Q4 2023 Seres Therapeutics Inc Earnings Call

March 5, 2024

Operator: Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Seres Therapeutics fourth quarter 2023 earnings conference call. Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise.

Ladies and gentlemen, good morning, My name is Abby and I will be your conference operator today.

Abby: At this time I would like to welcome everyone to the series Therapeutics fourth quarter 2023 earnings Conference call.

Abby: Today's conference is being recorded in all lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I will now turn the conference over to Rob Windsor of Investor Relations. You may begin. Thank you for the morning.

Abby: After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press. The star key followed by the number one on your telephone keypad.

If you would like to withdraw your question Press Star one a second time.

Abby: Thank you and I will now turn the conference over to Rob Windsor of Investor Relations you may begin.

Thank you and good morning, our press release for the company's fourth quarter 2023 financial results became available at seven am Eastern time. This morning, and can be found on the investors. The new section of the company's website I would like to remind you that we will be making forward looking statements, including the availability of cash to fund operations.

Rob Windsor: Our press release for the company's fourth quarter 2023 financial results became available at 7 a.m. Eastern Time this morning and can be found in the Investors and News section of the company's website. I'd like to remind you that we'll be making forward-looking statements, including the availability of cash to fund operations, the potential sales for VALST, including our ability to achieve sales targets and milestones, the timing and results of clinical studies, and other statements which are not historical facts. However, actual results may differ materially.

Abby: <unk> the potential sales for <unk>, including our ability to achieve sales targets and milestones the timing and results of clinical studies and other statements, which are not historical facts actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the risk factors section of our recent.

Rob Windsor: Additionally, these statements are subject to certain risks and uncertainties, which are discussed in the risk factors section of our recent SEC filings. Furthermore, any forward-looking statements made on today's call represent our views as of today only. We may have to update these statements in the future, but we disclaim any obligation to do so. On today's call, with prepared remarks, I'm joined by Eric Schaaf, Seres Chief Executive Officer, Dr. Terry Young, Chief Commercial and Strategy Officer, Dr. Lisa von Moltke, Chief Medical Officer, and David Arquette, Chief Financial Officer. In addition, Dr. Matthew Henn, Chief Scientific Officer, and Dr. Dave Ege, Chief Technology Officer, will also be available to address questions. With that, I'll pass it over to Eric. Thank you, Rob. And good morning, everyone.

Abby: SEC filings any forward looking statements made are made on today's call represent our views as of today only we may have to update these statements in the future, but we disclaim any obligation to do so on today's call with prepared remarks, I'm joined by Eric Shaff series, Chief Executive Officer, Dr. Terry Young Chief.

Abby: Commercial and strategy officer, Dr. Lisa Mulkey, Chief Medical Officer, and David <unk> Chief financial.

Speaker Change: Natural officer. In addition that Dr. Matthew <unk>, Chief Scientific Officer, and Dave Dr. David <unk>, Chief Technology Officer will also be available to address questions with that I'll pass it over there.

Eric D. Shaff: Thank you, Rob and good morning, everyone.

Eric D. Shaff: 2023 was an historic year for Seres and an inflection point for our company and for patients. With the approval and launch of VAUST, we brought to market our first-in-class oral microbiome therapeutic for patients with recurrent C. diff infection. We are proud of the impact VEST is having on patients, their families, and the entire recurrent C. diff community. As we enter 2024, our top priorities remain, first, delivering vows to patients, and second, advancing the potential of microbiome therapeutics more broadly, including with our CR155 Phase 1b readout and allo-HSAT patients expected in Q3 of this year. Everything we do with Seres has been and always will be driven by a desire to support patients with significant unmet medical needs. It is the hope and resilience of each patient and their families that inspires us and drives us to fulfill our mission. Voused is a perfect example of this.

Speaker Change: 2023 within the historic year for series and then an inflection point for our company and for patients with.

Matthew R. Henn: With the approval and launch of <unk>, we brought to market are first in class oral microbiome therapeutics for patients with recurrent C diff infection.

Matthew R. Henn: We are proud of the impact versus having on patients their families and the entire recurrent C diff community.

Matthew R. Henn: As we enter 2024, our top priorities remain first delivering vast the patients are second advancing the potential of microbiome therapeutics more broadly, including with our SER 155 phase <unk> readout and Allo HFC T patients expected in Q3 of this year.

Matthew R. Henn: Everything we do at series has been and always will be driven by a desire to support patients with significant unmet medical needs.

Matthew R. Henn: It is our hope and resilience of each patient and their families that inspires us and drives us to fulfill our mission.

Matthew R. Henn: <unk> is a perfect example of this.

Eric D. Shaff: In VAST, we have developed an incredible and unique option for patients who battle recurrency disinfection. One with a strong efficacy and safety profile, as well as a convenient oral route of administration, in a particularly complex disease where, historically, innovation has been difficult; today, VAUST is changing lives. The U.S. launch of VAST has exceeded our expectations. In partnership with Nestle Health Science, we are pleased with the broad patient access received thus far, with more patients gaining access to VAS than expected. The hospital team continues its efforts to enhance hospital outflow, which we expect will continue to bear fruit into 2024. We are also seeing continued strong demand from a broad set of healthcare practitioners and across the recurrent C. diff patient pool, including utilization in patients at their first recurrence. Terry will cover our commercial metrics in more detail shortly.

Matthew R. Henn: In <unk>, we have developed an incredible and unique option for patients who buy our currency this infection.

Matthew R. Henn: One was a strong efficacy and safety profile as well as a convenient oral route of administration.

Matthew R. Henn: In a particularly complex disease, where historically innovation has been difficult today about this changing lives.

Matthew R. Henn: The U S launch of <unk> has exceeded our expectations.

Matthew R. Henn: In partnership with Nestle Health Science, we are pleased with the broad patient access received thus far with more patients gaining access to vast unexpected.

The hospital team continues its efforts to enhance hospital outflow, which we expect will continue to bear fruit into 2024.

Matthew R. Henn: We are also seeing continued strong demand from a broad set of health care practitioners and across the recurrent C diff patient pool, including utilization and patients at their first recurrence.

Matthew R. Henn: Terry will cover our commercial metrics in more detail shortly.

Eric D. Shaff: I am extremely proud that we achieved over 2,000 valved patient starts in 2023 following our launch in June. We continue to see substantial opportunity for growth, given the broad label and the robust clinical profile of VAST, which makes it an ideal choice for so many of the estimated 156,000 cases of recurrent CDI in the U.S. each year. I would like to thank the team at Seres and Nestle for successfully executing our launch strategy together, collaborating with focus and urgency on behalf of our patients and their families. We look forward to seeing continued growth of VALS utilization in 2024 and expect this positive trend to continue as patient outcomes on VALS are more broadly recognized. We are excited by the potential of VALSTs to become the standard of care for preventing further C-diff recurrence.

Matthew R. Henn: I am extremely proud that we achieved over 2000 <unk> patient starts in 2023 following our launch in June.

Matthew R. Henn: We continue to see substantial opportunity for growth given the broad label and the robust clinical profile of <unk>, which makes it an ideal choice for so many of the estimated 156000 cases of recurrent CDI in the U S. Each year.

Matthew R. Henn: I would like to thank the team at series a nestle for successfully executing our launch strategy together collaborating with focus and urgency on behalf of our patients and their families and we look forward to seeing continued growth of <unk> utilization in 2024, and I expect this positive trend to continue as patient outcomes on.

Matthew R. Henn: <unk> are more broadly recognized.

Matthew R. Henn: We are excited by the potential of <unk> to become the standard of care for preventing further C diff recurrences.

Eric D. Shaff: Building off our strong proof-of-concept with VAUST, we were excited to announce in December receipt of fast-track designation for the CERO 155 program, with a Cohort 2 data readout anticipated in the third quarter of this year. We believe positive data from this readout would further validate the potential of our platform and infections, including in indications such as chronic liver disease, cancer neutropenia, solid organ transplantation, and AMR infections more broadly in settings of high risk, such as intensive care units. Last year, we made the difficult decision to restructure the company and focus on VAUST and 0155. This was an extremely difficult decision but a necessary one for positioning Seres optimally for the future. David will touch upon this later in the call, but financial discipline is at the forefront of SERES priorities in 2024 and beyond. We will continue to evaluate all options to strengthen our balance sheet. As we do so, we believe we will be well positioned to create value for our shareholders and deliver our mission for patients now and in the future. Recently, we announced the appointment of Mirella Thorell as Executive Vice President and Chief Financial Officer of Ceres following David's retirement.

Matthew R. Henn: Building off our strong proof of concept with <unk>. We were excited to announce in December receipt of SaaS track designation for the <unk> five program with the cohort two data readout anticipated in the third quarter of this year.

Matthew R. Henn: We believe positive data from this readout would further validate the potential of our platform and infections, including in indications such as chronic liver disease cancer neutropenia solid organ transplant and EMR infections more broadly in settings of high risks such as intensive care units.

Matthew R. Henn: Last year, we made the difficult decision to restructure the company and focus on <unk> and <unk> 155.

Matthew R. Henn: This was an extremely difficult decision, but a necessary one for positioning series optimally for the future.

Matthew R. Henn: David will touch upon this later in the call, but financial discipline is at the forefront of series priorities in 2024 and beyond.

Matthew R. Henn: We will continue to evaluate all options to strengthen our balance sheet as we do so we believe we will be well positioned to create value for our shareholders and deliver our mission for patients now and in the future.

Matthew R. Henn: Recently, we announced the appointment of <unk> <unk>.

Matthew R. Henn: As executive Vice President and Chief Financial Officer of series following David's retirement.

Matthew R. Henn: We welcome Marella and look forward to benefiting from her extensive strategy corporate finance and operational experience.

Matthew R. Henn: I would also like to thank David for his leadership and significant contributions over the past three years and we wish him the very best in retirement.

Eric D. Shaff: We welcome Mirella and look forward to benefiting from her extensive strategy, corporate finance, and operational experience. I would also like to thank David for his leadership and significant contributions over the past three years, and we wish him the very best in his retirement. With the continued success of the VEST launch and the clinical readout from CERA 155 later this year, we look forward to 2024 as a year that will further validate the SERES platform and the promise of microbiome therapeutics. I would like to now pass the call over to Terry to discuss the significant progress we've made bringing VAS to patients. Thank you, Eric.

Matthew R. Henn: With the continued success of the best launch in the clinical readout from <unk> 155. Later this year, we look forward to 2024 as a year that will further validates <unk> platform and the promise in microbiome therapeutics.

Matthew R. Henn: I would like to now pass the call over to Terry to cover the significant progress we've made bringing investigations.

Teresa L. Young: Thank you, Eric and pleased to report that along with our collaborators at Nestle Health Science, we continue to make significant progress on our launch priorities in the fourth quarter building upon earlier momentum observed with the <unk> launch.

Teresa L. Young: As Youll recall, our four focus areas are scaling HCP education metrics, creating a positive customer experience establishing payer coverage.

Teresa L. Young: And optimizing hospital outflow.

Teresa L. Young: I'll now provide an update on each of these.

Teresa L. Young: Our ACP education efforts emphasized the importance of microbiome restoration, and recurrent CDI and the unprecedented efficacy and safety profile of <unk>.

Teresa L. Young: I'm pleased to report that, along with our collaborators at Nestle Health Science, we continued to make significant progress on our launch priorities in the fourth quarter, building upon earlier momentum observed with the VALS launch. As you recall, our four focus areas are scaling HCP education efforts, [inaudible] Establishing payer coverage, and Optimizing Hospital Outflow. I'll now provide an update on each.

Teresa L. Young: We have made significant progress in this area supported by the promotional effort to Vanessa L teams.

Teresa L. Young: As a result demand continued to grow in the fourth quarter as reported to us by Nestle Health Science.

Teresa L. Young: In total between our June launch in year end, we received 2833 completed prescription enrollment forms for fast.

Teresa L. Young: Including one 322 in the fourth quarter alone.

Teresa L. Young: Of the total enrollments last year 2015 culminated in new patient starts, including 182 in the fourth quarter alone we.

Teresa L. Young: Our ACP education efforts emphasize the importance of microbiome restoration and recurrent CDI and the unprecedented efficacy and safety profile of Valve. We have made significant progress in this area, supported by the promotional efforts of the Nestle Field Team. As a result, demand continued to grow in the fourth quarter, as reported to us by Nestle Health Science.

Teresa L. Young: We've received prescription enrollment forms from 1330 unique prescribers between approval and year end nearly doubling the number of prescribers versus what we saw at the end of Q3.

Teresa L. Young: Approximately 65% of these prescribers of <unk> or from gastro neurology with the remainder from other specialties.

Teresa L. Young: Of these 1330, Hcp's, who prescribe fast 340 of them prescribed <unk> to more than one patient.

Teresa L. Young: In total, between our June launch and year end, we received 2,833 completed prescription enrollment forms for VALS, including 1,322 in the fourth quarter alone. Of the total enrollments last year, 2015 culminated in new patient starts, including 1,082 in the fourth quarter alone. We received prescription enrollment forms from 1,330 unique prescribers between approval and year-end, nearly doubling the number of prescribers versus what we saw at the end of Q3. Approximately 65% of these prescribers of VALS were from gastroenterology, with the remainder from other specialists.

Teresa L. Young: Although as expected the majority of 2023 utilization for house was in the multiply recurrent patient group, we continue to see in patients with their first recurrence.

Teresa L. Young: We expect this to continue to grow over time as Hcp's gain experience with an entirely new modality and developed an understanding at the foundational and distinct role that <unk> plays in preventing recurrence.

Teresa L. Young: We recently completed a round of market research with Hcp's, who have used <unk>.

Teresa L. Young: Findings from that research support the Hcp's remained highly receptive to the profile of <unk>.

Teresa L. Young: And users have had a positive experience obtaining patient access supported by initially field teams and the valves <unk> patient hub.

Teresa L. Young: Of these 1,330 HCPs who prescribed VALS, 340 of them prescribed VALS to more than one patient. Although, as expected, the majority of 2023 utilization for VAST was in the multiple recurrent patient group, we continue to see use in patients with their first recurrence. We expect this to continue to grow over time as HCPs gain experience with an entirely new modality and develop an understanding of the foundational and distinct role that VALS plays in preventing recurrence. We recently completed a round of market research with physicians who have used VAL. Findings from that research support that ACPs remain highly receptive to the profile of alpha, and users have had a positive experience obtaining patient access supported by the Nestle Field Teams and the Valves Voyage Patient Hub. These encouraging results align with our view that valves can become a foundational treatment for recurrent CDI and a highly significant commercial opportunity over time.

Teresa L. Young: These encouraging results aligned with our view that <unk> can become the foundational treatment for recurrent CDI and a highly significant commercial opportunity overtime.

Teresa L. Young: Providing a positive experience for patients and providers is our second launch priority. Our vast voyage hub continued to increase its successful conversion of enrollments to new patient starts in Q4.

Teresa L. Young: In terms of free drug utilization approximately 46% of the 2015, new patient starts in 2023 were dispensed via our free drug programs.

Teresa L. Young: In the fourth quarter, specifically that percentage was down was 44% down from the 48% we reported for Q3.

Teresa L. Young: As a reminder, the use of free drug that we are seeing is mostly due to patient affordability challenges with co pays or other cost sharing requirements. After the prescription was approved by their insurer. We believe these programs are an important investment to support future demand across the broad our CDI patient population.

Teresa L. Young: And the need for these programs is likely to decline as the inflation reduction act provisions governing Medicare part D benefit design and specific like patient cost sharing requirement come into effect over the next year.

Teresa L. Young: Providing a positive experience for patients and providers is our second launch priority. Our VALS Voyage Hub continued to increase its successful conversion of enrollments to new patient starts in Q4. In terms of free drug utilization, approximately 46 percent of the 2015 new patient starts in 2023 were dispensed via our free drug program. In the fourth quarter specifically, that percentage was down to 44%, down from the 48% we reported for Q3.

Teresa L. Young: Our third focus area is engaging payers to ensure access and to date, we've been pleased with the broad patient access we are seeing with the vast majority of patients able to gain access to <unk> through their insurer.

As of yearend, we had received coverage for valves across approximately 80% of commercial and 54% of Medicare part D lives and estimate that the remaining plans will issue coverage policies in the coming quarters.

Teresa L. Young: As a reminder, the use of free drugs that we are seeing is mostly due to patient affordability challenges with co-pays or other cost sharing requirements after the prescription was approved by their insurer. We believe these programs are an important investment to support future demand across the broad RCDI patient population, and the need for these programs is likely to decline as the Inflation Reduction Act provisions governing Medicare Part D benefit design and, specifically, patient cost sharing requirements come into effect over the next year. Our third focus area is engaging payers to increase insurer access, and to date, we have been pleased with the broad patient access we are seeing, with the vast majority of patients able to gain access to VALS through their insurer.

Through year end, we saw 54% of our 2015, new patient starts reimbursed through the patient's drug benefit.

Teresa L. Young: Our gross to net rate remains modest with minimal discretionary rebates at the stage of the launch David will say more about our gross to net rates momentarily.

Teresa L. Young: In summary, the vast majority of patients who are prescribed <unk> are able to obtain approval for the product either through the medical exception process prior to our policy being issued or via the prior authorization or appeals process.

Teresa L. Young: As first record demand for valves films, we will continue to work with prominent payers to ensure that we preserve the broad patient access to <unk> that we are currently observing.

Teresa L. Young: Finally, our hospital selling team continues its efforts to enhance hospital outflow and we believe these efforts will accelerate demand in 2024.

Teresa L. Young: As a result of this team's efforts we are starting to see value added to discharge protocols at some of the large institutions as well as added 10 patient formularies scaling. These efforts are critical to ensuring structural modifications to how our CDI patients are discharged.

Teresa L. Young: As of year-end, we had received coverage for VALS across approximately 80% of commercial and 54% of Medicare Part D lives, and estimate that the remaining plans will issue coverage policies in the coming quarters. Additionally, through year-end, we saw 54% of our 2015 new patient starts reimbursed through the patient's drug benefit. Our growth-to-net rate remains modest, with minimal discretionary rebates at this stage of the launch. David will say more about our growth-to-net rates momentarily. In summary, the vast majority of patients who are prescribed VALS are able to obtain approval for the product either through the medical exception process prior to a policy being issued or via the prior authorization or appeals process.

Teresa L. Young: Education of hospital based Hcp's and development of protocols for our CDI that can include valve.

Teresa L. Young: We will enable more consistent consideration of ALS patients slow from the inpatient to the outpatient setting.

Teresa L. Young: These 2023 results since the launch of <unk> in June.

Teresa L. Young: The strong start of a significant opportunity to change the treatment paradigm across the entire our CDI patient pool.

Teresa L. Young: In fact, our results exceeded our expectations across multiple dimensions.

Teresa L. Young: We along with our collaborators at Nestle Health Science will continue our focus on HCP education customer experience payer coverage and hospital outflow and expect to see continued acceleration of demand and progress on our key priorities as we move through 2024.

Teresa L. Young: As a result, we have confidence that we will ultimately achieve our goal of becoming a foundational therapy for our CDI potentially reaching our surpassing the highest sales based milestone threshold in the 2021 necessarily co commercialization agreement of $750 million.

Teresa L. Young: As first recurrent demand for VALS builds, we will continue to work with prominent payers to ensure that we preserve the broad patient access to VALS that we are currently observing. Finally, the hospital selling team continues its efforts to enhance hospital outflow, and we believe these efforts will accelerate demand in 2024. As a result of this team's efforts, we are starting to see VALS added to discharge protocols at some of the large institutions, as well as added to inpatient formularies. Scaling these efforts is critical to ensuring structural modifications to how RCD-guided patients are discharged. Education of hospital-based HCPs and development of protocols for RCDI that can include valve therapy will enable more consistent consideration of valve therapy as patients flow from the inpatient setting to the outpatient setting. These 2023 results, since the launch about in June, show the strong start of a significant opportunity to change the treatment paradigm across the entire RCDI patient pool. In fact, our results exceeded our expectations across multiple dimensions.

Teresa L. Young: I would now like to pass the call over to Lisa to give more details about tier 155, and our ongoing clinical trial.

Lisa von Moltke: And to reduce the incidence of graft versus host disease in patients undergoing hematopoietic stem cell transplantation.

Lisa von Moltke: The peer reviewed literature supports a strong connection between a disrupted Gi microbiome and pathogen domination in the Gi tract with the endpoint of infections graft versus host disease and mortality in patients undergoing allo HST.

Lisa von Moltke: Last year, we reported promising phase one b cohort, one clinical data with SER 155, being well tolerated and highly immunocompromised <unk> patients.

Lisa von Moltke: Patients.

Lisa von Moltke: Our data indicated at only a single patient had enteric pathogen domination within 30 days following stem cell transplant, which was a markedly lower incident than that observed in a large reference cohort of patients.

Teresa L. Young: We, along with our collaborators at Nestle HealthScience, will continue our focus on HCP education, customer experience, payer coverage, and hospital outflow, and expect to see continued acceleration of demand and progress on our key priorities as we move through 2024. As a result, we have confidence that we will ultimately achieve our goal of VALS becoming a foundational therapy for our CDI, potentially reaching or surpassing the highest sales-based milestone threshold in the 2021 Nestle co-commercialization agreement of $750 million. I would now like to pass the call over to Lisa to give more details about CR155 and our ongoing clinical trial. Thank you, Terry. As a reminder, CR 155 is a cultivated microbiome therapeutic candidate that is designed to prevent enteric infections, including those that may harbor antibiotic resistance, and to reduce the incidence of graft-versus-host disease in patients undergoing hematopoietic stem cell transplantation. The peer-reviewed literature supports a strong connection between a disrupted GI microbiome and pathogen domination in the GI tract with the endpoints of infection, graft-versus-host disease, and mortality in patients undergoing allohsct.

Lisa von Moltke: Enrollment is ongoing in cohort, two which incorporates a randomized double blinded placebo controlled design to further evaluate safety and <unk> as well as clinical outcome.

This portion of the study will enroll approximately 50 subject administered either SER 155 or placebo at a one to one ratio and we anticipate obtaining cohort two study data in Q3 of this year.

Lisa von Moltke: In addition to continued evaluation of the safety profile and drug pharmacology outcomes as Beth will be the ability of tier one 505 to decrease rates of pathogen domination grade three or four acute gvhd and the incidence of Gi and related bloodstream infections.

Lisa von Moltke: We also will assess the ability of SER 155 to decrease rates of fever during neutropenia, and the initiation of attendant antibiotic therapy.

Lisa von Moltke: We believe positive data from this readout, which further validate the promise of this novel therapeutic modality in addressing serious infection and medically vulnerable populations, including patients with chronic liver disease cancer neutropenia and solid organ transplant.

Lisa von Moltke: We also believe that this approach could impact the problem of antimicrobial resistance more broadly in settings of high risk such as intensive care unit.

Lisa von Moltke: These additional opportunities have the potential to extend the utility of <unk> and our preclinical stage pipeline and to establish a new approach and protecting immuno compromised patients from life threatening infection and related clinical events.

Lisa von Moltke: Last year, we reported promising Phase 1b Cohort 1 clinical data, with CR155 being well-tolerated in highly immunocompromised HSCT patients. Our data indicated that only a single patient had enteric pathogen domination within 30 days following stem cell transplant, which was a markedly lower incidence than that observed in a large reference cohort of patients. Enrollment is ongoing in Cohort 2, which incorporates a randomized, double-blind, placebo-controlled design to further evaluate safety and engraftment, as well as clinical outcomes. This portion of the study will enroll approximately 50 subjects administered either SER155 or placebo at a one-to-one ratio, and we anticipate obtaining Cohort 2 study data in Q3 of this year. In addition to continued evaluation of the safety profile and drug pharmacology, outcomes assessed will be the ability of CR 155 to decrease rates of pathogen domination, grade 3 or 4 acute GVHD, and the incidence of GI and related bloodstream infections. We will also assess the ability of SEER 155 to decrease rates of fever during neutropenia and the initiation of attendant antibiotic therapy.

Lisa von Moltke: With that I'll turn the call over to David for an update on financials.

David: Thanks, Lisa and good morning, I'd like to discuss our financial performance for the fourth quarter, starting with <unk>. Let me first remind everyone that series not recognized <unk> net sales in its financial statements, but instead, we share equally with nestle, the commercial profits and losses, and we record our share and collaboration profit.

David: Loss sharing related party.

David: <unk> profits and losses are determined based on <unk> net sales cost of goods sold and sales and marketing expenses.

David: Consistent with our pre release in January net sales of <unk> for the fourth quarter were $10 4 million in based on 673 units about sold during the period to specialty pharmacies and distributors.

David: Net sales reflect estimated gross to net reductions of approximately 11%.

David: We estimate that at the end of last year. There was approximately two weeks about inventory in the channel at specialty pharmacies.

David: Series supplies vast inventory and ethylene we received payments from NASA related to their valves supply purchases to meet market demand during the fourth quarter and as we purchased approximately $9 million of our supply from us and we received approximately $17 million in payments from nationally related to prior quarter purchases.

David: The total value loss in the fourth quarter was $25 million and our share of that was $10 3 million.

David: Our fourth quarter valves collaboration expenses, meaning Cogs and sales and marketing expenses for <unk>.

David: Increased from the prior quarter. This increase was due to higher Cogs given the variability of manufacturing costs for <unk> produced prior to approval as well as some prior period adjustments and higher sales and marketing expenses due to increased free goods and the initiation and ramp up of some key marketing activities.

Lisa von Moltke: We believe positive data from this readout would further validate the promise of this novel therapeutic modality in addressing serious infections in medically vulnerable populations, including patients with chronic liver disease, cancer neutropenia, and solid organ transplants. We also believe that this approach could impact the problem of antimicrobial resistance more broadly in settings of high risk, such as intensive care units. These additional opportunities have the potential to extend the utility of SEER 155 and our preclinical stage pipeline and to establish a new approach to protecting immunocompromised patients from life-threatening infections and related clinical events. With that, I'll turn the call over to David for an update on financials. Thanks, Lisa. And good morning. I'd like to discuss our financial performance for the fourth quarter, starting with VALS. Let me first remind everyone that Seres does not recognize BOWS net sales in its financial statements, but instead, we share equally with Nestle the commercial profits and losses, and we record our share in the collaboration, profit, and loss sharing related parties. BAUS profits and losses are determined based on BAUS net sales, cost of goods sold, and sales and marketing expenses.

David: <unk>.

For the fourth quarter, we also recognized as collaboration profit or loss sharing related party approximately $14 million of profit on the transfer of <unk> inventory to Nestle.

David: This profit represents the supply price to Nestle net of the cost of the inventory for the units sold and free goods distributed by nationally during the quarter because the vast majority of this valve inventory was manufactured prior to approval it's costs largely previously expensed and therefore, the inventory value is very low.

David: <unk> in the profit on the transfer of the valve inventory that is close to its supply price over time as the vast preapproval inventories consumed the magnitude of this profit component from the transfer of inventory will diminish.

David: Research and development expenses for the fourth quarter of 2023 were $26 8 million reduced from $46 2 million for the same period in 2022 a.

David: The year over year decrease in R&D expenses, primarily driven by <unk> commercial manufacturing costs no longer being recognized in the series following the product approval in April 2023, but instead capitalized and recognized on our balance sheet.

David: General and administrative expenses for the fourth quarter of 2023 were $17 2 million.

David: Reduced from $22 4 million from the same period in 2022.

David A. Arkowitz: Consistent with our pre-release in January, net sales of VAUS for the fourth quarter were 10.4 million units, and they were based on 673 units of VAUS sold during the period to specialty pharmacies and distributors. The net sales reflect estimated gross net reductions of approximately 11%. We estimate that at the end of last year, there was approximately two weeks of vouch inventory in the channel at specialty pharmacies. Seres supplies vouch inventory to Nestle, and we received payments from Nestle related to their vouch supply purchases to meet market demand. During the fourth quarter, Nestle purchased approximately $9 million of vouch supply from us, and we received approximately $17 million in payments from Nestle related to prior quarter purchases. The total vouch loss in the fourth quarter was $20.5 million.

David: As you know in November in November of last year, we announced a significant corporate restructuring, which is expected to achieve $75 million to $85 million in annual cash savings in 2024.

David: The restructuring was substantially implemented around year end last year as a result, R&D and G&A expenses for the fourth quarter were minimally impacted by the restructuring as the reduced spend related to the restructuring started in earnest at the beginning of this year.

David: We ended 2023 with a 100 day $128 million in cash cash equivalents and investments and Additionally, we received net proceeds of approximately $18 5 million from the sale of common stock under our aftermarket equity or ATM program. Thus far this year, we <unk>.

David: Anticipate that our cash balance in conjunction with the anticipated savings from the restructuring and assuming continued quarter over quarter revenue growth of about the expected receipt of the $45 million tranche b under our existing term loan facility with Oaktree will support our operations into the fourth quarter of 2020.

David A. Arkowitz: Our share of that was $10.3 million. The fourth quarter VOUS collaboration expenses, meaning COGS and sales and marketing expenses for VOUS, increased from the prior quarter. This increase was due to higher COGS, given the variability of manufacturing costs for VOUS produced prior to approval, as well as some prior period adjustments, and higher sales and marketing expenses due to increased free goods and the initiation and ramp-up of some key marketing activities.

David: Thank you and I'll now turn the call back to Eric.

David: Yes.

Eric D. Shaff: Thank you David and thank you again for all your contributions to series, we wish you well in their return.

Eric D. Shaff: Before opening the call up to Q&A I would like to express our proud proud I am of the team at series and the team at Nestle for bringing a first in class oral therapy to the market.

Eric D. Shaff: <unk> 2023 was truly a trailblazer near for series as well as for Microbiome therapeutics.

Eric D. Shaff: As we look forward into 2024 I'm excited about the continued success of <unk> as well as the possibilities with tier one byproduct.

David A. Arkowitz: For the fourth quarter, we also recognized, as a collaboration profit or loss sharing related party, approximately $14 million of profit on the transfer of BAUS inventory to NEST's profit or loss sharing related party. This profit represents the supply price to Nestle, net of the cost of the inventory for the units sold and free goods distributed by Nestle during the quarter. Because the vast majority of this vouch inventory was manufactured prior to approval, its cost was largely previously expensed, and therefore, the inventory value is very low, resulting in a profit on the transfer of the vouch inventory that is close to its supply price. Over time, as the BAUS pre-approval inventory is consumed, the magnitude of this profit component from the transfer of inventory will diminish.

Speaker Change: With that we will conclude our remarks and open the line up to questions.

Speaker Change: Thank you.

Speaker Change: And at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: To withdraw your question from Q Press Star one a second time and we'll pause for just a moment to compile our Q&A roster.

Okay.

Speaker Change: And we will take our first question from Jeff Jones with Oppenheimer. Your line is open.

Jeffrey Michael Jones: Thank you can you hear me.

Jeffrey Michael Jones: Yes, we can Jeff good morning.

Jeffrey Michael Jones: Great. Thanks, Eric.

Jeffrey Michael Jones: I guess can you speak to the main drivers of what looks to be about $170 million spend in 2024, I know we've spoken to.

Jeffrey Michael Jones: Your second manufacturing site in the past and then any discussions you might be having with nestle regarding the.

Speaker Change: Now about 10 months of runway.

Speaker Change: Yes, maybe I can ask David this third on the parameters of investment and then I can take the second question.

David A. Arkowitz: Research and development expenses for the fourth quarter of 2023 were $26.8 million, reduced from $46.2 million for the same period in 2022. The year-over-year decrease in R&D expenses is primarily driven by BAUS commercial manufacturing costs no longer being recognized in the series E&L following the product approval in April 2023 but instead capitalized and recognized on our balance sheet. General and administrative expenses for the fourth quarter of 2023 were $17.2 million, a decrease from $22.4 million for the same period in 2022.

David: But our partners, yes, I would just say, Jeff it at a high level.

David: About half of that relates to relates to R&D and a.

David: A big chunk of that R&D spend relates to.

Speaker Change: Really ramping up our.

David: Upcoming manufacturing facility in back there so youre talking about we're talking about tech transfer.

David: And really driving towards.

David: Approval of that facility. So that's driving a lot of the spend keeping keep in mind that we are also operating we will be we will be operating back there and our existing CMO.

David: Simultaneously in 2024, as we get into 2025 that will that will drop off we will move to primarily one CMO. So youll see some of that spend dissipate.

David A. Arkowitz: As you know, in November of last year, we announced a significant corporate restructuring, which is expected to achieve $75 million to $85 million in annual cash savings in 2024. The restructuring was substantially implemented around year-end last year. As a result, R&D and G&A expenses for the fourth quarter were minimally impacted by the restructuring as the reduced spend related to the restructuring started in earnest at the beginning of this year.

David: And then we've got G&A expenditures.

David: To operate as a public company as well as our share of the.

David: <unk> collaboration on profit and loss.

Speaker Change: Maybe I can just add Jeff to the second part of the question.

Speaker Change: In general we are highly focused on.

Jeffrey Michael Jones: Cash on runway on investments and ways in which we can continue to support the company and certainly you saw at the end of last year action from us with the restructure and 41% reduction in head count.

David A. Arkowitz: We ended 2023 with $128 million in cash, cash equivalents, and investments. Additionally, we have received net proceeds of approximately $18.5 million from the sale of common stock under our at-the-market equity, or ATM, program thus far this year. We anticipate that our cash balance, in conjunction with the anticipated savings from the restructuring, and assuming continued quarter-over-quarter revenue growth, the expected receipt of the $45 million tranche B under our existing term loan facility with Oak Tree, will support our operations into the fourth quarter of 2024. Thank you, and I now turn the call back to Eric. Thank you, David, and thank you again for all your contributions this year. We wish you well in your retirement. Before opening the call-up to Q&A, I would like to express how proud I am of the team at Seres and the team at Nestle for bringing a first-in-class oral therapy to the market. 2023 was truly a trailblazing year for Seres, as well as for microbiome therapeutics.

Jeffrey Michael Jones: We estimate between $75 $85 million reduction in 'twenty 'twenty four spend so.

Jeffrey Michael Jones: Our three priorities for this year are one supporting the launch of those two driving towards a 155 readout and three <unk>.

Jeffrey Michael Jones: Putting the company both through augmenting the balance sheet, reducing spend and looking actively at ways in which we can continue to support our operations.

Jeffrey Michael Jones: I would say from our partners' perspective, I think we both are pleased with the launch.

Jeffrey Michael Jones: Hey.

Jeffrey Michael Jones: We know that <unk> is important to nestle, we know that.

Jeffrey Michael Jones: There is real synergy between <unk> and <unk>.

Jeffrey Michael Jones: And I won't go through but obviously, we care deeply about supporting the company and we're actively working to try to put ourselves in the best position to serve patients, but the long term.

Speaker Change: Okay, just one quick follow up on that.

Speaker Change: Do you work it back there which involves manufacturing batches.

Speaker Change: Any chance that some of those batches can be used commercially and so that.

Speaker Change: SaaS spend there actually goes to.

Speaker Change: Saleable product.

Speaker Change: Okay.

Speaker Change: Yes, I can comment on that there, but maybe we've got Dave here, who can comment on the specific question around the batches.

Dave: Hi, Good morning, Yes, the simple answer is that is correct.

Eric D. Shaff: As we look forward into 2024, I'm excited about the continued success of VAUST and the possibilities with C0155. With that, we will conclude our remarks and open the line to questions. And at this time, I would like to remind everyone that in order to ask a question, press the star and then the number one on your telephone keypad. To withdraw your question from the queue, press star one a second time, and we'll pause for just a moment to compile our Q&A.

Dave: As stated at the <unk> batches for validation will be saleable.

Dave: And ultimately we would go into commercial supply.

Speaker Change: And I would just add.

Dave: Continue to make progress with Baxter.

Dave: In supporting continued.

Dave: Augmentation of our capacity.

Dave: We're working with them as well to think about ways in which we can continue to support both both companies and our relationship going forward.

Speaker Change: Alright, I appreciate it I'll jump back into the queue guys.

Thanks, Jeff.

Speaker Change: Okay.

Speaker Change: We will take our next question from John Newman with Canaccord. Your line is open.

John Lawrence Newman: Hi, guys good morning.

John Lawrence Newman: Great progress lots of hard work on the <unk> launch very good.

John Lawrence Newman: No.

Operator: And we will take our first question from Jeff Jones with Oppenheimer. Your line is open. Thank you. Can you hear me?

John Lawrence Newman: Obviously appreciating that you are currently very focused on commercialization commercialization excuse me of <unk>.

Operator: Yes, we can, Jeff. Good morning. Great, thanks, Eric. Can you speak to the main drivers of what looks to be about a $170 million spend in 2024? I know we've spoken to your second manufacturing site in the past, and then any discussions you might be having with Nestle regarding the, you know, now about 10 months runway. Yeah, maybe I can ask David to start on the parameters of investment, and then I can take the second question on our partners.

As well as the current tier 155 phase one <unk> study.

John Lawrence Newman: Just curious where do you see future opportunities for the drug technology itself.

Speaker Change: Yes, John Good morning, and thank you for the question, maybe I can start no invite Matt who is here to provide some commentary as well but.

I guess I'll start with your question, let off which is we are focused our priorities for 2020 for our valves launch one five in supporting the financial condition of the company. So.

Speaker Change: We are deeply committed to.

Speaker Change: The strict allocation of capital along those those key priorities.

Matt: And focus I think is the name of the game for us in the short term that said that doesn't mean that we can also can be can.

David A. Arkowitz: Yeah, I would just say, Jeff, at a high level, About half of that relates to R&D, and a big chunk of that R&D spend relates to really ramping up our upcoming manufacturing facility in Back Farah. So we're talking about tech transfer and really driving towards approval of that facility. So that's driving a lot of the spend.

Matt: And be excited about what could potentially be opened up with a positive readout in the <unk>. Five study. So we are particularly excited about that and maybe I can invite Matt to comment further there John I mean thinking about that kind of potential as Eric said that could be opened up really when you think about the past decade. There has really just been an incredible explosion and the <unk>.

Matt: Search that's defined a really substantial role for the microbiome in both states of disease States of health and importantly, we have learned a tremendous amount mechanistically about how that happened so.

David A. Arkowitz: Keep in mind that we are also operating; we will be operating Back Farah and our existing CMO simultaneously in 2024. As we get into 2025, that will drop off. We will move to primarily one CMO, and some of that spend will dissipate.

Matt: And this is best understood in the context of the gastrointestinal track, which is where series is focused.

Matt: Our research to date and our programs to date and there is a role to be played around infections as as we've talked about priming. The both the adaptive and the immune systems general metabolism, and quite frankly data supporting got brain access et cetera.

Eric D. Shaff: And then we've got G&A expenditures to operate as a public company, as well as our share of the BAUS collaboration profit and loss. Maybe I can just add, Jeff, to the second part of the question. In general, we are highly focused on cash, on runway, on investments, and ways in which we can continue to support the company. And certainly, you saw action from us at the end of last year with the restructuring and the 41% reduction in pet count. We estimate between $75,000,000 to $85,000,000 reduction in 2024 spending. And so our three priorities for this year are, one, supporting the launch of Valsky. Two, driving towards a 155 readout.

Matt: But as I think about the development of microbiome therapeutics.

Matt: And the various strategies.

Matt: That we can pursue here I don't think of it similar to.

Matt: Gene therapy, it's early.

Theres really sounds sound science, there's really a lot of potential for translation translation takes some time and to succeed here.

Matt: People need to build platforms that can really kind of get at the heart of scientifically and mechanistically, what's happening and as well.

Matt: Strategically broadened our pipeline and in short series has built such a platform and we're pursuing such a pipeline strategy right. We have the ability to go from early stage discovery all the way through to manufacturing of these therapeutics, we can interrogate at very very high resolution micro micro micro post interactions that allows us to really get at specific path.

Matt: With specific targets that we can.

Matt: That we can that we can target.

Matt: And then our portfolio strategy has been building incrementally. So valves provides us very strong proof of concept around the concept to be able to address infections and that got at our SER 155 program is building on that knowledge to go after a broader set of pathogens as well as leverage critical insights we have from a preclinical and clinical standpoint.

Eric D. Shaff: And three, supporting the company both through augmenting the balance sheet, reducing spend, and looking actively at ways in which we can continue to support our operations. I would say from our partner's perspective, I think we both are pleased with the launch to date. We know that Voused is important to Nestle. We know that there's real synergy between Zempep and Voused. And I won't go for that.

Matt: On how we can have an impact on preventing infections and in <unk>.

Matt: Colonization of various pathogens, how we can actually induce immune tolerance in the gastrointestinal tract as well as actually.

Matt: Look at the epithelioid barrier and have impacts there. So this is all built into this $1 505 program and as you heard on the call today that we see that really just as as the initial point.

Matt: For that expansion, where we can move into additional medically compromised patients, where we where we see disruptive microbiome people at risk for these same kinds of factors that include cancer neutropenia solid organ transplant liver chronic liver disease, and really that problem of EMR and more broadly in the ICU. So we see really.

Eric D. Shaff: But obviously, we care deeply about supporting the company, and we're actively working to try to put ourselves in the best position to serve patients in the long term. Just one quick follow-up on that and the work at Bacthera, which involves manufacturing batches. Any chance that some of those batches can be used commercially and so that the money spent there actually goes to, you know, saleable products? Yeah, I can comment on that back there.

Matt: Broad potential and we're excited to get to the next points to sort of enable us to be able to pursue that but right now we're focused on valves and our 155 program.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thanks for the question John.

Speaker Change: And we will take our next question from Tessa Romero with Jpmorgan. Your line is open.

David S. Ege: But maybe we've got Dave here who can comment on the specific question about the batches. Hi, good morning. Yes, the simple answer is that that is correct.

Speaker Change: Okay.

Tessa Thomas Romero: Hello, Good morning, guys. Thanks, so much for taking our question.

Tessa Thomas Romero: How should we think about that.

David S. Ege: Like it's stated that the PPQ batches for validation will be scalable and ultimately would go into commercial supply. And I would just add, you know, we continue to make progress with Baxterra in supporting continued augmentation of our capacity. And, you know, we're working with them as well to think about ways in which we can continue to support both companies in our relationship moving forward. I appreciate it. I'll jump back into the queue, guys.

Tessa Thomas Romero: Sales trajectory in 2024 for now skin.

Tessa Thomas Romero: It's typically what is the right way to forecast percent of free drug over the course of 2024 a gallon.

Patient affordability challenges you cited and then.

Tessa Thomas Romero: Second question is can you clarify what you mean by the strengthened promotional campaigns and expanded reach of digital promotion by gasoline and what this means with respect to your expected pull through to the launch.

Jeffrey Michael Jones: Thanks, Jeff. We will take our next question from John Newman with Canaccord. Your line is open.

Tessa Thomas Romero: Thanks.

Speaker Change: Yes, thanks for the questions and good morning.

Speaker Change: Let me invite Terry to comment on both questions I would just start by saying Terry spent most of last week with.

John Lawrence Newman: Hi guys, good morning. Great progress, lots of hard work on the VALS launch. Very good. You know, obviously appreciating that you are currently very focused. Thank you, as well as for the current SPHERE 155 Phase 1B study. I'm just curious, where do you see future opportunities for drug technology? Yeah, John, good morning, and thank you for the question. Maybe I can start, and I'll invite Matt, who's here, to provide some commentary as well.

Teresa L. Young: With the Nestle commercial group and leadership.

Teresa L. Young: So I think it's a good time to ask that question and provide some.

Teresa L. Young: Visibility as to how we how we look at 2024 and the trends that are important.

Teresa L. Young: Yes, so in 2024 hour, obviously as with any launch looking for continued growth of breadth and depth of prescribing specifically right. We are seeing good access we seek to preserve that.

Eric D. Shaff: But I think I'll start where your question led off, which is that we are focused. Our priorities for 2024 are VALS launch 155 and supporting the financial condition of the company. So we are deeply committed to the strict allocation of capital along those key priorities.

Teresa L. Young: It's really about HCP trial and adoption in.

Teresa L. Young: In 2024.

Teresa L. Young: And I'll touch on free drug last test.

Teresa L. Young: Digital promotion is actually a key tactic.

Teresa L. Young: That it's important for a brand to leverage after you've educated your top prescribers and Kols. So we've spent with nestle. The first two months after the launch making sure that we had deep conversations deep education efforts with the top prescribers.

Eric D. Shaff: And focus, I think, is the name of the game for us in the short term. That said, that doesn't mean that we can't also be excited about what could potentially be opened up with a positive readout in the 155 study. So we are particularly excited about that. Maybe I can invite Matt to comment further.

Teresa L. Young: Activating the high volume prescribers and from there, we're really seeking to enhance the breadth of trial.

Teresa L. Young: And so you can do that leveraging the salesforce that we have but we really aimed to go broader than that in and that's the role of digital promotions. So you tend to scale that.

Teresa L. Young: Anywhere from four to six months after approval and launch and so that's what we've done. So we had a new campaign that launched and was rolled out to the representatives in October of last year right around 19 week.

Matthew R. Henn: So, and this is best understood in the context of the gastrointestinal tract, which is where Seres is focused, our research to date, and our programs to date. And there's a role to be played around infections, as we've talked about, priming both the adaptive and the immune systems, general metabolism, and quite frankly, data supporting gut-brain access, et cetera. But, you know, as I think about the development of microbiome therapeutics and the various strategies that we can pursue here, I think of it as similar to gene therapy. But it's early.

Teresa L. Young: <unk>.

Teresa L. Young: That campaign was significantly scaled digitally to HCP. We also scaled patient promotion you typically do that six months after launch because you don't want to send activating a patient into a physician and the.

Teresa L. Young: Patient would be the first source of awareness about a new product. So we wanted to make sure that physicians are aware of the new product before we turn patients on and send them in so all of that is in the rearview mirror now and it's about those campaigns delivering the additional breadth of prescribing and subsequent depth that we would expect because we know once physicians try valves, they're having a good experience.

Matthew R. Henn: There's really sound science behind it. There's really a lot of potential, but translation takes some time. And to succeed here, people need to build platforms that can really kind of get at the heart of scientifically and mechanistically what's happening and, as well, strategically broaden our pipeline. And in short, Seres has built such a platform, and we're pursuing such a pipeline strategy, right? We have the ability to go from early stage discovery all the way through to manufacturing of these therapeutics. We can interrogate at very, very high resolution microbe-microbe, and microbe-host interactions that allow us to really get at specific pathways, specific targets that we can target.

Teresa L. Young: And they're willing to try it on additional patients in their practice and we're seeing that in our results.

Teresa L. Young: We're very happy about.

Teresa L. Young: Scaling that promotion and look forward to the additional growth that we'll get this year as a result of it.

Teresa L. Young: Switching to free drug.

Teresa L. Young: I mentioned that we saw the rates come down in Q4 from Q3, right, but we've got three quarters now and sort of the mid forty's.

Teresa L. Young: So in terms of forecasting Theres, a net data points that we have.

Teresa L. Young: We've got 46, $48 44, and Mr Me different quarters in 2023.

Matthew R. Henn: And then our portfolio strategy has been building incrementally. So, VALS provides us with very strong proof of concept around the idea to be able to address infections in the gut. And our SERE 155 program is building on that knowledge to go after a broader set of pathogens, as well as leverage critical insights we have from a preclinical and clinical standpoint on how we can have an impact on preventing infections and colonization of various pathogens, how we can actually induce immune tolerance in the gastrointestinal tract, as well as actually look at the epithelial barrier and have impacts there. So, this is all built into this

Teresa L. Young: <unk> said and I have said that we expect the utilization of these programs to go down the voucher program will go down as we get policies on board. So you can imagine we might see some decline this year as payer policies are issued for the majority of the population.

Teresa L. Young: Specifically in 2025.

Teresa L. Young: With the IRS provisions going into effect the patient assistance program. The more traditional path that we had that's income qualified in Medicare part D patient, that's where we're seeing the majority of the utilization that should really decline in 2025.

Teresa L. Young: So that sort of the data points that we have and the knowledge that we have around patient assistance.

Speaker Change: Thanks for the question.

Speaker Change: Thank you.

Speaker Change: And we will take our next question from Peyton Bon sacks, with TB Cowen Your line is open.

Matthew R. Henn: And as you heard on the call today, we see that really just as the initial point for that expansion, where we can move into additional medically compromised patients, where we see disrupted microbiomes, people at risk for these same kinds of factors that include cancer, neutropenia, solid organ transplant, liver, chronic liver disease, and really that problem of AMR more broadly in the ICU. So, we see really broad potential, and we're excited to get to the next points to sort of enable us to be able to pursue that. But right now, we're focused on VALS and our 155 program. Great, thank you.

Speaker Change: Hey, good morning, guys and thanks for taking our questions I guess to kind of buildup.

Speaker Change: The previous question talking about launch trajectory I was wondering if you could give us a little more detail about the potential penetration in the first start CDI population and are there any specific strategies that you guys can do to kind of build further into that population or is it just mostly.

Speaker Change: Our physician education efforts.

Speaker Change: Yes.

Speaker Change: Sure why don't I give the first one that Terry.

Teresa L. Young: Sure. So absolutely the strategy that we're taking is to definitely accelerate utilization into the earlier lines of therapy within our CVI right. So there are a number of ways to do that one is achieving breadth and I went into some depth about the breadth there with test a minute ago.

Tessa Thomas Romero: Thanks for the question, John, and we will take our next question from Tess Romero on J.P. Morgan. Your line is open.

Teresa L. Young: But digital promotion.

Tessa Thomas Romero: Hello, good morning, guys. Thanks so much for taking our question. So how should we think about the VALS. Specifically, what is the right way to forecast the percent of free drugs over the course of 2024, given the patient affordability challenges you cited, and then My second question is, can you clarify what you mean by the strengthened promotional campaigns and expanded reach of digital promotion by Nestle and what this means with respect to pull through to the launch. Thanks.

Teresa L. Young: Is it really a way that you can reach deeper into the prescriber base, even into primary care, where a lot not a lot, but many of the first recurrent patients are treated so the breadth of.

Teresa L. Young: Prescribing the breadth of promotion the breath of awareness is really important to achieve and that should go a long way towards unlocking additional Houston that population, but we do see that our core set of prescribers actually see enter choosing <unk> for these patients and as they see <unk> work they see that easing.

Teresa L. Young: Yeah, Tess, thanks for the questions and good morning. I'll invite Terry to comment on both questions. I would just start by saying Terry spent most of last week with the Nestle commercial group and leadership. So I think it's a good time to ask that question and provide some visibility as to how we look at 2024 and the trends that are important. Yeah, so in 2024, we're obviously, as with any launch, looking for continued growth, breadth, and depth of prescribing specifically, right? We're seeing good access, and we seek to preserve that. So it's really about the HCP trial and adoption in 2024, and I'll touch on the last pre-drug test.

Teresa L. Young: To use they will broaden their use they have told us that they would do that before launch we're already seeing that with the depth and net repeat prescribing that we're observing and observed in 2023.

Teresa L. Young: So it's continuing to have the sales representatives on the necessarily side encouraged their physicians to move the product earlier based on the amazing results that theyre seeing in the patients that they initially chosen it's a mixed bag of tactics, but we're very focused there with necessary this year.

Teresa L. Young: Positive experience can have a cascading effect and thats absolutely right.

Teresa L. Young: <unk>.

Teresa L. Young: Great.

Actually touched on my second question, which was.

Teresa L. Young: Are you really seeing a lot of these first our CDI.

Teresa L. Young: Digital promotion is actually a key tactic that it's important for a brand to leverage after you've educated your top prescribers and KOLs. So we spent with Nestle, the first months after the launch, making sure that we had deep conversations, deep education efforts with the top prescribers, and activated the high volume prescribers. And from there, we're really seeking to enhance breadth of trial. And so you can do that leveraging the sales force that we have, but we really aim to go further than that. And that's the role of digital promotion.

Teresa L. Young: <unk> treated are these largely coming from <unk> or you are like targeted group of high prescribers are these from like people that are maybe not as high prescribing or principal care providers or infectious disease docs.

Teresa L. Young: Any additional details you can give on that would be much appreciated.

Teresa L. Young: Yes.

Teresa L. Young: It's actually been one of the most interesting aspects of the launch in and one way that the launch has exceeded our expectations.

Teresa L. Young: Is the breadth of use that we're seeing across physicians across physicians. The sales representatives are calling on also physicians that they're not and we're seeing within the physician user pool.

Teresa L. Young: So you tend to scale that anywhere from four to six months after approval and launch. And so that's what we did. So we had a new campaign that launched and was rolled out to the representatives in October of last year, right around ID week. And that campaign was significantly scaled digitally to HCPs.

Teresa L. Young: A large variety of where physicians are choosing to use it first so.

Teresa L. Young: We're not really seeing a pattern interestingly.

Teresa L. Young: Which I think is highly encouraging for the launch every physician is basically choosing the patient that they think is at risk based on the patient that happens to be in front of them and their office at the moment.

Teresa L. Young: We also scaled patient promotion. You typically do that six months after a launch because you don't want to send activated patients to a physician and have the patient be the first source of awareness about a new product. So we want to make sure that physicians are aware of the new product before we turn patients on and send them in. So all of that is in the rear view mirror now, and it's about those campaigns delivering the additional breadth of prescribing and subsequent depth that we would expect because we know once physicians try VALST, they have a good experience, and they're willing to try it on additional patients in their practice, and we're seeing that in the So we're very happy about, you know, scaling that promotion and look forward to the additional growth that we'll get this year as a result of it. Switching to free drugs, I mentioned that we saw the rate come down in Q4 from Q3, right? But we've got three quarters now in sort of the mid-40s. So, you know, in terms of forecasting, those are the data points that we have. I think we'll have 46, 48, and 44 in the three different quarters in 2023.

Teresa L. Young: And we are seeing the utilization in first recurrence as well as in multiply recurrent. So we feel good about the patterns that we are seeing in that there is not a pattern.

Teresa L. Young: Other than the doctors choosing a high risk patient irrespective of number of recurrences.

Speaker Change: Great. Thanks for the functional color.

Yes.

Speaker Change: Yes. Thank you for the additional color and then letting the ethical.

Speaker Change: Thanks, Pat and thanks for the question.

Speaker Change: And we will take our next question from Chris <unk> with Goldman Sachs. Your line is open.

Chris: Great. Good morning, I wanted to ask about SER 155, and how we should be thinking about.

Chris: The decision tree that Youll have when the data is reported in the third quarter in particular, when you think about the kind of scale and the budget that would be required to further advance in the event of positive data. How are you thinking about your capacity to fund. This is this something where you're currently contemplating.

Chris: Potential partnerships and then secondly, I think you have access to a tranche of alone from Oaktree can you help us understand any of the mechanics that would be involved so that we can understand how that might be a lever to also help support financing.

Teresa L. Young: We have said, and I have said, that we expect the utilization of these programs to go down. The voucher program will go down as we get policies on board. So you can imagine we might see some declines this year as payer policies are issued for the majority of the population. But specifically in 2025, with the IRA provisions going into effect, the patient assistance program, the more traditional PAP that we have that's income-qualified for Medicare Part D patients, that's where we're seeing the majority of utilization, that should really decline in 2025. So that's sort of the data points that we have and the knowledge that we have around patient assistance. Thank you for the question. Thank you. And we will take our next question from Peyton Bohnsack with T.D. Cowan

Chris: Continued success with SER one five.

Chris: If positive data comes in the third quarter. Thank you.

Speaker Change: Yes, Chris good morning, and thanks for the two questions, but I'd like to do is maybe invite Lisa to comment a little bit on.

Lisa von Moltke: What we are expecting.

Lisa von Moltke: In the 155 readout or what we'd hoped for I will say as it relates to Resourcing Chris.

Lisa von Moltke: At the time of the restructuring last year was that we would pursue one five to the clinical readout with the both the clinical and microbiome analysis that comes with it but that we were gaining investment beyond that to the readout itself. So our expectation is that 155.

Lisa von Moltke: Basically stand on its own.

Lisa von Moltke: If it's successful we think there are multiple ways in which we can support it and it could bring additional resources into the company.

Lisa von Moltke: But if not then.

Lisa von Moltke: We're not going to.

Lisa von Moltke: Pursue it.

Lisa von Moltke: Without being able to fund it obviously, so maybe I can ask Luis to comment on that and then David and I can take the question on Oaktree.

Luis: Yes, just a reminder, that this study offers us the possibility to go in a number of different directions, depending on the results.

Speaker Change: Have a play in acute gvhd.

John Peyton Bohnsack: And are there any specific strategies that you guys, www.thevenusproject.com, Physician Education, and then I have a. Sure, Peyton. Why don't I give the first one to Terry?

Speaker Change: As well as on the infection side, where we think there are a number of different endpoint that could.

Speaker Change: Show Us.

Speaker Change: A way forward and so we'd be looking to most likely choose a particular.

Speaker Change: Route either the infection side or the acute gvhd side, and then hopefully do a very focused and accelerated path forward.

Teresa L. Young: So, absolutely, the strategy that we're taking is to definitely accelerate utilization into the earlier lines of therapy within RCBI, right? And there are a number of ways to do that. You know, one is achieving breadth, and I went into some depth about the breadth there with Tessa a minute ago, but digital promotion is really a way that you can reach deeper into the prescriber base, even into primary care, where not a lot, but many of the first recurrent patients are treated. So, the breadth of prescribing, the breadth of promotion, the breadth of awareness is really important to achieve, But we do see that our core set of prescribers actually see and are choosing VALST for these patients, and as they see VALST work, and they see that it's easy to use, they will broaden their use. They told us that they would do that before launch.

Speaker Change: With the kind of results that we would be hoping to see we would not expect that this would be a large long trial that would be they have to resource.

Speaker Change: So we will follow the data.

Speaker Change: And.

Speaker Change: And the Resourcing piece, we hit I would just also mentioned.

Speaker Change: As a reminder, that we did receive fast track designation. So we think that.

Speaker Change: How we interact with the agency and thinking about the mix of at least I mentioned that it should be should be augmented as well maybe I can ask David to comment on the <unk> question that I might add a couple of comments on Tom Alright. Thanks, Eric So when we established the debt facility with Oaktree now almost a year ago, we set it up in a way that it would provide access to capital for us.

Speaker Change: Us.

David: Not just initially but also as the company grew and as the company evolves. There is actually $245 million tranches that are available to us.

Teresa L. Young: We're already seeing that with the depth and the repeat prescribing that we're observing and observed in 2023. So it's continuing to have the sales representatives on the Nestle side encourage their physicians to move the product earlier based on the amazing results that they're seeing in the patients that they initially chose. So it's a mixed bag of tactics, but we're very focused there with Nestle this year. A positive experience can have a cascading effect. Absolutely, it's a big accelerator.

David: <unk> B, which is based on six month trailing valves sales of at least $35 million.

David: And then tranche C, which is based on 12 months trailing sales of at least $120 million.

Speaker Change: And I would just reiterate again Christopher.

Speaker Change: As we think about those potential sources of capital.

Speaker Change: I kind of think about that exclusive of $1 five I think that 155 will stand on its own.

Teresa L. Young: Great. I guess you kind of touched on my second question, which was, you know, are you really seeing a lot of these first-star CDI patients that you have been seeing treated? Are these largely coming from GIs or your like targeted group of high prescribers? Or are these from like people that are maybe not as high prescribing or principal care providers?

Speaker Change: With positive results.

Speaker Change: But we think about the oaktree.

Speaker Change: Somewhat differently.

Speaker Change: Great and if I could just ask a follow up on 155 amongst the different paths is there one that scientifically you think you have the highest probability of success or at least you have a hypothesis that will be the case and then is there one that may be from a regulatory progress standpoint might be a shorter duration and more sort of <unk>.

Teresa L. Young: and any additional details you can get on that would be much appreciated. Yeah, it's actually been one of the most interesting aspects of the launch, and one way that the launch has exceeded our expectations, is the breadth of use that we're seeing across physicians, across fields, the physicians that representatives are calling on, and also with physicians that they're not. And we're seeing within the physician user pool a large variety of where physicians are choosing to use it first. So we're not really seeing a pattern here.

Speaker Change: Concise efficient from a cost standpoint path I ask those two questions and that way because hopefully they're related but may not be the same and again looking for your perspective.

Speaker Change: No. Thanks for the question.

Speaker Change: Maybe I'll ask Matt to start and I might suggest that we start with the first cohort data that we saw.

Matt: Which was really encouraging to us and then maybe at least we can comment on her perspective as well as the regulatory landscape.

Teresa L. Young: Interestingly, which I think is highly encouraging for the launch, every physician is basically choosing the patient that they think is at risk based on the patient that happens to be in front of them in their office at the moment. And, you know, we are seeing utilization in first recurrence as well as in multiple recurrence. So we feel good about the patterns that we are seeing and that there is not a pattern other than doctors choosing a high-risk patient, irrespective of the number of recurrences. Great. Thanks for the follow-up. Yeah, thank you for the additional color and for letting me.

Matt: Right. So so Chris as a reminder, tier 155 is really designed to target <unk>.

Matt: Two specific areas one is the domination of packages and the incidence of that in the gastrointestinal tract, particularly.

Matt: Enterococcus and a couple of intra vector ACI species that are particularly problematic in this patient population and the second is to improve immune tolerance in the gastrointestinal tract to have an impact on graft versus host disease, particularly in the Gi where it's most prominent in these particular patients there is a strong <unk>.

John Peyton Bohnsack: Thanks, Peyton. Thanks for the question. And we will take our next question from Chris Shibutani with Goldman Sachs. Your line is open.

Matt: Churn of deep literature that connects and particularly this disruption of the microbiome in that increased incidents and pathogen domination too.

Matt: To these various downstream clinical sequela that we're looking at that Lisa talked about earlier enteric infections associated bloodstream infections and in particularly more severe forms of graft versus host disease. So we believe actually both are both endpoints in terms of thinking about infections and the various ways, we're looking at that as well as as well as graft versus host disease.

Chris Shibutani: Great. Good morning. I wanted to ask about SERE 155 and how we should be thinking about the decision tree that you'll have when the data is reported in the third quarter, in particular when you think about the kind of scale and the budget that would be required to further advance in the event of positive data. How are you thinking about your capacity to fund this? Is this something you're currently contemplating potential partnerships? And then, secondly, I think you have access to a trosh of a loan from Oak Tree.

Matt: These are very well founded and we have substantial.

Matt: Preclinical and clinical data that support our drugs can have an impact there.

Matt: I think most significantly is the cohort one data.

Matt: That we released last year, where we saw a substantial reduction in that incidence of pathogen domination in the gastrointestinal track relative to control cohort, where we saw a single patient.

Eric D. Shaff: Can you help us understand any of the mechanics that would be involved so that we can understand how that might be a lever to also help support financing for continued success with SERE 155 if positive data comes in the third quarter? Chris, good morning, and thanks for the two questions. What I'd like to do is maybe invite Lisa to comment a little bit on, you know, what we are expecting in the 155 readout or what we hope for. I will say, as it relates to resourcing, Chris, what we said at the time of the restriction last year was that we would pursue 155 to the clinical readout with both the clinical and microbiome analysis that comes with it, but that we were gating investment beyond that So our expectation is that 155 will basically stand on its own.

Matt: Having one of these pathogen overgrowth events.

Matt: Where we would've expected that to be substantially.

Matt: Substantially substantially higher on the order of about 60 plus percent of patients having such so with that I'll turn it over to Lisa.

Lisa von Moltke: I would just say that the both areas the gvhd as well as the infection protection area huge interest to both the medical community and the regulators Gvhd, we now have a guidance from the regulatory folks at FDA. So we know what they would want there.

Lisa von Moltke: Sure.

Lisa von Moltke: Thank the infection protection side has numerous programs coming out of the agency to encourage development work there.

Eric D. Shaff: If it's successful, we think there are multiple ways in which we can support it, and it could bring additional resources into the company. But if it's not, then we're not going to pursue it without being able to fund it, obviously. So maybe I can ask Lisa to comment on that, and then David and I can take the question on O3. Yeah, just a reminder that this study offers us the possibility to go in a number of different directions, depending on the results. We could have a play in both acute GVHD and on the infection side, where we think there are a number of different endpoints that could show us a way forward. And so we'd be looking to most likely choose a particular route, either the infection side or the GVHD side, and then hopefully, we can take a very focused and accelerated path forward. With the kind of results that we would be hoping to see, we would not expect that this would be a large, long trial that we'd have to fund.

Lisa von Moltke: Obviously it adjacent to.

The C diff.

Lisa von Moltke: Area in terms of our results and our ability to show results, there and we could imagine.

Lisa von Moltke: A number of endpoint lining up.

Lisa von Moltke: From high very high frequency events, such as neutropenia, and fever, and all the way down to the incidents of particular infections, such as the Gi tract.

Lisa von Moltke: All of those lining up would make a very powerful story and the agency has talked about that before with regard to primary and secondary endpoints lining up and the strength that that gives an approach.

Lisa von Moltke: Great.

Lisa von Moltke: Buffy I haven't I have a little bit of a preference.

Buffy: Yes, no that comes through thank you so much.

Thanks for the question.

Buffy: And we will take our final question from Kay Mackay with short your line is open.

Lisa von Moltke: Yep, so we will follow the data and the resourcing piece we hit. I would just also mention, as a reminder, that we did receive FastTrack designation. So we think that how we interact with the agency and think about the next study that Lisa mentioned should be augmented as well. Maybe I can ask David to comment on the O3 question, and I might add a couple of comments on top. Thanks, Eric. So when we established the debt facility with Oaktree, now almost a year ago, we set it up in a way that it would provide access to capital for us, not just initially, but also as the company grew and as the company evolved. There are actually two $45 million tranches that are available to us. Tranche B, which is based on six-month trailing voucher sales of at least $35 million, and then Tranche C, which is based on 12-month trailing sales of at least $120 million.

Keay Thomas Nakae: Hi, yes. Thank you.

Keay Thomas Nakae: So having implemented the head count reduction.

Keay Thomas Nakae: Late last year.

Keay Thomas Nakae: To what extent and again I know you're very focused on.

Keay Thomas Nakae: Launch of valves towards extended any at this point do you feel like.

Keay Thomas Nakae: The current.

Keay Thomas Nakae: Head count.

Keay Thomas Nakae: Operating plan is in any way constraining, what you would like to do on the marketing side.

Keay Thomas Nakae: Thanks.

Speaker Change: Yes, good morning, and thanks for the question I would say that.

Speaker Change: Our head count reductions.

Speaker Change: Constrained the number of things in.

Speaker Change: In particular on the R&D side of.

Speaker Change: Our portfolio both from a marketing investment.

Speaker Change: Work with Nestle, we have contract contractual parameters by which the.

Speaker Change: The budgets are set.

Speaker Change: And executed against so we don't believe.

David A. Arkowitz: And I would just reiterate again, Chris, that as we think about those potential sources of capital, I kind of think about that exclusively in terms of 155. I think that 155 will stand on its own with positive results, but we think about the O3 somewhat differently. Great. And if I could just ask you a follow-up question on 155. Amongst the different paths, is there one that, scientifically, you think you have the highest probability of success, or at least, you have a hypothesis that that would be the case?

Speaker Change: The head count reduction has an impact on the investment to support <unk> launch.

Speaker Change: Okay. Thanks.

Sure.

Speaker Change: And ladies and gentlemen, there are no further questions at this time I will now turn the call back to Mr. Eric <unk> for closing remarks.

Eric D. Shaff: Thank you and thanks to everyone for joining us. This morning, we look forward to keeping you updated on our progress.

Speaker Change: Hope you have a great morning, Great day, and a great week, we'll talk soon thank you.

Speaker Change: And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.

Chris Shibutani: And then is there one that maybe, from a regulatory progress standpoint, might be a shorter duration, more sort of focused, concise, efficient from a cost standpoint? I ask those two questions in that way because, hopefully, they're related, but may not be the same. And again, looking for your perspective. No, it's great; thanks for the question.

Speaker Change: Okay.

Matthew R. Henn: Maybe I'll ask Matt to start, and I might suggest that we start with the first cohort data that we saw, which is really encouraging to us, and then maybe Lisa can comment on her perspective as well as the regulatory landscape. So, Chris, as a reminder, CR155 is really designed to target two specific areas. One is the dominion of pathogens and their incidence in the gastrointestinal tract, particularly Enterococcus and a couple Enterobacteraceae species that are particularly problematic in this patient population.

Speaker Change: [music].

Matthew R. Henn: And the second is to improve immune tolerance in the gastrointestinal tract to have an impact on graft-versus-host disease, particularly in the GI tract, where it's most prominent in these particular patients. There is a strong literature and a deep literature that connects, in particular, this disruption of the microbiome and that increased incidence of pathogen domination to these various downstream clinical sequelae that we're looking at that Lisa talked about earlier, enteric infections, associated bloodstream infections, and, in particular, more severe forms of graft-versus-host disease. And I believe, actually, both endpoints, in terms of thinking about infections and the various ways we're looking at that, as well as graft-versus-host disease, are very well-founded. And we have substantial preclinical and clinical data that support our drugs can have an impact there.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Matthew R. Henn: And I think most significantly is the Cohort 1 data that we released last year, where we saw a substantial reduction in the incidence of pathogen domination in the gastrointestinal tract relative to the control cohort. Remember, we saw a single patient having one of these pathogen overgrowth events, where we would have expected that to be substantially higher, on the order of about 60-plus percent of patients having such events.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Okay.

Matthew R. Henn: So with that, I'll turn it over to Lisa. Sure. So I would just say that both areas, the GVHD, as well as the infection protection area, are of huge interest to both the medical community and the regulators. For GVHD, we now have guidance from the regulatory folks at FDA, so we know what they would want there. I think the infection protection side has numerous programs coming out of the agency to encourage development work there. It obviously is adjacent to the C. diff area in terms of our results and our ability to show results there. And we could imagine a number of endpoints lining up, from very high-frequency events, such as neutropenia and fever, and all the way down to the incidence of particular infections, such as the GI tract.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Okay.

Lisa von Moltke: All of those lining up would make a very powerful story, and the agency has talked about that before, with regard to primary and secondary endpoints lining up and the strength that that gives an approach. Great, I appreciate the additional thoughts. I have a little bit of a preference.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Chris Shibutani: Yeah, no, that comes through. Thank you so much. Thanks for the questions, sir. And we will take our final question from Keay Nakae with Chardon. Your line is open. Yes, thank you.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Keay Thomas Nakae: So having implemented the headcount reduction late last year, to what extent, and again, I know you're very focused on the launch of VALS, but to what extent, if any, at this point, do you feel like the current headcount and operating plan is in any way constraining what you'd like to do on the marketing side? Yeah, good morning, and thanks for the question. I would say that our headcount reductions constrain a number of things, in particular on the R&D side of our portfolio, but from a marketing investment point of view, we work with Nestle; we have contractual parameters by which the budget is set and executed against. So we don't believe the headcount reduction has an impact on the investment to support the VAS line. Okay, thanks.

Yes.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Eric D. Shaff: And ladies and gentlemen, there are no further questions at this time, so I will now turn the call back to Mr. Eric Shaff for closing remarks. Thank you and thanks to everyone for joining us this morning. We look forward to keeping you updated on our progress. Hope you have a great morning, a great day, and a great week.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: Okay.

Operator: We'll talk soon. Thank you. And, ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now go.

Speaker Change: Okay.

Operator: David Ege, Tessa Romero, Mark Breidenbach, Kevin Mannix, Jeffrey Jones, Mark Bohnsack, Tessa Romero, Mark Breidenbach, Jeffrey Jones, Mark Bohnsack, Mark Bohnsack, Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Seres Therapeutics fourth quarter 2023 earnings conference call. Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise.

Speaker Change: Okay.

Speaker Change: Yes.

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Speaker Change: Okay.

Speaker Change: Yes.

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Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you.

Rob Windsor: Additionally, these statements are subject to certain risks and uncertainties, which are discussed in the risk factors section of our recent SEC filings. Furthermore, any forward-looking statements made on today's call represent our views as of today only. We may have to update these statements in the future, but we disclaim any obligation to do so. On today's call, with prepared remarks, I'm joined by Eric Schaaf, Seres Chief Executive Officer, Dr. Terry Young, Chief Commercial and Strategy Officer, Dr. Lisa von Moltke, Chief Medical Officer, and David Arquette, Chief Financial Officer. In addition, Dr. Matthew Henn, Chief Scientific Officer, and Dr. Dave Egge, Chief Technology Officer, will also be available to address questions. With that, I'll pass it over to Eric.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

Eric D. Shaff: Thank you, Rob, and good morning, everyone. 2023 was an historic year for Seres and an inflection point for our company and for patients. With the approval and launch of ZAUSS, we brought to market our first-in-class oral microbiome therapeutic for patients with recurrent C. diff infection. We are proud of the impact this is having on patients, their families, and the entire C. diff community. As we enter 2024, our top priorities remain, first, delivering promises to patients, and second, advancing the potential of microbiome therapeutics more broadly, including with our CR155 phase 1b readout in alloHSAT patients expected in Q3 of this year. Everything we do with Seres has been and always will be driven by a desire to support patients with significant unmet medical needs. It is the hope and resilience of each patient and their families that inspires us and drives us to fulfill our mission. Voused is a perfect example of this.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Eric D. Shaff: In VAST, we have developed an incredible and unique option for patients who battle recurrence disinfection, one with a strong efficacy and safety profile, as well as a convenient oral route of administration, in a particularly complex disease where, historically, innovation has been difficult. Today, VAUST is changing lives. The U.S. launch of VAST has exceeded our expectations. In partnership with Nestle Health Science, we are pleased with the broad patient access received thus far, with more patients gaining access to VAS than expected. The hospital team continues its efforts to enhance hospital outflow, which we expect will continue to bear fruit into 2024. We are also seeing continued strong demand from a broad set of healthcare practitioners and across the recurrent C. diff patient pool, including utilization in patients at their first recurrence. Terry will cover our commercial metrics in more detail shortly.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you.

Yes.

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Speaker Change: Yes.

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Yes.

Speaker Change: Okay.

Abby: Ladies and gentlemen, good morning, My name is Abby and I will be your conference operator today.

Abby: At this time I would like to welcome everyone to the series Therapeutics fourth quarter 2023 earnings Conference call.

Abby: Today's conference is being recorded in all lines have been placed on mute to prevent any background noise.

Eric D. Shaff: I am extremely proud that we achieved over 2,000 VALS patient starts in 2023 following our launch in June. We continue to see substantial opportunity for growth, given the broad label and the robust clinical profile of VAST, which makes it an ideal choice for so many of the estimated 156,000 cases of recurrent CDI in the U.S. each year. I would like to thank the team at Ceres and Nestle for successfully executing our launch strategy together, collaborating with focus and urgency on behalf of our patients and their families. We look forward to seeing continued growth of VAUS utilization in 2024 and expect this positive trend to continue as patient outcomes on VAUS are more broadly recognized. We are excited by the potential of VALS to become the standard of care for preventing further CVF recurrence.

Abby: After the Speakers' remarks, there will be a question and answer session.

Abby: I'd like to ask a question during that time simply press the star key followed by the number one on your telephone keypad.

Abby: If you would like to withdraw your question Press Star one a second time.

Abby: Thank you and I will now turn the conference over to Rob Windsor of Investor Relations you may begin.

Rob Windsor: Thank you and good morning, our press release for the company's fourth quarter 2023 financial results became available at seven a M. Eastern time. This morning, and can be found on the investors and news section of the company's website.

Rob Windsor: Like to remind you that we will be making forward looking statements, including the availability of cash to fund operations the potential sales for <unk>, including our ability to achieve sales targets and milestones the timing and results of clinical studies and other statements, which are not historical facts actual results may differ materially. Additionally, these.

Eric D. Shaff: Building off our strong proof-of-concept with VAUST, we were excited to announce in December receipt of fast-track designation for the CERO 155 program, with the Cohort 2 data readout anticipated in the third quarter of this year. We believe positive data from this readout would further validate the potential of our platform and infections, including in indications such as chronic liver disease, cancer neutropenia, solid organ transplantation, and AMR infections more broadly in settings of high risk, such as intensive care units. Last year, we made the difficult decision to restructure the company and focus on VAUST and Serum 155. This was an extremely difficult decision but a necessary one for positioning Seres optimally for the future. David will touch upon this later in the call, but financial discipline is at the forefront of SERES priorities in 2024 and beyond. We will continue to evaluate all options to strengthen our balance sheet. As we do so, we believe we will be well positioned to create value for our shareholders and deliver our mission for patients now and in the future. Recently, we announced the appointment of Mirella Thorell as Executive Vice President and Chief Financial Officer of Ceres following David's retirement.

Rob Windsor: Ents are subject to certain risks and uncertainties, which are discussed under the risk factors section of our recent SEC filings any forward looking statements made are made on today's call represent our views as of today only we may have to update these statements in the future, but we disclaim any obligation to do so on today's call with <unk>.

Rob Windsor: <unk> remarks, I'm joined by Eric Shaff series, Chief Executive Officer, Dr. Terry Young Chief commercial and strategy Officer, Dr. Lisa Mulkey, Chief Medical Officer, and David <unk>, Chief Financial Officer. In addition to Dr. Matthew <unk>, Chief Scientific Officer, and Dave Dr. David AG.

Rob Windsor: Chief Technology Officer will also be available to address questions with that I'll pass it over there.

Eric D. Shaff: Thank you, Rob and good morning, everyone.

Speaker Change: 2023, with an historic year for series and then an inflection point for our company and for patients with.

Eric D. Shaff: With the approval and launch of <unk>, we brought to market are first in class oral microbiome therapeutic for patients with recurrent C diff infection.

Eric D. Shaff: We are proud of the impact vessels, having on patients their families and the entire recurrent C diff community.

Eric D. Shaff: As we enter 2024, our top priorities remain first delivering <unk> to patients.

Eric D. Shaff: We welcome Mirella and look forward to benefiting from her extensive strategy, corporate finance, and operational experience. I would also like to thank David for his leadership and significant contributions over the past three years, and we wish him the very best in his retirement. With the continued success of the VEST launch and the clinical readout from CERA 155 later this year, we look forward to 2024 as a year that will further validate CERA's platform and the promise of microbiome therapeutics. I would like to now pass the call over to Terry to discuss the significant progress we've made during the investigation. Thank you, Eric.

Eric D. Shaff: Advancing the potential of microbiome therapeutics more broadly.

Eric D. Shaff: With our SER 155 phase <unk> readout, and Allo HFC T patients expected in Q3 of this year.

Eric D. Shaff: Okay.

Eric D. Shaff: Everything we do at series has been and always will be driven by a desire to support patients with significant unmet medical needs.

Eric D. Shaff: It is the hope and resilience of each patient and their families that inspires us and drives us to fulfill our mission.

Eric D. Shaff: <unk> is a perfect example of this.

Eric D. Shaff: <unk>, we have developed an incredible and unique option for patients who power currency. This infection.

Teresa L. Young: I'm pleased to report that, along with our collaborators at Nestle Health Science, we continued to make significant progress on our launch priorities in the fourth quarter, building upon earlier momentum observed with the VALS launch. As you recall, our four focus areas are scaling HCP education efforts, Creating a Positive Customer Experience, Establishing payer coverage, and Optimizing Hospital Outflow. I'll now provide an update on each.

Eric D. Shaff: And with a strong efficacy and safety profile as well as a convenient or rather the administration.

Eric D. Shaff: In a particularly complex disease, where historically innovation has been difficult today about this changing lives.

Eric D. Shaff: The U S launch of <unk> has exceeded our expectations.

Eric D. Shaff: In partnership with Nestle Health Science, we are pleased with the broad patient access received thus far with more patients gaining access to vascular expected.

Eric D. Shaff: The hospital team continues its efforts to enhance hospital outflow, which we expect will continue to bear fruit into 2024.

Teresa L. Young: Our ACP education efforts emphasize the importance of microbiome restoration and recurrent CDI and the unprecedented efficacy and safety profile of valves. We have made significant progress in this area, supported by the promotional efforts of the Nestle Field Team. As a result, demand continued to grow in the fourth quarter, as reported to us by Nestle Health Science.

Eric D. Shaff: We are also seeing continued strong demand from a broad set of health care practitioners and across the recurrent C diff patient pool, including utilization and patients at their first recurrence.

Yes.

Eric D. Shaff: Terry will cover our commercial metrics in more detail shortly.

Eric D. Shaff: Extremely proud that we achieved over 2000 and valves patient starts in 2023 following our launch in June.

Eric D. Shaff: We continue to see substantial opportunity for growth given the broad label and the robust clinical profile of <unk>, which makes it an ideal choice for so many of the estimated 156000 cases of recurrent CDI in the U S. Each year.

Eric D. Shaff: I would like to thank the team at series, a nestle to successfully execute on our launch strategy together collaborating with focus and urgency on behalf of our patients and their families. We look forward to seeing continued growth of <unk> utilization in 2024 and expect this positive trend to continue as patient outcome.

Eric D. Shaff: On <unk> or more broadly recognized.

Eric D. Shaff: We are excited by the potential of <unk> to become the standard of care for preventing further see different currencies.

Eric D. Shaff: Building off our strong proof of concept with <unk>. We were excited to announce in December receipt of fast track designation for the <unk> five program with the cohort two data readout anticipated in the third quarter of this year.

Eric D. Shaff: We believe positive data from this readout would further validate the potential of our platform and infections, including in indications such as chronic liver disease cancer neutropenia solid organ transplant and EMR infections more broadly in settings of high risks such as intensive care units.

Teresa L. Young: Although, as expected, the majority of 2023 utilization for VAST was in the multiple recurrent patient group, we continue to see use in patients with their first recurrence. We expect this to continue to grow over time as healthcare professionals gain experience with an entirely new modality and develop an understanding of the foundational and distinct role that VALS plays in preventing recurrence. We recently completed a round of market research with HCPs who have used VAL. Findings from that research support that ACPs remain highly receptive to the profile of valve syndrome, and users have had a positive experience obtaining patient access supported by the Nestle Field Teams and the Valves Voyage Patient Hub. These encouraging results align with our view that valves can become a foundational treatment for recurrent CDI and a highly significant commercial opportunity over time.

Eric D. Shaff: Last year, we made the difficult decision to restructure the company and focus on <unk> and sort of 155.

Eric D. Shaff: This was an extremely difficult decision, but a necessary one for positioning series optimally for the future.

Eric D. Shaff: David will touch upon this later in the call was financial discipline is at the forefront of series priorities in 2024 and beyond.

Eric D. Shaff: We will continue to evaluate all options to strengthen our balance sheet.

Eric D. Shaff: As we do so we believe we will be well positioned to create value for our shareholders and deliver our mission for patients now and in the future.

Eric D. Shaff: Recently, we announced the appointment of Mirella Thrill as executive Vice President and Chief Financial Officer of theories following David's retirement.

Eric D. Shaff: We welcome Marella and look forward to benefiting from her extensive strategy corporate finance and operational experience.

Eric D. Shaff: I'd also like to thank David for his leadership and significant contributions over the past three years and we wish him the very best in retirement.

Teresa L. Young: Providing a positive experience for patients and providers is our second launch priority. Our Valves Voyage Hub continued to increase its successful conversion of enrollments to new patient starts in Q4. In terms of free drug utilization, approximately 46 percent of the 2015 new patient starts in 2023 were dispensed via our free drug program. In the fourth quarter specifically, that percentage was down to 44%, down from the 48% we reported for Q3. As a reminder, the use of free drugs that we are seeing is mostly due to patient affordability challenges with co-pays or other cost sharing requirements after the prescription was approved by their insurer.

Eric D. Shaff: With the continued success of the versant launch and the clinical readout from sort of 155. Later this year, we look forward to 2024 as a year that will further validates <unk> platform and the promise and microbiome therapeutics.

Eric D. Shaff: I would like to now pass the call over to Terry to cover the significant progress we've made bringing us the patients.

Thank you Eric I am pleased to report that along with our collaborators at Nestle Health Science, we continue to make significant progress on our launch priorities in the fourth quarter building upon earlier momentum observed with <unk> launch.

Teresa L. Young: As Youll recall, our four focus areas are scaling HCP education efforts, creating a positive customer experience.

Teresa L. Young: Establishing payer coverage.

Teresa L. Young: And optimizing hospital outflow.

Teresa L. Young: I will now provide an update on each of these.

Teresa L. Young: Our ACP education efforts emphasize the importance of microbiome restoration, and recurrent CDI and the unprecedented efficacy and safety profile of <unk>.

Teresa L. Young: We believe these programs are an important investment to support future demand across the broad RCDI patient population, and the need for these programs is likely to decline as the Inflation Reduction Act provisions governing Medicare Part D benefit design and, specifically, patient cost sharing requirements come into effect over the next year. Our third focus area is engaging payers to insure access, and to date, we have been pleased with the broad patient access we are seeing, with the vast majority of patients able to gain access to VALS through their insurer. As of year-end, we had received coverage for VALS across approximately 80 percent of commercial and 54 percent of Medicare Part D lives. We estimate that the remaining plans will issue coverage policies in the coming quarters.

Teresa L. Young: We have made significant progress in this area supported by the promotional efforts of the Nestle field teams.

Teresa L. Young: As a result demand continued to grow in the fourth quarter as reported to us by Nestle Health Science.

Teresa L. Young: In total between our June launch in year end, we received 2833 completed prescription enrollment forms for fast.

Teresa L. Young: Including 1322 in the fourth quarter alone.

Teresa L. Young: Of the total enrollments last year 2015 culminated in new patient starts, including 182 in the fourth quarter alone we.

Teresa L. Young: You've received prescription enrollment forms from 1330 unique prescribers between approval and year end nearly doubling the number of prescribers versus what we saw at the end of Q3.

Teresa L. Young: Through year-end, we saw 54% of our 2015 new patient starts reimbursed through the patient's drug benefit. Our gross-to-net rate remains modest, with minimal discretionary rebates at this stage of the launch. David will say more about our gross-to-net rates momentarily. In summary, the vast majority of patients who are prescribed VALS are able to obtain approval for the product either through the medical exception process prior to a policy being issued or via the prior authorization or appeals process.

Teresa L. Young: Approximately 65% of these prescribers of valves, where from gastro neurology with the remainder from other specialties.

Teresa L. Young: Of these 1330, Hcp's, who prescribe fast 340 of them prescribed valves to more than one patient.

Teresa L. Young: Although as expected the majority of 2023 utilization for <unk> was in the multiply recurrent patient group, we continue to see in patients with their first recurrence.

Teresa L. Young: We expect this to continue to grow over time as Hcp's gain experience with an entirely new modality and developed an understanding that the foundational and distinct role that <unk> plays in preventing recurrence.

Teresa L. Young: As first recurrent demand for VALS builds, we will continue to work with prominent payers to ensure that we preserve the broad patient access to VALS that we are currently observing. Finally, the Hospital Selling Team continues its efforts to enhance hospital outflow, and we believe these efforts will accelerate demand in 2024. As a result of this team's efforts, we are starting to see valves added to discharge protocols at some of the large institutions, as well as added to inpatient formularies. Scaling these efforts is critical to ensuring structural modifications to how our CV-guided patients are discharged. Education of Hospital-Based HCPs and Development of Protocols for RCDI that include VALS will enable more consistent consideration of valves as patients flow from the inpatient setting to the outpatient setting. These 2023 results, since the launch of VALPS in June, show the strong start of a significant opportunity to change the treatment paradigm across the entire RCDI patient pool. In fact, our results exceeded our expectations across multiple dimensions.

Teresa L. Young: We recently completed a round of market research with Hcp's you abused vast findings from that research support the Hcp's remained highly receptive to the profile of valves and users have had a positive experience obtaining patient access.

Teresa L. Young: <unk> by the necessary field teams and the valves <unk> patient hub.

Teresa L. Young: These encouraging results aligned with our view that <unk> can become the foundational treatment for recurrent CDI and a highly significant commercial opportunity over time.

Teresa L. Young: Providing a positive experience for patients and providers is our second launch priority.

Teresa L. Young: <unk> continued to increase its successful conversion of enrollments to new patient starts in Q4.

Teresa L. Young: In terms of free drug utilization approximately 46% of the 2015, new patient starts in 2023 were dispensed via our free drug programs.

Teresa L. Young: In the fourth quarter, specifically that percentage was down was 44% down from the 48% we reported for Q3.

Teresa L. Young: We, along with our collaborators at Nestle Health Science, will continue our focus on HCP education, customer experience, payer coverage, and hospital outflow, and expect to see continued acceleration of demand and progress on our key priorities as we move through 2024. As a result, we have confidence that we will ultimately achieve our goal of VALS becoming a foundational therapy for our CDI, potentially reaching or surpassing the highest sales-based milestone threshold in the 2021 Nestle co-commercialization agreement of $750 million. I would now like to pass the call over to Lisa to give more details about CR155 and our ongoing clinical trial. Thank you, Terry. As a reminder, FEAR-155 is a cultivated microbiome therapeutic candidate that is designed to prevent enteric infections, including those that may harbor antibiotic resistance, and to reduce the incidence of graft-versus-host disease in patients undergoing hematopoietic stem cell transplantation. The peer-reviewed literature supports a strong connection between a disrupted GI microbiome and pathogen domination in the GI tract with the endpoints of infection, graft-versus-host disease, and mortality in patients undergoing allohsct.

Teresa L. Young: And the need for these programs is likely to decline as the inflation reduction act provisions governing Medicare part D benefit design, and specifically patient cost sharing requirement come into effect over the next year.

Teresa L. Young: As of yearend, we had received coverage for valves across approximately 80% of commercial and 54% of Medicare part D lives and estimate that the remaining plans will issue coverage policies in the coming quarters.

Teresa L. Young: Through year end, we saw 54% of our 2015, new patient starts reimbursed through the patient's drug benefit.

Teresa L. Young: Gross to net rate remains modest with minimal discretionary rebates at this stage of the launch David will say more about our gross to net rates momentarily.

In summary, the vast majority of patients who are prescribed <unk> are able to obtain approval for the product either through the medical exception process prior to our policy being issued or via the prior authorization or appeals process.

Teresa L. Young: As first demand for valves build we will continue to work with prominent payers to ensure that we preserve the broad patient access to <unk> that we are currently observing.

Teresa L. Young: Finally, our hospital selling team continues its efforts to enhance hospital outflow and we believe these efforts will accelerate demand in 2024.

Lisa von Moltke: Last year, we reported promising Phase 1b, Cohort 1 clinical data with CR155 being well-tolerated in highly immunocompromised HSCT patients. Our data indicated that only a single patient had enteric pathogen domination within 30 days following stem cell transplant, which was a markedly lower incidence than that observed in a large reference cohort of patients. Enrollment is ongoing in Cohort 2, which incorporates a randomized, double-blind, placebo-controlled design to further evaluate safety and engraftment, as well as clinical outcomes. This portion of the study will enroll approximately 50 subjects administered either SER155 or placebo at a one-to-one ratio, and we anticipate obtaining Cohort 2 study data in Q3 of this year. In addition to continued evaluation of the safety profile and drug pharmacology, outcomes assessed will be the ability of CR 155 to decrease rates of pathogen domination, grade 3 or 4 acute GVHD, and the incidence of GI and related bloodstream infections. We will also assess the ability of CR155 to decrease rates of fever during neutropenia and the initiation of attendant antibiotic therapy.

Teresa L. Young: Education of hospital based Hcp's and development of protocols for our CDI that conclude valve.

Teresa L. Young: We will enable more consistent consideration of ALS patients slow from the inpatient to the outpatient setting.

Teresa L. Young: These 2023 results since the launch of <unk> in June.

Teresa L. Young: The strong start of a significant opportunity to change the treatment paradigm across the entire our CDI patient pool in.

Teresa L. Young: Our results exceeded our expectations across multiple dimensions.

Teresa L. Young: As a result, we have confidence that we will ultimately achieve our goal of becoming the foundational therapy for our CDI potentially reaching our surpassing the highest sales based milestone threshold in the 2021 necessarily co commercialization agreement of $750 million.

Teresa L. Young: I would now like to pass the call over to Lisa to give more details about tier 155, and our ongoing clinical trial.

Lisa von Moltke: Thank you Terry as a reminder, tier 155 is a cultivated microbiome therapeutic candidate that is designed to prevent enteric infections, including those that May harbor antibiotic resistant and to reduce the incidence of graft versus host disease in patients undergoing hematopoietic stem cell transplants.

Lisa von Moltke: <unk>.

Lisa von Moltke: Last year, we reported promising phase one b cohort, one clinical data with SER 155, being well tolerated and highly immunocompromised patients.

Lisa von Moltke: Patients.

David A. Arkowitz: I'd like to discuss our financial performance for the fourth quarter, starting with VALS. Let me first remind everyone that Seres does not recognize Bows Net Sales in its financial statements, but instead, we share equally with Nestle the commercial profits and losses, and we record our share in collaboration, profit, and loss sharing related parties. Voused profits and losses are determined based on voused net sales, cost of goods sold, and sales and marketing expenses.

Lisa von Moltke: Enrollment is ongoing in cohort, two which incorporates a randomized double blinded placebo controlled design to further evaluate safety and <unk> as well as clinical outcome.

Lisa von Moltke: This portion of the study will enroll approximately 50 subject administered either SER 155 or placebo at a one to one ratio and we anticipate obtaining cohort two study data in Q3 of this year.

David A. Arkowitz: Consistent with our pre-release in January, net sales of VAUS for the fourth quarter were 10.4 million units, and they were based on 673 units of VAUS sold during the period to specialty pharmacies and distributors. The net sales reflect estimated gross net reductions of approximately 11%. We estimate that at the end of last year, there was approximately two weeks of vouch inventory in the channel at specialty pharmacies. Seres supplies vouch inventory to Nestle, and we received payments from Nestle related to their vouch supply purchases to meet market demand. During the fourth quarter, Nestle purchased approximately nine million vouchers supply from us, and we received approximately 17 million in payments from Nestle related to prior quarter purchases. The total voucher loss in the fourth quarter was $20.5 million.

Lisa von Moltke: In addition to continued evaluation of the safety profile and drug pharmacology outcomes as Beth will be the ability of <unk> 505 to decrease rates of pathogen domination grade three or four acute gvhd and the incidence of Gi and related bloodstream infections.

Lisa von Moltke: We also will assess the ability of SER 155 to decrease rates of fever during neutropenia, and the initiation of attendant antibiotic therapy.

Lisa von Moltke: We believe positive data from this readout, which further validate the promise of this novel therapeutic modality in addressing serious infections in medically vulnerable populations, including patients with chronic liver disease cancer neutropenia and solid organ transplant.

Lisa von Moltke: We also believe that this approach could impact the problem of anti microbial resistance more broadly in settings of high risk such as intensive care unit.

David A. Arkowitz: Our share of that was $10.3 million. The fourth quarter VAUS collaboration expenses, meaning COGS and sales and marketing expenses for VAUS, increased from the prior quarter. This increase was due to higher COGS, given the variability of manufacturing costs for VAUS produced prior to approval, as well as some prior period adjustments, and higher sales and marketing expenses due to increased free goods and the initiation and ramp-up of some key marketing activities. For the fourth quarter, we also recognized, as a collaboration profit or loss-sharing related party, approximately $14 million of profit on the transfer of BAUS inventory to NEST. This profit represents the supply price to Nestle, net of the cost of the inventory for the units sold and free goods distributed by Nestle during the quarter.

Lisa von Moltke: These additional opportunities have the potential to extend the utility of tier 155, and our preclinical stage pipeline and to establish a new approach and protecting immuno compromised patients from life threatening infection and related clinical events.

Lisa von Moltke: With that I'll turn the call over to David for an update on financials.

David: Thanks, Lisa and good morning, I'd like to discuss our financial performance for the fourth quarter, starting with <unk>. Let me first remind everyone that series is not recognized <unk> net sales in its financial statements, but instead, we share equally with nestle, the commercial profits and losses, and we record our share and collaboration profit.

David: Loss sharing related party.

David: <unk> profits and losses are determined based on <unk> net sales cost of goods sold and sales and marketing expenses.

David A. Arkowitz: Because the vast majority of this vouch inventory was manufactured prior to approval, its cost was largely previously expensed, and therefore the inventory value is very low, resulting in a profit on the transfer of the vouch inventory that is close to its supply price. Over time, as the BAUS pre-approval inventory is consumed, the magnitude of this profit component from the transfer of inventory will diminish. Research and development expenses for the fourth quarter of 2023 were $26.8 million, reduced from $46.2 million for the same period in 2022. The year-over-year decrease in R&D expenses is primarily driven by BAUS commercial manufacturing costs no longer being recognized in the series E&L following the product approval in April 2023 but instead capitalized and recognized on our balance sheet. General and administrative expenses for the fourth quarter of 2023 were $17.2 million, a decrease from $22.4 million for the same period in 2022.

David: Net sales reflect estimated gross to net reductions of approximately 11%.

David: We estimate that at the end of last year. There was approximately two weeks about inventory in the channel at specialty pharmacies.

Series supplies vast inventory and ethylene we received payments from NASA related to their valves supply purchases to meet market demand during the fourth quarter nationally purchased approximately $9 million of our supply from us and we received approximately $17 million in payments from nationally related to prior quarter purchases.

David: The total <unk> loss in the fourth quarter was $25 million and our share of that was $10 3 million.

David: Our fourth quarter valves collaboration expenses, meaning Cogs and sales and marketing expenses for <unk>.

David: <unk>.

David A. Arkowitz: As you know, in November of last year, we announced a significant corporate restructuring, which is expected to achieve $75 million to $85 million in annual cash savings in 2024. The restructuring was substantially implemented around year-end last year. As a result, R&D and G&A expenses for the fourth quarter were minimally impacted by the restructuring, as the reduced spend related to the restructuring started in earnest at the beginning of this year.

David: For the fourth quarter, we also recognized as collaboration profit or loss sharing related party approximately $14 million of profit on the transfer of <unk> inventory to nationally.

David: This profit represents the supply price to Nestle net of the cost of the inventory for the units sold and free goods distributed by nationally during the quarter because the vast majority of this valve inventory was manufactured prior to approval. Its costs were largely previously expensed and therefore, the inventory value is very low.

David: <unk> in the profit on the transfer of the vast inventory that is close to its supply price over time as the vast preapproval inventories consumed the magnitude of this profit component from the transfer of inventory will diminish.

David A. Arkowitz: We ended 2023 with 128 million in cash, cash equivalents, and investments. And additionally, we have received net proceeds of approximately 18.5 million from the sale of common stock under our at-the-market equity, or ATM, program thus far this year. We anticipate that our cash balance, in conjunction with the anticipated savings from the restructuring and assuming continued quarter-over-quarter revenue growth of VAUS, the expected receipt of the 45 million tranche B under our existing term loan facility with Oak Tree, will support our operations into the fourth quarter of 2024. Thank you, and I now turn the call back to Eric. Thank you, David, and thank you again for all your contributions to the series.

David: Research and development expenses for the fourth quarter of 2023 were $26 8 million reduced from $46 2 million for the same period in 2020 to the.

David: General and administrative expenses for the fourth quarter of 2023 were $17 2 million.

David: Reduced from $22 4 million from the same period in 2022.

David: As you know in November and November of last year, we announced a significant corporate restructuring, which is expected to achieve $75 million to $85 million in annual cash savings in 2024.

Eric D. Shaff: We wish you well in your retirement. Before opening the call up to Q&A, I would like to express how proud I am of the team at Seres and the team at Nestle for bringing a first-in-class oral therapy to the market. 2023 was truly a trailblazing year for Seres, as well as for microbiome therapeutics.

David: We ended 2023 with a 100 day $128 million in cash cash equivalents and investments and Additionally, we have received net proceeds of approximately $18 5 million from the sale of common stock under our aftermarket equity or ATM program. Thus far this year we.

Eric D. Shaff: As we look forward into 2024, I'm excited about the continued success of VAUST and the possibilities with CR155. With that, we will conclude our remarks and open the line to questions. And at this time, I would like to remind everyone that in order to ask a question, press the star and then the number one on your telephone keypad. To withdraw your question from the queue, press star one a second time.

David: Thank you and I now turn the call back to Eric.

David: Okay.

Eric D. Shaff: Thank you David and thank you again for all your contributions to series, we wish you well in your retirement.

Operator: And we'll pause for just a moment to compile our Q&A, and we will take our first question from Jeff Jones with Oppenheimer. Your line is open. Thank you. Can you hear me?

Eric D. Shaff: 2023 was truly a trailblazer near for series as well as for Microbiome therapeutics.

Eric D. Shaff: As we look forward into 2024 I'm excited about the continued success of <unk> as well as the possibilities with tier one byproduct.

Jeffrey Michael Jones: Yes, we can, Jeff. Good morning. Great, thanks, Eric. Can you speak to the main drivers of what looks to be about a $170 million spend in 2024? I know we've spoken to your second manufacturing site in the past, and then any discussions you might be having with Nestle regarding the now about 10 months runway? Yeah, maybe I can ask David to start on the parameters of investment, and then I could take the second question on our partners.

Speaker Change: With that we will conclude our remarks and open the lineup for questions.

Speaker Change: Thank you.

Speaker Change: And at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: To withdraw your question from Q Press Star one a second time and we'll pause for just a moment to compile our Q&A roster.

Speaker Change: Okay.

Speaker Change: And we will take our first question from Jeff Jones with Oppenheimer. Your line is open.

David A. Arkowitz: Yeah, I would just say, Jeff, at a high level, About half of that relates to R&D, and a big chunk of that R&D spend relates to really ramping up our upcoming manufacturing facility in Backvera. So we're talking about tech transfer and really driving towards approval of that facility. So that's driving a lot of the spend.

Jeffrey Michael Jones: Thank you can you hear me.

Jeffrey Michael Jones: Yes, we can Jeff good morning.

Jeffrey Michael Jones: Great. Thanks, Eric.

Jeffrey Michael Jones: I guess can you speak to the main drivers of what looks to be about $170 million spend in 2024, I know we've spoken to.

Jeffrey Michael Jones: Your second manufacturing site in the past and then any discussions you might be having with nestle regarding the.

David A. Arkowitz: Keep in mind that we will be operating Backvera and our existing CMO simultaneously in 2024. As we get into 2025, that will drop off. We will move to primarily one CMO, and some of that spend will dissipate.

Speaker Change: Now about 10 months of runway.

Speaker Change: Yes, maybe I can ask David to start on the parameters of investment and then I can take the second question on.

Eric D. Shaff: And then we've got G&A expenditures to operate as a public company, as well as our share of the BAUS collaboration profit and loss. Maybe I can just add, Jeff, to the second part of the question. In general, we are highly focused on cash, on runway, on investments, and ways in which we can continue to support the company. And certainly, you saw action from us at the end of last year with the restructuring and the 41% reduction in pet count. We estimate between $75 million to $85 million in reduction in 2024 spend. And so our three priorities for this year are, one, supporting the launch of Valve. Two, driving towards a 155 readout.

David: But our partners, yes, I would just say, Jeff it at a high level.

David: About half of that relates to relates to R&D.

David: And a big chunk of that R&D spend relates to.

David: Really ramping up our.

David: Upcoming manufacturing facility in back there so youre talking about we're talking about tech transfer.

David: And really driving towards.

David: Approval of that facility. So that's driving a lot of the spend keeping keep in mind that we are also operating we will we will be operating back there and our existing CMO.

David: Simultaneously in 2024, as we get into 2025 that will that will drop off we will move to primarily one CMO. So youll see some of that spend dissipate.

Eric D. Shaff: And three, supporting the company both through augmenting the balance sheet, reducing spend, and looking actively at ways in which we can continue to support our operations. I would say from our partner's perspective, I think we both are pleased with the launch to date. We know that Voust is important to Nestle. We know that there's real synergy between Zempap and Voust. And I won't go further than that.

David: And then we've got G&A expenditures.

David: To operate as a public company as well as our share of the <unk> collaboration.

David: Profit and loss.

Speaker Change: Maybe I can just add Jeff to the second part of the question.

In general we are highly focused on.

Jeffrey Michael Jones: Cash on runway on investments and ways in which we can continue to support the company and certainly you saw at the end of last year.

Eric D. Shaff: But obviously, we care deeply about supporting the company, and we're actively working to try to put ourselves in the best position to serve patients in the long term. Just one quick follow-up on that and the work at Baxterra, which involves manufacturing batches. Any chance that some of those batches can be used commercially and so that the money spent there actually goes to, you know, saleable products? Yeah, I can comment on that back there.

Jeffrey Michael Jones: From us with the restructuring 41% reduction in head count.

Jeffrey Michael Jones: We estimate between $75 $85 million reduction in 'twenty 'twenty four spend so.

Jeffrey Michael Jones: Our three priorities for this year are one supporting the launch of those two driving towards a 155 readout and three.

Jeffrey Michael Jones: Putting the company both through augmenting the balance sheet, reducing spend and looking actively at ways in which we can continue to support our operations.

David S. Ege: But maybe we've got Dave here who can comment on the specific question about the batches. Hi, good morning. Yes, the simple answer is that that is correct.

Jeffrey Michael Jones: I would say from our partners' perspective, I think we both are pleased with the launch.

David S. Ege: Like it's stated that the PPQ batches for validation will be saleable, and ultimately, they would go into commercial supply. And I would just add, you know, we continue to make progress with Baxterra in supporting continued augmentation of our capacity. And, you know, we're working with them as well to think about ways in which we can continue to support both companies in our relationship moving forward. I appreciate it. I'll jump back into the queue, guys.

Jeffrey Michael Jones: Dave.

Jeffrey Michael Jones: We know that <unk> is important to nestle, we know that.

There is real synergy between <unk> and <unk>.

And I won't go for that but obviously, we care deeply about supporting the company.

Jeffrey Michael Jones: We're actively working to try to put ourselves in the best position to serve patients, but the long term.

Speaker Change: Okay, just one quick follow up on that and.

Do you work it backs, there which involves manufacturing batches.

Speaker Change: Any chance that some of those batches can be used commercially and said that.

Jeffrey Michael Jones: Thanks, Jeff. And we will take our next question from John Newman with Canaccord. Your line is open.

Speaker Change: SaaS spend there actually goes to.

John Lawrence Newman: Hi guys, good morning. Great progress on the hard work on the VALS launch. Very good. You know, obviously appreciating that you are currently very focused on commercialization, as well as the current SPHERE 155 Phase 1B study. I'm just curious, where do you see future opportunities for drug technology? Yeah, John, good morning. And thank you for the question. Maybe I can start, and I'll invite Matt, who's here, to provide some commentary as well.

Speaker Change: Saleable product.

Yes, I can comment on that there, but maybe we've got Dave here, who can comment on the specific question around the batches.

Dave: Yes, the simple answer is that is correct.

That the <unk> batches for validation will be saleable.

Dave: And ultimately we'd go into commercial supply.

Dave: And I would just add we.

Dave: Continue to make progress with Baxter.

Dave: In supporting continued.

Dave: Argumentation of our capacity.

Dave: And.

Dave: We're working with them as well to think about ways in which we can continue to support both both companies in a relationship moving forward.

Eric D. Shaff: But I guess I'll start where your question led off, which is that we are focused. Our priorities for 2024 are VALS launch 155 and supporting the financial condition of the company. So we are deeply committed to the strict allocation of capital along those key priorities.

Speaker Change: Alright, I appreciate it I'll jump back into the queue guys.

Speaker Change: Thanks, Jeff.

Speaker Change: And we will take our next question from John Newman with Canaccord. Your line is open.

John Lawrence Newman: Hi, guys. Good morning, Great progress lots of hard work on the <unk> launch very good.

John Lawrence Newman: Obviously appreciating that you are currently very focused on commercialization commercialization excuse me <unk>.

John Lawrence Newman: As well as the current tier one five phase one <unk> study I'm, just curious where do you see future opportunities for the drug technology itself.

Speaker Change: Yes, John Good morning, and thank you for the question, maybe I can start no invite Matt who is here to provide some commentary as well but.

Matthew R. Henn: Yeah, John, I mean, thinking about that kind of potential, as Eric said, that could be opened up. Really, when you think about the past decade, there's really just been an incredible explosion in research that's defined a really substantive role for the microbiome in both states of disease and states of health. And importantly, we've learned a tremendous amount mechanistically about how that happens. So, this is best understood in the context of the gastrointestinal tract, which is where SERES is focused, our research to date, and our programs to date. And there's a role to be played around infections, as we've talked about, priming both the adaptive and the immune systems, general metabolism, and quite frankly, data supporting gut-brain access, et cetera. But, you know, as I think about the development of microbiome therapeutics and the various strategies that we can pursue here, I think of it as similar to gene therapy. It's early in the morning.

Speaker Change: I guess I'll start with your question, let off which is we are focused our priorities for 2020 for our valves launch 155 in supporting the financial condition of the company. So.

Speaker Change: We are deeply committed to.

Speaker Change: The strict allocation of capital along those those key priorities.

Matt: And focus I think is the name of the game for us in the in the short term that said that doesn't mean that we can also can be can.

Matt: And be excited about what could potentially be opened up with a positive readout in the <unk> study. So we are particularly excited about that and maybe I can invite Matt to comment further yes, John I mean thinking about that kind of potential as Eric said that could be opened up really when you think about the past decade. There has really just been an incredible explosion and the <unk>.

Matt: Search that's defined a really substantial role for the microbiome.

Matt: Both states are disease states of health and importantly, we've learned a tremendous amount mechanistically about how that happened so.

Matt: And this is best understood in the context of the gastrointestinal track, which is where series is focused.

Matthew R. Henn: There's really sound science behind it. There's really a lot of potential, but translation takes some time. And to succeed here, people need to build platforms that can really kind of get at the heart of scientifically and mechanistically what's happening and, as well, strategically broaden our pipeline. And in short, SERES has built such a platform, and we're pursuing such a pipeline strategy, right? We have the ability to go from early stage discovery all the way through to manufacturing of these therapeutics. We can interrogate at very, very high resolution microbe-microbe, and microbe-host interactions that allow us to really get at specific pathways, specific targets that we can target.

Matt: But as I think about the development of microbiome therapeutics.

Matt: And the various strategies that we can pursue here I don't think of it similar to <unk>.

Matt: <unk> therapy, it's early.

Matt: Theres really sounds sound science, there's really a lot of potential but translation translation takes some time and to succeed here.

Matt: People need to build platforms that can really kind of get at the heart of scientifically and mechanistically, what's happening and as well.

Matt: With specific targets that we can.

Matthew R. Henn: And then our portfolio strategy has been building incrementally. So, VALS provides us with very strong proof of concept around the concept of being able to address infections in the gut, and our SERE 155 program is building on that knowledge to go after a broader set of pathogens, as well as leverage critical insights we have from a preclinical and clinical standpoint on how we can have an impact on preventing infections and colonization of various pathogens, and how we can actually induce immune tolerance in the gastrointestinal As well as actually look at the epithelial barrier and have impacts there.

Matt: That we can that we can target.

Matt: And then our portfolio strategy has been building incrementally. So valves provides us very strong proof of concept around the concept to be able to address infections and they got at our SER 155 program is building on that knowledge to go after a broader set of pathogens as well as leverage critical insights we have from our preclinical and clinical standpoint.

Matt: On how we can have an impact on preventing infections and in colonization of various pathogens, how we can actually induce immune tolerance in the gastrointestinal tract as well as actually.

Matthew R. Henn: So, this is all built into this 155 program, and as you heard on the call today, we see that really just as the initial point for that expansion, where we can move into additional medically compromised patients where we see disrupted microbiomes, people at risk for these same kinds of factors that include cancer neutropenia, solid organ transplantation, liver, chronic liver disease, and really that problem of AMR more broadly in the ICU. So, we see really broad potential, and we're excited to get to the next points to sort of enable us to be able to pursue that. But right now, we're focused on VALS and our 155 program. Great, thank you.

Matt: For that expansion, where we can move into additional medically compromised patients.

Matt: Where we see disruptive microbiome people at risk for these same kinds of factors that include cancer neutropenia solid organ transplant liver chronic liver disease, and really that problem of AML or more broadly in the ICU. So so we see really broad potential and we're excited to get to the next points to sort of enable us to be able to pursue that but.

Matt: Right now we're focused on valves and our 155 program.

Speaker Change: Okay, great. Thank you.

Tessa Thomas Romero: Thanks for the question, John, and we will take our next question from Tess Romero on J.P. Morgan. Your line is open.

Speaker Change: Thanks for the question John.

Speaker Change: And we will take our next question from Tessa Romero with Jpmorgan. Your line is open.

Tessa Thomas Romero: Hello, good morning, guys. Thanks so much for taking our question. So how should we think about the VALS. Specifically, what is the right way to forecast the percent of free drugs over the course of 2024 given the patient affordability challenges you cited, and then My second question is, can you clarify what you mean by the strengthened promotional campaigns and expanded reach of digital promotion by Nestle and what this means with respect to pull through to the launch. Thanks. Yeah, Tess, thanks for the questions and good morning.

Speaker Change: Okay.

Tessa Thomas Romero: Hello, Good morning, guys. Thanks, so much for taking our question so.

Tessa Thomas Romero: How should we think about that.

Tessa Thomas Romero: Charles trajectory in 2024 for now skin.

Tessa Thomas Romero: Specifically, what is the right way to forecast per cent of free drug over the course of 2024 given the.

Tessa Thomas Romero: Patient affordability challenges you cited and then.

Tessa Thomas Romero: Second question is can you clarify what you mean by that.

Tessa Thomas Romero: The strengthened promotional campaigns and expanded reach of digital promotion by Nestle and what this means with respect to your expected pull through to the launch.

Tessa Thomas Romero: Thanks.

Speaker Change: Yes, thanks for the questions and good morning.

Teresa L. Young: Let me invite Terry to comment on both questions. I would just start by saying Terry spent most of last week with the Nestle commercial group and leadership. So I think it's a good time to ask that question and provide some visibility as to how we look at 2024 and the trends that are important. Yeah, so in 2024, we're obviously, as with any launch, looking for continued growth, breadth, and depth of prescribing specifically, right? We're seeing good access, and we seek to preserve that.

Speaker Change: Let me invite Terry to comment on both questions I would just start by saying Terry spent most of last week.

Teresa L. Young: With the Nestle commercial group and leadership.

Teresa L. Young: So I think it's a good time to ask that question and provide some visibility as to how we how we look at 2024 and the trends that are important.

Yes, so in 2024 hour, obviously as with any launch looking for continued growth of breadth and depth of prescribing specifically right. We are seeing good access we seek to preserve that so it's really about HCP trial and adoption in.

Teresa L. Young: So it's really about the HCP trial and adoption in 2024, and I'll touch on the last pre-drug test. Digital promotion is actually a key tactic that it's important for a brand to leverage after you've educated your top prescribers and KOLs. So we spent time with Nestle in the first months after the launch making sure that we had deep conversations, deep education efforts with the top prescribers, and activated the high volume prescribers. And from there, we're really seeking to enhance breadth of trial. And so you can do that leveraging the sales force that we have, but we really aim to go further than that. And then there is the role of digital promotion.

Teresa L. Young: In 2024.

Teresa L. Young: And I'll touch on free drug last test digital promotion is actually a key tactic.

Teresa L. Young: Activating the high volume prescribers and from there, we're really seeking to enhance the breadth of trial.

Teresa L. Young: So you can do that leveraging the salesforce that we have but we really aimed to go broader than that and that's the role of digital promotions. So you tend to scale that.

Teresa L. Young: We were from four to six months after approval and launch and so that's what we've done. So we had a new campaign that launched and was rolled out to the representatives in October of last year right around 90 weak and that campaign was significantly scaled digitally to HCP. We also scaled patient promotion you typically do that six months.

Teresa L. Young: We also scaled patient promotion. You typically do that six months after a launch because you don't want to send activated patients to a physician and have the patient be the first source of awareness about a new product. So we want to make sure that physicians are aware of the new product before we turn patients on and send them in. So all of that is in the rear view mirror now, and it's about those campaigns delivering the additional breadth of prescribing and subsequent depth that we would expect because we know once physicians try VALST, they have a good experience, and they're willing to try it on additional patients in their practice. And we're seeing that in the results. So we're very happy about scaling that promotion and look forward to the additional growth that we'll get this year as a result of it. Switching to free drugs. I mentioned that we saw the rate come down in Q4 from Q3, right? But we've got three quarters now in sort of the mid 40s. So, you know, in terms of forecasting, those are the data points that we have. I think we'll have 46, 48, and 44 in the three different quarters in 2023.

Teresa L. Young: After a launch because you don't want to send activating a patient into a physician and the.

Teresa L. Young: And they're willing to try it on additional patients in their practice and we're seeing that in our results.

Teresa L. Young: We're very happy about.

Teresa L. Young: That promotion and look forward to the additional growth that we'll get this year as a result of it switching the free drug.

Teresa L. Young: I mentioned that we saw the rates come down in Q4 from Q3, right, but we've got three quarters now and sort of the mid forty's.

Teresa L. Young: On.

Teresa L. Young: So in terms of forecasting those are the data points that we have I think we've got 46, $48 44 and Mr. Me different quarters. In 2023, we have said and I have said that we expect the utilization of these programs to go down the voucher program will go down as we get policies on board. So you can.

Teresa L. Young: We have said, and I have said, that we expect the utilization of these programs to go down. The voucher program will go down as we get policies on board. So you can imagine we might see some declines this year as payer policies are issued for the majority of the population. But specifically in 2025, with the IRA provisions going into effect, the patient assistance program, the more traditional PAP that we have, that's income-qualified for Medicare Part D patients, that's where we're seeing the majority of utilization, that should really decline in 2025. So that's sort of the data points that we have and the knowledge that we have around patient assistance. Thank you for the questions. Thank you. And we will take our next question from Peyton Bohnsack with T.D. Cowan

Teresa L. Young: Imagine we might see some decline this year as payer policies are issued for the majority of the population.

Teresa L. Young: But specifically in 2025.

Teresa L. Young: With the IRS provisions going into effect the patient assistance program. The more traditional path that we had that's income qualified in Medicare part D patients, that's where we're seeing the majority of the utilization that should really decline in 2025.

Teresa L. Young: So that sort of the data points that we have and the knowledge that we have around patient assistance.

Speaker Change: Thanks for the question.

Speaker Change: Thank you.

And we will take our next question from Peyton bump back with TB Cowen Your line is open.

John Peyton Bohnsack: Your line is open. Hey, good morning, guys. And thanks for taking our questions. I guess to kind of build on the previous question talking about the launch trajectory, I was wondering if you could give us a little more detail about the potential penetration into the first RCDI population. And are there any specific strategies that you guys, https://thevenusproject.com, Physician Education, and then I have a. Sure. Peyton, why don't I give the first one to Terry?

Peyton Bump: Hey, good morning, guys and thanks for taking our questions I guess to kind of buildup on the previous question talking about launch trajectory I was wondering if you could give us a little more detail about the potential penetration in the first part CDI population and are there any specific strategies that you guys can do to kind of build further into that population or is it just mostly.

Peyton Bump: Our physician education efforts.

Peyton Bump: And then I have a whole lot.

Speaker Change: Sure Manav.

Manav: The first one that Terry.

Teresa L. Young: Sure, absolutely, the strategy that we're taking is to definitely accelerate utilization into the earlier lines of therapy within RCBI, right? So there are a number of ways to do that. One is achieving breadth, and I went into some depth about the breadth there with Tessa a minute ago, but digital promotion is really a way that you can reach deeper into the prescriber base, even into primary care, where a lot, not a lot, but many of the first recurrent patients are treated. So the breadth of prescribing, the breadth of promotion, the breadth of awareness is really important to achieve, But we do see that our core set of prescribers actually see and are choosing VALST for these patients, and as they see VALST work, and they see that it's easy to use, they will broaden their use. They told us that they would do that before launch.

Manav: Sure. So absolutely the strategy that we're taking is to definitely accelerate utilization into the earlier lines of therapy within our CVI right. So there are a number of ways to do that one is achieving breadth and I went into some depth about the breadth of their with test a minute ago.

Manav: But digital promotion.

Manav: Is it really a way that you can reach deeper into the prescriber base, even into primary care, where a lot not a lot, but many of the first recurrent patients are treated so the breadth of <unk>.

Manav: Prescribing the breadth of promotion the breath of awareness is really important to achieve and that should go a long way towards unlocking additional Houston that population, but we do see that our core set of prescribers actually see and are choosing <unk> for these patients and as they see <unk> work they see that easing.

Manav: To use they will broaden they argue they have told us that they would do that before launch we're already seeing that with the depth and net repeat prescribing that we're observing and observed in 2023.

Manav: So it's continuing to have the sales representatives on the necessarily side encourage their physicians to move the product earlier based on the amazing results that theyre seeing.

Manav: The patients that they initially chose <unk>, it's a mixed bag of tactics, but we're very focused there with necessary. This year positive experience can have a cascading effect.

Speaker Change: Alright, Thanks, Brian Begg accelerator.

Keay Thomas Nakae: Great, and I guess you kind of touched on my second question, which was, you know, are you really seeing a lot of these first RRTDI patients that you have been seeing treated? Are these largely coming from GIs or your like targeted group of high prescribers? Are these from people that are maybe not as high prescribing or principal care providers? and any additional details you can get from that would be great. Yeah, it's actually been one of the most interesting aspects of the launch, and one way that the launch has exceeded our expectations, is the breadth of use that we're seeing across physicians, across physicians, the fields representatives are calling on, and also physicians that they're not. And we're seeing, within the physician user pool, a large variety of where physicians are choosing to use it first. So we're not really seeing a pattern. Interestingly,

Speaker Change: Great.

Speaker Change: You kind of actually touched on my second question, which was.

Brian Begg: Are you really seeing a lot of these first our CDI patients that had been seen treated are these largely coming from <unk> or you are like targeted group of high prescribers are these people that are maybe not as high describing or principal care providers or infectious disease docs.

Speaker Change: Any additional details you can get on that would be much appreciated.

Speaker Change: Yes. It is.

Speaker Change: Actually been one of the most interesting aspects of the launch in and one way that the launch has exceeded our expectations is the breadth of use that we're seeing across physicians across physicians. The sales representatives are calling on also physicians that they're not.

Speaker Change: And we're seeing within the physician user pool.

Speaker Change: Large variety of where physicians are choosing to use it first so we're not really seeing a pattern interestingly.

Speaker Change: Okay.

Q4 2023 Seres Therapeutics Inc Earnings Call

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