Eric Shaff Chief Executive Officer Jefferies Virtual Healthcare Conference June 1, 2021 2 Forward Looking Statements Some of the statements in this presentation constitute "forward looking statements" under the Private Securities Litigation Reform Act of 1995, including, but not limited to, our development plans, the promise and potential impact of any of our microbiome therapeutics, the ability of our clinical trials to support approval, the timing and results of clinical studies, the timing and ultimate r ...

Corporate Overview May 2021 2 Forward Looking Statements Some of the statements in this presentation constitute "forward looking statements" under the Private Securities Litigation Reform Act of 1995, including, but not limited to, our development plans, the promise and potential impact of any of our microbiome therapeutics, the ability of our clinical trials to support approval, the timing and results of clinical studies, the timing and ultimate results of the SER- 109 safety data, the size of the market f ...

Seres Therapeutics, Inc. (NASDAQ:MCRB) Q1 2021 Earnings Conference Call May 4, 2021 8:30 AM ET Company Participants Carlo Tanzi - Investor Relations Eric Shaff - Chief Executive Officer Lisa von Moltke - Chief Medical Officer Matthew Henn - Chief Scientific Officer David Ege - Chief Technology Officer Terri Young - Chief Commercial & Strategy Officer Conference Call Participants Mark Breidenbach - Oppenheimer Joe Thome - Cowen and Company Ted Tenthoff - Piper Sandler Chris Howerton - Jefferies Terence Flynn ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from to Commission file number: 001-37465 Seres Therapeutics, Inc. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 Washington, D.C. 20549 FORM 10-Q | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | ...

Eric Shaff Chief Executive Officer 31st Annual Oppenheimer Healthcare Conference March 16, 2021 2 Forward Looking Statements Some of the statements in this presentation constitute "forward looking statements" under the Private Securities Litigation Reform Act of 1995, including, but not limited to, our development plans, the promise and potential impact of any of our microbiome therapeutics, the ability of our clinical trials to support approval, the timing and results of clinical studies, the timing and ul ...

Seres Therapeutics Corporate Overview March 2, 2021 Forward looking statements Some of the statements in this presentation constitute "forward looking statements" under the Private Securities Litigation Reform Act of 1995, including, but not limited to, our development plans, the promise and potential impact of any of our microbiome therapeutics, the ability of our clinical trials to support approval, the timing of clinical studies, the timing and ultimate results of the SER-109 safety data, the size of the ...

Seres Therapeutics, Inc. (NASDAQ:MCRB) Q4 2020 Earnings Conference Call March 2, 2021 8:30 AM ET Company Participants Carlo Tanzi - IR Eric Shaff - President and CEO Lisa von Moltke - Chief Medical Officer Matthew Henn - Chief Scientific Officer Terri Young - Chief Commercial and Strategy Officer David Ege - Chief Technology Officer Conference Call Participants Ted Tenthoff - Piper Sandler Joseph Thome - Cowen & Company Mark Breidenbach - Oppenheimer Terence Flynn - Goldman Sachs Chris Howerton - Jefferies ...

PART I. Preliminary Information [Business](index=5&type=section&id=Item%201.%20Business) Seres Therapeutics develops live biotherapeutic drugs, focusing on SER-109 for recurrent CDI, with other clinical programs and in-house GMP manufacturing - Company is a microbiome therapeutics company developing novel live biotherapeutic drugs[23](index=23&type=chunk) - Lead candidate **SER-109** for recurrent CDI successfully completed a Phase 3 clinical study and is preparing for BLA submission[24](index=24&type=chunk)[25](index=25&type=chunk) - Other clinical programs include **SER-287** and **SER-301** for ulcerative colitis, **SER-401** for metastatic melanoma, and **SER-155** for immunocompromised patients[24](index=24&type=chunk) - The company's strategy focuses on gaining FDA approval for **SER-109**, advancing its clinical pipeline, and enhancing its microbiome drug discovery, development, and manufacturing platforms[41](index=41&type=chunk)[45](index=45&type=chunk) - The company has in-house **cGMP manufacturing capabilities** for live biotherapeutic drugs, covering fermentation, purification, and formulation[51](index=51&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Overview](index=5&type=section&id=Overview) Seres Therapeutics is a microbiome therapeutics company focused on developing live biotherapeutic drugs, with SER-109 as its lead candidate - **SER-109**, the lead clinical candidate, successfully completed a Phase 3 study for recurrent CDI and is designed to rapidly modulate the gastrointestinal microbiome[25](index=25&type=chunk) - Phase 3 ECOSPOR III study showed **SER-109** administration resulted in a highly statistically significant absolute decrease of **30.2%** in CDI recurrence within eight weeks versus placebo (**11.1% vs. 41.3%**)[27](index=27&type=chunk) - The study's efficacy results exceeded the statistical threshold for a single clinical study to fulfill BLA efficacy requirements, and safety results were favorable[28](index=28&type=chunk)[29](index=29&type=chunk) - **SER-287** (ulcerative colitis) is in a Phase 2b clinical trial with top-line results anticipated in mid-2021[30](index=30&type=chunk) - **SER-301** (ulcerative colitis) initiated a Phase 1b study in November 2020 in Australia and New Zealand[34](index=34&type=chunk) - **SER-155** (immunocompromised patients) is advancing into clinical development, expected in the first half of 2021, supported by CARB-X grants[36](index=36&type=chunk) - **SER-401** (metastatic melanoma) is in a Phase 1b clinical study to augment anti-PD-1 checkpoint inhibitor therapy[37](index=37&type=chunk) [Our Strategy](index=7&type=section&id=Our%20Strategy) The company's strategy is to lead in microbiome therapeutics by securing FDA approval for SER-109 and advancing its clinical pipeline - Goal is to remain the leading biopharmaceutical company developing and commercializing microbiome therapeutics[41](index=41&type=chunk) - Near-term focus on gaining FDA approval for **SER-109** for recurrent CDI and advancing its commercialization[41](index=41&type=chunk)[42](index=42&type=chunk) - Continuing clinical development of **SER-287** for UC, **SER-301** for IBD, **SER-155** for immunocompromised patients, and **SER-401** for solid tumors with checkpoint inhibitors[45](index=45&type=chunk) - Leveraging its reverse translation microbiome therapeutics platform to develop additional innovative candidates[45](index=45&type=chunk) - Developing manufacturing capabilities sufficient to support commercialization of approved microbiome therapeutic candidates[45](index=45&type=chunk) [Our Microbiome Therapeutics Platform](index=8&type=section&id=Our%20Microbiome%20Therapeutics%20Platform) The company's platform uses a reverse translational discovery approach, leveraging human clinical data and in-house cGMP manufacturing - Utilizes a reverse translational discovery platform incorporating microbiome biomarkers from human clinical data and preclinical assessments[45](index=45&type=chunk)[46](index=46&type=chunk) - Employs proprietary assays, bioinformatics, and computational tools to integrate high-resolution genomic, metagenomic, metabolomic, and transcriptomic data[48](index=48&type=chunk) - Maintains a proprietary strain library of bacterial isolates from healthy donors and patients for drug design[49](index=49&type=chunk) - Possesses in-house **cGMP manufacturing capabilities**, including optimized fermentation, formulation, and quality control for spores and live non-spore bacteria[51](index=51&type=chunk) [Disease Overview and Our Product Pipeline](index=9&type=section&id=Disease%20Overview%20and%20Our%20Product%20Pipeline) The company's pipeline focuses on recurrent CDI with SER-109, ulcerative colitis with SER-287/SER-301, and cancer immunotherapy with SER-401 - **SER-109** is the most advanced program, having successfully completed a Phase 3 study for recurrent CDI and received Breakthrough Therapy and Orphan Drug designations[54](index=54&type=chunk) - **SER-287** is in a Phase 2 study for ulcerative colitis and has received Orphan Drug designation for pediatric UC[55](index=55&type=chunk) - **SER-301** is a microbiome therapeutic candidate for UC, and **SER-401** is being designed for combination therapy with immune checkpoint inhibitors in cancer[55](index=55&type=chunk) - **SER-155** is advancing into clinical development for immunocompromised patients[55](index=55&type=chunk) - Early-stage research is also being conducted on potential microbiome therapeutic candidates for metabolic disorders[55](index=55&type=chunk) [CDI Overview and SER-109](index=10&type=section&id=CDI%20Overview%20and%20SER-109) CDI is a severe, recurrent gastrointestinal infection with high recurrence rates, for which SER-109 shows significant efficacy - *Clostridioides difficile* infection (CDI) is a leading cause of healthcare-associated infections in the US, responsible for over **20,000 deaths annually**, with approximately **170,000 incidences of recurrent CDI** each year[58](index=58&type=chunk) - Current antibiotic treatments for CDI may exacerbate microbiome disruption and do not eliminate *C. difficile* spores, leading to high recurrence rates (approximately **25%** after primary CDI, increasing to **>40%** after a first recurrence)[59](index=59&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - Fecal microbiota transplantation (FMT) is an unapproved procedure with challenges related to pathogen transmission, lack of standardization, and scalability[63](index=63&type=chunk)[64](index=64&type=chunk) - **SER-109** is an oral microbiome therapeutic candidate consisting of highly purified Firmicute spores, designed to prevent recurrent CDI by restructuring the disrupted microbiome[66](index=66&type=chunk) - The pivotal Phase 3 ECOSPOR III study showed **SER-109** administration resulted in a highly statistically significant absolute decrease of **30.2%** in CDI recurrence within eight weeks versus placebo (**11.1% vs. 41.3%**)[67](index=67&type=chunk) - **SER-109** demonstrated a favorable safety profile comparable to placebo and induced rapid and durable engraftment of bacterial species, leading to a significant decrease in primary bile acids and an increase in secondary bile acids[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - **SER-109** manufacturing involves purification from healthy screened donor stool, with a process designed to remove unwanted microbes and ensure identity, potency, and purity[82](index=82&type=chunk)[84](index=84&type=chunk) [Ulcerative Colitis, SER-287 and SER-301](index=14&type=section&id=Ulcerative%20Colitis,%20SER-287%20and%20SER-301) Ulcerative Colitis is a chronic inflammatory disorder with unmet needs, addressed by SER-287 (Phase 2b) and SER-301 (Phase 1b) - Ulcerative Colitis (UC) is a chronic inflammatory disorder affecting the colon, with a prevalence of **263 per 100,000 adults** in the United States, characterized by symptoms like bloody diarrhea and abdominal pain[86](index=86&type=chunk)[87](index=87&type=chunk) - Current UC therapies often suppress the immune system with significant side effects, leaving an unmet need for safer, non-immunosuppressive agents[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - **SER-287**, an oral microbiome therapeutic, is designed to normalize the gastrointestinal microbiome in UC patients[96](index=96&type=chunk) - Phase 1b clinical study results for **SER-287** showed a statistically significant improvement in clinical remission (**40% vs. 0% placebo**) in the vancomycin pre-conditioning/SER-287 daily dosing arm[104](index=104&type=chunk) - The Phase 1b study also demonstrated dose-dependent engraftment of **SER-287**-derived bacterial species, particularly with vancomycin pre-conditioning, and a favorable safety profile[110](index=110&type=chunk)[113](index=113&type=chunk) - A Phase 2b (ECO-RESET) study for **SER-287** is ongoing and, if positive, could serve as one of two pivotal trials for BLA submission[96](index=96&type=chunk)[115](index=115&type=chunk) - **SER-301**, a next-generation cultivated bacterial consortium, is in Phase 1b development for UC, designed to reduce pro-inflammatory activity and improve epithelial barrier integrity[116](index=116&type=chunk)[117](index=117&type=chunk) [Other Programs](index=18&type=section&id=Other%20Programs) The company is developing SER-155 for immunocompromised patients and SER-401 for metastatic melanoma to augment anti-PD-1 therapy - **SER-155** is an oral microbiome therapeutic candidate designed to prevent mortality due to gastrointestinal infections, bacteremia, and GvHD in immunocompromised patients[118](index=118&type=chunk) - Clinical development for **SER-155** is expected to initiate in the first half of 2021, supported by competitive grants from CARB-X totaling up to **$11.8 million**[118](index=118&type=chunk) - **SER-401** is an oral microbiome therapeutic candidate in a Phase 1b clinical study to evaluate its potential to augment anti-PD-1 checkpoint inhibitor therapy in metastatic melanoma patients[119](index=119&type=chunk)[120](index=120&type=chunk) - The **SER-401** study's primary endpoints are safety and tolerability, with secondary endpoints evaluating the correlation of microbiome biomarkers to clinical and immunological outcomes[120](index=120&type=chunk) - The COVID-19 pandemic continues to impact the timing of the **SER-401** Phase 1b clinical readout[121](index=121&type=chunk) [Sales and Marketing](index=20&type=section&id=Sales%20and%20Marketing) The company plans to commercialize SER-109 in the US and Canada with a specialty sales force, while Nestlé holds ex-US/Canada rights - If **SER-109** is approved in the United States and Canada, the company plans to commercialize it with a focused specialty sales force targeting gastrointestinal and infectious disease physicians[123](index=123&type=chunk) - Commercial readiness activities include market assessments, publication planning, stakeholder mapping, brand name selection, and payer/reimbursement strategic planning[123](index=123&type=chunk) - An agreement with Nestlé grants exclusive rights for development and commercialization of CDI and IBD product candidates outside the United States and Canada, providing financial support for R&D[124](index=124&type=chunk) [Manufacturing](index=20&type=section&id=Manufacturing) The company specializes in cGMP manufacturing of live bacterial products, operating an in-house facility for clinical supplies - Production of live bacterial products, especially spore-forming organisms, is highly specialized and subject to **cGMP regulations**[126](index=126&type=chunk) - The company has developed supply chains and processes for fermentation, purification, and formulation, designed to be scalable and transferable to a **cGMP environment**[127](index=127&type=chunk) - It utilizes proprietary microbiological and sequence-based testing schemes for quality control, assessing identity, potency, and purity of product candidates[128](index=128&type=chunk) - The company operates a **10,000 square foot cGMP manufacturing facility** in Cambridge, Massachusetts, for early-phase and small-scale clinical supplies, with plans for future expansion for commercial supply[128](index=128&type=chunk) [Material Agreements](index=21&type=section&id=Material%20Agreements) The company has key collaboration agreements with Nestlé (potential $1.9 billion) and a terminated agreement with AstraZeneca, plus a loan with Hercules - Collaboration and License Agreement with Nestlé for development and commercialization of CDI and IBD product candidates (**SER-109, SER-262, SER-287, SER-301**) outside the US and Canada[130](index=130&type=chunk)[131](index=131&type=chunk) - Under the Nestlé agreement, the company received an upfront payment of **$120.0 million** and is eligible for up to **$285.0 million** in development milestones, **$375.0 million** in regulatory payments, and **$1.125 billion** in commercial milestones (total potential over **$1.9 billion**)[132](index=132&type=chunk) - To date, **$80.0 million** in development milestones have been received from Nestlé[134](index=134&type=chunk) - Research Collaboration and Option Agreement with AstraZeneca for cancer immunotherapy research, which included **$20.0 million** in payments to the company[135](index=135&type=chunk) - AstraZeneca terminated the Research Agreement, effective April 2, 2021[136](index=136&type=chunk) - Loan and Security Agreement with Hercules for a term loan facility of up to **$50.0 million**; **$25.0 million** was received, but the second tranche of **$12.5 million** was not met[137](index=137&type=chunk) [Intellectual Property](index=22&type=section&id=Intellectual%20Property) The company protects its technology through patents and trade secrets, with SER-109 and SER-287 protection extending through 2033 - The company protects its proprietary technology through patents covering product candidates, methods of use, and manufacturing processes, and relies on trade secrets[139](index=139&type=chunk)[140](index=140&type=chunk)[147](index=147&type=chunk) - The patent portfolio includes **23 active patent application families**, **14 issued U.S. patents**, and **2 allowed U.S. patent applications**[143](index=143&type=chunk)[340](index=340&type=chunk) - Intellectual property rights related to **SER-109** and **SER-287** extend through **2033**[462](index=462&type=chunk) - The patent prosecution process is expensive, time-consuming, and uncertain, with risks from challenges to validity, inventorship, and enforceability[141](index=141&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk) - Changes in U.S. patent law, such as the Leahy-Smith America Invents Act and Supreme Court rulings, could diminish the value and scope of patent protection[348](index=348&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk) [Competition](index=23&type=section&id=Competition) The biopharmaceutical industry is highly competitive, with numerous companies and institutions vying for market share and product success - The development and commercialization of new drug and biologic products is highly competitive, characterized by rapid technological development and product innovations[149](index=149&type=chunk) - Competitors include major pharmaceutical, specialty pharmaceutical, and biotechnology companies, as well as academic institutions and research organizations, many with significantly greater resources[149](index=149&type=chunk)[150](index=150&type=chunk) - Key competitive factors for product success include efficacy, safety, convenience, price, and the availability of reimbursement[152](index=152&type=chunk) - Commercial opportunity could be reduced if competitors develop more effective, safer, convenient, or less expensive products, or obtain regulatory approval more rapidly[153](index=153&type=chunk) [Government Regulation](index=23&type=section&id=Government%20Regulation) The company's products are extensively regulated by the FDA and global authorities, requiring lengthy approval processes and ongoing compliance - The FDA and other regulatory authorities extensively regulate the research, development, testing, manufacture, and commercialization of the company's biologic product candidates[155](index=155&type=chunk)[157](index=157&type=chunk) - The regulatory approval process involves preclinical studies (GLP), IND submission, and extensive human clinical trials (Phase 1, 2, 3) conducted under GCP[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - Expedited programs like Fast Track and Breakthrough Therapy designations can facilitate development and review but do not guarantee faster approval or increased likelihood of marketing approval[171](index=171&type=chunk)[175](index=175&type=chunk)[268](index=268&type=chunk)[270](index=270&type=chunk) - Post-approval, products are subject to continuous regulation, including cGMP compliance, adverse event reporting, and restrictions on advertising and promotion[176](index=176&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) - The Biologics Price Competition and Innovation Act (BPCIA) in the US provides **12 years of market exclusivity** for reference biological products, while the EU offers **10 years** for new molecular entities[182](index=182&type=chunk)[196](index=196&type=chunk) - Orphan Drug designation provides incentives and marketing exclusivity (**7 years in US, 10 years in EU**) but does not shorten development or guarantee approval[184](index=184&type=chunk)[185](index=185&type=chunk)[198](index=198&type=chunk) - The company is subject to various healthcare laws, including the federal Anti-Kickback Statute, False Claims Act, HIPAA, and Physician Payments Sunshine Act, which restrict business practices[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[322](index=322&type=chunk) - Significant uncertainty exists regarding coverage and reimbursement policies from third-party payors, and evolving healthcare reforms (e.g., ACA) could impact pricing and profitability[213](index=213&type=chunk)[217](index=217&type=chunk)[303](index=303&type=chunk)[306](index=306&type=chunk)[326](index=326&type=chunk) - Data privacy and security laws (HIPAA, CCPA, CPRA, GDPR) impose increasing compliance obligations and risks for handling health-related and personal information[220](index=220&type=chunk)[221](index=221&type=chunk)[324](index=324&type=chunk) [Human Capital](index=34&type=section&id=Human%20Capital) As of December 31, 2020, the company had 155 employees, focusing on attracting and retaining talent through competitive compensation and fostering diversity - As of December 31, 2020, the company had **155 full-time permanent employees**, with **130** in research and development[223](index=223&type=chunk) - Future success depends on the ability to attract, retain, and motivate qualified personnel, offering a total rewards package including base salary, cash bonus, equity compensation, and benefits[224](index=224&type=chunk)[377](index=377&type=chunk) - The company is committed to diversity, inclusion, and belonging, focusing on building diverse teams, attracting diverse talent, and supporting employee growth and development[225](index=225&type=chunk) [COVID-19 Pandemic](index=35&type=section&id=COVID-19%20Pandemic) The company activated a task force in March 2020 to manage COVID-19 risks, implementing remote work and monitoring impacts on operations - Activated a task force in March 2020 to assess, mitigate, and manage COVID-19 risks, including safeguarding facilities and ensuring employee safety[226](index=226&type=chunk) - Implemented remote working arrangements for non-essential employees and suspended non-essential travel, which have not significantly affected critical business operations to date[226](index=226&type=chunk) - Continues to monitor the impact of the COVID-19 pandemic on company operations and ongoing clinical development activity, with timing of clinical readouts remaining uncertain[226](index=226&type=chunk) [Our Corporate Information](index=35&type=section&id=Our%20Corporate%20Information) Seres Therapeutics, Inc. was incorporated in Delaware in 2010, with principal offices in Cambridge, Massachusetts, and files reports with the SEC - Incorporated in Delaware in 2010 as Newco LS21, Inc., changing to Seres Health, Inc. in 2011 and Seres Therapeutics, Inc. in 2015[228](index=228&type=chunk) - Principal executive offices are located at 200 Sidney Street, Cambridge, Massachusetts 02139[228](index=228&type=chunk) - Subject to informational requirements of the Securities Exchange Act of 1934 and files reports with the SEC, which are available on its website[229](index=229&type=chunk)[230](index=230&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, development, regulatory, commercial, intellectual property, and operational risks, requiring substantial funding - The company is a development-stage company with significant accumulated losses (**$548.8 million** as of December 31, 2020) and expects to incur losses for the foreseeable future, requiring additional funding[234](index=234&type=chunk)[238](index=238&type=chunk)[444](index=444&type=chunk) - Clinical drug development is a risky, lengthy, and expensive process with uncertain outcomes, and product candidates based on microbiome therapeutics represent an unproven approach[248](index=248&type=chunk)[251](index=251&type=chunk) - Delays or difficulties in patient enrollment in clinical trials could delay or prevent necessary regulatory approvals[255](index=255&type=chunk)[257](index=257&type=chunk) - Reliance on third parties for clinical trials and manufacturing increases risks of unsatisfactory performance, delays, or insufficient supply[281](index=281&type=chunk)[285](index=285&type=chunk) - Even if approved, product candidates may fail to achieve market acceptance due to competition, pricing, or reimbursement challenges[293](index=293&type=chunk)[299](index=299&type=chunk)[303](index=303&type=chunk) - Inability to adequately protect proprietary technology or obtain and maintain issued patents could allow competitors to compete more directly[336](index=336&type=chunk)[340](index=340&type=chunk) - The COVID-19 pandemic has adversely impacted and could continue to impact business operations, preclinical studies, and clinical trials, leading to potential delays and increased costs[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) - The company is subject to complex and evolving healthcare laws and regulations (e.g., anti-kickback, false claims, data privacy), non-compliance with which could result in significant penalties[322](index=322&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) [Unresolved Staff Comments](index=69&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments for this item - No unresolved staff comments[416](index=416&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) The company's corporate headquarters, including office, laboratory, and pilot manufacturing space, is located in Cambridge, Massachusetts, under a lease expiring in November 2023 - Corporate headquarters in Cambridge, Massachusetts, comprising approximately **83,396 square feet** of office, laboratory, and pilot manufacturing space[418](index=418&type=chunk) - The current lease for the Cambridge facilities expires in November 2023[418](index=418&type=chunk) - Conducts part of its manufacturing operations for clinical products in its leased facilities[420](index=420&type=chunk) - Plans to control the production of all products under current good manufacturing practices (cGMP) through strategic investments, including potential expansion or construction of new facilities for commercial supply[421](index=421&type=chunk) [Legal Proceedings](index=69&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in an opposition proceeding at the European Patent Office, challenging a patent granted to The University of Tokyo - Filed a notice of opposition in the European Patent Office on April 25, 2017, challenging the validity of European Patent No. 2 575 835 B1 granted to The University of Tokyo[422](index=422&type=chunk) - The Opposition Division required The University of Tokyo to narrow the scope of the patent claims, and both The University of Tokyo and other opponents (including the company) have appealed certain aspects of this decision[422](index=422&type=chunk) [Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported that this item is not applicable - Not applicable[423](index=423&type=chunk) PART II. Financial Information [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock (MCRB) trades on Nasdaq, with no cash dividends paid or anticipated due to debt restrictions - Common stock has been publicly traded on The Nasdaq Global Select Market under the symbol "**MCRB**" since June 26, 2015[427](index=427&type=chunk) - As of February 24, 2021, there were approximately **11 holders of record** of the company's common stock[431](index=431&type=chunk) - The company has not paid any cash dividends on its common stock since inception and does not anticipate paying cash dividends in the foreseeable future[433](index=433&type=chunk) - The loan and security agreement with Hercules Capital currently prohibits the company from paying dividends on its equity securities[433](index=433&type=chunk) - No sales of unregistered securities or repurchases of shares of common stock were made during the quarter ended December 31, 2020[435](index=435&type=chunk)[436](index=436&type=chunk) [Selected Financial Data](index=71&type=section&id=Item%206.%20Selected%20Financial%20Data) The company reported that this item is not applicable - Not applicable[437](index=437&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews financial condition, operations, revenue, expenses, net losses, liquidity, capital, COVID-19 impact, and critical accounting policies - The company is a microbiome therapeutics company with an advanced drug pipeline, focusing on **SER-109** for CDI and other clinical programs[441](index=441&type=chunk)[442](index=442&type=chunk) Net Loss and Accumulated Deficit | Metric | 2020 (in thousands) | 2019 (in thousands) | 2018 (in thousands) | | :------------------ | :------------------ | :------------------ | :------------------ | | Net Loss | $(89,127) | $(70,279) | $(98,942) | | Accumulated Deficit (as of Dec 31) | $(548,776) | $(459,649) | $(389,370) | - As of December 31, 2020, the company had **$303.4 million** in cash, cash equivalents, and short- and long-term investments, which are believed to be sufficient to fund operations for at least the next 12 months[444](index=444&type=chunk)[516](index=516&type=chunk) - The company will need additional financing to support its continuing operations beyond the next 12 months[460](index=460&type=chunk)[512](index=512&type=chunk)[543](index=543&type=chunk)[544](index=544&type=chunk) - The COVID-19 pandemic has impacted and could continue to impact the company's business, preclinical studies, and clinical trials, leading to uncertainty in future results[446](index=446&type=chunk)[447](index=447&type=chunk)[458](index=458&type=chunk)[546](index=546&type=chunk) - The company's intellectual property portfolio includes patents for rationally designed ecologies of spores and microbes, with regulatory exclusivity expected for approved biological products[462](index=462&type=chunk)[463](index=463&type=chunk) - Critical accounting policies include revenue recognition (ASC 606, cost-to-cost method for collaboration revenue) and accrued research and development expenses, both requiring significant judgment and estimates[479](index=479&type=chunk)[480](index=480&type=chunk)[483](index=483&type=chunk)[484](index=484&type=chunk)[487](index=487&type=chunk)[491](index=491&type=chunk)[495](index=495&type=chunk) [Overview](index=74&type=section&id=Overview) Seres Therapeutics is a microbiome therapeutics company with a pipeline including late-stage clinical assets, focusing on SER-109 BLA submission - The company's highest priority is preparing the **SER-109 BLA** for submission to the FDA, following positive topline results from the pivotal Phase 3 ECOSPOR III study for recurrent CDI[442](index=442&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) - Other clinical programs include **SER-287** (Phase 2b for UC, top-line results mid-2021), **SER-301** (Phase 1b for UC, initiated Nov 2020), **SER-155** (clinical development expected H1 2021), and **SER-401** (Phase 1b for metastatic melanoma)[442](index=442&type=chunk)[451](index=451&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk)[454](index=454&type=chunk)[455](index=455&type=chunk)[457](index=457&type=chunk) Key Financials | Metric | Dec 31, 2020 (in thousands) | | :-------------------------- | :------------- | | Net Loss | $(89,127) | | Accumulated Deficit | $(548,776) | | Cash, Cash Equivalents & Investments | $303,441 | - Recent financing activities in August 2020 included a public offering yielding **$243.7 million** and a concurrent placement with Nestlé yielding **$19.9 million**[445](index=445&type=chunk)[446](index=446&type=chunk) - The COVID-19 pandemic has caused modifications to business practices and continues to pose risks to operations and clinical development activities[446](index=446&type=chunk)[447](index=447&type=chunk)[458](index=458&type=chunk) [Intellectual Property](index=77&type=section&id=Intellectual%20Property) The company possesses an extensive patent portfolio covering rationally designed ecologies of spores and microbes, with protection for SER-109 and SER-287 extending through 2033 - The company has an extensive patent portfolio covering rationally designed ecologies of spores and microbes, including composition of matter and methods of treatment[462](index=462&type=chunk) - Intellectual property rights related to **SER-109** and **SER-287** extend through **2033**[462](index=462&type=chunk) - The portfolio includes **23 active patent application families**, **14 issued U.S. patents**, and **2 allowed U.S. patent applications**[462](index=462&type=chunk) - If marketing approval is obtained for product candidates, the company expects to receive **12-year marketing exclusivity** in the United States and **10 years** in Europe for new biological compositions[463](index=463&type=chunk) [Financial Operations Overview](index=78&type=section&id=Financial%20Operations%20Overview) The company relies on collaboration agreements for revenue, with increasing R&D and G&A expenses contributing to net losses - Revenue has been derived primarily from collaboration agreements, with no product sales to date[465](index=465&type=chunk) Research and Development Expenses | Program | 2020 (in thousands) | 2019 (in thousands) | Change (2020 vs 2019, in thousands) | | :-------------------------- | :----- | :----- | :-------------------- | | Microbiome therapeutics platform | $53,961 | $50,307 | +$3,654 | | SER-109 | $14,939 | $10,281 | +$4,658 | | SER-287 | $16,347 | $17,398 | $(1,051) | | Early stage programs | $5,323 | $2,155 | +$3,168 | | **Total R&D Expenses** | **$90,570** | **$80,141** | **+$10,429** | General and Administrative Expenses | Category | 2020 (in thousands) | 2019 (in thousands) | Change (2020 vs 2019, in thousands) | | :------------------------------------ | :----- | :----- | :-------------------- | | Personnel related (incl. stock-based comp) | $11,078 | $9,586 | +$1,492 | | Professional fees | $13,781 | $9,279 | +$4,502 | | Facility-related and other | $5,916 | $5,883 | +$33 | | **Total G&A Expenses** | **$30,775** | **$24,748** | **+$6,027** | - A corporate restructuring in February 2019 focused resources on clinical-stage therapeutic candidates and reduced headcount by approximately **30 percent**, incurring **$1.5 million** in restructuring expenses in 2019[473](index=473&type=chunk)[502](index=502&type=chunk)[508](index=508&type=chunk) - Other (expense) income, net, shifted from **$1.6 million income** in 2019 to **$1.0 million expense** in 2020, primarily due to **$2.9 million** in interest expense from the Hercules term loan[503](index=503&type=chunk) - The company has not recorded U.S. federal or state income tax benefits due to net losses and uncertainty of realizing a benefit, with significant net operating loss and R&D tax credit carryforwards[477](index=477&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=79&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) The company's financial statements require significant estimates for revenue recognition (ASC 606) and accrued R&D expenses, with COVID-19 adding uncertainty - Significant estimates and assumptions are required for revenue recognition and the accrual of research and development expenses[479](index=479&type=chunk) - Revenue is recognized under **ASC 606** using a five-step model, which involves identifying performance obligations (often combined licenses and R&D services) and determining the transaction price, including variable consideration like milestone payments[480](index=480&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk) - Revenue for combined performance obligations is generally recognized over time using a cost-based input method[484](index=484&type=chunk)[488](index=488&type=chunk) - Accruals for research and development expenses are estimated based on the progress of studies, invoices received, and contracted costs with third-party vendors and clinical sites[495](index=495&type=chunk) - The COVID-19 pandemic introduces additional uncertainty to these estimates, with potential changes in future periods[655](index=655&type=chunk) [Results of Operations](index=82&type=section&id=Results%20of%20Operations) The company's 2020 financial performance shows a slight revenue decrease, increased operating expenses, and a higher net loss Total Revenue | Year | Amount (in thousands) | | :--- | :----- | | 2020 | $33,215 | | 2019 | $34,505 | | 2018 | $28,267 | - Total revenue decreased by **$1.3 million** in 2020, primarily due to a **$15.3 million decrease** in Nestlé collaboration revenue (driven by increased estimated costs for SER-109/SER-287) partially offset by a **$10.9 million increase** in AstraZeneca collaboration revenue (due to termination) and a **$3.1 million increase** in grant revenue[498](index=498&type=chunk) Research and Development Expenses | Year | Amount (in thousands) | | :--- | :----- | | 2020 | $90,570 | | 2019 | $80,141 | | 2018 | $95,955 | - Research and development expenses increased by **$10.4 million** in 2020, driven by increases in microbiome therapeutics platform expenses (**+$3.7M**), **SER-109** program expenses (**+$4.7M**), and early-stage programs (**+$3.2M**), partially offset by a decrease in **SER-287** program expenses (**-$1.1M**)[499](index=499&type=chunk) General and Administrative Expenses | Year | Amount (in thousands) | | :--- | :----- | | 2020 | $30,775 | | 2019 | $24,748 | | 2018 | $32,596 | - General and administrative expenses increased by **$6.0 million** in 2020, primarily due to higher personnel-related costs (**+$1.5M**) and professional fees (**+$4.5M**, including SER-109 commercial readiness)[502](index=502&type=chunk) Net Loss | Year | Amount (in thousands) | | :--- | :----- | | 2020 | $(89,127) | | 2019 | $(70,279) | | 2018 | $(98,942) | - Net loss increased by **$18.8 million** in 2020 compared to 2019, largely due to increased operating expenses and a **$2.4 million increase** in interest expense from the Hercules term loan[497](index=497&type=chunk)[503](index=503&type=chunk) [Liquidity and Capital Resources](index=86&type=section&id=Liquidity%20and%20Capital%20Resources) The company relies on collaborations and financings, with $303.4M in cash as of Dec 31, 2020, projected to fund operations for at least 12 months - The company has incurred recurring net losses since inception and anticipates continued losses, requiring additional capital to fund operations[512](index=512&type=chunk) Cash, Cash Equivalents and Investments | Metric | Dec 31, 2020 (in thousands) | | :------------------------------------ | :------------- | | Cash, Cash Equivalents & Investments | $303,441 | - Management believes existing cash, cash equivalents, and investments are sufficient to fund operating expenses, debt service, and capital expenditures for at least the next **12 months** from the financial statements' issuance date[516](index=516&type=chunk)[547](index=547&type=chunk) - In August 2020, the company completed a public offering, raising **$243.7 million** in net proceeds, and a concurrent placement with Nestlé, raising **$19.9 million** in net proceeds[513](index=513&type=chunk)[514](index=514&type=chunk) - The Nestlé License Agreement has a potential value of over **$1.9 billion** in upfront and milestone payments, with **$80.0 million** in development milestones received to date[517](index=517&type=chunk) - The Hercules Term Loan Facility provides up to **$50.0 million**, with **$25.0 million** drawn and additional tranches subject to approval; it is secured by substantially all assets except intellectual property[524](index=524&type=chunk)[526](index=526&type=chunk) Cash Flows Summary | Activity | 2020 (in thousands) | 2019 (in thousands) | 2018 (in thousands) | | :------------------------------------------ | :----- | :----- | :----- | | Cash used in operating activities | $(93,610) | $(76,520) | $(62,854) | | Cash (used in) provided by investing activities | $(158,891) | $(30,518) | $112,318 | | Cash provided by financing activities | $303,424 | $86,231 | $268 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $50,923 | $(20,807) | $49,732 | Contractual Obligations (as of Dec 31, 2020) | Obligation Type | Total (in thousands) | Less Than 1 Year (in thousands) | 2 - 3 Years (in thousands) | | :---------------------------------------------------- | :------ | :--------------- | :---------- | | Operating lease commitments | $18,009 | $6,461 | $11,548 | | Long-term debt obligation (incl. interest & end of term charge) | $32,296 | $3,395 | $28,901 | | **Total** | **$50,305** | **$9,856** | **$40,449** | [Quantitative and Qualitative Disclosures about Market Risk](index=90&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate risk, but a 10% change in rates is not expected to materially impact its financial position - The company is exposed to market risk related to changes in interest rates[555](index=555&type=chunk) - An immediate **10% change** in market interest rates would not have a material impact on the fair market value of the company's investment portfolio or on its financial position or results of operations, due to the short-term nature of its cash, cash equivalents, and investments[556](index=556&type=chunk) - The Term Loan Facility bears a variable interest rate (greater of Prime Rate + **4.40%** or **9.65%**), but an immediate **10% change** in the Prime Rate would not materially impact the company's debt-related obligations[557](index=557&type=chunk) [Financial Statements and Supplementary Data](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the financial statements and supplementary data appended to the report, with an index provided on page F-1 - The financial statements and supplementary data required are appended to this report[557](index=557&type=chunk) - An index of the financial statements is found on page F-1[557](index=557&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=90&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure - No changes in and disagreements with accountants on accounting and financial disclosure[558](index=558&type=chunk) [Controls and Procedures](index=90&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020[562](index=562&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2020[565](index=565&type=chunk) - The Annual Report on Form 10-K does not include an attestation report on internal control over financial reporting from the registered public accounting firm because the company is a non-accelerated filer[567](index=567&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[569](index=569&type=chunk) [Other Information](index=91&type=section&id=Item%209B.%20Other%20Information) The company reported no other information for this item - None[570](index=570&type=chunk) PART III. Directors and Executive Officers [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section lists the company's directors and executive officers, detailing their experience and the company's adopted Code of Business Conduct and Ethics Board of Directors | Name | Age | Position | | :------------------------ | :-- | :-------------------------------- | | Dennis A. Ausiello, M.D. | 75 | Director | | Grégory Behar | 51 | Director | | Stephen Berenson | 60 | Chairman of the Board of Directors | | Paul R. Biondi | 51 | Director | | Willard H. Dere, M.D. | 67 | Director | | Kurt C. Graves | 53 | Director | | Richard N. Kender | 65 | Director | | Eric D. Shaff | 45 | President, Chief Executive Officer and Director | | Meryl S. Zausner | 64 | Director | Executive Officers | Name | Age | Position | | :------------------ | :-- | :------------------------------------------ | | Eric D. Shaff | 45 | President, Chief Executive Officer and Director | | Marcus Chapman | 50 | Vice President, Finance and Principal Financial and Accounting Officer | | Thomas J. DesRosier | 66 | Executive Vice President and Chief Legal Officer | | David S. Ege, Ph.D. | 46 | Executive Vice President and Chief Technology Officer | | Matthew Henn, Ph.D. | 46 | Executive Vice President and Chief Scientific Officer | | Lisa von Moltke, M.D. | 62 | Executive Vice President and Chief Medical Officer | | Teresa L. Young, Ph.D. | 54 | Executive Vice President, Chief Commercial and Strategy Officer | - The board of directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors, and employees, available on the company's website[597](index=597&type=chunk) [Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) This item's information is incorporated by reference from the Proxy Statement for the 2021 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the registrant's definitive Proxy Statement relating to its 2021 Annual Meeting of Stockholders[601](index=601&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=96&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This item's information is incorporated by reference from the Proxy Statement for the 2021 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the registrant's definitive Proxy Statement relating to its 2021 Annual Meeting of Stockholders[602](index=602&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=96&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) This item's information is incorporated by reference from the Proxy Statement for the 2021 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the registrant's definitive Proxy Statement relating to its 2021 Annual Meeting of Stockholders[603](index=603&type=chunk) [Principal Accountant Fees and Services](index=96&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This item's information is incorporated by reference from the Proxy Statement for the 2021 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the registrant's definitive Proxy Statement relating to its 2021 Annual Meeting of Stockholders[604](index=604&type=chunk) PART IV. Exhibits and Financial Statements [Exhibits and Financial Statement Schedules](index=97&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Annual Report on Form 10-K, including an index to consolidated financial statements - Financial statements are filed as part of this report, with an index on page F-1[606](index=606&type=chunk) - Financial statement schedules are omitted as not required or because the information is provided in the consolidated financial statements or notes[607](index=607&type=chunk) - A list of exhibits is provided, including corporate documents, compensation plans, lease agreements, employment agreements, collaboration agreements, loan agreements, and SEC certifications[609](index=609&type=chunk)[610](index=610&type=chunk) [Form 10-K Summary](index=99&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reported no Form 10-K Summary for this item - None[611](index=611&type=chunk) [SIGNATURES](index=100&type=section&id=SIGNATURES) The report is signed by Eric D. Shaff and Marcus Chapman on behalf of Seres Therapeutics, Inc., along with other directors, on March 2, 2021 - The report is signed by Eric D. Shaff, President, Chief Executive Officer and Director, and Marcus Chapman, Vice President, Finance and Principal Financial and Accounting Officer[615](index=615&type=chunk)[616](index=616&type=chunk) - The signing date for the report is March 2, 2021[615](index=615&type=chunk)[616](index=616&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=104&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on the consolidated financial statements, highlighting accounting principle changes and the need for future financing - PricewaterhouseCoopers LLP issued an unqualified opinion on the consolidated financial statements for the period ended December 31, 2020[621](index=621&type=chunk) - The company changed accounting principles for leases in 2019 and revenues from contracts with customers in 2018[622](index=622&type=chunk) - The report emphasizes the company's requirement for additional financing to fund future operations[626](index=626&type=chunk) - A critical audit matter identified was the significant judgment by management in determining the total estimated costs for the Nestlé Health Science collaboration agreement's revenue recognition[628](index=628&type=chunk)[629](index=629&type=chunk)[630](index=630&type=chunk) [Consolidated Balance Sheets](index=106&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20December%2031,%202020%20and%202019) The consolidated balance sheets present the company's financial position, showing significant increases in assets and equity in 2020 due to financing activities Consolidated Balance Sheet Highlights | Metric | Dec 31, 2020 (in thousands) | Dec 31, 2019 (in thousands) | | :------------------------------------ | :------------- | :------------- | | Cash and cash equivalents | $116,049 | $65,126 | | Short term investments | $137,567 | $29,690 | | Total current assets | $268,777 | $100,189 | | Property and equipment, net | $13,897 | $19,495 | | Long term investments | $49,825 | $0 | | Total assets | $342,940 | $132,440 | | Total current liabilities | $46,415 | $45,993 | | Total liabilities | $168,190 | $180,764 | | Total stockholders' equity (deficit) | $174,750 | $(48,324) | - Total assets increased significantly from **$132.4 million** in 2019 to **$342.9 million** in 2020, primarily driven by an increase in cash, cash equivalents, and investments[635](index=635&type=chunk) - Total stockholders' equity shifted from a deficit of **$(48.3) million** in 2019 to a positive **$174.8 million** in 2020, reflecting successful capital raising efforts[635](index=635&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=107&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20years%20ended%20December%2031,%202020,%202019%20and%202018) The consolidated statements of operations show net losses of $89.1M (2020), $70.3M (2019), and $98.9M (2018), driven by operating expenses Consolidated Statements of Operations and Comprehensive Loss | Metric | 2020 (in thousands) | 2019 (in thousands) | 2018 (in thousands) | | :-------------------------------------------------- | :----- | :----- | :----- | | Total revenue | $33,215 | $34,505 | $28,267 | | Research and development expenses | $90,570 | $80,141 | $95,955 | | General and administrative expenses | $30,775 | $24,748 | $32,596 | | Restructuring expenses | $0 | $1,492 | $0 | | Total operating expenses | $121,345 | $106,381 | $128,551 | | Loss from operations | $(88,130) | $(71,876) | $(100,284) | | Total other (expense) income, net | $(997) | $1,597 | $1,342 | | Net loss | $(89,127) | $(70,279) | $(98,942) | | Net loss per share attributable to common stockholders, basic and diluted | $(1.12) | $(1.24) | $(2.43) | | Weighted average common shares outstanding, basic and diluted | 79,789,220 | 56,649,220 | 40,743,492 | | Comprehensive loss | $(89,174) | $(70,279) | $(98,796) | - Net loss increased to **$89.1 million** in 2020 from **$70.3 million** in 2019, primarily due to higher operating expenses and increased interest expense[637](index=637&type=chunk) - Total revenue slightly decreased in 2020 compared to 2019, while research and development expenses continued to be the largest component of operating expenses[637](index=637&type=chunk) [Consolidated Statements of Stockholders' Equity (Deficit)](index=108&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20as%20of%20December%2031,%202020,%202019%20and%202018) The consolidated statements of stockholders' equity show a significant increase to positive $174.8M in 2020, driven by public offerings and equity issuances Consolidated Statements of Stockholders' Equity (Deficit) | Metric | Dec 31, 2020 (in thousands) | Dec 31, 2019 (in thousands) | Dec 31, 2018 (in thousands) | | :------------------------------------ | :------------- | :------------- | :------------- | | Common Stock Shares | 91,459,239 | 70,143,252 | 40,936,735 | | Common Stock Par Value | $91 | $70 | $41 | | Additional Paid-in Capital | $723,482 | $411,255 | $341,284 | | Accumulated Other Comprehensive Income (Loss) | $(47) | $0 | $0 | | Accumulated Deficit | $(548,776) | $(459,649) | $(389,370) | | **Total Stockholders' Equity (Deficit)** | **$174,750** | **$(48,324)** | **$(48,045)** | - Total stockholders' equity (deficit) significantly increased from a deficit of **$(48.3) million** in 2019 to a positive **$174.8 million** in 2020[639](index=639&type=chunk) - The increase in equity in 2020 was primarily driven by **$243.7 million** from a public offering of common stock, **$19.9 million** from a Securities Purchase Agreement with Nestlé, and **$24.8 million** from an at-the-market equity offering[639](index=639&type=chunk) [Consolidated Statements of Cash Flows](index=109&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20years%20ended%20December%2031,%202020,%202019%20and%202018) The consolidated statements of cash flows show consistent cash usage in operating activities, significant investing outflows, and substantial cash provided by financing activities in 2020 Consolidated Statements of Cash Flows | Activity | 2020 (in thousands) | 2019 (in thousands) | 2018 (in thousands) | | :------------------------------------------ | :----- | :----- | :----- | | Cash used in operating activities | $(93,610) | $(76,520) | $(62,854) | | Cash (used in) provided by investing activities | $(158,891) | $(30,518) | $112,318 | | Cash provided by financing activities | $303,424 | $86,231 | $268 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $50,923 | $(20,807) | $49,732 | | Cash, cash equivalents and restricted cash at end of year | $116,049 | $65,126 | $85,933 | - Operating activities consistently used cash across all three years, with **$93.6 million** used in 2020[641](index=641&type=chunk)[532](index=532&type=chunk) - Investing activities used **$158.9 million** in 2020, primarily for purchases of investments (**$218.3 million**) and property and equipment (**$0.6 million**), partially offset by sales and maturities of investments (**$60.0 million**)[641](index=641&type=chunk)[536](index=536&type=chunk) - Financing activities provided substantial cash in 2020 (**$303.4 million**), mainly from public offerings and other equity issuances, resulting in a net increase of **$50.9 million** in cash and cash equivalents[641](index=641&type=chunk)[539](index=539&type=chunk) [Notes to Consolidated Financial Statements](index=110&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's business, accounting policies, financial position, and the impact of the COVID-19 pandemic - The company is a microbiome therapeutics platform company with product candidates in development, subject to risks common to the biotechnology industry and requiring significant additional financing[643](index=643&type=chunk)[644](index=644&type=chunk) - As of December 31, 2020, the company had an accumulated deficit of **$548.8 million** and expects operating losses and negative cash flows to continue, necessitating additional capital[651](index=651&type=chunk)[652](index=652&type=chunk) - The preparation of financial statements involves significant estimates and assumptions, particularly for revenue recognition and accrued research and development expenses, with additional uncertainty due to the COVID-19 pandemic[654](index=654&type=chunk)[655](index=655&type=chunk) - The company adopted **ASC 606** (Revenue from Contracts with Customers) on January 1, 2018, and **ASC 842** (Leases) on January 1, 2019, using the modified retrospective approach[677](index=677&type=chunk)[704](index=704&type=chunk) Fair Value Measurements as of December 31, 2020 | Asset Type | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :------------------ | :------ | :------ | :------ | :------ | | Money market funds | $35,480 | $0 | $0 | $35,480 | | Commercial paper | $0 | $22,656 | $0 | $22,656 | | Corporate bonds | $0 | $70,303 | $0 | $70,303 | | Certificate of deposits | $0 | $2,272 | $0 | $2,272 | | Government securities | $0 | $104,488 | $0 | $104,488 | | **Total** | **$35,480** | **$199,719** | **$0** | **$235,199** | - The company's collaboration revenue includes amounts from the Nestlé License Agreement (**$11.9 million** in 2020) and the AstraZeneca Research Agreement (**$17.2 million** in 2020, due to termination)[777](index=777&type=chunk)[790](index=790&type=chunk) - As of December 31, 2020, the company had federal and state net operating loss carryforwards of **$390.0 million** and **$386.9 million**, respectively, and research and development tax credit carryforwards of **$36.4 million** and **$7.5 million**, respectively, with a full valuation allowance against deferred tax assets[803](index=803&type=chunk)[805](index=805&type=chunk)[806](index=806&type=chunk)

SER-109 for *C. difficile* Infection - SER-109 Phase 3 ECOSPOR III study showed a sustained clinical response rate of 88.9% compared to 58.7% in the placebo arm at 8 weeks[12] - SER-109 demonstrated a 30.2% absolute reduction in the rate of *C. difficile* infection recurrence compared to placebo at 8 weeks[13] - Approximately 453,000 cases of primary *C. difficile* infection occur within the U S each year, leading to an estimated $5 billion in healthcare burden[20] - There are approximately 170,000 episodes of recurrent *C. difficile* infection per year in the U S[20] SER-287 for Ulcerative Colitis - SER-287 Phase 1b study showed a statistically significant clinical remission improvement in the daily treatment arm, with 40% remission compared to 0% in the placebo arm[39, 41] - SER-287 daily arm GI AEs were 13.3% vs 45.5% in the placebo arm[43] - The ECO-RESET Phase 2b study of SER-287 in ulcerative colitis is nearly 90% enrolled, with topline results anticipated in H2 2021[51] Pipeline and Financial Status - Seres Therapeutics had $320 million in cash, cash equivalents, and short and long-term investments as of September 30, 2020[58] - The company is advancing multiple earlier-stage programs, including SER-301, SER-401, and SER-155, targeting ulcerative colitis, metastatic melanoma, and antibiotic-resistant bacterial infections, respectively[6, 53]

Financial Data and Key Metrics Changes - Seres reported a net loss of $30.3 million for Q3 2020, compared to a net loss of $15.4 million for the same period in 2019, indicating a significant increase in losses driven by clinical and development expenses [42][43] - The company ended Q3 2020 with approximately $320 million in cash, cash equivalents, and investments, a substantial increase from $63.9 million at the end of Q2 2020, following a public equity offering and a securities purchase agreement with Nestle that provided approximately $264 million in net proceeds [44][45] Business Line Data and Key Metrics Changes - The SER-109 Phase 3 study demonstrated a 30.2% absolute reduction in recurrences of C. difficile infection compared to placebo at eight weeks post-treatment, showcasing the efficacy of the microbiome therapeutic approach [18][10] - SER-287 is currently in a Phase 2b study for ulcerative colitis, with over 75% enrollment achieved despite challenges posed by the COVID-19 pandemic [25][21] Market Data and Key Metrics Changes - The company is preparing for the anticipated launch of SER-109, conducting market assessments, and engaging in education efforts for healthcare professionals and payers [14][15] - The SER-287 program aims to provide a non-immunosuppressive treatment option for ulcerative colitis, addressing a significant unmet medical need [22] Company Strategy and Development Direction - Seres aims to become the first microbiome company to obtain FDA product approval and bring a drug to market, focusing on SER-109 and other drug candidates to transform disease management [10][11] - The company plans to scale market education efforts in 2021 and expand manufacturing capabilities in preparation for product launch [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the future of Seres and the microbiome space, emphasizing the importance of completing the work needed for SER-109's BLA and preparing for its potential launch [47][48] - The management team acknowledged the challenges posed by the COVID-19 pandemic but noted progress in clinical trial enrollment and operational strategies to mitigate these impacts [25][71] Other Important Information - The company recently appointed a new Chief Technology Officer, Dave Ege, to enhance manufacturing capabilities in anticipation of SER-109's commercialization [16] - The SER-155 program is expected to advance into a Phase 1b study early in 2021, supported by a CARB-X grant [38] Q&A Session Summary Question: Enrollment status for the additional safety cohort - Management confirmed that progress is being made in site activation and enrollment for the open-label study, with enthusiasm from trial sites and physicians [52][53] Question: Treatment paradigm for SER-109 - Management indicated that SER-109 is expected to be applicable for a broad set of patients, including those with first recurrence, pending FDA discussions [61][62] Question: Initial data on SER-287 - Management noted that enrollment is progressing, and they are optimistic about the potential for data updates as the study continues [71] Question: SER-401 study advancement - Management stated that the Phase 1b study of SER-401 is exploratory, and decisions on future studies will be based on the data collected [76] Question: 24-week data from ECOSPOR III - Management is working with the FDA to clarify the schedule for presenting data and expects to have internal data available soon [81] Question: Plans for CMC expansion - Management emphasized the importance of expanding manufacturing capabilities to ensure drug availability and support the growing pipeline [97]