Seres Therapeutics, Inc. Q3 FY2024 earnings call

• Positive SER-155 Phase Ib Cohort 2 clinical results were reported, showing potential to reduce bacterial bloodstream infections in allo-HSCT patients.
• Sale of VOWST strengthened the balance sheet and provided resources to support SER-155 advancement.
• Applied for breakthrough therapy designation and QIDP for SER-155, with anticipation of FDA feedback by end of 2024.
• SER-155 has potential in multiple patient populations beyond allo-HSCT, including autologous HSCT, cancer patients with neutropenia, etc.
• VOWST transaction details: Received $155 million upfront, with future installment payments, and the company retired debt and reduced headcount.
• Quarterly financials: Continuing operations had a net loss, while discontinued operations had a significant net income. Cash position as of Sept 30, 2024 was $66.8 million, with expected funding into Q4 2025.
• Plans to pursue internal clinical development and external partnerships for SER-155 and other programs.

The VOWST business was classified as discontinued operations. In continuing operations, Seres reported a net loss from continuing operations of $51 million for Q3 2024 compared to $41 million in the same period of 2023. Research and development expenses in continuing operations for Q3 2024 were $16.5 million vs $25.2 million in 2023. General and administrative expenses in continuing operations were $12.7 million vs $19.4 million in 2023. Net income from discontinued operations, net of tax, was $139.8 million for Q3 2024 compared to a net loss of $6.8 million in the same period of 2023. The VOWST transaction saw Seres receive $155 million upfront, with additional installment payments expected in 2025, and the company fully retired its debt to Oaktree using proceeds from the transaction.

• Expect to fund operations into the fourth quarter of 2025 based on existing cash, projected installment payments, and current plans.
• Evaluate opportunities to maximize value creation for live biotherapeutic programs, including potential internal and externally supported efforts.

Actual results may differ materially from forward-looking statements as mentioned in the call regarding forward-looking statements made.

Q: Could you provide more color on the profile of an ideal potential partner for SER-155 and potential partnership terms?

A: Look for capital and capabilities to accelerate SER-155, alignment of values, and will work through partnership process while awaiting FDA responses. No specific internal time frame given, and focused on moving forward with partnership.

Q: How do you see Seres three to five years down the road with multiple targeted programs?

A: Aspire to be like legacy biotech companies with discovery, development, manufacturing, and commercialization, but currently focused on driving shareholder value through R&D side, with potential for commercial footprint in targeted patient populations.

Q: About clinical study design for SER-155 adjacencies and composition differences between SER-147 and SER-155?

A: Clinical study design for adjacencies may involve basket studies or specific arms, leveraging safety established in allo-HSCT population. SER-155 and SER-147 have different bacterial consortia; SER-155 targets pathogens in hematic stem cell transplant patients, SER-147 targets those in chronic liver disease patients with distinct environmental conditions in GI track.