Seres Therapeutics(MCRB) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The net sales of VOWST for Q4 2023 were $10.4 million, based on 673 units sold, reflecting an estimated gross to net reduction of approximately 11% [55] - The total loss for VOWST in Q4 was $20.5 million, with the company's share being $10.3 million [56] - Research and development expenses for Q4 2023 were $26.8 million, down from $46.2 million in the same period in 2022, primarily due to the cessation of VOWST commercial manufacturing costs being recognized in the P&L [58] - General and administrative expenses for Q4 2023 were $17.2 million, reduced from $22.4 million in Q4 2022, attributed to a significant corporate restructuring [59] - The company ended 2023 with $128 million in cash, cash equivalents, and investments, and anticipates that this, along with expected savings from restructuring, will support operations into Q4 2024 [60] Business Line Data and Key Metrics Changes - Approximately 65% of VOWST prescribers were from gastroenterology, with 1,330 unique prescribers recorded, nearly doubling the number from Q3 [38][66] - The utilization of VOWST in patients with their first recurrence is expected to grow as healthcare providers gain experience with the product [38] - The percentage of new patient starts utilizing free drug programs was 44% in Q4, down from 48% in Q3, indicating a slight decrease in reliance on these programs [39] Market Data and Key Metrics Changes - The company has received coverage for VOWST across approximately 80% of commercial and 54% of Medicare Part D lives, with expectations for remaining plans to issue coverage policies soon [51] - The hospital selling team is enhancing hospital outflow, with VOWST being added to discharge protocols at some large institutions [68] Company Strategy and Development Direction - The company aims to deliver VOWST to patients and advance microbiome therapeutics, with a focus on SER-155 and its Phase 1b readout expected in Q3 2024 [35][46] - Financial discipline is a priority for the company in 2024, with ongoing evaluations to strengthen the balance sheet [46] - The company is focused on HCP education, customer experience, payer coverage, and optimizing hospital outflow to accelerate demand for VOWST [52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the VOWST launch, noting that it has exceeded expectations with broad patient access and strong demand [36] - The company anticipates continued growth in VOWST utilization as patient outcomes become more recognized [45] - Positive data from the SER-155 readout is expected to validate the potential of the platform and expand its applications in various medical conditions [46][70] Other Important Information - The company announced the appointment of Marella Thorell as the new Chief Financial Officer following David Arkowitz's retirement [47] - The restructuring implemented last year is expected to achieve annual cash savings of $75 million to $85 million in 2024 [59] Q&A Session Summary Question: What are the main drivers of the $170 million spend in 2024? - The spend includes R&D, particularly ramping up the manufacturing facility in Bacthera, and G&A expenditures related to operating as a public company [76][77] Question: Can you comment on the potential for commercial batches from Bacthera? - It is anticipated that the PPQ batches for validation will be salable and will ultimately go into commercial supply [90] Question: What is the sales trajectory for VOWST in 2024? - The focus is on continued growth, breadth, and depth of prescribing, with digital promotion playing a key role in enhancing reach [98] Question: Is there a specific path for SER-155 that has a higher probability of success? - The company is focused on VOWST and SER-155, with broad potential for SER-155 in addressing infections and graft-versus-host disease [103] Question: How should we forecast the percent of free drug in 2024? - The utilization of free drug programs is expected to decline as payer policies are issued, particularly with the IRA provisions coming into effect in 2025 [108]