Seres Therapeutics(MCRB) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Seres Therapeutics reported a net loss of $32.9 million for Q2 2024, compared to a net income of$46.6 million in Q2 2023, primarily due to a $125 million milestone payment received in Q2 2023 upon FDA approval of VOWST [25][26] - Research and development expenses decreased to$17.9 million from $46.8 million year-over-year, driven by the capitalization of VOWST commercial manufacturing costs and reductions in headcount [24][25] - General and administrative expenses were reduced to$16.1 million from $28.1 million in the same period last year, reflecting lower headcount and cost reduction efforts [24][25] Business Line Data and Key Metrics Changes - VOWST net sales for Q2 2024 were$14.4 million, reflecting approximately 43% growth over Q1 2024 [23][24] - The company does not recognize VOWST net sales in its financial statements but shares equally in the product's commercial profits and losses [23] Market Data and Key Metrics Changes - The VOWST asset sale to Nestle Health Science is expected to close within 90 days, providing Seres with $155 million in cash, which will strengthen its balance sheet and support pipeline development [4][5][26] Company Strategy and Development Direction - The company plans to leverage its capabilities and core intellectual property to advance new biotherapeutics targeting significant unmet medical needs, particularly in high-risk patient populations [6][7] - Seres is focusing on the SER-155 program, which is being evaluated in a Phase Ib study, with important clinical data expected next month [7][8] - The company aims to develop SER-147 for patients with metabolic diseases, expanding its therapeutic portfolio [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of VOWST and the strategic direction following the asset sale, emphasizing a streamlined organization focused on advancing pipeline assets [5][7] - The upcoming clinical data from SER-155 is anticipated to validate the therapeutic approach and inform future development steps [12][21] Other Important Information - More than one-third of the employee base is expected to transition to Nestle Health Science as part of the VOWST asset sale, which will lead to a more focused organization [25] - The company expects its cash runway to extend into Q4 2025, supported by the capital from the VOWST asset sale [26] Q&A Session Summary Question: What signals are being looked for in cohort 2 for SER-155? - Management indicated that they are looking for meaningful decrements in rates of neutropenia, fever, bloodstream infections, and consistency across endpoints [30][31] Question: What might a potential pivotal study look like if Cohort 2 is successful? - A pivotal study would likely be efficiently sized, building on the experience with VOWST, with a safety database requirement of about 300 total subjects [34] Question: Is there applicability for SER-155 in CAR T therapy? - Management confirmed that SER-155 could address both infectious complications and immunologic issues in CAR-T therapy [38][39] Question: What are the next steps with the agency if the Phase Ib cohort data is positive? - The company plans to discuss the data with the agency and seek designations for orphan drug and breakthrough status [46][47] Question: How does the company prioritize its pipeline post-VOWST? - The company prioritizes programs based on unmet needs and the potential for its technology to address those needs effectively [50][53]