview of
    the published clinical data from its collaborators at MD Anderson
    Cancer Center and its own pre-clinical data supporting the potential
    for microbiome therapeutics to augment checkpoint inhibitor drugs in
    the PD-(L)1 pathway. The R&D day presentation is available on the
    Investor & Media section of Seres' website and is expected to be
    archived for at least the next 21 days.
  • SER-287 late stage development activity: The Company expects to
    initiate the planned SER-287 Phase 2b clinical study in patients with
    active mild-to-moderate ulcerative colitis (UC) in the coming months.
    The SER-287 Phase 1b placebo-controlled induction study of 58 patients
    with mild-to-moderate active UC who were failing current therapies
    demonstrated that SER-287 administration resulted in a dose-dependent
    improvement of both clinical remission rates and endoscopic scores.
    The SER-287 safety and tolerability profile was favorable, with no
    imbalance in adverse events in patients treated with SER-287, as
    compared to placebo. Analyses of study microbiome data demonstrated
    that SER-287 induced dose-dependent engraftment of SER-287-derived
    bacterial species and identified specific bacterial signatures linked
    to remission. SER-287 has been granted Orphan Drug Designation by the
    Food & Drug Administration (FDA) for the treatment of UC in pediatric
  • Digestive Disease Week 2018 conference attendance: Seres
    presented various data sets and held a scientific symposium
    highlighting SER-287 clinical and microbiome results as well as the
    promise of microbiome therapeutics for UC, and other forms of
    inflammatory bowel disease.
  • Continued execution of the SER-109 ECOSPOR III Phase 3 study: Seres
    continues to enroll its SER-109 Phase 3 clinical study in patients
    with multiply-recurrent C. difficile infection, at sites
    in both the U.S. and Canada. Several factors have impacted enrollment
    including primary use of C. difficile toxin testing to increase
    the accuracy of proper patient inclusion, the widespread availability
    of unapproved and unregulated fecal microbiota transplantation, and
    the fact that multiply recurrent C. difficile infection is an orphan
    disease. It remains premature to provide an estimate for the timing of
    study enrollment completion. The Company has made various operational
    changes to further expedite study execution. ECOSPOR III has been
    designated a Phase 3 trial and the Company expects that this single
    pivotal study could support SER-109 registration and approval. SER-109
    has been designated by the FDA as a Breakthrough Therapy and has also
    been given Orphan Drug Designation.
  • Preparations for SER-401 immuno-oncology clinical study: In
    collaboration with the Parker Institute for Cancer Immunotherapy and
    MD Anderson Cancer Center, Seres is preparing to initiate a clinical
    study later this year to evaluate the potential for SER-401, a
    microbiome therapy, to augment checkpoint inhibitor response in
    patients with metastatic melanoma. We expect this to be the first
    microbiome drug study in the Immuno-oncology therapeutic area.
  • Completion of SER-262 clinical study: Seres obtained clinical
    data from the final patient cohort (cohort 8 of 8) of the SER-262
    Phase 1b study in patients with primary C. difficile infection.
    SER-262 is the first rationally-designed, fermented microbiome
    therapeutic candidate to be evaluated in clinical development. The
    full study clinical data remains consistent with the top line results
    from the first 7 cohorts which have previously been reported. The
    observed recurrence rate of C. difficile was statistically
    significantly lower in patients treated with vancomycin and SER-262,
    as compared to those patients treated with metronidazole and SER-262.
    Phase 1b microbiome data suggest that treatment with vancomycin,
    followed by SER-262, results in more robust and kinetically more rapid
    engraftment, and thus may lead to corresponding clinical efficacy.
    Microbiome and metabolomic analyses from the study remain ongoing.
    Seres plans to present full study results at an upcoming medical

Financial Results

Seres reported a net loss of $27.8 million for the second quarter of
2018, as compared to a net loss of $28.0 million for the same period in
2017. The second quarter net loss was driven primarily by clinical and
development expenses, personnel expenses, and ongoing development of the
Company's microbiome therapeutics platform. The second quarter net loss
figure was inclusive of $4.6 million in recognized revenue primarily
associated with the Company's collaboration with Nestlé Health Science.

Research and development expenses for the second quarter were $24.1
million, as compared to $23.1 million for the same period in 2017. The
research and development expense was primarily related to Seres'
microbiome therapeutics platform, the clinical development of SER-109,
SER-262 and SER-287, as well as the Company's SER-301, SER-155 and
immuno-oncology preclinical programs.

General and administrative expenses for the second quarter were $8.7
million, as compared to $8.4 million for the same period in the prior
year. General and administrative expenses were primarily due to
headcount, professional fees, and facility costs.

The decrease in cash, cash equivalents and investments balance during
the quarter was $26.1 million. Seres ended the second quarter with
approximately $96.1 million in cash, cash equivalents and investments.
Current resources are expected to fund the Company into the second
quarter of 2019. This estimate does not include a $20.0 million
milestone payment that the Company expects to receive with the start of
the SER-287 Phase 2b study.

Conference Call Information

Seres' management will host a conference call today, August 2, 2018, at
8:30 a.m. ET. To access the conference call, please dial 844-277-9450
(domestic) or 336-525-7139 (international) and reference the conference
ID number 8181429. Accompanying slides will be made available on the
Seres website prior to the call. To join the live webcast, please visit
the "Investors and Media" section of the Seres website at

A webcast replay will be available on the Seres website beginning
approximately two hours after the event and will be archived for at
least 21 days.

About Seres Therapeutics

Seres Therapeutics, Inc. (NASDAQ:MCRB) is a leading microbiome
therapeutics platform company developing a novel class of biological
drugs that are designed to treat disease by restoring the function of a
dysbiotic microbiome, where the state of bacterial diversity and
function is imbalanced. Seres' lead program, SER-109, has obtained
Breakthrough Therapy and Orphan Drug designations from the U.S. Food and
Drug Administration and is in Phase 3 development for multiply recurrent C.
infection. SER-287 has successfully completed a Phase 1b
study in patients with mild-to-moderate ulcerative colitis. Seres is
developing SER-262, the first ever synthetic microbiome therapeutic
candidate, in a Phase 1b study in patients with primary C. difficile
infection. Seres is also developing SER-401 to augment the efficacy of
immuno-oncology treatment. For more information, please visit
Follow us on Twitter @SeresTx.

Forward-looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. All
statements contained in this press release that do not relate to matters
of historical fact should be considered forward-looking statements,
including our development plans, the ability of ECOSPOR III to support
SER-109 approval, the promise and potential impact of any of our
microbiome therapeutics or clinical trial data, timing of and plans to
initiate clinical studies of SER-287 and SER-401, the timing and results
of any clinical studies, and the sufficiency of cash to fund operations.

These forward-looking statements are based on management's current
expectations. These statements are neither promises nor guarantees, but
involve known and unknown risks, uncertainties and other important
factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements,
including, but not limited to, the following: we have incurred
significant losses, are not currently profitable and may never become
profitable; our need for additional funding; our limited operating
history; our unproven approach to therapeutic intervention; the lengthy,
expensive, and uncertain process of clinical drug development; our
reliance on third parties and collaborators to conduct our clinical
trials, manufacture our product candidates, and develop and
commercialize our product candidates, if approved; our lack of
experience in manufacturing, selling, marketing, and distributing our
product candidates; failure to compete successfully against other drug
companies; protection of our proprietary technology and the
confidentiality of our trade secrets; potential lawsuits for, or claims
of, infringement of third-party intellectual property or challenges to
the ownership of our intellectual property; our patents being found
invalid or unenforceable; our ability to retain key personnel and to
manage our growth; the potential volatility of our common stock; and our
management and principal stockholders have the ability to control or
significantly influence our business. These and other important factors
discussed under the caption "Risk Factors" in our Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission, or SEC, on
May 9, 2018 and our other reports filed with the SEC, including the
Quarterly Report we intend to file later today, could cause actual
results to differ materially from those indicated by the forward-looking
statements made in this press release. Any such forward-looking
statements represent management's estimates as of the date of this press
release. While we may elect to update such forward-looking statements at
some point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change. These forward-looking
statements should not be relied upon as representing our views as of any
date subsequent to the date of this press release.



(unaudited, in thousands, except share
and per share data)

June 30,
December 31,
Current assets:
Cash and cash equivalents $ 57,960 $ 36,088
Investments 38,106 113,895
Prepaid expenses and other current assets   5,471   5,095
Total current assets 101,537 155,078
Property and equipment, net 29,904 32,931
Restricted cash   1,513   1,513
Total assets $ 132,954 $ 189,522
Liabilities and Stockholders' Equity/(Deficit)
Current liabilities:
Accounts payable $ 5,158 $ 7,033
Accrued expenses and other current liabilities 13,651 12,513
Deferred revenue - related party   17,962   12,079
Total current liabilities 36,771 31,625
Lease incentive obligation, net of current portion 8,119 8,989
Deferred Rent 2,231 2,233
Deferred revenue, net of current portion - related party 97,959 84,847
Other long-term liabilities   1,129   1,129
Total liabilities   146,209   128,823
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at
June 30, 2018 and December 31, 2017; no shares issued and
outstanding at June 30, 2018 and December 31, 2017
Common stock, $0.001 par value; 200,000,000 shares authorized at
June 30, 2018 and December 31, 2017; 40,754,681 and 40,571,015
shares issued and outstanding at June 30, 2018 and December 31,
2017, respectively
40 40
Additional paid-in capital 332,870 324,376
Accumulated other comprehensive loss (29 ) (146 )
Accumulated deficit   (346,136 )   (263,571 )
Total stockholders' equity/(deficit)   (13,255 )   60,699
Total liabilities and stockholders' equity $ 132,954 $ 189,522


in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Collaboration revenue - related party $ 4,271 $ 3,014 $ 8,037 $ 6,029
Grant revenue   341     546  
Total revenue 4,612 3,014 8,583 6,029
Operating expenses:
Research and development expenses 24,053 23,060 47,513 43,203
General and administrative expenses   8,695   8,370   17,472   17,132
Total operating expenses   32,748   31,430   64,985   60,335
Loss from operations   (28,136 )   (28,416 )   (56,402 )   (54,306 )
Other income (expense):
Interest income 349 615 696 1,390
Other income (expense)     (217 )     (576 )
Total other income, net   349   398   696   814
Net loss $ (27,787 ) $ (28,018 ) $ (55,706 ) $ (53,492 )
Net loss per share attributable to common stockholders, basic and
$ (0.68 ) $ (0.69 ) $ (1.37 ) $ (1.32 )
Weighted average common shares outstanding, basic and diluted   40,661,464   40,394,605   40,645,040   40,381,643
Other comprehensive (loss) income:
Unrealized (loss) gain on investments, net of tax of $0   77 $ (25 ) $ 117 $ (27 )
Total other comprehensive (loss) income   77   (25 )   117   (27 )
Comprehensive loss $ (27,710 ) $ (28,043 ) $ (55,589 ) $ (53,519 )

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