Q1 2024 Seres Therapeutics Inc Earnings Call

Alex: Thank you for standing by. My name is Alex, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2024 Seres Therapeutics Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Alex and I will be a conference operator today at this time I would like to welcome everyone to the Q1 'twenty 'twenty four showers Therapeutics earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session. If you would.

Alex: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the call over to Carlo Tanzi, Investor Relations. Please go ahead.

Like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the call overdue Carlo Tanzi Investor Relations. Please go ahead.

Carlo Tanzi: Thank you and good morning. Our press release for the company's first quarter 2020 financial results and business update became available at 7 a.m. Eastern Time this morning and can be found in the Investors & You section of the company's website. I'd like to remind you that we will be making forward-looking statements, including about the potential for BAUST, the timing and results of our clinical studies, future product candidates and development plans, our ability to generate additional capital, the sufficiency of cash to fund operations, and other statements, all of which are not historical facts. However, actual results may differ materially.

Carlo Tanzi: Thank you and good morning, our press release for the company's first quarter 2020 financial results and business update 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.

Carlo Tanzi: To remind you that we will be making forward looking statements, including about the potential for ballast the timing and results of our clinical studies.

Carlo Tanzi: Sure product candidates in development plans, our ability to generate additional capital the sufficiency of cash to fund operations and other statements all of which are not historical facts.

Carlo Tanzi: 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 SEC filings any forward looking statements made on today's call.

Carlo Tanzi: We may 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 serious Chief Executive Officer, Dr. Terry Young Chief commercial and strategy Officer, Dr. Lisa von Moltke, Chief Medical Officer, and Marella thorough chief financial.

Carlo Tanzi: 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 are not historical facts. We may 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, Seres Chief Executive Officer, Dr. Terry Young, Chief Commercial and Strategy Officer, Dr. Lisa von Moltke, Chief Medical Officer, and Mirella Thorell, Chief Financial Officer. In addition, Dr. Matthew Henn, Chief Scientific Officer, will be available to answer questions. With that, I'll pass the call to Eric.

Carlo Tanzi: In addition, Dr. Matthew <unk>, Chief Scientific officer will be available to answer.

Eric D. Shaff: With that I'll pass the call to Eric.

Eric D. Shaff: Thank you, Carlo, and good morning, everyone. In 2024, Seres has continued executing on our mission of bringing revolutionary microbiome therapeutic options to patients in need. We will provide an update today on the commercial launch of ZAUSS as well as our plan to develop the next wave of life-changing microbiome therapeutics. We have tremendous optimism in the promise of microbiome therapeutics to provide transformative clinical benefits to patients. Including serious diseases that impact large populations and the potential to impact the growing risk that antimicrobial resistance poses to global public health.

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

Eric D. Shaff: In 2024 series is continued executing on our mission of bringing revolutionary microbiome therapeutic options.

Eric D. Shaff: <unk> need.

Eric: We will provide an update today on the commercial launches as well as our plans to develop a next wave of life changing microbiome therapeutics.

Eric D. Shaff: Have tremendous optimism and the promise of microbiome therapeutics to provide transformative clinical benefits to patients including for serious diseases that impact large populations and the potential to impact the growing risk.

Eric: How many peripheral resistance poses to global public health.

Eric D. Shaff: Last year was a historic year for the company as we obtained FDA approval for VAUS, and alongside our collaborator, Nestle Health Science, we successfully launched VAUS into the marketplace for adults suffering from recurrent C. difficile infection. These events mark major milestones for Seres, for the microbiome field in general, and, most importantly, for patients who have been waiting for a more effective approach to treat this difficult disease. We believe that obtaining FDA approval for the first oral microbiome therapeutic provides clear evidence of the company's scientific leadership position in the field.

Eric: Last year was an historic year for the company as we obtained FDA approval for <unk>.

Eric: And alongside our collaborators definitely help Satya, we successfully launched into the marketplace for adults suffering from recurrent C diff infection.

Eric: These events marked major milestones for series for the microbiome field in general.

Eric: And most importantly for patients who had been waiting for a more effective approach to approach to treat this difficult disease.

Eric: We believe that obtaining FDA approval of the first oral microbiome therapeutic provides clear evidence of the company's scientific leadership position in the field.

Eric D. Shaff: We are proud of the impact that VAST has had on patients, their families, and on the entire recurrent C. diff community. To date, we have seen demand from an extensive group of healthcare practitioners for VAST across the recurrent C. diff patient pool, and thousands of patients have now been treated with VAST. However, we did not see the continued level of growth that we had hoped for in the first quarter as compared to the fourth quarter of 2023.

Eric: We are proud of the impact that <unk> had on patients their families and on the entire recurrent CF community.

Eric: To date, we have seen demand from an extensive group of health care practitioners for best across the recurrent CDI patient pool and thousands of patients have now been treated with vast.

Eric: However, we did not see the continued level of growth that we had hoped for in the first quarter as compared to the fourth quarter of 2023.

Eric D. Shaff: Accelerating demand is a top priority for the Ceres-Nestle partnership, and we are optimistic about 2024 growth potential based on the refinements to launch execution that Nestle has recently implemented. Nestle has been carefully examining launch execution and has implemented refinements as the launch proceeds. During the first quarter and into April, Nestle retrained its sales teams to educate HCPs about the role thou should play in patients early in the recurrence cycle. We believe that we are beginning to see the benefits of these efforts, and we have been encouraged by a recent acceleration in VAUS net sales during March and April. In both months, net sales were the highest seen to date.

Eric: Accelerating demand is a top priority for the series Nestle partnership and we are optimistic about 2024 growth potential based on the refinement to launch execution Nestle has recently implemented.

Eric: Necessarily has been carefully examining launch execution and has implemented refinements as the launch proceeds.

Eric: During the first quarter and into April necessarily has retrained their field team to educate hcp's about the roles that should play in patients early and the recurrent cycle.

Eric: We believe that we are beginning to see the benefits of these efforts and we have been encouraged by a recent acceleration in <unk> net sales during March and April.

Eric: In both months net sales were the highest seen to date.

Eric D. Shaff: In addition, Nestle has recently increased the number of ACPs on the call list of their GI sales team, which we expect will help further accelerate sales in the near future. We believe that the commercial opportunity for VAAS remains substantial, especially when considering the large underlying patient population with an estimated 156,000 cases of recurrent CDI in the U.S. each year and given the severity of this life-threatening disease. Terry will provide more detail about the progress of the commercialization efforts and actions taken to accelerate product growth.

Eric: In addition.

Eric: <unk> has recently increased the number of Hcp's on a call list of their Gi sales team, which we expect will help further accelerate sales in the near future.

Eric: We believe that the commercial opportunity for valves remains substantial.

Eric: Especially when considering the large underlying patient population with an estimated 156000 cases of recurrent CDI in the U S. Each year and given the severity of this life threatening disease.

Eric: Terry will provide more detail about the progress of the commercialization efforts and actions taken to accelerate product growth.

Eric D. Shaff: Before she does, I'd like to take a moment to summarize our company priorities, beginning with the continued delivery of Voyager to eligible patients and working with Nestle to maximize commercial performance. We were also preparing for the clinical readout of Cohort 2 in our ongoing CR155 Phase 1B study in HSAT patients. 0155 is a consortia of 16 cultivated bacterial strains and a wholly owned program that could represent an important opportunity for the company and for patients.

Teresa L. Young: <unk> she does I would like to take a moment to summarize our company priorities beginning with the continued delivery of <unk> eligible patients and working with nestle to maximize commercial performance.

Teresa L. Young: We are also preparing for the clinical readout of cohort two and our ongoing SER 155 phase <unk> study in <unk> patients.

Teresa L. Young: SER 155 is a consortia of 16 cultivated bacterial strains and our wholly owned program that could represent an important opportunity for the company and for patients.

Eric D. Shaff: As we announced in April, we completed enrollment for the placebo-controlled Cohort 2 of this study. Last year, we announced encouraging 0155 Phase 1b Cohort 1 clinical data that showed favorable tolerability, successful drug bacteria engraftment, and a substantial reduction in pathogen domination in the gastrointestinal microbiome compared to a reference cohort of patients. The pending clinical data from cohort two could provide further demonstration of our approach to address an important new patient group.

Teresa L. Young: As we announced in April we completed enrollment for the placebo controlled cohort two of the study.

Teresa L. Young: Last year, we announced encouraging <unk> five phase one b cohort one clinical data that showed favorable tolerability.

Teresa L. Young: Successful drug bacteria in <unk>.

Teresa L. Young: And a substantial reduction in pathogen domination in the gastrointestinal microbiome compared to a reference cohort of patients.

Teresa L. Young: The pending clinical data from cohort two could provide further demonstration of our approach to addressing important new patient group.

Eric D. Shaff: The pending CR155 data are on track for late Q3 of this year, and we are highly optimistic about the prospects for this readout. As part of our strategy, we aim to leverage Seres' industry-leading microbiome capabilities and know-how to advance the development of promising new candidates in our pipeline. We believe these programs have the potential to protect millions of medically vulnerable individuals, such as those with chronic liver disease, cancer neutropenia, or who have received solid organ transplants, from life-threatening infections.

Teresa L. Young: The pending tier one side five data are on track for late Q3 of this year and we are highly optimistic about the prospects for this readout.

Teresa L. Young: Following our strategy, we aim to leverage serious industry, leading microbiome capabilities and know how to advance the development of promising new candidates in our pipeline.

Teresa L. Young: We believe these programs have the potential to protect millions of medically vulnerable individuals such as those with chronic liver disease cancer neutropenia or who have received saw solid organ transplants from life threatening infections.

Eric D. Shaff: We recognize that it is critically important to ensure that Seres has the resources required to execute on these initiatives. We are working with urgency to evaluate various options to support our promising pipeline with additional capital. With that, I'll now pass the call over to Terry.

Teresa L. Young: We recognize that it is critically important to ensure that series has the resources required to execute on these initiatives.

Teresa L. Young: We are working with urgency to evaluate various options to support our promising pipeline with additional capital.

Teresa L. Young: With that I'll now pass the call over to Terry.

Teresa L. Young: Thank you Eric.

Teresa L. Young: Although meaningful progress was made across the VALS launch priorities during the first quarter, as Eric shared just now, we did not see the growth we had hoped for across the entirety of the period. In February, based on analysis of LOMP's execution, Nestle identified a number of opportunities for refinement and retrained their sales teams to reinforce a focus on the earlier use of that. As a result, we saw that net sales in March and April were much higher than those in January and February.

Teresa L. Young: Although meaningful progress was made across the valves launch priorities during the first quarter as Eric shared just now we did not see the growth we had hedged for across the entirety of the period.

Teresa L. Young: In February based on analysis of launch execution, Nestle identified a number of opportunities for refining and retrain. The sales teams to reinforce our focus on the earlier use of <unk>.

Teresa L. Young: As a result, we saw that net sales in March and April ended much higher than those in January and February.

Teresa L. Young: In April, Nestle also significantly increased the number of HCPs on the GI sales team's call list, and we believe this will drive meaningful acceleration in the months to come. I'll move now to the details around Q1 results as provided to us by Nestle HealthSign. In the first quarter, we observed continued growth of enrollment while new patient starts remained at a similar level to that observed in Q4 of last year. In total, between the June 2023 launch and the end of the first quarter, 4,239 completed prescription enrollment forms were received for VALST, including 1,411 in the first quarter alone. Total Enrollment was 3,096.

Teresa L. Young: In April Nestle also significantly increased the number of HCP on the GI sales teams call list.

Teresa L. Young: And we believe this will drive meaningful acceleration in the months to come.

Teresa L. Young: I'll move now to the details around Q1 results as provided to us by Nestle Health Science.

Teresa L. Young: In the first quarter, we observed continued growth of enrollments, while new patient starts remained at a similar level to that observed in Q4 of last year.

Teresa L. Young: In total between June the June 2023 launch and the end of the first quarter 4239 completed prescription enrollment forms were received for ballast, including 1411 in the first quarter alone.

Teresa L. Young: Of total enrollment.

Teresa L. Young: <unk> thousand 96 culminated in new patient starts, including 183 in the first quarter.

Teresa L. Young: Fulminant and New Patient Starts, including 1,083 in the first quarter. We continue to observe new prescribers of VALS, with 609 prescribers added in the first quarter. Since approval, prescription enrollment forms were received from a total of 1,939 unique prescribers.

Teresa L. Young: We continue to observe new prescribers of <unk> with 609 prescribers added in the first quarter.

Teresa L. Young: Since approval prescription enrollment forms were received from the total of 1939 unique prescribers.

Teresa L. Young: In terms of specialty mix, approximately 65% of VALS prescribers in Q1 were from gastroenterology, with the remainder from other specialties. Additionally, 604 of them prescribed VALS to more than one patient in their practice. Although, as expected, the majority of utilization for valves to date continues to be in the multiple recurrent patient group, we do continue to see use in patients with their first recurrence. Moving now to the four focus areas for the launch, I'll first discuss HCP education.

Teresa L. Young: In terms of specialty mix, approximately 65% of those prescribers in Q1 or from gastroenterology with the remainder from other specialties.

Teresa L. Young: Of the 1939, HCP prescribed balance 604 of them prescribed.

Teresa L. Young: More than one patient in their practice.

Teresa L. Young: Although as expected the majority of the utilization for <unk> today continues to be in the multiply recurrent patient group. We do continue to see used in patients with that first recurrence.

Teresa L. Young: Moving now to the four focus areas for the launch I'll first discuss HCP education.

Teresa L. Young: The initial launch focus of the Nestle Field Sales teams was on educating a select group of high prescribers about the benefits of BALST. As a result of those efforts, many of these high-volume prescribers have tried BALST and are adopting it in their routine practice. However, in the RCBI market, even the highest prescribers see a limited number of patients annually.

Teresa L. Young: The initial launch focus have been necessarily field sales teams was on educating a select group of high prescribers about the benefits of <unk> as a.

Teresa L. Young: Most of those efforts many of these high volume prescribers have tried Dallas and are adopting it in their routine practice. However.

Teresa L. Young: However, in our CPI market.

Teresa L. Young: Even the highest prescribers.

Teresa L. Young: A limited number of patients annually.

Teresa L. Young: This creates the need to rapidly expand education efforts to a broader HCP audience in order to accelerate growth. In April, Nestle proposed refining their call list to significantly expand the number of HCPs covered by their sales plan. This expanded list, implemented in April, will also be used to inform targeted digital promotion to HCP. At launch, early uptake in the multiply recurrent segment was pronounced, providing much initial success for the sales team.

Teresa L. Young: This creates the need to rapidly expand education efforts to a broader HCP audience in order to accelerate growth.

Teresa L. Young: And April initially proposed refinement of their call list to significantly expand the number of hcp's covered by their sales teams.

Teresa L. Young: This expanded blessed implemented in April will also be used to inform targeted digital promotion to HCP.

Teresa L. Young: At launch early uptake in the multiply recurrent segment was pronounced providing much initial success of sales teams.

Teresa L. Young: But we know that in order to accelerate adoption, penetration of the earlier patient segments is a must, since patients with first and second recurrence represent a significant proportion of the RCDI patient opportunity. Nestle held its national sales meeting at the end of February, and during the meeting, we saw the significant training provided to the sales teams in support of sourcing patients from the early recurrent patient pool.

Teresa L. Young: We know that in order to accelerate adoption penetration of earlier patient segments as of March.

Teresa L. Young: Patients with first and second recurrent represent a significant proportion of our CDI patient opportunity.

Teresa L. Young: Necessarily held its national sales meeting at the end of February and during the meeting we saw the significant training provided to the sales teams and supportive sourcing patients from the early recurrent patient pool.

Teresa L. Young: Providing a positive experience for patients and providers is the second launch priority. Last year, the NESTLE team made significant progress, converting patient enrollment to New Patient Start and meeting and then exceeding benchmarks for specialty products.

Teresa L. Young: Providing a positive experience for patients and providers is the second launch priority last year. The Nestle team made significant progress converting patient enrollment can you patient starts meeting and then exceeding benchmarks for specialty products the.

Teresa L. Young: The sales team supported this key priority by working closely with the HCPs, their office staff, and the Valves Voyage Hub. However, in their efforts to provide a positive customer experience, in some cases, the sales representatives were having in-depth conversations directly with HCPs regarding the patient enrollment process at the expense of time spent on why valves should be used early and often to prevent future recurrence. Nestle recently increased the staff of a separate field reimbursement team and enhanced the remit of this team to proactively educate and support HCP office staff on the patient enrollment process.

Teresa L. Young: Our sales teams supported this key priority by working closely with HCP are office staff and the valves for this hub.

Teresa L. Young: In their efforts to provide a positive customer experience in some cases the sales representatives were having in depth conversations directly with HCP regarding the patient enrollment process.

Teresa L. Young: At the expense of time spent on why <unk> should be used early and often to prevent future.

Teresa L. Young: Recurrences.

Teresa L. Young: Mostly recently increased the staff of a separate field reimbursement team.

Teresa L. Young: And enhance the remit of this team to proactively educate and support HCP office staff on the patient enrollment process.

Teresa L. Young: These changes will empower Yale's representatives to focus on the robust profile of VALS first and foremost, leaving conversations about enrollment forms and how to start a patient for the HCP's office staff and the field reimbursement team. Finally, in late Q1, the patient enrollment process was simplified to reduce the amount of required information and move to an entirely new digital format.

Teresa L. Young: These changes will empower sales representatives to focus on the robust profile of <unk> first and foremost leading conversations about enrollment forms and how to start a patient for the Hcp's office staff in the field reimbursement team.

Teresa L. Young: Finally in late Q1, the patient enrollment process with simplify and reduce the amount of required information and to move to an entirely new digital format.

Teresa L. Young: We believe that these refinements were necessary to accelerate trial and adoption across the entire RCDI patient population. The VALS patient assistance programs continue to support a positive HCP in-patient experience, and in the first quarter, we observed that 44% of new patient starts were dispensed by the VALS patient assistance program. This level is consistent with that observed in Q4 of last year. As a reminder, dispensing the drug at no cost to the patient is primarily triggered by patient affordability challenges with co-pays or other cost-sharing requirements imposed by the patient's health plan once the prescription is approved.

Teresa L. Young: We believe that these refinements are unnecessary to accelerate trial and adoption across the entire our CDI patient pool.

Teresa L. Young: The valve patient assistance programs continued to support a positive HCP and patient experience and in the first quarter, we observed that 44% of new patient starts.

Teresa L. Young: Via the balanced patient assistance programs.

Teresa L. Young: Level is consistent with that observed in Q4 of last year.

Teresa L. Young: As a reminder, dispensing drug at no cost to the patient is primarily triggered by patient affordability challenges with co pays or other cost sharing requirements imposed by the patient's health plan once the prescription is approved.

Teresa L. Young: We believe these programs are an important investment to support future demand across the broad RCDI patient population. However, we also believe that the need for these programs is likely to decline as the Inflation Reduction Act provisions governing Medicare Part D benefit design and specifically capping patient cost sharing requirements come to Reflect over the next. The third focus area for the launch is engaging payers to ensure access, and we continue to be pleased with the broad patient access we are seeing. In Q1, like in Q4, we saw 56% of new patient starts reimbursed through the patient's drug benefit. Our growth-to-net rate remains modest, with minimal discretionary rebates.

Teresa L. Young: We believe these programs are important investments to support future demand across the broad our CDI patient populations. We also believe that the need for these programs is likely to decline as the inflation reduction at provisions governing Medicare part D benefit design and specifically.

Teresa L. Young: Capping patient cost sharing requirements come into effect over the next year.

Teresa L. Young: The third focus area for the launch.

Teresa L. Young: Engaging payers to ensure access and we continue to be pleased with the broad patient access we are seeing.

Speaker Change: Thank you Juan like in Q4, we saw 56% of new patient starts reimbursed assuming the patient's drug benefit.

Teresa L. Young: Our gross to net rate remains modest with minimal discretionary rebates marella will provide more context around the gross to net rate for <unk>.

Teresa L. Young: Morella will provide more context around the growth-to-net rate for VALS on the screen. By the end of Q1, coverage with this super valve covered approximately 83% of commercial and 55% of Medicare Part D lines. At this point in the launch, the larger plans and PBMs have issued policies for valves, and the remainder of smaller plans have decided to simply extend the new-to-market block phase versus exerting effort to construct a policy. In summary, when an HCP office staff works with the VALS Voyage Hub to navigate the approval process, we continue to see the vast majority of patients gain access to VALS through their insurer.

Teresa L. Young: By the end of Q1 covered.

Teresa L. Young: For valves across approximately 83% of commercial and 55% of Medicare part D lives.

Teresa L. Young: At this point in the launch the larger plans and Pbms have issued policies for valves and the remainder smaller plans have decided to simply extend the new to market block phase versus exert effort to construct a policy.

Teresa L. Young: In summer in summary, sorry.

Teresa L. Young: <unk> ran HCP offices staff works with the ballast voyage hub to navigate new peripheral process. We continue to see the vast majority of patients gain access to <unk> through their insurance.

Teresa L. Young: Finally, the hospital selling team continues its efforts to educate hospital outflow regarding hospital outflow, and we believe these efforts will accelerate demand this year. Education of hospital-based HCPs and development of protocols for RCDI that include VALST will enable more consistent consideration of VALST as patients flow from the inpatient setting to the outpatient setting.

Teresa L. Young: Finally, the hospital selling team continues its efforts to educate hospital outflow regarding hospital outflow and we believe these efforts will accelerate demand this year.

Teresa L. Young: Education of hospital base, Hcp's and development of protocols for our CDI that include valves will enable more consistent consideration of valves as patients flow from the inpatient to the outpatient setting.

Teresa L. Young: As the launches progress, Nestle has refined execution with this team as well, prioritizing institutions where significant progress is well underway to make VALS available broadly to their patients. Nestle is also scaling a pilot program from last year, which would allow certain hospitals to be considered for inclusion in the voucher distribution network. Thus, we expect some further net sales growth independent of the enrollments and new patient starts reported to Nestle and then to Ceres by the core specialty pharmacy.

Teresa L. Young: As the launch has progressed nestle has refined execution with this team's well prioritizing institutions, where significant progress is well underway.

Teresa L. Young: Available broadly to their patients.

Teresa L. Young: <unk> is also scaling and pilot program from last year, which would allow certain hospitals to be considered for inclusion in the valves distribution networks. Thus, we expect some further net sales growth independent of the enrollments in new patient starts reported to Nestle and Linda series by the core specialty pharmacies.

Teresa L. Young: To wrap up my remarks, I'll remind you that in 2023, we saw the early and substantial uptake of VALST, leading to financial performance for the year that exceeded both our expectations and those of Nestle. We believe these results reflect three important factors. First, the extensive pre-commercialization work conducted that remains foundational to future success. Second, a simple, effective launch strategy that remains in place. And third, focused execution during the early period by the Nestle sales team.

Teresa L. Young: To wrap up my remarks, I will remind you that in 2023, we saw the early and substantial uptake.

Teresa L. Young: <unk> financial performance for the year that exceeded both our expectations and those of nationally. We believe these results reflect three important factors first the extensive pre commercialization work conducted that remain foundational to our future success second.

Teresa L. Young: Simple effective launch strategy that remains in place.

Teresa L. Young: Focused execution during the early period by the initially sales teams. We believe that we have the path forward to reach the full potential of valves and our nestle colleagues have proven that they can focus to drive results as they did early in the launch with the recent refinements and refocusing on launch execution, we expect acceleration of our performance and in fact early.

Teresa L. Young: We believe that we have the path forward to reach the full potential of Valve, and our Nestle colleagues have proven that they can focus on driving results as they did early in the launch. With the recent refinements and refocusing of launch execution, we expect an acceleration of performance, and, in fact, early results in March and April demonstrate this. I would now like to pass the call over to Lisa to give more details about the SEER 155 program.

Lisa: <unk> in March and April demonstrates this.

Lisa von Moltke: Thank you, Terry. As a reminder, SEER 155 is a consortium of bacterial strains cultivated from clonal master cell banks. This therapeutic candidate is designed to prevent GI infections, including those from antibiotic-resistant organisms, and to reduce bloodstream infections by promoting epithelial barrier integrity. Steer 155 is also intended to modulate immune pathways with the potential to induce immune tolerance both locally and systemically. SERE 155 is being evaluated in an ongoing Phase 1b study in patients who have undergone alo-HSCT following a diagnosis of AML or other hematologic malignancy.

Teresa L. Young: I would now like to pass the call over to Lisa to give more details about this tier 155 program.

Lisa von Moltke: Thank you Terry as a reminder, tier 155 is a consortium of bacterial strains cultivated from clonal master cell banks.

Lisa von Moltke: This therapeutic candidate designed to prevent infections, including those from antibiotic resistant organisms and to reduce bloodstream infections by promoting epithelium barrier integrity.

Lisa von Moltke: Tier 155 was also intended to modulate immune pathways with the potential to induce immune tolerance, both locally and systemically.

Lisa von Moltke: SER 155 is being evaluated in an ongoing phase <unk> study in patients who have undergone allo HSBC following a diagnosis of AML or other hematologic malignancies.

Lisa von Moltke: As a result of extensive exposure to antibiotics and the effects of HSCT conditioning regimens, these patients experience a highly disrupted GI microbiome, which is linked to pathogen overgrowth and domination in the GI tract. This domination has been shown to be significantly associated with increased risks of bloodstream infections, graft-versus-host disease, and mortality.

Lisa von Moltke: As a result of extensive exposure to antibiotics and the effects of HFC T conditioning regimens. These patients experienced a highly disrupted Gi microbiome, which is linked to pathogen overgrowth in domination in the Gi tract.

Lisa von Moltke: This domination has been shown to be significantly associated with increased risks of blood stream infections graft versus host disease and mortality.

Lisa von Moltke: Last year, we reported promising Phase 1b, Cohort 1 clinical data, with SIR 155 being well-tolerated in highly immunocompromised LOHSCT patients. In this open-label cohort, CR155 was administered to 13 subjects, and we had valuable microbiome data from nine subjects. Our data indicated that of the subjects administered 155, only a single patient had enteric pathogen domination within 30 days following stem cell transplantation. This domination event was transient, and the resulting incidence of domination in Cohort 1 was markedly lower than the incidence observed in a large reference cohort of patients.

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

Lisa von Moltke: In this open label cohort tier one <unk> five was administered to 13 subjects and we had evaluable microbiome data from nine subjects.

Lisa von Moltke: Our data indicated that of the subjects administered <unk> five only a single patient had enteric pathogen domination within 30 days following stem cell transplant.

Lisa von Moltke: This domination event was transient and the resulting incidence of domination in cohort one was markedly lower than the incidence observed and the large referenced cohort of patients.

Lisa von Moltke: Last month, we reported that enrollment was complete for Cohort 2 of the study, which incorporates a randomized, double-blinded, placebo-controlled design. This portion of the study enrolled 45 subjects. We anticipate obtaining Cohort 2 study data in late Q3 of this year.

Lisa von Moltke: Last month, we reported that enrollment will complete for cohort two of the study, which incorporates a randomized double blinded placebo controlled design.

Lisa von Moltke: This portion of the study enrolled 45 subjects.

Lisa von Moltke: We anticipate obtaining cohort two study data in late Q3 of this year.

Lisa von Moltke: In addition to continued evaluation of the safety profile and drug pharmacology, we will assess the ability of CR155 to decrease rates of pathogen domination, the incidence of GI and related bloodstream infections, and the incidence of acute graft-versus-host disease. We will also assess the ability of CR 155 to decrease rates of fever during neutropenia and the initiation of attendant antibiotic therapy. 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 potentially patients with chronic liver disease, cancer neutropenia, and solid organ transplants.

Lisa von Moltke: In addition to continued evaluation of the safety profile and drug pharmacology, we will assess the ability of tier 155 to decrease rates of pathogen domination, the incidence of Gi and related bloodstream infections, and the incidence of acute graft versus host disease.

Lisa von Moltke: We will also assess the ability of <unk>, 5% 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 and medically vulnerable populations, including potentially patients with chronic liver disease cancer neutropenia and solid organ transplant.

Lisa von Moltke: We also believe that this approach could reduce the use of antibiotics by reducing events of infection or suspected infection that require antibiotic initiation. A reduction in antibiotic use could impact the problem of antimicrobial resistance more broadly. This could be especially important in settings with high rates of antibiotic use and resistance, such as intensive care units. These additional opportunities could extend the clinical utility of CIR 155 and our preclinical stage program while establishing a fundamentally new approach to protect substantial numbers of medically vulnerable patients from life-threatening infections. And with that, I'll turn the call to Mirella.

Lisa von Moltke: We also believe that this approach could reduce the use of antibiotics by reducing events of infection or suspected infections that require antibiotic initiation.

Mirella: A reduction in antibiotic use could impact the problem of anti microbial resistance more broadly.

Mirella: This could be especially important in settings with high rate of antibiotic use and resistant such as intensive care unit.

Mirella: These additional opportunities could extend the clinical utility of SER 155, and our preclinical stage programs, while establishing a fundamentally new approach to protect substantial numbers of medically vulnerable patients are life threatening infections.

Mirella: With that I'll turn the call tomorrow.

Mirella Thorell: Thanks, Lisa, and good morning. I'd like to discuss our financial performance for the first quarter, starting with VAL. To remind you, Seres does not recognize VALS 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. VALS profits and losses are determined based on VALS net sales, cost of goods sold, and sales and marketing expenses.

Mirella: Thanks, Lisa and good morning, I'd like to discuss our financial performance for the first quarter starting with <unk>.

Mirella Thorell: To remind you serious does not recognize fast net sales in its financial statements, but instead, we share equally with NES fleet, the commercial profits and losses, and we record our share in collaboration profit and loss sharing related party SaaS profits and losses.

Mirella Thorell: Are determined based on SaaS net sales cost of goods sold and sales and marketing expenses net sales of <unk> for the first quarter were $10 1 million.

Mirella Thorell: Net sales of VALST for the first quarter were $10.1 million, based on 642 units of VALST sold during the period to specialty pharmacies and distributors. The net sales reflected estimated gross to net reductions of approximately 15%. This is slightly higher than the previous quarter due primarily to an increase in copay assistance.

Mirella Thorell: And based on 642 units a vast so during the period to specialty pharmacies and distributors.

Mirella Thorell: Net sales reflected estimated gross to net reductions of approximately 15%. This is slightly higher than the previous quarter due primarily to an increase in co pay assistance.

Mirella Thorell: We estimate that at the end of the quarter, there were approximately two weeks of vouch inventory in the channel at specialty pharmacies, consistent with the levels at the end of last year. Seres supplies vouch inventory to Nestle, and we received payments from Nestle related to their vouch supply purchases to meet market demand. During the first quarter, Nestle purchased approximately $7.4 million of verified supply from the company, and we received approximately $8.7 million in payments from Nestle related to prior quarter purchases.

Mirella Thorell: We estimate that at the end of the quarter. There were approximately two weeks of inventory in the channel at specialty pharmacies consistent with the levels at the end of last year.

Mirella Thorell: Series surprised about inventory to Nestle and we receive payment from nestle related to their fast supply purchases to meet market demand.

Mirella Thorell: During the first quarter Nestle purchased approximately $7 $4 million of supply from the company and we received approximately $8 $7 million in payments from net fleet related to prior quarter purchases.

Mirella Thorell: The total VOUST loss in the first quarter was $14.3 million, and our share of that was $7.1 million. The first quarter VOUST collaboration expenses, meaning COGS and sales and marketing expenses for VOUST, decreased from the prior quarter. This decrease was due to prior period adjustments or charges recognized in the fourth quarter and lower external costs in the first quarter of this year. For the first quarter, we also recognized, as a collaboration, profit, or loss sharing related party, approximately $4.7 million of profit on the transfer of vouching inventory to Nestle. The profit from the supply price to Nestle, net of the cost of inventory for the units sold and free goods distributed by Nestle during the quarter.

Mirella Thorell: The total loss in the first quarter was $14 $3 million and our share of that with $7 1 million. The first quarter <unk> collaboration expenses, meaning Cogs and sales and marketing expenses for <unk> <unk>.

Mirella Thorell: Decreased from the prior quarter. This decrease was due to prior period adjustments or charges recognized in the fourth quarter and lower external costs in the first quarter of this year.

Mirella Thorell: For the first quarter, we also recognized as collaboration profit or loss sharing related party approximately $4 $7 million of profit on the transfer of <unk> inventory to next week.

Mirella Thorell: Profit.

Mirella Thorell: The supply price to NES fleet net of the cost of inventory for the units sold and free goods distributed by Nestle during the quarter.

Mirella Thorell: Research and development expenses for the first quarter were $21.7 million, reduced from $44 million for the same period in 2023. The year-over-year decrease in R&D expenses is primarily driven by valved commercial manufacturing costs no longer being recognized in the Series P&L following the product approval in April 2023 but instead capitalized and recognized on our balance sheet. In addition, reductions in headcount and other expenses contributed to decreased expenses following the implementation of the Structuring Plan in the fourth quarter of last year and the focus of our resources on the CIRA 155 program. General and administrative expenses for the first quarter were $15.5 million, reduced from $22.5 million for the same period in 2023.

Mirella Thorell: Research and development expenses for the first quarter were $21 $7 million reduced from $44 million for the same period in 2023.

Mirella Thorell: The year over year decrease in R&D expenses is primarily driven by commercial manufacturing costs no longer being recognized in this series P&L. Following the product approval in April 2023, but instead capitalized and.

Mirella Thorell: <unk> on our balance sheet.

Mirella Thorell: In addition reductions in head count and other expenses contributed to decreased expenses. Following the implementation of the restructuring plan in the fourth quarter of last year and the focus of our resources on the SER 155 program.

Mirella Thorell: Again, reflecting lower headcount following the restructuring actions and other cost reduction efforts. In May, we received a Notice of Default and Reservation of Rights letter from our lender, Oaktree, stating that an event of default had occurred due to our non-payment of a milestone due to Bexara under our manufacturing agreement with Bexara. We advised Oaktree that no event of default had occurred because we believe the milestone has not yet been met.

Mirella Thorell: General and administrative expenses for the first quarter were $15 $5 million reduced from $22 5 million from the same period in 2023, again, reflecting lower head count following the restructuring actions and other cost reduction effort.

Mirella Thorell: Rich.

Mirella Thorell: Yes.

Mirella Thorell: In May we received a notice of default and reservation of rights letter from our lender oak tree, stating that an event of default had occurred due to our non payment of a milestone due to Baxter era under our manufacturing agreement with Baxter era.

Mirella Thorell: We advised oak tree that no event of default has occurred because we believe the milestone has not yet been met.

Mirella Thorell: Yes.

Mirella Thorell: And we're also in constructive discussions with Bec Therer regarding the steps necessary to achieve the milestones. Turning to our cash position, as of March 31st, 2024, we had $111.2 million in cash and cash equivalents, as compared with $128 million at the end of 2023. Based on our various operating plans, we anticipate these resources will support our operations through obtaining this year's 155 Cohort 2 data and into the fourth quarter of this year.

Mirella Thorell: And we're also we're also in constructive discussions with back there regarding the steps necessary to achieve that milestone.

Mirella Thorell: Turning to our cash position as of March 31, 2024, we had $111 $2 million in cash and cash equivalents as compared with $128 million at the end of 2023.

Mirella Thorell: Based on our various operating plans, we anticipate these resources will support our operations through obtaining this year 155 cohort two data and into the fourth quarter of this year.

Mirella Thorell: The companies' operating plans may include drawing down the $45 million tranche B under the company's existing Senior Secured Debt Facility with OPTRE if the net sales and other conditions are met, as well as alternate plans if the necessary conditions are not met. Additionally, the companies may include selling shares under the company's ATM, implementing additional cost reduction initiatives, and other measures. Importantly, as Eric mentioned, activities are underway to strengthen the company's balance sheet to support our pipeline and drive value. Thank you. I will now turn the call back to Eric.

Mirella Thorell: Company's operating plans may include drawing down the $45 million tranche b under the Companys existing senior secured debt facility with Oaktree, if the net sales and other conditions are met.

Mirella Thorell: As well as alternate plans if the necessary conditions are not met our operating plans may include selling shares under the company's ATM implementing additional cost reduction initiatives and other measures.

Mirella Thorell: Importantly, as Eric mentioned activities are underway to strengthen the company's balance sheet to support our pipeline and drive value.

Mirella Thorell: Thank you I will now turn the call back to Eric.

Eric: Thank you Laura.

Eric D. Shaff: Seres has continued to execute with the ongoing commercialization of VAUST as well as driving our additional promise in microbiome therapeutic candidates forward in clinical development. We are particularly excited about the upcoming 0155 data readout later this year as an important potential value driver for the company. We look forward to keeping you updated on our progress during 2024 and as we evaluate options to support the company. With that, we have clearly demonstrated the potential for microbiome therapeutics. We believe that many more opportunities lie ahead and that Seres has the potential to bring additional transformative new therapies to patients. With that, Operator, we'll conclude our prepared remarks and open up the line to questions.

Eric: Sirius has continued to execute with the ongoing commercialization of <unk> as well as driving our additional promising microbiome therapeutic candidates forward in clinical development.

Eric D. Shaff: We are particularly excited about the upcoming SER one slide five data readout later this year.

Eric D. Shaff: As an important potential value driver for the company.

Eric D. Shaff: We look forward to keeping you updated on our progress during 2024.

Eric D. Shaff: And as we evaluate options to support the company.

Eric D. Shaff: With valves, we have clearly demonstrated the potential for microbiome therapeutics, we believe that many more opportunities lie ahead and that series has the potential to bring additional transformative new therapies to patients.

Eric D. Shaff: With that operator, we'll conclude our prepared remarks and open up the line for questions.

Alex: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Ted Tenthoff with Piper Sandler. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again, if you are called upon to ask your question in a listening via loud speakers.

Edward Andrew Tenthoff: On your device. Please pickup your handset and ensure that your phone is not on mute when asking your question again.

Edward Andrew Tenthoff: Star one to join the queue and your first question comes from the line of Ted Ted Hoff with Piper Sandler. Please go ahead.

Edward Andrew Tenthoff: Great. Thank you. And thank you for the update. I was wondering whether or not you could remind us if there were any price changes for VALS this year, and, if you can, what the current gross price is. And I appreciate all the color on the adjustments being made by Nestle. Can you remind us how many reps in total are detailing VALS? Thank you.

Edward Andrew Tenthoff: Great. Thank you and thank you for the update.

Edward Andrew Tenthoff: Just wondering whether or not you could remind us if there was any price changes for valves. This year.

Ken: Ken will take time.

Edward Andrew Tenthoff: Gross price.

Edward Andrew Tenthoff: And I appreciate all the color on the.

Edward Andrew Tenthoff: Adjustments being made by Netflix can you remind us how many reps in total are detailing Ralph thank you.

Eric D. Shaff: Yeah, Ted, good morning, and thank you for the question. So maybe I'll take the first or the second, and I'll ask Terry to comment on the pricing and any other comments on the sales force. So there are approximately 150 reps on the GI side, as well as 20 reps that are devoted to the hospital and really are the quarterbacks of helping patients navigate through the hospital infrastructure. But maybe Terry can comment further on that, as well as the WAC question.

Speaker Change: Yes, hi, good morning, and thank you for the question. So maybe I'll take the first and second I'll ask Terry to comment on the pricing and any other comments on salesforce. So theres approximately 150 reps on the <unk>.

Eric D. Shaff: <unk> side as well as 20 reps that are devoted towards the hospital and really being the quarterbacks of helping patients navigate through the hospital infrastructure, but maybe Terry comment further on that as well as the last question.

Eric D. Shaff: Okay.

Teresa L. Young: Sure, and thanks for the questions, Ted. You know, with respect to the Nestle representatives, I would highlight the fact that, based on the refinements that Nestle's implemented, they have increased the call list specifically for the GI sales team that carries both Zenpep and Val, but they haven't increased the size of the So I think this gives us all a message about the importance of this launch and accelerating performance for both companies, but particularly Nestle, in that they are allocating additional representative time and effort away from ZenPEP and Taboust.

Terry: Sure and thanks for the questions Ted.

Teresa L. Young: With respect to the Nestle Representatives I would highlight the fact that based on the refinement that nestle's implemented.

Teresa L. Young: They have increased the call list specifically for the GI sales team that carries those events have been balanced.

Teresa L. Young: And they havent increased the size of the sales team so I think.

Teresa L. Young: This gives us all a message on the importance of this launch and accelerating performance for both companies, but particularly nestle and that they are allocating additional representatives time and effort away from <unk> and <unk>. So we're very pleased with the the digging under the hood that.

Teresa L. Young: So we're very pleased with the digging under the hood that they've done and the refinements in the execution of the field sales team. And it really speaks to the importance of this launch to their company the fact that they are allocating resources in this manner. With respect to price changes, a price increase was implemented on December 31st of last year. It was a 6% increase. So that brings us to a whack of $18,550 for the product. Thanks for the question. Thank you, and I really, yep, super helpful, and I really appreciate the color on the focus of the reps. Thank you.

Speaker Change: They've done and refinements of the execution of the field sales team in and it really speaks to.

Teresa L. Young: The importance of this launch to their company. The fact that they are allocating resources in this manner.

Teresa L. Young: With respect to price change or price increases taken on December 31st of last year. It was a 6% increase so that brings us to a whack of $18550 for the product.

Speaker Change: Thanks for the question, Kevin I really Super.

Speaker Change: Super helpful. I really appreciate it appreciate the color.

Teresa L. Young: The focus of the reps. Thank you.

Speaker Change: Thanks for the question Doug.

Teresa L. Young: Okay.

John Lawrence Newman: Your next question comes from the line of John Newman with Canaccord Genuity; please go ahead.

Teresa L. Young: Your next question comes from the line of John Newman with Canaccord Genuity. Please go ahead.

Eric D. Shaff: Hi, guys. Thank you for the update, and thanks for taking my question. So, wondering if you could talk to us about CR155 about the efficacy endpoints. We're looking at some really interesting and important outcomes here, I think, following transplant. And just wondering what you think will be particularly interesting here for investors to focus on the data readout late in 3Q. Thanks.

John Lawrence Newman: Hi, guys. Thank you for the update and thanks for taking my question.

Eric D. Shaff: So I'm wondering if you could talk to us on tier 155 about the efficacy endpoints looking at some really interesting and important outcomes here I think following transplant.

Eric D. Shaff: And just wondering what do you think will be particularly interesting here.

Eric D. Shaff: For investors to focus on.

Eric D. Shaff: The data readout late <unk>. Thanks.

Lisa von Moltke: John, good morning, and thank you for the question. So maybe I'll start, and I'll ask Lisa to comment, and Matt after Lisa, but I'll just start by reminding everyone this is a 1B study, so, you know, primarily we're looking at engraftment and safety, but we are very excited about this study. We think it's representative of where the technology is going, and not only are we excited about the potential to help patients within this specific indication, but what it unlocks for us, as we mentioned in our prepared remarks. But with that, maybe I can turn it over to Lisa for your question. Sure.

Eric D. Shaff: John Good morning, and thank you for the question, So maybe I'll start and I'll ask Lisa to comment and Matt After Liza, but I'll just start by reminding everyone. This is this is a one day study so.

Lisa: Primarily we're looking at <unk>.

Lisa: In safety, but we are very excited about this study we think its representative of where the technology is going and not only are we excited about the potential to help patients within this specific indication.

Lisa von Moltke: It unlocks for us as we mentioned in our prepared remarks, but with that maybe I can turn it over to Lisa for your question, Sir Hi, John Yeah.

Lisa von Moltke: Sure. Hi John.

Lisa von Moltke: Yeah, just as you noted, there are a number of endpoints in the study that would be, could be great positive outcomes for patients. But we are going to be paying particular attention to the ability of 155 to decrease the incidence of neutropenia and fever, as well as bloodstream infections. And that's because the ability of 155 to decrease pathogen domination and infectious events, including things that might be further downstream, like antibiotic starts and more time in the hospital, would be applicable not just to HSCT patients but to broader patient groups, some of which we mentioned in our prepared remarks. So, in that way, 155 could offer a whole new therapeutic approach to reducing infections in a very large number of patients. So we're very excited to see the results of that.

Lisa: Just as you noted there is a number of endpoints in the study that would be could be great positive outcomes for patients.

Lisa von Moltke: But we are going to be paying particular attention to the ability of 1552 decreased incidence of neutropenia and fever as well as bloodstream infections.

Lisa von Moltke: And that's because of the ability of one five to decrease pathogen domination and infectious events, including things that might be further downstream like.

Lisa von Moltke: Antibiotics starts and more time in the hospital would be applicable not just to HFC T patients, but to broader patient groups some of which we mentioned in our prepared remarks, so in that way 155 could offer.

Lisa von Moltke: Whole new therapeutic approach to.

Lisa von Moltke: Two reducing infections in a very large number of patients. So we're very excited to see the results on that.

Lisa von Moltke: And then Matt, maybe a comment to start with.

Lisa von Moltke: And then Matt maybe you can comment and just does it.

Matt: Sure Yes.

Matthew R. Henn: Yeah, John, and again, from a pharmacology standpoint, the thing we're most focused on is the type of data we reported in the first cohort, which is pathogen domination, the incidence of that across different patient populations. Remember, we saw a very promising result there where we saw a substantially lower rate of these adverse events than we did in a reference control cohort. We'll be looking to see that type of data again compared to the control cohort, but also, importantly, in the context of the placebo control.

Matthew R. Henn: [inaudible] Yeah, John, and again, from a pharmacology point of view.

Matt: Yes, John.

Matt: Again from a pharmacology standpoint, the thing we're most focused on is the type of data we reported in the first cohort.

Matthew R. Henn: Which is that pathogen combination and the incidence of that across different patient population.

Matthew R. Henn: Remember we saw a very promising result, there where we saw.

Matthew R. Henn: Substantially lower rate of these incidents events than we did in the reference control cohort will be we'll be looking to see that type of data.

Matthew R. Henn: When compared to the control cohort, but also importantly in the context of the placebo control. These are the types of data we used along with the safety profile of the drug.

Matthew R. Henn: These are the types of data we used, along with the safety profile of the drug from the first cohort, to get fast-track designation from the FDA on this program, so we'll be looking to see those types of data play out in the second cohort.

Matthew R. Henn: From the from the first cohort to get fast track designation from the FDA on this on this program. So we'll be we'll be looking to see those types of data play out in the second cohort.

Speaker Change: Great. Thank you.

Speaker Change: Thanks for the question John.

Matthew R. Henn: Yes.

Tessa Thomas Romero: Your next question comes from the line of Tess Romero with J.P. Morgan. Please go ahead.

Matthew R. Henn: Your next question comes from the line of Tess Romero with Jpmorgan. Please go ahead.

Eric D. Shaff: Hi, good morning. Thanks so much for taking our questions. So a big picture one from us, can you provide your latest thinking around how we should think about the launch trajectory here over the next few quarters for Voused? You know, you talked about how MedSales was roughly flattish quarter over quarter. But how does that kind of play into your degree of confidence in being able to meet this net sales requirement in order to draw down on that OPTREATRANCE by the end of 3Q?

Tessa Thomas Romero: Hi, good morning, Thanks, so much for taking our questions.

Eric D. Shaff: So a big picture one for Matt can you provide.

Eric D. Shaff: Your latest thinking around how we should think about to launch trajectory here over the next few quarters from a mouse.

Eric D. Shaff: You talked about how <unk> net sales were roughly flattish quarter over quarter.

Eric D. Shaff: But how does that kind of play into your degree of confidence in being able to meet this net sales requirement in order to draw down on that treat <unk> by the end of <unk>, you don't really what I'm trying to get at guidance you talked about a number of refinements that theory is making to launch strategy, but I'll.

Eric D. Shaff: You know, really what I'm trying to get at, guys, is you talked about a number of refinements that Ceres is making to the launch strategy, but how quickly do those refinements actually translate to an acceleration of the launch here? Thanks so much.

Eric D. Shaff: Quickly do those refinements actually translate to an acceleration of the launch here. Thanks, so much.

Eric D. Shaff: Yeah, Tess, good morning, and thank you for the questions. Maybe I'll start, and then I'll hand it over to Teri for her comments.

Speaker Change: Yes, good morning, and thank you for the questions, maybe I'll start and then I'll hand, it over to Terry for her comments, but I guess.

Eric D. Shaff: But I guess I'll begin where you ended your question, which is, how quickly may we see an acceleration? And I think the short answer is that we have begun to see it, including in March and April. So as it relates to the milestone, you know, we would need to see growth from the March and April numbers in order to put us in a position to earn it. On the other hand, we think that growth is achievable. And maybe I'll ask Teri to comment, and I can add some comments at the end.

Teri: I'll begin where where you ended your question, which is how quickly maybe we see an acceleration and I think the short answer is that we have begun to see it including in March and April so as it relates to the milestone.

Teri: We would need to see growth from the March and April numbers in order to put us in a position to earn it on the other hand, we think that that growth is achievable and maybe I'll ask Terry to comment and I can add some color to the area.

Teresa L. Young: Sure. Thanks for the question, Tess. It's actually a really important nuance and point to make.

Teri: Sure. Thanks for the questions asked it's actually it's a really important.

Teri: Nuance and point to make.

Teresa L. Young: We don't believe that we have, new patient starts as well, all-time highs in March and April versus previous months. So we're really pleased with the turning of the tide here, and we would expect that acceleration to continue over the coming quarters. The most important refinement that happened in April was the revision of the call list and the expansion of that call list to include additional high-volume or high-potential HCPs. So we're very optimistic about the potential for the product, both in the long term but also in the short term here based on the changes that Nestle is making.

Teri: We don't believe that we have.

Teresa L. Young: The wrong strategy, our strategy has been that since prior to the launch and agreed with Nestle.

Teresa L. Young: We believe we have an execution issue on a number of fronts and some nestle, having obviously at the customer facing teams deployed from their company their closest to those teams that are closest to the customer.

Teresa L. Young: And as you could see in my car here in my prepared remarks.

Teresa L. Young: <unk> done a remarkable job of really getting under the hood of execution and where there are some areas that we can refine and improve working with their sales teams and I saw that pull through at the February sales meeting.

Teresa L. Young: In terms of really focusing the representatives on making the case for earlier use of valves and getting them out of the weeds with their HCP on logistics.

Teresa L. Young: And allowing a field reimbursement team to take the helm and take the baton on that with the office staff that we have the conversations now in the places where they belong those execution will refinements are critical and we're seeing the results not only in sales, but also in some of the other metrics like enrollment and new patient starts.

Teresa L. Young: So April for example was an all time high for patient enrollment.

Teresa L. Young: Net sales all time highs for March and April.

Teresa L. Young: And.

Teresa L. Young: New patient starts as well all time highs in March and April versus previous months. So we're really pleased with the turning of the tide here and we would expect that acceleration to continue over the coming quarters.

Teresa L. Young: The most important refinement that happened in April is the revision of the call list and the expansion of that call list.

Teresa L. Young: To include additional high volume or high potential HCP. So we're very optimistic about the potential for the product both in the long term, but also in the short term here based on the changes that Nestle is making.

Eric D. Shaff: I might just add one more comment, which is, Tessa, your question has kind of two dimensions to it. One is the underlying commercial opportunity. The other was the next tranche of debt. What I would say is that while we do think that the conditions of reaching the threshold to qualify for the debt are possible, we are not building our financial strategy around the next tranche of debt as the solution. As we mentioned in our prepared remarks, we have urgency in considering and acting on different alternatives that we have ahead of us to support the company both this year and into the future. Certainly, those include options that wouldn't require the next tranche of debt as the primary financing vehicle for the company.

Speaker Change: Yes, I might just add one more comment which is test to your question is kind of two dimensions to it one is the underlying commercial opportunity. The other was the miles.

Eric D. Shaff: Next tranche of debt, what I would say is that while we do think that the conditions of reaching the threshold.

Eric D. Shaff: Qualified for the that are possible.

Eric D. Shaff: We are not building our financial strategy around the next tranche of debt as the solution. So as we mentioned in our prepared remarks, we have urgency in considering and acting on different alternatives that we have ahead of us to.

Eric D. Shaff: To support the company in both this year and into the future.

Eric D. Shaff: And certainly those include options that.

Eric D. Shaff: Wouldn't require the next tranche of debt as the primary financing vehicle for our company.

Tessa Thomas Romero: Thanks so much for taking our questions.

Speaker Change: Thanks, so much for taking our question.

Speaker Change: Thanks, guys.

Jeffrey Michael Jones: Your next question comes from the line of Jeff Jones with Oppenheimer. Please go ahead.

Tessa Thomas Romero: Your next question comes from the line of Jeff Jones with Oppenheimer. Please go ahead.

Eric D. Shaff: Good morning, guys, and thanks for taking the question. Can you speak to any, um, cost modifications as a result of the revised sales strategy and efforts coming from Nestle, and any visibility on where you see sales needing to be to reach a break even here?

Jeffrey Michael Jones: Good morning, guys and thanks for taking the question.

Eric D. Shaff: Sure.

Jeffrey Michael Jones: Can you speak to any.

Eric D. Shaff: Cost modifications.

Eric D. Shaff: As a result in the <unk>.

Eric D. Shaff: <unk> sales strategy and efforts coming from nationally.

Eric D. Shaff: And.

Jeffrey Michael Jones: Any visibility on where you see sales and needing to be to Rachel reach a breakeven here.

Eric D. Shaff: Yeah, Jeff, maybe I can start and then I can hand it to Mirella. But, you know, as you know, we instituted and executed upon a significant restructuring in November of last year and certainly were on target for those actions. You know, we are highly focused on reaching the 155 results as well as putting the company in a position to be successful in the longer term. So what Mirella mentioned in her prepared remarks is that we certainly expect to get there.

Speaker Change: Yes, Jeff maybe I can start and then I can hand it to relevant.

Eric D. Shaff: You know, we instituted and executed upon a significant restructuring in November of last year and certainly we're on target for those actions.

Eric D. Shaff: We are highly focused on reaching the 155 results as well as putting the company in a position to be successful in the longer term. So.

Eric D. Shaff: What marella had mentioned in her prepared remarks.

Eric D. Shaff: We certainly.

Mirella Thorell: Expect to get there there are different ways in which we can get there.

Eric D. Shaff: There are different ways in which we can get there. I don't think that we can be specific in terms of too far in terms of the types of alternatives that we're considering. But, you know, certainly you should know that we are active in considering those options now. And we expect to report back to you shortly. But maybe Mirella can comment further.

Mirella Thorell: I don't think that we can be specific in terms of.

Mirella Thorell: Too far in terms of the types of alternatives that we're considering but certainly you should know that we are active in considering those options.

Mirella Thorell: And we expect to report back to you shortly but maybe Paul can comment further.

Mirella Thorell: Agreed. We are being mindful and proactive in making sure that we're continually looking for opportunities to save and those that make sense, that don't compromise our clinical development plans and, equally, don't compromise our ability and collaboration to grow the vast sales. So we're in lockstep with them about the need to support and spend to deliver growth, and we have a good mechanism in our Joint Steering Committee to make those decisions thoughtfully, and we'll continue to support that.

Eric D. Shaff: Yes.

Mirella Thorell: Agreed we are being mindful and proactive in making sure that we are continually looking for opportunities to save.

Mirella Thorell: And those that makes sense that don't compromise.

Mirella Thorell: Our.

Mirella Thorell: Clinical development plans and equally don't compromise, our ability and <unk> ability and collaboration to grow the valve sales. So we are in lockstep with them about the need to support and spend to deliver the growth and we have a good mechanism in our joy.

Mirella Thorell: Steering committee to make those decisions thoughtfully and we will continue to support that.

Jeffrey Michael Jones: Thanks. One follow-up question on manufacturing. When do you expect the majority of that investment in the back therapy facility to be completed, triggering the milestone? And when would you have visibility into whether you can use those validation batches for saleable goods? Yeah, I guess.

Speaker Change: Thanks <unk>.

Mirella Thorell: One follow up question on manufacturing.

Jeffrey Michael Jones: When do you expect the majority of that investment in the back there.

Jeffrey Michael Jones: The facility to be completed.

Jeffrey Michael Jones: Triggering.

Jeffrey Michael Jones: The milestone.

Jeffrey Michael Jones: And when would you have visibility to whether you can use those validation batches.

Jeffrey Michael Jones: For saleable goods.

Eric D. Shaff: Yeah, I guess I'll answer this way, Jeff, which is, we embarked upon the Back Thera project, we designed it, and we worked collaboratively to support it based on a number of factors. One was the quality of their team. Two is the quality of the facility and the campus. And three is, of course, the capacity that it would add. Four is the efficiency that we expect to accrue from the reduced cost of manufacturing through automation and batch size, and so forth.

Speaker Change: Yes, I guess, let me answer it this way, Jeff which is.

Eric D. Shaff: We had embarked upon the backs of a project we had design that we had.

Eric D. Shaff: Our collateral collaboratively to support it based on a number of factors one is the quality of their team.

Eric D. Shaff: Two is the quality of the facility on the campus three is of course, the capacity that it would add.

Eric D. Shaff: For is the efficiency that we expect to accrue into the.

Eric D. Shaff: Reduced cost of manufacturing through automation to batch size and so forth all of those factors continue to be critical for us and for our partners and definitely so we're making great progress with BACS era.

Eric D. Shaff: All of those factors continue to be critical for us and for our partners at Nestle. So, we're making great progress with Bacthera, and we do expect that the milestones that we talked about in our filings will be hit shortly, and we continue to work collaboratively with them to bring VASTA patients. So, I do think that we will continue to work with them with urgency like everything else. I think it's in our shareholders' benefits, and it's in our patients' benefits. So, I think we continue to view them as a critical partner, and we'll work together to bring those validation patches to patients as quickly as we can.

Eric D. Shaff: We do expect that the milestones that.

Eric D. Shaff: That we've talked about in our filings will be here shortly.

Eric D. Shaff: And we continue to work collaboratively collaboratively with them to bring the vast the patient so.

Eric D. Shaff: I do think that.

Eric D. Shaff: We will continue to work with them.

Eric D. Shaff: With urgency like everything else I think it's to our shareholders' benefits and it's to a patient's benefits.

Eric D. Shaff: So.

Eric D. Shaff: I think we continue to view them as a critical partner.

Eric D. Shaff: And we'll work together to brenda's validation batches to patients as quickly as we can.

Speaker Change: Great. Thanks, guys.

Speaker Change: Thanks for the questions.

Keay Thomas Nakae: Your next question comes from the line of Keay Nakae with Chardon. Please go ahead.

Eric D. Shaff: Your next question comes from the line of Kian Nikai with Chardan. Please go ahead.

Keay Thomas Nakae: Yes, thanks. A couple of questions. One, I did see a sequential increase in inventory on the balance sheet. Can you talk about that separately from that? In terms of the capitalized product, once you go commercial, when will you exhaust that?

Keay Thomas Nakae: Yes, Thanks, a couple of questions.

Keay Thomas Nakae: One.

Keay Thomas Nakae: You did see a sequential increase in inventory on the balance sheet can you talk about.

Keay Thomas Nakae: Separate from that.

Keay Thomas Nakae: Of the capitalized.

Keay Thomas Nakae: Product.

Keay Thomas Nakae: Once you win a commercial one way you exhaust that.

Mirella Thorell: Sure. Let me ask Mirella to answer the first question, and then we can talk about the second.

Keay Thomas Nakae: Sure.

Speaker Change: Relative to ask answer the first and then deduct et cetera, yes. So we are thoughtfully building up inventory in anticipation.

Mirella Thorell: So, we are thoughtfully building up inventory in anticipation of the transition to Bactera. And so, we're going to continue to do that as it makes sense.

Mirella Thorell: Anticipation of that transition to Baxter era.

Mirella Thorell: And so we're going to continue again to do that as it as it makes sense.

Eric D. Shaff: And then I don't think we've provided guidance on when the capitalized inventory would roll through, except to say that, you know, we're working collaboratively with Nestle to ensure that we utilize the assets and the capabilities and capacity that we have to try to ensure that we don't leave patients short, but also continue to build the capacity that we think we will need over time to support patients. And what we expect will continue to be a growing top line.

Speaker Change: And then I don't think we've provided guidance on when the capitalized inventory would roll through except to say that.

Eric D. Shaff: We're working collaboratively with nestle to ensure that.

Eric D. Shaff: We are utilizing the assets and the capabilities and capacity that we have.

Eric D. Shaff: To try to ensure that we don't leave patients short, but also continued to build the capacity that we think we will need overtime.

Eric D. Shaff: To support patients and what we expect will continue to be a growing top line.

Keay Thomas Nakae: Okay, and then just a strategy question, as it pertains to 155. You know, given the strength of your balance sheet currently, and given that vows is, let's say, the bird in the hand, how likely are you to partner out 155? Yeah, I think so.

Speaker Change: Okay, and then just a strategy question.

Keay Thomas Nakae: As it pertains to one five.

Keay Thomas Nakae: Given the strength of your balance sheet currently and given that the houses, let's say the bird in the hand.

Keay Thomas Nakae: How likely are you to partner out one five opportunities.

Eric D. Shaff: Yeah, I think you probably can anticipate the answer is that we can't provide specifics. What I will say is that we are actively considering options across a number of different dimensions. It always strikes me that, you know, non-dilutive capital sometimes doesn't mean what people think. Whenever you're giving rights or value away, then that is, in some sense, dilutive. But we are focused on short-term cash and the need to support the company and to support other programs that we think could help patients. So, you know, we think about BD holistically, short-term, long-term, what it enables for today, and what it supports for tomorrow. And those are obviously discussions and decisions that have multiple dimensions to them.

Keay Thomas Nakae: Yes.

Speaker Change: I think you probably can anticipate the answer is that we.

Eric D. Shaff: We can't provide specifics.

Eric D. Shaff: I will say is that we are actively considering options across a number of different dimensions.

Eric D. Shaff: It always strikes me that.

Eric D. Shaff: Non dilutive capital, sometimes doesn't mean, what people think whenever you're giving Reits are valued away then that is in some sense dilutive, but we are focused on short term cash and the need to support the company in two.

Eric D. Shaff: To support other programs that we think could help patients. So we think about BD holistically.

Eric D. Shaff: Short term long term what it enables for today, what it supports for tomorrow.

Eric D. Shaff: And those are obviously discussions and decisions that have multiple dimensions to them.

Eric D. Shaff: We've done it before in a meaningful way when we thought it was right and helpful to shareholders, and we'll consider it again. Yeah, we're really excited about this readout. I think that the data from the first cohort was impressive and interesting to us, as it was to our stakeholders and our KOLs. And the ability to help what is a different patient population with our technology and what it could potentially open up for us is just incredibly exciting to us. You know, I think you can imagine we're excited about these results.

Eric D. Shaff: We've done it before in a meaningful way when we thought it was right.

Eric D. Shaff: <unk> to shareholders and we'll consider it again, but I can't specifically I can't specifically comment on one side five except to say.

Eric D. Shaff: Yes, we're really excited about this readout I think that the data from the first cohort.

Eric D. Shaff: Was impressive and interesting to us it was to our stakeholders and our kols.

Eric D. Shaff: <unk>.

Eric D. Shaff: The ability to help what is a different patient population with our technology and what it could potentially open up for US is just incredibly exciting to us so.

Eric D. Shaff: I think you can imagine we're excited about these results.

Eric D. Shaff: Okay.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks for the question.

Alex: That concludes our Q&A session. I will now turn the conference back over to management for closing remarks.

Speaker Change: That concludes our Q&A session I will now turn the conference back over to management for closing remarks.

Unknown Executive: So, thank everybody for their time this morning. We appreciate it, and we look forward to keeping you updated as we go. So, thanks, and have a great week.

Speaker Change: So thank you everybody for your time. This morning, we appreciate it and we look forward to keeping you updated as we go so thanks and have a great week.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Operator: Okay.

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Operator: Yeah.

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Speaker Change: Thank you.

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