Seres Therapeutics, Inc. Q2 FY2024 earnings call

• Announced agreement to sell VOWST assets to Nestle Health Science, expecting close in 90 days, to receive $155M cash, strengthen balance sheet, retire debt, and support pipeline.
• SER-155 in Phase Ib study, expecting clinical data in September from Cohort 2 (placebo-controlled), targeting GI-derived infections in allo-HSCT patients.
• SER-147 for metabolic diseases, including chronic liver disease, with IND readiness expected in H2 2025.
• Pipeline strategy focused on medically vulnerable populations, leveraging live biotherapeutics technology, with potential to address autoimmune diseases like inflammatory bowel disease.

VOWST net sales for the second quarter were $14.4 million, reflecting approximately 43% growth over the first quarter. Research and development expenses for the second quarter were $17.9 million, down from $46.8 million in the same period in 2023, primarily due to VOWST commercial manufacturing costs no longer being recognized in Seres' P&L. General and administrative expenses were $16.1 million, reduced from $28.1 million in the same period in 2023. The company reported a net loss of $32.9 million for the second quarter of 2024 compared to net income of $46.6 million in the same period in 2023.

• VOWST asset sale expected to close in next 90 days, providing $155M cash, extending cash runway into Q4 2025.
• Anticipate SER-155 Cohort 2 data in September, which could highlight opportunities in SER-155 and adjacent indications.
• SER-147 has IND readiness expected in H2 2025.

• Technical issues with call access mentioned initially.
• Uncertainty around clinical trial results for SER-155 Cohort 2.
• Dependence on successful execution of pipeline development and commercialization of SER-155 and SER-147.

Q: What signal or signals are specifically looking for in cohort 2 for SER-155 around these key secondary endpoints?

A: Safety, neutropenia/fever rates, bloodstream infections, acute GvHD; consistency of findings.

Q: Could SER-155 help with challenges in CAR T therapy?

A: Yes, potential for infectious complications and immunologic issues, aligns with trial's mechanistic basis.

Q: How is pipeline prioritized post-VOWST?

A: Data-driven, focusing on unmet needs, technology advantage, and commercial opportunity; SER-155 and SER-147 prioritized.

Q: Profit sharing post-VOWST deal?

A: Post-close, profit on inventory transfer will stop, only product profit/loss sharing remains, with estimates provided.