Q2 2024 Seres Therapeutics Inc Earnings Call

Unknown Executive: John Newman, Joseph John, David Arkowitz, Tessa Romero, Joseph John, David Arkowitz, Tessa Romero [inaudible] Good day and thank you for standing by. At this time, I would like to welcome everyone to Seres Therapeutics' second quarter 2024 earnings conference. All lines have been placed on mute to prevent any background noise. 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 followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star 1.

Speaker Change: Good day and thank you for standing by. At this time, I would like to welcome everyone to Serious Therapeutics' second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Speaker Change: 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 star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.

Carlo Tanzi: Thank you. I would now like to turn the conference over to Dr. Carlo Tanzi, Investor Relations. Please go ahead.

Speaker Change: I would now like to turn the conference over to Dr. Carlo Tanzi, Investor Relations. Please go ahead.

Carlo Tanzi: Thank you and good morning. Our press release with the company's second quarter 2024 financial results and a business update became available at 7am Eastern Time this morning and can be found in the Investors & You section of the company's website. The company has also posted an updated corporate presentation on the website. I'd like to remind you that we will be making forward-looking statements, including related to the financial terms, timing, and completion of the sale of VALS assets to Nestle Health Science, the receipt of future payments and the use of proceeds of the transaction, the timing and results of clinical studies and data readouts, development plans and commercial opportunities, operating plans and our future cash runway, our planned strategic focus, However, actual results may differ materially.

Speaker Change: Thank you and good morning.

Speaker Change: Our press release with the company's second quarter 2024 financial results and a business update became available at 7 a.m. Eastern Time this morning and can be found on the Investors & You section of the company's website. The company has also posted an updated corporate presentation to the website.

Speaker Change: I'd like to remind you that we will be making forward-looking statements, including related to the financial terms, timing, and completion of the sale of VALS assets to Nestle Health Science.

Speaker Change: The receipt of future payments and the use of proceeds of the transaction, the timing and results of clinical studies and data readouts,

Speaker Change: Development Plans and Commercial Opportunities

Speaker Change: Operating plans and our future CACHE runway.

Speaker Change: are planned, strategic focus, and other statements which are not historical fact.

Eric Shaff: On today's call, with prepared remarks, I'm joined by Eric Shaff, Seres President and CEO, Marella Thorell, CFO, Dr. Lisa Von Moltke, Chief Medical Officer, Dr. Matthew Henn, Chief Scientific Officer, and Dr. Terry Young, Chief Commercial and Strategy Officer. With that, I'll pass the call to Eric. Thank you, Carlo, and good morning, everyone. Last week, we announced our agreement to sell Seres-voused assets of commercial rights to Nestle Health Science in exchange for substantial immediate and future financial consideration.

Speaker Change: Actual results may differ materially. On today's call with prepared remarks, I'm joined by Eric Shaff, Ceres President and CEO, Marella Thorell, CFO, Dr. Lisa Von Moltke, Chief Medical Officer, and Dr. Kevin Mannix, Dr. Lisa Von Moltke.

Speaker Change: Dr. Matthew Henn, Chief Scientific Officer, and Dr. Terry Young, Chief Commercial and Strategy Officer. With that, I'll pass the call to Eric.

Eric: Thank you, Carlo, and good morning, everyone.

Speaker Change: Last week, we announced our agreement to sell series-voused assets of commercial rights to Nestle Health Science in exchange for substantial immediate and future financial consideration.

Eric Shaff: We held a call at that time to review the agreements and the field terms and to provide a high-level view of our corporate strategy to advance our live biotherapeutics, drug candidates, which are a consortium of bacterial strains cultivated from clonal master cell banks and rationally designed and optimized to target disease-relevant pathways. Today's call will focus on our CR155 program and the clinical data we look forward to obtaining next month and more broadly our strategy moving forward.

Speaker Change: We held a call at that time to review the agreement and the deal terms and to provide a high-level view of our planned corporate strategy to advance our live biotherapeutics

Speaker Change: Drug Candidates, which are a consortium of bacterial strains cultivated from clonal master cell banks, and rationally designed and optimized to target disease-relevant pathways.

Speaker Change: David Arkowitz, John Bohnsack,

Speaker Change: Today's call will focus on our CR 155 program and the clinical data we look forward to obtaining next month and more broadly our strategy moving forward.

Eric Shaff: Later in the call, we will provide a review of our second quarter financial results. I'll begin with a recap of the Voused Asset Sale and how this helps to support the advancement of our pipeline. We expect the transaction to close in the next 90 days, as we discussed last week. The vouch asset sale provides Seres with a meaningful capital infusion. Upon deal close, pending stockholder approval, we will receive $155 million in cash, which includes an upfront payment, a prepaid milestone payment, and an equity investment, net of operational obligations we pay Nestle at close.

Speaker Change: Later in the call, we will provide a review of our second quarter financial results.

Speaker Change: I'll begin with a recap of the Voused Asset Sale and how this helps to support advancement of our pipeline.

Speaker Change: We expect the transaction to close in the next 90 days.

Speaker Change: As we discussed last week, the Voused Asset Sale provides series with a meaningful capital infusion.

Speaker Change: Upon deal close, pending stockholder approval, we will receive $155 million in cash, which includes an upfront payment, a prepaid milestone payment, and an equity investment, net of operational obligations we pay Nestle at close.

Eric Shaff: The capital provided will strengthen our balance sheet, enable us to retire our existing debt facility and certain other operational liabilities, and most importantly, support the development of our pipeline of wholly owned live biotherapeutics that build upon our previous successes and represent the next generation of our drug technology. We are proud to have developed the first ever FDA-approved oral-live microbiome therapy. VAUST has transformed the lives of thousands of patients with recurrent C. difficile infection, preventing devastating recurrences of infections for individuals who have limited FDA-approved therapeutic options.

Speaker Change: The capital provided will strengthen our balance sheet.

Speaker Change: enable us to retire our existing debt facility and certain other operational liabilities.

Speaker Change: And, most importantly, support the development of our pipeline of wholly owned live biotherapeutics that build upon our previous successes and represent the next generation of our drug technology.

Speaker Change: kind

Speaker Change: We are proud to have developed VAUST as the first ever FDA-approved oral live microbiome therapy.

Speaker Change: VAUST has transformed the lives of thousands of patients with recurrent C. difficile infections.

Speaker Change: Preventing devastating recurrences of infections for individuals who have limited FDA-approved therapeutic options.

Eric Shaff: In developing VALSP, we created numerous capabilities, including entirely new manufacturing methods, and we collaborated with the FDA to secure regulatory approval for a product in an entirely new class of oral biotherapeutics. Looking ahead, we believe that the capabilities, know-how, and core intellectual property that we have developed over the last decade, and our underlying technology platforms position Seres to continue to successfully advance new biotherapeutics to address significant unmet medical needs in additional medically vulnerable patient populations.

Speaker Change: In developing VAUSP, we created numerous capabilities, including entirely new manufacturing methods, and we collaborated with the FDA to secure regulatory approval for a product in an entirely new class of oral biotherapeutics.

Speaker Change: Looking ahead.

Speaker Change: We believe that the capabilities, know-how, and core intellectual property that we have developed over the last decade

Speaker Change: and our underlying technology platforms position CERES to continue to successfully advance new biotherapeutics to address significant unmet medical needs in additional medically vulnerable patient populations.

Eric Shaff: We believe that there are near-term opportunities to apply our drug technology to prevent serious bacterial infections and related conditions such as bloodstream infections and febrile neutropenia in high-risk patients such as allo-HSCT patients. In the longer term, we plan to leverage our acquired capabilities in other diseases and conditions. More specifically... We believe we can develop our biotherapeutics to prevent infection in multiple medically vulnerable patient groups, and we could also address GI immune-related diseases such as inflammatory bowel disease.

Speaker Change: We believe that there are near-term opportunities to apply our drug technology to prevent serious bacterial infections and related conditions such as bloodstream infections and febrile neutropenia in high-risk patients such as Aloe HSCT patients.

Speaker Change: In the longer term, we plan to leverage our acquired capabilities in other diseases and conditions.

Speaker Change: More specifically, we believe we can develop our biotherapeutics to prevent infection in multiple medically vulnerable patient groups and we could address also GI immune related diseases such as inflammatory bowel disease.

Eric Shaff: In summary... We believe the Voused Asset Sale will enable Seres to create meaningful new biotherapeutics for diseases that are not able to be effectively addressed with conventional approaches, thereby creating value for patients and other stakeholders. The transaction enabled us to transform Series into a number and more streamlined organization deploying our financial and human capital to advance and pipeline assets through discovery and clinical development, core competencies of CERES.

Speaker Change: In summary,

Speaker Change: We believe the Voused Asset Sale will enable Ceres to create meaningful new biotherapeutics for diseases that are not able to be effectively addressed with conventional approaches, thereby creating value for patients and other stakeholders.

Speaker Change: The transaction enables us to transform Ceres into a nimbler and more streamlined organization, deploying our financial and human capital to advancing pipeline assets through discovery and clinical development.

Eric Shaff: We will be well positioned to build upon our extensive technical capabilities and to advance the development of potentially transformative new treatments for many serious diseases. Our lead program, CR155, is being evaluated in an ongoing Phase 1B study, and we are looking forward to obtaining important clinical data next month in the placebo-controlled Cohort 2. We anticipate this readout will extend the positive results observed in Cohort 1 and further highlight the potential for our novel therapeutic approach, expanding our prior clinical success.

Speaker Change: Core competencies of series.

Speaker Change: We will be well-positioned to build upon our extensive technical capabilities and to advance the development of potentially transformative new treatments for many serious diseases.

Speaker Change: Our lead program, CIRR-155, is being evaluated in an ongoing Phase 1b study, and we are looking forward to obtaining important clinical data next month in the placebo-controlled Cohort 2.

Speaker Change: We anticipate this readout will extend the positive results observed in Cohort 1 and further highlight the potential for our novel therapeutic approach, expanding our prior clinical successes.

Eric Shaff: Seres is also developing another proprietary live biotherapeutic composition, SIR-147, to improve clinical outcomes in patients with metabolic disease, including those with chronic liver disease, and those at high risk of bacterial infection. Matt will discuss this program shortly. I'll now pass the call over to Lisa to discuss SIR 155 in more detail. Thank you, Eric.

Speaker Change: Series is also developing another proprietary live biotherapeutic composition, SERE 147, to improve clinical outcomes in patients with metabolic disease, including those with chronic liver disease, and those at high risk of bacterial infections.

Speaker Change: Matt will discuss this program shortly.

Speaker Change: I'll now pass the call over to Lisa to discuss SIR 155 in more detail.

Lisa Moltke: SIR 155 is a live biotherapeutic that was specifically designed to target the unmet medical needs of gastrointestinal-derived infections, including bloodstream infections, as well as infection-associated negative clinical outcomes, such as fever during periods of neutropenia. CR 155 is being evaluated in a Phase 1b study in patients undergoing aloHSCT following a diagnosis of AML or other hematologic malignancy. As a result of the extensive exposure to antibiotics and the effects of HSCT conditioning regimens, these patients often develop a disruptive gastrointestinal mitre biome, resulting in functional deficiencies that often lead to pathogen overgrowth and domination in the GI tract.

Lisa: Thank you, Eric.

Lisa: CR 155 is a live biotherapeutic that was specifically designed to target the unmet medical needs

Lisa: of gastrointestinal-derived infections, including bloodstream infections.

Lisa: as well as infection-associated negative clinical outcomes such as fever during periods of neutropenia.

Speaker Change: CR 155 is being evaluated in a phase 1b study in patients undergoing alo-HSCT following a diagnosis of AML or other hematologic malignancy.

Speaker Change: as a result of the extensive exposure to antibiotics.

Speaker Change: and the effects of HSCT conditioning regimens.

Speaker Change: These patients often develop a disrupted gastrointestinal microbiome, resulting in functional deficiencies that often lead to pathogen overgrowth and domination in the GI tract.

Lisa Moltke: These disruptions, coupled with diminished integrity of the GI epithelial barrier, are associated with significantly increased risks of bloodstream infections, graft-versus-host disease, and Last year, we reported promising Phase 1b Cohort 1 clinical data, with CR155 being well-tolerated in highly immunocompromised alloHSCT patients. In this open-label cohort, CR155 was administered to 13 subjects, with 11 continuing to transplant. Our data indicated that of the subjects administered SIR155, only a single patient had enteric pathogen domination within 30 days following stem cell transplantation. This event was transient, and the resulting incidence of domination in Cohort 1 was markedly lower than the incidence observed in a large reference cohort.

Speaker Change: These disruptions, coupled with diminished integrity of the GI epithelial barrier, are associated with significantly increased risks of bloodstream infections, graft-versus-host disease, and mortality.

Speaker Change: Last year we reported promising phase 1b cohort 1 clinical data with CR 155 being well tolerated in highly immunocompromised allo HSCT patients.

Speaker Change: In this open-label cohort, CR155 was administered to 13 subjects, with 11 continuing to transplant.

Speaker Change: Our data indicated that of the subjects administered CR155, only a single patient had enteric pathogen domination within 30 days following stem cell transplant.

Speaker Change: This event was transient and the resulting incidence of domination in Cohort 1 was markedly lower than the incidence observed in a large reference cohort.

Lisa Moltke: These data provide strong mechanistic evidence supporting the clinical intent of SEER 155 to prevent GI pathogen domination and related bloodstream infections. Next month, we will obtain data from Study Cohort 2, which enrolled 45 subjects. I'd like to review several of the specific study endpoints that we will be evaluating. From a safety perspective, we would like to see continued evidence indicating that CR155 is well tolerated.

Speaker Change: These data provide strong mechanistic evidence supporting the clinical intent of CR 155 to prevent GI pathogen domination and related bloodstream infections.

Speaker Change: Next month we will obtain data from Study Cohort 2, which incorporates a randomized, double-blinded, placebo-controlled design and enrolled 45 subjects.

Speaker Change: I'd like to review several of the specific study endpoints that we will be evaluating.

Speaker Change: From a safety perspective, we would like to see continued evidence indicating that CR 155 is well tolerated.

Lisa Moltke: It is important to note that our biotherapeutics candidates are derived from bacteria isolated from the GI tract of healthy humans and only include bacterial strains that have not been associated with infection. As a result, we have reason to believe that the safety profile associated with our biotherapeutics will continue to be favorable, as we have observed in our prior clinical study. From an efficacy perspective, we will be assessing the ability of CR155 to decrease the incidence of GI-derived bloodstream infections within the first 30 and 100 days following HSCP, a period associated with a high rate of complications. We will also evaluate if tier 155 administration results in decreased rates of fever during neutropenia and subsequent rates of antibiotic initiation.

Speaker Change: It is important to note that our biotherapeutics candidates are derived from bacteria isolated from the GI tract of healthy humans and only include bacterial strains that have not been associated with infection.

Speaker Change: As a result, we have reason to believe that the safety profile associated with our biotherapeutics will continue to be favorable, as we have observed in our prior clinical studies.

Speaker Change: to

Speaker Change: From an efficacy perspective, we will be assessing the ability of CR155 to decrease the incidence of GI-derived bloodstream infections within the first 30 and 100 days following HSCP, a period associated with a high rate of complications.

Speaker Change: We will also evaluate if CR155 administration results in decreased rates of fever during neutropenia and subsequent rates of antibiotic initiation.

Lisa Moltke: In addition, we will examine if FEAR 155 is associated with a reduced incidence of acute graft versus host disease. However, given recent changes in standard treatment practices, we expect the overall rate of GVHD to be low during the study assessment period.

Speaker Change: In addition, we will examine if FEAR 155 is associated with a reduced incidence of acute graft versus host disease.

Speaker Change: However, given recent changes in standard treatment practices, we expect the overall rate of GVHD to be low during the study assessment period.

Lisa Moltke: The Cohort 2 results and our subsequent discussions with FDA will inform next steps, but we expect our next study to be global and that there could be an opportunity for it to be a single pivotal study. We believe positive data from the Cohort 2 readout would further validate the promise of our live biotherapeutics modality to address serious infections and infection-related negative clinical outcomes in medically vulnerable populations, including cancer patients with neutropenia, solid organ transplant recipients, and individuals with chronic liver disease.

Speaker Change: The Cohort 2 results and our subsequent discussions with FDA will inform next steps, but we expect our next study to be global and that there could be an opportunity for it to be a single pivotal study.

Speaker Change: We believe positive data from the Cohort 2 readout would further validate the promise of our live biotherapeutics modality to address serious infections and infection-related negative clinical outcomes in medically vulnerable populations.

Speaker Change: Including cancer patients with neutropenia, solid organ transplant recipients, and individuals with chronic liver disease.

Lisa Moltke: Assuming supportive Cohort 2 data, we have already begun to plan further development steps for SIR 155, including a potential global registrational study in allohsct and potentially also initiating development in other medically vulnerable groups with high rates of bacterial infections. I'll now pass the call to Matt to discuss the pharmacology data that we will be collecting in the CIR 155 study. Thank you, Lisa Thank you, thank you, thank you. SERE 155 is a consortium of 16 bacterial strains that were rashly designed and optimized based on the functional properties of the individual strains, as well as clinical insights from across SERE's portfolio of clinical studies.

Speaker Change: Assuming supportive cohort 2 data.

Speaker Change: We have already begun to plan further development steps for SIR 155.

Speaker Change: including a potential global registrational study in Allohsct and potentially also initiation of development in other medically vulnerable groups, high rates of bacterial infections.

Matt: I'll now pass the call to Matt to discuss the pharmacology data that we will be collecting in the CIR 155 study.

Matt: Thank you, Lisa.

Matt: CIR155 is a consortium of 16 bacterial strains that was rationally designed and optimized based on the functional properties of the individual strains, as well as clinical insights from across CIRI's portfolio of clinical studies.

Lisa Moltke: This biotherapeutic is designed to prevent and reduce pathogen colonization, abundance, and overgrowth in the GI tract and to promote the epithelial barrier to reduce the likelihood of harmful bacteria translating from the GI tract to the bloodstream. Additionally, there are bacteria included in SIR155 to modulate immune pathways to induce immune tolerance with the potential to impact GVHD. In Cohort 2 of the SIR155-ALLO-HSCT trial, we will evaluate a number of pharmacology parameters, including the kinetics and magnitude of drug species engraftment, meaning the outgrowth of bacteria in SIR155 in the gastrointestinal tract, and the abundance and overgrowth of harmful bacteria, including those that can harbor antimicrobial resistance in the GI tract.

Matt: This biotherapeutic is designed to prevent and reduce pathogen colonization, abundance and overgrowth in the GI tract and to promote epithelial barrier to reduce the likelihood of harmful bacteria translating from the GI to the bloodstream.

Matt: Additionally, there are bacteria included in CR155 to modulate immune pathways to induce immune tolerance with the potential to impact GVHD.

Matt: In Cohort 2 of the CR155-ALLO-HSCT trial,

Speaker Change: We will evaluate a number of pharmacology parameters, including the kinetics and magnitude of drug species engraftment, meaning the outgrowth of bacteria in SIR155 in the gastrointestinal tract.

Matt: and the abundance and overgrowth of harmful bacteria, including those that can harbor antimicrobial resistance in the GI.

Lisa Moltke: In addition, we will be evaluating changes in the GI microbiome and associated functions and a collection of host biomarkers to evaluate mechanisms of pathogen decolonization, epithelial barrier function, and additionally, modulation of both local and systemic immune pathways that can induce immune tolerance.

Matt: In addition, we will be evaluating changes in the GI microbiome and associated functions, and a collection of host biomarkers to evaluate mechanisms of pathogen decolonization, epithelial barrier function, and additionally, modulation of both local and systemic immune pathways that can induce immune tolerance.

Matthew Henn: Cohort 2 pharmacology data and endpoints will be examined in the context of the placebo control and the reference control cohort. The pending pharmacology data could provide additional support for the clinical outcomes observed. In addition, these data will be important as we consider further development plans for CR155 in targeting the prevention of infection in additional patient populations as well as GI-related immune diseases. In addition to CIR155, we are developing CIR147 for compromised patients living with metabolic diseases.

Matt: Cohort 2 pharmacology data and endpoints will be examined in the context of the placebo control and the reference control cohort.

Matt: The pending pharmacology data could provide additional support for clinical outcomes observed.

Matt: In addition, these data will be important as we consider further development plans for CR155 in targeting the prevention of infection in additional patient populations, as well as GI-related immune diseases.

Matt: In addition to CR155, we are developing CR147 for compromised patients living with metabolic diseases.

Matthew Henn: Tier 147 is an oral live biotherapeutic product candidate consisting of a consortium of cultivated bacteria designed to prevent gut-seeded infections and associated downstream infections and spontaneous bacterial peritonitis, or SVP, in chronic liver disease. In the advanced stages of chronic liver disease, known as decompensated cirrhosis, patients can exhibit gastrointestinal microbiome disruption and associated functional deficiencies.

Matt: Tier 147 is an oral, live biotherapeutic product candidate consisting of a consortium of cultivated bacteria designed to prevent gut-seeded infections and associated downstream infections and spontaneous bacterial peritonitis, or SVP, in chronic liver disease.

Matt: In the advanced stages of chronic liver disease, known as decompensated cirrhosis, patients can exhibit gastrointestinal microbiome disruption and associated functional deficiencies.

Matthew Henn: This combined with the frequent contact with the healthcare system can drive increased susceptibility to bacterial infections and other negative clinical outcomes such as hospitalization. SIR 147 was designed and optimized using our reverse translational MBTX platform, enabling the data-driven selection of a unique set of bacterial strains with the desired functional properties. These strains were selected based on clinical insights and extensive preclinical in vitro and disease model screening of individual strains and lead consortia.

Matt: This, combined with the frequent contact with the healthcare system, can drive increased susceptibility to bacterial infections and other negative clinical outcomes such as hospitalization.

Matt: SIR 147 was designed and optimized using our reverse translational MBTX platform, enabling the data-driven selection of a unique set of bacterial strains with the desired functional properties.

Matt: These strains were selected based on clinical insights and extensive preclinical in vitro and disease model screening of individual strains and lead consortia.

Matt: Our cultivated biotherapeutics are manufactured from single-strain isolates through fermentation methods that allow for efficient, scalable processes.

Teresa Young: Our cultivated biotherapeutics are manufactured from single-strain isolates through fermentation methods that allow for efficient, scalable processes. As with SIR 155, we believe that SIR 147 could represent another opportunity for Seres, and we anticipate IND readiness in the second half of 2025. I'll now pass the call to Terry to provide further context around our pipeline strategy. Thank you, Matt.

Terry: As with SIR 155, we believe that SIR 147 could represent another opportunity for series, and we anticipate IND readiness in the second half of 2025. I'll now pass the call to Terry to provide further context around our pipeline strategy.

Teresa Young: To summarize our general path forward, we believe our approach has demonstrated unique clinical success with FAUST in preventing frequent, serious, and expensive infections, and we plan to build upon this success with additional medically vulnerable patients. Our next step in this journey is to substantiate a highly attractive profile for CR155 in terms of safety and efficacy with a short oral dosing regimen.

Terry: Thank you, Matt. To summarize our general path forward, we believe our approach has demonstrated unique clinical success with FAUS in preventing frequent, serious, and expensive infections, and we plan to build upon this success in additional medically vulnerable patients.

Terry: Our next step in this journey is to substantiate a highly attractive profile for CR155 in terms of safety and efficacy with a short oral dosing regimen.

Teresa Young: With meaningful results next month from the Phase 1b study, we will begin to pursue additional therapeutic adjacencies for SIR 155, as Lisa and Matt both outlined. Each adjacent patient population under consideration is significant in its own right, but together, they represent a substantial commercial opportunity. The AlloHSCT population is comprised of approximately 30,000 patients annually across the U.S. and, Expansion across other hematologic malignancies would bring an additional 23,000 patients annually to the CIR158 patient pool from auto-HSP, and another 190,000 from hematologic cancer patients with high neutropenia rates, for example, AML, multiple myeloma, and non-Hodgkin's

Speaker Change: With meaningful results next month from the Phase 1b study, we will begin to pursue additional therapeutic adjacencies for CR155, as Lisa and Matt both outlined.

Speaker Change: Each adjacent patient population, under consideration, is significant in its own right, but together, they represent a substantial commercial opportunity.

Lisa: The Aloe HSCT population is comprised of approximately 30,000 patients annually across the US and EU.

Speaker Change: Expansion across other hematologic malignancies would bring an additional 23,000 patients annually to the CR158 patient pool from AutoHSCP.

Terry: and another 190,000 from hematologic cancer patients with high neutropenia rates, for example, AML, multiple myeloma, and non-Hodgkin's lymphoma.

Teresa Young: These patients are mainly treated at large centers across the developed world, and therefore, we would benefit from an efficient commercial model designed to reach a concentrated set of eights. We are also considering expansion into other transplants with the potential to avoid infections in 65,000 patients across the U.S. and E.U. each year who receive solid organ transplants, specifically kidney and liver. Our next program, C-147, provides the opportunity to prevent infections and chronic liver disease. Another large patient.

Lisa: These patients are mainly treated at large centers across the developed world, and therefore we would benefit from an efficient commercial model designed to reach a concentrated set of HCP.

Lisa: We are also considering expansion into other transplants with the potential to avoid infections in the 65,000 patients across the US and EU each year who receive solid organ transplants, specifically kidney and liver.

Lisa: Our next program, CR147, provides the opportunity to prevent infections in chronic liver disease patients, another large patient pool.

Teresa Young: We also believe our approach can make a difference for patients beyond activity against infection by Addressing Immune Modulation. This would enable us to pursue additional highly prevalent conditions, such as inflammatory bowel disease. We remain excited about the breadth of opportunities in front of us, and it's worth reminding everyone that a key outcome of the VALS asset sale to Nestle is that we will have full ownership of our entire next generation of pipeline candidates, providing strategic optionality as we move forward and positioning us to drive value for our key states. Our pipeline prioritization has been informed by our knowledge of where microbiome disruption has been implicated in disease, thereby leaving patients vulnerable to serious and expensive infections.

Lisa: We also believe our approach can make a difference for patients beyond activity against infection by addressing immune modulation.

Lisa: This would enable us to pursue additional highly prevalent conditions such as inflammatory bowel disease.

Lisa: We remain excited about the breadth of opportunities in front of us. And it's worth reminding everyone that a key outcome of the VALS asset sailed in Nestle is that we will have full ownership of our entire next generation of pipeline candidates.

Lisa: Providing strategic optionality as we move forward and positioning us to drive value for our key stakeholders.

Lisa: Our pipeline prioritization has been informed by our knowledge of where microbiome disruption has been implicated in disease, thereby leaving patients vulnerable to serious and expensive infection.

Marella Thorell: We also strongly consider diseases with high unmet needs, where a product with an attractive profile would bring a strong value proposition, affording us pricing flexibility. In addition, as we develop our future plan, we will carefully consider the required development path for all indications under evaluation to ensure that we can demonstrate clinical proof of concept at modest cost and in a timely manner. In summary, we will continue to utilize a rigorous and data-driven approach to develop our pipeline strategy, which considers the strength of scientific rationale and commercial potential, along with clinical development feasibility timing.

Lisa: We also strongly consider diseases with high unmet needs, where a product with an attractive profile would bring a strong value proposition, affording us pricing flexibility.

Operator: Good day, and thank you for standing by. At this time, I would like to welcome everyone to series, there are a few things, second quarter, 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Lisa: In addition, as we develop our future plans, we will carefully consider the required development path for all indications under evaluation to ensure that we can demonstrate clinical proof of concept at modest cost and in a timely manner.

Operator: After this speaker remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.

Lisa: In summary, we will continue to utilize a rigorous and data-driven approach to develop our pipeline strategy, which considers the strength of scientific rationale and commercial potential, along with clinical development feasibility time and cost.

Carlo Tanzi: I would not like to turn the conference over to Dr. Carlo Tanzi investor relations. Please go ahead. Thank you and good morning. Our press release with the company's second quarter, 2024 financial results, and a business update became available at 7 a.m. Eastern time this morning and can be found on the investors and new section of the company's website. The company has also posted an updated corporate presentation to the website.

Marella Thorell: The CR 155 clinical results that we receive next month will be a key input to our path forward and will allow us to refine our plan. We look forward to communicating more about our strategic path forward once we obtain and fully consider this important data set. Now I'll turn the call over to Marella to discuss our financial results.

Lisa: The CR 155 clinical results that we receive next month will be a key input to our path forward and will allow us to refine our plan.

Lisa: We look forward to communicating more about our strategic path forward once we obtain and fully consider this important data set.

Lisa: Now I'll turn the call over to Marella to share our financial results.

Carlo Tanzi: I would like to remind you that we will be making forward-looking statements, including related to the financial terms, timing and completion of the sale of valve assets to Nestle Health Science, the receipt of future payments and the use of proceeds of the transaction, the timing and results of clinical studies and data readouts, development plans and commercial opportunities, operating plans in our future cash runway, our plan strategic focus and other statements which are not historical fact. Actual results may differ materially.

Marella Thorell: Thanks, Terry, and good morning, everyone. I'd like to discuss our financial results for the second quarter, starting with VAL. As a reminder, Seres does not recognize vouch net sales in its financial statements, but instead, under the terms of our prior agreements with Nestle, we share equally the product's commercial profits and losses, and we record our share in the collaboration profit and loss sharing related party line. VALST profits and losses are determined based upon VALST's net sales, costs of goods sold, and sales and marketing expenses.

Marella: Thanks, Terry. And good morning, everyone. I'd like to discuss our financial results for the second quarter, starting with Baust.

Speaker Change: As a reminder, Ceres does not recognize Dow's net sales in its financial statements.

Marella: But instead, under the terms of our prior agreements with Nestle, we share equally the product's commercial profits and losses, and we record our share in the collaboration profit and loss sharing related party line.

Eric Shaff: On today's call with prepared remarks, I'm joined by Eric Shaugh, series president and CEO, Morales Thorelle, CFO, Dr. Lisa Von Mulkey, chief medical officer, Dr. Matthew Hen, chief scientific officer, and Dr. Terry Young, chief commercial and strategy officer. With that, I'll pass the call to Eric. Thank you, Carlo. Good morning, everyone. Last week, we announced our agreement to sell serious valve assets of commercial rights to Nestle Health Science in exchange for substantial immediate and future financial consideration.

Marella: Valst Profits and Losses are determined based upon Valst's net sales, costs of goods sold, and sales and marketing expenses.

Marella Thorell: Net sales of VALST for the second quarter were $14.4 million, reflecting an approximately 43% growth over the first quarter of this year. As discussed in our first quarter update, Nestle refined its call strategy and increased call points to broaden its prescriber reach. We remain confident in the potential vows, and Nestly continues to refine their launch execution to respond to market dynamics as they work to expand the business. Research and development expenses for the second quarter were $17.9 million, down from $46.8 million for the same period in 2023.

Marella: Net sales of VALST for the second quarter were 14.4 million dollars reflecting an approximately 43% growth over the first quarter of this year.

Marella: As discussed in our first quarter update, Nestle refined their call strategy and increased call points to broaden their prescriber reach.

Eric Shaff: We held a call at that time to review the agreements and the field terms and to provide a high level view of our plan corporate strategy to advance our live biotherapeutics, drug candidates which are consortia bacterial strains cultivated from clonal master cell banks, and rationally designed and optimized target disease roles and pathways. Today's call will focus on our CR155 program and the clinical data we look forward to obtaining next month and more broadly our strategy moving forward.

Speaker Change: We remain confident in the potential of Vaust and Nestle continues to refine their launch execution to respond to market dynamics as they work to expand the business.

Speaker Change: Research and development expenses for the second quarter were $17.9 million, down from $46.8 million for the same period in 2023.

Marella Thorell: The year-over-year decrease in R&D expenses was primarily driven by vouching commercial manufacturing costs no longer being recognized in the series P&L but instead being capitalized and recognized on our balance. In addition, reductions in headcount and other expenses from the restructuring announced at the end of 2023 contributed to lower expenses. General and administrative expenses for the second quarter were $16.1 million, reduced from $28.1 million for the same period in 2023.

Speaker Change: The year-over-year decrease in R&D expenses was primarily driven by vouched commercial manufacturing costs no longer being recognized in the series P&L, but instead being capitalized and recognized on our balance sheet.

Eric Shaff: Later in the call, we will provide review of our second quarter financial results. I'll begin with a recap of the vast asset sale and how this helps to support advancement of our pipeline. We expect the transaction to close in the next 90 days. As we discussed last week, the vast asset sale provides series with a meaningful capital infusion. Upon deal close pending stockholder approval, we will receive 155 million in cash which includes an upfront payment, a prepaid milestone payment, and an equity investment, net of operational obligations we pay Nestle at close.

Speaker Change: In addition, reductions in headcount and other expenses from the restructuring announced at the end of 2023 contributed to lower expenses.

Speaker Change: Thanks for watching!

Speaker Change: General and administrative expenses for the second quarter were $16.1 million, reduced from $28.1 million for the same period in 2023, again reflecting lower headcount following the restructuring actions, as well as lower professional fees and other cost reduction efforts. For more information, visit www.fema.gov

Marella Thorell: Again, reflecting lower headcount following the restructuring actions, as well as lower professional fees and other cost reductions, we reported a net loss of $32.9 million for the second quarter of 2024, as compared to a net income of $46.6 million for the same period in 2023. The change is the result of a $125 million milestone payment received from Nestle in the second quarter of 2023 upon the FDA approval of VAUST, along with other operating expense reductions noted during the period.

Eric Shaff: The capital provided will strengthen our balance sheet, enable us to retire our existing debt facility and certain other operational liabilities, and, most importantly, support the development of our pipeline of wholly owned live biotherapeutics that build upon our previous successes and represent the next generation of our drug technology. We are proud to have developed VAST at the first ever FDA-approved oral live microbiome therapy. VAST has transformed the lives of thousands of patients with recurrent, seed-efficial infections, preventing devastating recurrences of infections for individuals who have limited FDA-approved therapeutic options.

Speaker Change: We reported a net loss of $32.9 million for the second quarter of 2024, as compared to net income of $46.6 million for the same period in 2023.

Speaker Change: The change being a result of a $125 million milestone payment received from Nestle in the second quarter of 2023 upon the FDA approval of VAUST.

Speaker Change: along with other operating expense reductions noted between the periods.

Marella Thorell: More than one-third of our employee base is expected to move to Nestle Health Science as part of the vouch asset sale. Seres will be a more focused and streamlined organization upon the sale, and we will continue to manage expenses prudently. As a result, our cash burn will decline following the close of the transaction. Turning to our cash position, as of June 30th, 2024, we had $71.2 million in cash and cash equivalents.

Speaker Change: More than one-third of our employee base is expected to move to Nestle Health Science as part of the Valst Asset Sale.

Eric Shaff: In developing VAST, we created numerous capabilities, including entirely new manufacturing methods, and we collaborated with the FDA to secure regulatory approval for a product and an entirely new class of oral biotherapeutics. Looking ahead, we believe that the capabilities know how and core intellectual property that we have developed over the last decade and our underlying technology platforms position series to continue to successfully advance new biotherapeutics to address significant unmetable needs and additionally an additional medically vulnerable patient populations.

Speaker Change: Series will be a more focused and streamlined organization upon the sale, and we will continue to manage expenses prudently. As a result, our cash burn will decline following the close of the transaction.

Speaker Change: Turning to our cash position, as of June 30, 2024, we had $71.2 million in cash and cash equivalents.

Eric Shaff: This does not include the cash infusion expected as part of the vast asset sale, which we expect to close within 90 days of the August 5th signing. We expect that the capital obtained through the vouch asset sale, if completed, will allow us to extend our cash runway, enabling Seres to meaningfully advance its pipeline, based on our current cash, future operating plans, and the capital expected to be received at transaction close plus the installment payments expected in 2025, and Accounting for the Ongoing Transaction-Related Obligations. We anticipate a cash runway into the fourth quarter of 2025. I'll now pass the call back to Eric. Thank you, Marella.

Speaker Change: This does not include the cash infusion expected as part of the vouched asset sale, which we expect to close within 90 days of the August 5th signing.

Eric Shaff: We believe that there are near-term opportunities to apply our drug technology to prevent serious bacterial infections and related conditions such as bloodstream infections and febrile neutropenia in high-risk patients such as ALO-HSCT patients. In the longer term, we plan to leverage our acquired capabilities in other diseases and conditions. More specifically, we believe we can develop our biotherapeutics to prevent infection in multiple medically vulnerable patient groups and we could address also GI immune-related diseases such as inflammatory bowel disease.

Speaker Change: We expect that the capital obtained through the vouched asset sale, if completed, to allow us to extend our cash runway, enabling Ceres to meaningfully advance its pipeline.

Speaker Change: Based on our current cash, future operating plans, and the capital expected to be received at transaction close, plus the installment payments expected in 2025.

Speaker Change: And accounting for the ongoing transaction-related obligations, we anticipate a cash runway into the fourth quarter of 2025.

Eric Shaff: In summary, we believe the VAST asset sale will enable series to create meaningful new biotherapeutics for diseases that are not able to be effectively addressed with conventional approaches thereby creating value for patients and other stakeholders. The transaction enables us to transform series into a number and more streamlined organization deploying our financial and human capital to advance and pipeline assets through discovery and clinical development core competencies of series. We will be well-positioned to build upon our extensive technical capabilities and to advance the development of potentially transformative new treatments for many series diseases.

Speaker Change: I'll now pass the call back to Eric.

Eric Shaff: And before we move forward, I'll just note that we have been made aware that there may be a technical issue with folks being able to access the call or at least the first part of the call from our website. So following the completion of this call, we will ensure that the full transcript of our remarks is posted and available to everybody. Okay, moving forward. I'm going forward.

Eric: and many more. Thank you. Thank you.

Eric: Thank you, Marella. And before we move forward, I'll just note that we have been made aware that there may be a technical issue with folks.

Eric: being able to access the call or at least the first part of the call from our website. So following the completion of this call, we will ensure that the full transcript from our remarks is posted and available to everybody.

Eric Shaff: Seres will pursue a focused corporate strategy where we will apply our experience with live biotherapeutics to improve patient outcomes in a variety of medically vulnerable patient populations. As discussed, our immediate strategy is focused on reducing the risk of bacterial infections in high-risk populations. In the future, we also believe that our biotherapeutics could be developed to address other large commercial opportunities, including the treatment of autoimmune diseases such as inflammatory bowel disease. As you've heard today, we are very excited to obtain the CER155 Clinical Data and AlloHSCT in September. These data have the potential to highlight the tremendous opportunity we see in 0155.

Eric: Okay, moving forward.

Speaker Change: Series will pursue a focused corporate strategy where we will apply our experience with live biotherapeutics to improve patient outcomes in a variety of medically vulnerable patient populations.

Speaker Change: As discussed, our immediate strategy is focused on reducing the risk of bacterial infections in high-risk populations.

Eric Shaff: Our lead program, 0155, is being evaluated in an ongoing phase 1B study and we are looking forward to obtaining important clinical data next month in the placebo-controlled cohort 2. We anticipate this readout will extend the positive results observed in cohort 1 and further highlight the potential for our novel therapeutic approach expanding our prior clinical successes.

Speaker Change: In the future, we also believe that our biotherapeutics could be developed to address other large commercial opportunities, including the treatment of autoimmune diseases such as inflammatory bowel disease.

Speaker Change: As you've heard today, we are very excited to obtain the CR155 clinical data in AlloHSCT in September.

Speaker Change: These data have the potential to highlight the tremendous opportunity we see in 0155.

Eric Shaff: If we are successful, the medical and commercial opportunities for 0.155 could be very meaningful. Beyond 0155, we are developing 0147 for medically compromised patients with metabolic diseases, opening additional substantial opportunities. We've already shown that our therapeutic approach can yield highly efficacious and well-tolerated medicine that can change lives.

Eric Shaff: Series is also developing another proprietary live biotherapeutic composition. Series 147 to improve clinical outcomes in patients with metabolic disease including those with chronic liver disease and those at high risk of bacterial Matt will discuss this program shortly.

Speaker Change: If we are successful, the medical and commercial opportunities for 0.155 could be very meaningful.

Speaker Change: Beyond 0155 we are developing 0147 for medically compromised patients with metabolic diseases, opening additional substantial opportunity.

Speaker Change: We've already shown that our therapeutic approach can yield highly efficacious and well-tolerated medicine that can change lives.

Lisa Moltke: I'll now pass the call over to Lisa to discuss CIR155 in more detail. Thank you, Eric.

Operator: We have the capabilities, and with our recently announced transaction, we expect to have the capital to support the development of additional transformative new therapies for medically vulnerable patients. Operator, with that, let's now open the call to questions. 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. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Lisa Moltke: CIR155 is a live bio therapeutic that was specifically designed to target the unmet medical needs of gastrointestinal derived infections, including bloodstream infections, as well as infection-associated negative clinical outcomes such as fever during periods of time. CIR155 is being evaluated in a phase-1B study in patients undergoing L-O-H-S-C-T following a diagnosis of AML or other hematologic malignancy. As a result of the extensive exposure to antibiotics and the effects of H-S-C-T conditioning regimens, these patients often developed a disrupted gastrointestinal mitrobiome, resulting in functional deficiencies that often lead to pathogen overgrowth and domination in the GI tract.

Speaker Change: We have the capabilities, and with our recently announced transaction, we expect to have the capital to support the development of additional transformative new therapies for medically vulnerable patients.

Speaker Change: Operator, with that, let's now open the call up to questions.

Operator: 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.

Operator: and many more. Thank you. Thank you.

Operator: If you are called upon to ask your question and are listening via 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.

Operator: Again, press star one to join. Your first question comes from the line of Tess Romero with Jeep Immorgan. Your line is: Good morning, team. Thanks for taking our questions. So the first one from us is really around the, if you can possibly quantify, what signal or signal are you looking for in cohort 2, for tier 155.

Lisa Moltke: These disruptions, coupled with diminished integrity of the GI epithelial barrier, are associated with significantly increased risks of bloodstream infections, graft versus host disease, and mortality. Last year, we reported promising phase-1B cohort-1 clinical data, with CIR155 being well tolerated in highly immunocompromised L-O-H-S-C-T patients. In this open label cohort, CIR155 was administered to 13 subjects with 11 continuing to transplant. Our data indicated that of the subjects administered CIR155, only a single patient had enteric passage and domination within 30 days following stem cell transplant.

Speaker Change: Your first question comes from the line of Tess Romero with JP Morgan. Your line is open.

Tess Romero: Good morning team. Thanks for taking our questions. So the first one from us is really around the if you can possibly quantify for us what signal or signals you are specifically looking for in cohort 2 or CR 155 around these

Lisa Moltke: This event was transient, and the resulting incidence of domination in cohort-1 was markedly lower than the incidence observed in a large reference cohort. These data provides strong mechanistic evidence, supporting the clinical intent of CIR155 to prevent GI passage and domination and related bloodstream infections.

Tessa Romero: Secondary Endpoints that you've talked about today. And then, zooming ahead a little bit, can you provide a... How we should think about what an Eddie might look like. It's cohort 2. Thank you all so much for joining us today.

Speaker Change: key secondary endpoints that you've talked about today.

Speaker Change: and then.

Speaker Change: Zooming ahead a little bit, can you provide a framework for how we should think about

Speaker Change: what a potential pivotal study might look like if Cohort 2 is successful. You know, just try to get at kind of how de-risked that trial design might be on the backside of Cohort 2, and also how fast do you think you could get that pivotal study up and running? Thanks so much.

Tessa Romero: I hope you have a great day. We'll see you next time, co-worked to, and also about that pivotal study I've been running. Thanks.

Eric Shaff: Tess, good morning, and thanks again for the questions. Let me start, and maybe I'll pass it over to Lisa. I think we lost a little bit of audio at the end there, but I think I heard most of the questions.

Speaker Change: Good morning and thanks again for the questions. Let me start and maybe I'll pass it over to Lisa. I think we lost a little bit of audio at the end there, but I think I heard most of the questions. The first question was around how do we think about quantifying signal in an endpoint, I assume on the efficacy side in this upcoming readout.

Eric Shaff: So the first question was around how we think about quantifying signal in an endpoint, I assume on the efficacy side, in this upcoming readout. The second question was how quickly we can get to a next study, and if it was pivotal, what does it kind of look, smell, feel like in terms of time, cost, and so forth? So if I didn't butcher your questions, Tess, maybe I can start, and then Lisa can go from there.

Lisa Moltke: Next month, we will obtain data from study cohort-2, which incorporates a randomized, double-blinded, placebo-controlled design and enrolled 45 subjects. I'd like to review several of the specific study endpoints that we will be evaluating. From a safety perspective, we would like to see continued evidence indicating that CIR155 is well tolerated. It is important to note that our biotherapeutics candidates are derived from bacteria isolated from the GI tract of healthy humans and only include bacterial strains that have not been associated with infection.

Speaker Change: Second question was, how quickly can we get to a next study, and if it were pivotal, what does it kind of look, smell, feel like in terms of time, cost, and so forth?

Eric Shaff: And, you know, I would start by just saying and reminding folks that, you know, this is a phase 1B study, so the primary endpoints are, of course, safety and the pharmacology, which I think. We do have the benefit of having a placebo arm, roughly 25 patients per cohort. So we are looking to see signals, and, as always, our studies tend to be pretty data-rich. So maybe I can pass it to Lisa to talk about the parameters of the study and perhaps your questions about where we go with positive data. Yeah, Tessa, good morning.

Lisa: So the primary endpoints are, of course, safety and the pharmacology that I think you mentioned.

Speaker Change: We do have the benefit of having a placebo arm, roughly 25 patients per cohort.

Lisa Moltke: As a result, we have reason to believe that the safety profile associated with our biotherapeutics will continue to be favorable as we have observed in our prior clinical studies. From an efficacy perspective, we will be assessing the ability of CIR155 to decrease the incidence of GI derived bloodstream infections within the first 30 and 100 days following HACP, a period associated with a high rate of complications. We will also evaluate if CIR-155 administration results in decreased rates of fever during neutropenia and subsequent rates of antibiotic initiation.

Speaker Change: So, we are looking to see signals and, you know, as always, our studies tend to be pretty data rich. So, maybe I can pass it to Lisa to talk about the parameters of the study and perhaps your questions about where we go with positive data.

Lisa Moltke: We have not been specific about the actual deltos that we're looking for, but I think we can go through the endpoints. Starting with something like neutropenia and fever, where rates are very, very high, we have a chance to be able to see a very meaningful decrement just because it's so prevalent. Something like bloodstream infections, which are less frequent.

Lisa: Yeah Tess, good morning. We have not been specific about the actual deltas that we're looking for but I think we can go through the end points and it's starting with something like neutropenia and fever where rates are very very high. We have a chance to be able to see a very meaningful decrement just because it's so prevalent.

Lisa Moltke: In addition, we will examine if CIR-155 is associated with a reduced incidence of acute graft versus host disease. However, given recent changes in standard treatment practices, we expect the overall rate of GVHD to be low during the study assessment period.

Lisa: Something like bloodstream infections, which are less frequent, we still think we would be able to see a meaningful difference, but obviously the delta would not be the same. Same thing for GI infections, same thing for acute GVHD.

Lisa Moltke: But we still think we would be able to see a meaningful difference, but obviously, the delta would not be the same. Same thing for GI infections, same thing for QGVHD. With regard to the infectious endpoints, the other thing we're looking for is consistency, right? We want to see that if we see a change in neutropenia and fever, we're also seeing a change in antibiotic starts as well as BSI. So the consistency of that picture, as well as then looking at the pathogen abundance data, which mechanistically we believe would underlie those findings, will really be important. So it's the individual endpoints, yes, but it's also the consistency of the picture that we see that paints, you know, the idea that we're doing what we want to do.

Lisa Moltke: The cohort to result and our subsequent discussions with FDA will inform next steps, but we expect our next study to be global and that there could be an opportunity for it to be a single pivotal study. We believe positive data from the cohort to read out would further validate the promise of our live biotherapeutics modality to address serious infections and infection-related negative clinical outcome in medically vulnerable populations, including cancer patients with neutropenia, solid organ transplant recipients, and individuals with chronic liver disease.

Lisa: With regard to the infectious endpoints, the other thing we're looking for is consistency, right? We're wanting to see that if we see a change in neutropenia and fever, we're also seeing a change in antibiotic starts, as well as BSIs.

Lisa: So, the consistency of that picture, as well as then looking at the pathogen abundance data, which mechanistically we believe would underlie those findings, will really be important.

Lisa: So, it's the individual endpoints, yes, but it's also the consistency of the picture that we see that paints, you know, the idea that we're doing what we want to do.

Lisa Moltke: And the next question was around, how do we think about a registration study? Yeah, and I think what we would want is a study that builds on our experience with VAUST, in that when you have a meaningful clinical delta, you can run an efficiently sized trial. And that's what we'd be looking for.

Lisa Moltke: Assuming supportive cohort to data, we have already begun to plan further development steps for CIR-155, including a potential global registration study in all OHSCT, and potentially also initiation of development in other medically vulnerable groups, high rates of bacterial infections.

Lisa Moltke: We have some idea of the kind of safety database that the agency wants. So we would be using that experience to build a pivotal study, you could imagine on the same scale as the pivotal study, as well as expecting a safety database requirement of about 300 total. Really helpful, thanks for giving your questions and sorry about my... No problem. The next question comes from the line of Ted Tenthoff with Piper Sander. Your line is open. Great.

Lisa: And the next question was around, how do we think about a registration study? Yeah, and I think what we would want is a study that builds on our experience with VAUST in that when you have a

Lisa: a meaningful clinical Delta, you can run an efficiently sized trial. And that's what we'd be looking for. We have some idea of the kind of safety database that the agency wants. So we would be

Matthew Henn: I will now pass the call to Matt to discuss the pharmacology data that we will be collecting in the CIR-155 study. Thank you, Lisa. CIR-155 is a consortium of 16 bacterial strains that was rashly designed and optimized based on the functional properties of the individual strains, as well as clinical insights from across series portfolio of clinical studies. This biotherapeutic is designed to prevent and reduce pathogen colonization, abundance, and overgrowth in the GI tract, and to promote epithelial barrier, to reduce the likelihood of harmful bacteria, translating from the GI to the bloodstream.

Lisa: Using that experience to build a pivotal study you could imagine on the same scale as the VAUST pivotal study as well as expecting a safety database requirement of about 300 total.

Speaker Change: Really helpful. Thanks for taking our questions and sorry about my audio.

Speaker Change: Next question comes from the line of Ted Tentoff with Piper Sandler. Your line is open.

Matthew Henn: Additionally, there are bacteria included in CIR-155 to modulate immune pathways to induce immune tolerance with the potential to impact GVHD. In cohort two of the CIR-155 allohcct trial, we will evaluate a number of pharmacology parameters, including the kinetics and magnitude of drug species and graftment, meaning the outgrowth of bacteria in CIR-155 in the gas and testinal tract, and the abundance and overgrowth of harmful bacteria, including those that can harbor antimicrobial resistance in the GI.

Edward Tenthoff: Thank you for taking my question and looking forward to the data in September. Kind of looking ahead a little bit, as you were walking through the profile, I was thinking, would it make sense for 155 in CAR T therapy, and could it help with some of the challenges in terms of CRS and CVHD that are seen, especially with some of the new allogeneic therapies that are coming down the pipe? Just a thought I had; I'm wondering what your view of that opportunity is.

Ted Tentoff: Great. Thank you for taking my question. I'm looking forward to the data in September.

Speaker Change: , , , , ,

Ted Tentoff: I was kind of looking forward a little bit as you were walking through the profile. I was thinking...

Speaker Change: Would it make sense for 1-5-5 in CAR T therapy and could it help...

Speaker Change: with some of the challenges in terms of CRS and GVHD that's seen, especially with some of the new allogeneic therapies that are coming down the pipe. Just a thought I had, I'm wondering what your view of that opportunity is. Thank you.

Matthew Henn: In addition, we will be evaluating changes in the GI microbiome and associated functions and a collection of host biomarkers to evaluate mechanisms of pathogen decolonization, epithelial barrier function, and additionally modulation of both local and systemic immune pathways that can induce immune tolerance. Cohort two pharmacology data and endpoints will be examined in the context of the placebo control and the reference control cohort. The pending pharmacology data could provide additional support for clinical outcomes observed.

Edward Tenthoff: Thank you. Yeah, Ted, great questions. Let me hand it to Lisa.

Lisa: Yeah, Ted, great question. Let me hand it to Lisa. Yeah, we absolutely think there could be applicability in CAR-T, both from the infectious complications as well as the immunologic.

Lisa Moltke: Yeah, we absolutely think there could be applicability in CAR T, both from the infectious complications, as well as the immunologic issues that you've just outlined. And I think that's the beauty of this trial, which is the ongoing trial, which is that we believe mechanistically. It applies to CAR T, as well as auto transplants and other indications where there's chemotherapy. Hey, Ted.

Lisa: issues that you've just outlined. And I think that's the beauty of this trial is, which is the ongoing trial, which is that we believe mechanistically, it applies to CAR T as well as auto transplants and other indications where there's chemotherapy.

Eric Shaff: One additional point, too, which is, you know, we've known each other for a long time, and we've been really focusing on the core mechanisms and biologies, both around the ability to prevent pathogens from colonizing and then decolonizing, as well as the epi barrier and inducing immune tolerance. And I think something that's really important in the context of our technology is that we're bringing a novel approach And I think that's particularly important in many of these different patient populations where we see challenges such as infections and other immune responses. So, Ted, just one more thing.

Matthew Henn: In addition, these data will be important as we consider further development plans for CIR155 in targeting the prevention of infection in additional patient populations, as well as GI-related immune diseases.

Speaker Change: Hey Ted, one additional point too, which is, you know, you've known us for a long time and we've been really focusing on that core mechanism in biology, both around the ability to prevent pathogens from colonizing and then decolonize, as well as the epi barrier and inducing immune tolerance. And I think something that's really important in the context of our technology is we're bringing a novel approach forward that's not immunosuppressive. And I think that's particularly important in many of these different patient populations where we see challenges such as infections and other immune responses.

Matthew Henn: In addition to CIR155, we are developing CIR147 for compromised patients living with metabolic diseases. CIR147 is an oral, live biotherapeutic product candidate, consisting of a consortium of cultivated bacteria designed to prevent gut-seated infections and associated downstream infections, and spontaneous bacterial parotonitis, or SDP, in chronic liver disease. In the advanced stages of chronic liver disease known as de-compensated cirrhosis, patients can exhibit gastrointestinal microbiome disruption and associated functional deficiencies. This combined with the frequent contact with the healthcare system can drive increased susceptibility to bacterial infections and other negative clinical outcomes such as hospitalization.

Lisa Moltke: There was a recent meta-analysis that came out in Nature Medicine that actually looked at the kinds of problems that CAR T patients have that actually cause mortality. And the surprise in that paper was that infections are still an amazingly important issue, and that more than 50% of the deaths are being attributed not to ICANs or to other things that are a bit more exotic, but to just infections. So there's still a lot of work to be done on just that kind of fundamental issue.

Speaker Change: And Ted, just one more thing. There was a recent meta-analysis that came out in Nature Medicine that actually looked at the kinds of...

Ted Tentoff: problems that CAR T patients have that actually cause mortality.

Ted Tentoff: And the surprise in that paper was that...

Ted Tentoff: Infections are still an amazingly important issue, and that more than 50% of the deaths are being attributed not to eye cans or to other things that are a bit more exotic, but to just infections.

Matthew Henn: CIR147 was designed and optimized using our reverse translational MBTX platform, enabling the data-driven selection of a unique set of bacterial strains with the desired functional properties. These strains were selected based on clinical insights and extensive pre-climical in vitro and disease model screening of individual strains and lead consortia. Our cultivated biotherapeutics are manufactured from single-strain isolates through fermentation methods that allow for efficient, scalable processes. As with CIR155, we believe that CIR147 could represent another opportunity for series and we anticipate IND readiness in the second half of 2025.

Ted Tentoff: So there's still a lot of work to be done on just that kind of fundamental issue.

Lisa Moltke: Great, thank you for that additional color. Looking forward to the data and excited to hear more about the new 147. Thanks Dad, thanks for watching. The next question comes from the line between Peyton Bohnsack and T.D. Cowen.

Speaker Change: Great. Thank you for that additional color. Looking forward to the data and excited to hear more about the new 147 program.

Speaker Change: Thanks, Ted. Thanks for the question.

Speaker Change: and many more. Thank you. Thank you.

Speaker Change: i

Speaker Change: Next question comes from the line of Peyton Bonsack with TD Cowen. Your line is open.

Peyton Bohnsack: Good morning. Hi, this is Peyton Onkwojo, and thanks for taking our questions. I guess a real quick one on SIR155's pivotal design. I know that you mentioned it was going to most likely be a global trial. Could you talk about whether or not there are data sets for kind of pathogen domination? Because I know there's a reference data set that you guys tend to use. It's from MSKCC

Peyton Bonsack: Good morning. Hi, this is Peyton. I'm for Joe and thanks for taking our questions. I guess a real quick one on Sarah 155 pivotal design I know that you mentioned is going to most likely be a global trial. Could you talk about whether or not there are? Datasets for kind of the pathogen domination because I know there's a reference data set that you guys tend to use is from MSKC

Terry Young: I'll now pass the call to Terry to provide further context around our pipeline strategy. Thank you, Matt. To summarize our general path forward, we believe our approach has demonstrated unique clinical success with spouse and preventing frequent, serious, and expensive infections, and we plan to build upon this success in additional medically vulnerable patients. Our next step in this journey is to substantiate a highly attractive profile for CIR155 in terms of safety and efficacy with a short oral dosing regimen.

Peyton Bohnsack: And whether or not you would think that there would be any difference in the types and amount of pathogens for global trials. And then I have a follow-up. Sure, Peyton takes the question, and maybe I'll have Matt to comment, but before he does, just a... Make sure that we're level setting, right?

Peyton Bonsack: and whether or not you would think that there would be any difference in the types and amount of pathogens globally. And then I have a follow-up.

Speaker Change: Thanks for watching, see you next time!

Speaker Change: Sure, Peyton, thanks for the question. And maybe I'll ask Matt to comment. I mean, but before he does, just to...

Eric Shaff: One of the really interesting aspects of this study is the first cohort, for those that might not be aware, where we looked at pathogen domination in comparison, as Peyton mentioned, versus a reference cohort that we had established with the partnership of MSK. And there are some really interesting early signals around lower pathogen incidents and domination incidents than we might have thought based on that reference cohort, including one out of, I think, 11 subjects. And It was actually a transitory event.

Matt: Make sure that we're level setting. One of the really interesting aspects of this study is the first cohort, for those that might not be aware, where we had

Terry Young: With meaningful results next month from the phase 1B study, we will begin to pursue additional therapeutic adjacencies for CIR155 as Lisa and Matt both outline. Each adjacent patient population under consideration is significant in its own rights, but together they represent a substantial commercial opportunity. The ALO-HSCT population is comprised of approximately 30,000 patients annually across the U.S, and India. Expansion across other hematologic militancies would bring an additional 23,000 patients annually to the CIR155 patient pool from auto-HSCT, and another 190,000 from hematologic cancer patients with high extropoemia rate.

Matt: We looked at pathogen domination.

Matt: In comparison, as Peyton mentioned, versus a reference cohort that we had established with the partnership of MSK, and we saw some really interesting initial early signals.

Matt: around

Peyton Bonsack: Lower pathogen incidence domination than we might have thought based on that reference cohort

Peyton Bonsack: including one out of, I think it was 11 subjects and it was actually a transitory event, so.

Matthew Henn: So that's one of the reasons that we're so excited about this upcoming second cohort, particularly with the placebo control. But maybe Matt can comment further on your question. So yeah, there is global data around pathogen abundance.

Matt: You know, that's one of the reasons that we're so excited about this upcoming second cohort, particularly with the placebo control. But maybe Matt can comment further on your question.

Matt: Yeah, so... So, um... So, um...

Matthew Henn: And I would point you to a New England Journal of Medicine article that was published. And, obviously, we'd be happy to share that. But there was work conducted there across major transplant centers globally, including Asian as well as European centers and other centers in the US. CERES actually helped support some of that work. And the data are consistent across the globe.

Matt: So yeah, so there is global data around pathogen abundance, and I would point you to a New England Journal of Medicine article that was published, and obviously we'd be happy to share that. But there was work conducted there across major transplant centers globally, including Asian as well as European centers and other centers in the U.S. CERES actually helped support some of that work, and the data are consistent across the globe. The reason we use the reference cohort data set that we've developed with MSK is because we've put a lot of energy and time into collection of that, and so it's a very, very high-quality data set that we feel highly reflects what those rates look like. But those trends are observed.

Terry Young: For example, AML, multiple myeloma, and non-hodgkin, and so on. These patients are mainly treated at large centers across the developed world and therefore we would benefit from an efficient commercial model designed to reach a concentrated set of HCP. We are also considering expansion into other transplants with the potential to avoid infections in the 65,000 patients across the US and EU each year to receive solid organ transplants specifically kidney and liver. Our next program, C-147 provides the opportunity to prevent infections in chronic liver disease patients, another large patient. We also believe our approach can make a difference for patients beyond activity against infection by addressing immune modulation. This would enable us to pursue additional highly prevalent conditions such as inflammatory bowel disease.

Matthew Henn: The reason we use the reference cohort data set that we've developed with MSK is because we've put a lot of energy and time into collecting that, and so it's a very, very high quality data set that we feel highly reflects what those rates look like. But those trends are observed in the global data sets as well. And then you had a follow-up. Yeah, I did.

Matt: and the Global Datasets as well.

Peyton Bohnsack: So I guess, kind of, could you go into any additional details about when the ACE-1b core data, the placebo-controlled core data, is positive? What are the next steps with the agency? What still needs to be required for actually initiating these studies? Do you have the back extremes put together?

Matt: And then you had a follow-up.

Speaker Change: Yeah, I did. So I guess, kind of, could you go into any additional details about if the, when the ACE-1b core data, the placebo-controlled core data is positive? What are the next steps with the agency? What still needs to be required for actually initiating these studies? Do you have the package pretty much put together?

Terry Young: We remain excited about the breadth of opportunities in front of us and it's worth reminding everyone that a key outcome of the valve asset sailed in Nestle is that we will have full ownership of our entire next generation of pipeline candidate, providing strategic optionality as we move forward and positioning us to drive value for our key stakeholders. Our pipeline prioritization has been informed by our knowledge of where microbiome disruption has been implicated in disease, thereby leaving patients vulnerable to serious and expensive infections.

Eric Shaff: Yeah, I get the easy answer, and then I can hand it to Lisa. The easy answer, of course, is that it depends on what the data shows, right? We always follow the data, and that has been our experience, including with what was then 109, now VAUS. We were thrilled with the result then, but, of course, we follow the data, including our discussions with the agency. But maybe Lisa can comment a little bit more specifically on what the process looks like.

Speaker Change: Yeah, I get the easy answer and then I can hand it to Lisa. The easy answer, of course, is it depends what the data shows, right? We always follow the data.

Speaker Change: And that has been our experience, including with what was then 109, now VAUST.

Speaker Change: We were thrilled with the result then, but of course we followed the data, including our discussions with the agency.

Speaker Change: Maybe Lise can comment a little bit more specifically around what the process looks like.

Terry Young: We are also strongly considered diseases with high and met needs where product with an attractive profile would bring a strong value proposition affording us pricing flexibility. In addition, as we develop our future plans, we will carefully consider the required development path for all indications under evaluation to ensure that we can demonstrate clinical proof of concept at modest costs in a time manner. In summary, we will continue to utilize a rigorous and data-driven approach to develop our pipeline strategy which considers the strength of scientific rationale and commercial potential along with clinical development feasibility timing costs. The SEAR-155 clinical results that we receive next month will be a key input to our path forward and will allow us to refine our plan.

Eric Shaff: Yeah, we would be going to them to actually discuss the data in the next study, as well as for designations around orphan drug and breakthrough. And obviously, we can't do too much until we actually get the data and then start to construct the argument.

Lise: Yeah, we would be going to them to actually discuss the data in the next study as well as for designations around orphan drug and breakthrough.

Speaker Change: And obviously we can't do too much until we actually get the data and then start to construct the argument. But you can imagine we've given all of that a lot of thought and clearly on the breakthrough side and orphan drug, we've done that before.

Lisa Moltke: But you can imagine we've given all of that a lot of thought, and clearly, on the breakthrough side and the orphan drug, we've done that before. So we feel that that's a fairly straightforward kind of request coming from our experience. Great, that's extremely helpful.

Speaker Change: So we feel that that's a fairly straightforward kind of request coming from our experience.

Peyton Bohnsack: Thanks for taking our questions. Thanks for the questions, Peyton. John Nez's question comes from the line of Jeff Jones with Open Heimer.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: Great, that's extremely helpful. Thanks for taking our questions.

Speaker Change: Thanks for the questions, Peyton.

Terry Young: We look forward to communicating more about our strategic path forward once we have came and fully considered this important data set.

Speaker Change: And last question comes from the line of Jeff Jones with Oppenheimer. Your line is open.

Jeff Jones: Your line is- Hi, this is Fanyi for Jeff. We have a couple questions. First, can you share how you think of the line post-vote, like what the criteria you're using to decide when programs to bring back online, and what drives you to select one for seven at the first program to bring back? We have some to follow up. Thank you.

Marella Thorell: Now I'll turn the call over to Morella to share our financial results. Thanks, Terry, and good morning, everyone. I'd like to discuss our financial results for the second quarter starting with BALFT. As a reminder, SEAR-155 does not recognize BALFT net sales in its financial statements, but instead, under the terms of our prior agreements with Nestle, we share equally the product's commercial profits and losses, and we record our share in the collaboration profit and loss sharing related party line.

Fanyi: Hi, this is Fanyi for Jeff. We have a couple of questions. First,

Fanyi: Can you share how you think of the blind post-divorce?

Fanyi: like what the criteria you're using to decide when programs to bring back online and what drive you to select 147 at the first program to bring back. We have some to follow. Thank you.

Eric Shaff: I think the question was around how we decide to prioritize our programs, perhaps in... What we expect will be the closing of the NETLI transaction and our ability to focus more on the pipeline. You know, I think there's some element of our process that Teri mentioned in her prepared remarks as we think about unmet needs and where our technology has a, you know, call it an unfair advantage relative to other approaches.

Speaker Change: So, thanks for the question. I think the question was around how do we decide to prioritize our programs, perhaps in

Marella Thorell: BALFT profits and losses are determined based upon BALFT net sales, costs of good sold, and sales and marketing expenses. Net sales of BALFT for the second quarter were $14.4 million, reflecting in approximately 43% growth over the first quarter of this year. As discussed in our first quarter update, Nestle refined their call strategy and increased call points to broaden their prescriber reach. We remain confident in the potential of the house and Nestle continues to refine their launch execution to respond to market dynamics as they work to expand the business.

Speaker Change: What we expect will be the closing of the Nestle transaction and our ability to focus more on the pipeline. And so, you know, I think there's some element of...

Speaker Change: Our process that Terry mentioned in her prepared remarks, as we think about unmet need, as we think about where our technology has a

Eric Shaff: And there's a lot of excitement that we have in terms of our, you know, technology based on our experiences. You know, this is a disease where companies have for many years tried to innovate and have had, you know, limited success. We were successful in developing a therapeutic that was highly efficacious, well tolerated, and oral. And we think that that's really a precedent that we can take forward into adjacencies, and Serum 155 is the next step for us, which is one of the reasons we're so excited about this upcoming readout. You know, 147. Maybe I can ask Matt to talk about mechanistically why that's next on the list.

Speaker Change: You know, call it an unfair advantage relative to other approaches, and there's a lot of excitement that we have in terms of our, you know, technology based on our experiences out. You know, this is a disease where

Speaker Change: Companies have for many years tried to innovate and it's had, you know, limited success.

Marella Thorell: Research and development expenses for the second quarter were 17.9 million down from $46.8 million for the same period in 2023. The year-over-year decrease in R&D expenses was primarily driven by bounced commercial manufacturing costs no longer being recognized in the series PNL, but instead being capitalized and recognized on our balance sheet. In addition, reductions in headcount and other expenses from the restructuring announced at the end of 2023 contributed to lower expenses. General and administrative expenses for the second quarter were $16.1 million reduced from $28.1 million for the same period in 2023. Again, reflecting lower headcount following the restructuring actions as well as lower professional fees and other cost reduction efforts.

Speaker Change: We were successful in developing

Speaker Change: A therapeutic which was highly efficacious, well-tolerated, and oral.

Matt: And we think that that's really a precedent that we can take forward into adjacencies and CRM 155 is the next step for us, which is one of the reasons we're so excited about the upcoming readout. You know, 147, maybe I can ask Matt to talk about.

Matt: mechanistically why that's next on the list but certainly in our opinion if we are successful with 155

Matthew Henn: But certainly in our opinion, if we are successful with 155, it really opens up adjacencies where we can move, we think quickly with 155, with 147 and based on the cultivated, you know, side of our manufacturing platform, where we have a backbone of bacterial strains that we utilize as part of our therapeutics and then can switch out additional strains based on what we're hoping to do functionally, we think we've got the opportunity to move quickly. So maybe I can ask Matt to comment further. Yeah.

Matt: It really opens up adjacencies where we can move, we think, quickly with 155, with 147, and based on the cultivated...

Matt: side of our manufacturing platform, where we have a backbone of bacterial strains that we utilize as part of our therapeutics and then can switch out additional strains based on what we're hoping to do.

Matt: Functionally, we think we've got the opportunity to move quickly. So maybe I can ask Matt to comment further.

Eric Shaff: So, I mean, Seres as a company has always been data-driven, and that's at the heart of how we make our decisions, whether it be scientific data, clinical data, or commercial data. And that's what we put into play as we think about prioritizing the various diseases. We are highly focused as a company in settings of medically compromised patients where we know there is a highly disrupted microbiome in the gastrointestinal tract, which leads to functional deficiencies that are linked to various different disease outcomes.

Matt: Yeah, so I mean, Ceres as a company has always been data driven. And that's at the heart of how we make our decisions, whether it be the scientific data, the clinical data or the commercial data. And that's what we put in put into play as we think about prioritizing, prioritizing the various diseases.

Eric Shaff: We reported a net loss of $32.9 million for the second quarter of 2024 as compared to net income of $46.6 million for the same period in 2023. The change being a result of a $125 million milestone payment received from Nestle in the second quarter of 2023 upon the FDA approval of vowsed along with other operating expense reductions noted between the period. More than one-third of our employee base is expected to move to Nestle Health Science as part of the vowsed asset sale.

Matt: We are highly focused as a company in settings of medically compromised patients where we know there's a highly disrupted microbiome in the gastrointestinal tract.

Matt: which leads to functional deficiencies that are linked to various different disease outcomes. And what we've done at the company is done a lot of work to understand which of those functional pathways we are, can successfully target with our drugs and actually modulate. And that information is based on both preclinical and clinical data. And so when we looked across the spectrum of diseases, we saw real opportunities where basically the peer-reviewed literature had strong support for a microbiome connection. We've been able to confirm those kinds of results and we're moving those forward. So chronic liver disease is an example of that where we think there's a really nice lineup with basically what we believe our technology can do. We see a path clinically and we see a meaningful commercial opportunity.

Eric Shaff: And what we've done at the company is done a lot of work to understand which of those functional pathways we can successfully target with our drugs and actually modulate. And that information is based on both preclinical and clinical data. And so when we looked across the spectrum of diseases, we saw real opportunities where, basically, the peer-reviewed literature had strong support for a microbiome connection. We've been able to confirm those kinds of results, and we're moving those forward.

Eric Shaff: Series will be a more focused and streamlined organization upon the sale and we will continue to manage expenses prudently. As a result, our cash burn will decline following the close of the transaction. Turning to our cash position, as of June 30, 2024, we had $71.2 million in cash and cash equivalents. This does not include the cash infusion expected as part of the vowsed asset sale, which we expect to close within 90 days of the August 5th signing.

Eric Shaff: So chronic liver disease is an example of that, where we think there's a really nice lineup with basically what we believe our technology can do. We see a path clinically, and we see a meaningful commercial opportunity. The last thing I'll just say is that, you know, with our ability to move quickly, we also bring a mindset of focus.

Michael D.: and Michael D. Last thing I'll just say is that with our ability to move quickly, we also bring a mindset of focus.

Matthew Henn: We are deploying our capital and our resources in areas where we think there's the greatest opportunity for return. And that, of course, is the idea behind the 155 readout and, hopefully, what happens after that.

Michael D.: We are deploying our capital and our resources in areas where we think there's the greatest opportunity for return. And that, of course, is the idea behind the 155 redoubt and hopefully what happens after that. So that is our approach.

Eric Shaff: That is our approach. Great. Thank you. It's very helpful.

Eric Shaff: We expect that the capital obtained through the vowsed asset sale is completed to allow us to extend our cash runway enabling series to meaningfully advance its pipeline. Based on our current cash, future operating plans and the capital expected to be received at transaction close, plus the installment payments expected in 2025, and the counting for the ongoing transaction-related obligations. We anticipate a cash runway into the fourth quarter of 2025. Now pass the call back to Eric.

Jeff Jones: And for 50-50 profit and loss sharing, Vols continues well past the deal closing through fourth quarter 2025, as you mentioned. We know that that one has turned profitable this quarter, so can you speak to whether this is expected to continue, or if the profit this quarter was associated with any one time, like, goodbye? Yeah, maybe I can ask Marella to comment on the parameters of this past quarter and maybe what we expect. Yes, thank you for the question. Excuse me.

Speaker Change: Great. Thank you. It's very helpful. And for 50-50 profit loss sharing,

Speaker Change: Thank you for catching me as well.

Speaker Change: closing through fourth quarter 2025. As you mentioned, we know that that one has turned profitable this quarter. So can you

Speaker Change: Speak to whether this anticipated to continue or if the profit this quarter was associated with any one time like the bond.

Speaker Change: Yeah, maybe I can ask Marella to comment on the parameters of this past quarter and maybe what we expect going forward.

Marella Thorell: The profit this quarter was a combination of two things. Number one was the overall collaboration law for the enterprise of VALST, which is the net sales less the COGS, less the marketing expenses incurred by Nestle. And that was a loss for the period.

Eric Shaff: Thank you, Marella. And before we move forward, I'll just note that we have been made aware that there may be a technical issue with folks being able to access the call or at least the first part of the call from our website. So following the completion of this call, we will ensure that the full transcript from our remarks is posted and available to everybody. Okay, moving forward.

Marella: Yes, thank you for the question. Excuse me. The the profit this quarter was a combination of two things. Number one was the overall collaboration loss.

Marella: for the enterprise of Baust, which is the net sales, less the COGS, less the marketing expenses incurred by Nestle. And that was a loss for the period.

Eric Shaff: Seres will pursue a focus-corporate strategy where we will apply our experience with live biotherapeutics to improve patient outcomes in a variety of menoply vulnerable patient populations. As discussed, our immediate strategy is focused on reducing the risk of bacterial infections in high-risk populations. In the future, we also believe that our biotherapeutics could be developed to address other large commercial opportunities, including the treatment of autoimmune diseases such as inflammatory bowel disease. As you've heard today, we are very excited to obtain the 0155 critical data in all OHSCT in September.

Marella Thorell: The component that put us in profit was the profit that we recognized on the transfer of inventory to Nestle when they sell that on to a third party. Going forward, that second component, profit on inventory after the deal closes, will no longer be an element. The manufacturing operations will transfer over to Nestle. We're providing some support through a transition services period, but we will no longer recognize profit. So that element will be gone from the results.

Marella: The component that put us into a profit was the profit that we recognized on the transfer of inventory to Nestle when they sell that on to a third party.

Marella: Going forward, that second component, profit on inventory after the deal closes, will no longer be an element. The manufacturing operations.

Marella: will transfer over to Nestle. We're providing some support through a transition services period, but we will no longer recognize profit. So that element will be gone from the, uh, from the results.

Eric Shaff: These data have the potential to highlight the tremendous opportunity we see in 0155. If we are successful, the medical and commercial opportunities for 0155 could be very meaningful. Beyond 0155, we are developing 0147 for medically compromised patients with metabolic diseases, opening additional substantial opportunity. We've already shown that our therapeutic approach can yield highly efficacious and well-tolerated medicine that can change lives. We have the capabilities and with our recently announced transaction, we expect to have the capital to support the development of additional transformative new therapies for menoply vulnerable patients.

Marella Thorell: So it will really just be a matter of the product profit and loss that we will absorb in the proxy, which we plan to publish in the coming days. We will include an estimate of what that collaboration profit or loss will be for the period in which we will continue to share. And then, as of closing on the closing balance sheet, we will record a liability for an estimate of what that profit or loss sharing for the period will be and will adjust that each quarter. So you should think about the collaboration loss going forward in comparison to that one piece, that 6.6 million loss component of this quarter.

Marella: So it will really just be a matter of the product, profit, and loss that we will absorb. In the proxy, which we plan to publish in the coming days.

Marella: We will include an estimate for what that collaboration, profit or loss, will be for the period in which we'll continue to share.

Marella: And then as of closing, in the closing balance sheet, we will record a liability for an estimate of what that profit or loss sharing for the period will be. And we'll adjust that each quarter.

Marella: So you should think about the collaboration loss going forward in comparison to that one piece, that 6.6 million loss component of this quarter's results.

Operator: Operator, with that, let's now open the call-up to questions. 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 t-pad to raise your hand and join the queue. If you are called upon to ask your question and I'm listening via 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.

Marella Thorell: Very helpful. Thank you so much. Thanks for taking time, thanks for the questions. There are no further questions at this time. I turn the call back over to management for closing remarks. Thank you, Operator, and thanks to everyone for joining us this morning. We appreciate your time, and we look forward to keeping you updated as we go. Thanks very much, and have a great week. This concludes today's conference call. You may now disconnect. David Arkowitz, John Bohnsack, John Bohnsack,

Speaker Change: Very helpful. Thank you so much. Thanks for taking our question.

Speaker Change: There are no further questions at this time. I turn the call back over to the management for closing remarks.

Speaker Change: Thank you, operator, and thanks to everyone for joining us this morning. We appreciate your time and we look forward to keeping you updated as we go. Thanks very much and have a great week.

Tessa Romero: Your first question comes from the line of test Romero with GP Morgan. Your line is open. Good morning team, thanks for taking our questions.

Speaker Change: This concludes today's conference call. You may now disconnect.

Tessa Romero: The first one from us is really around the, if you can possibly quantify for us, what signal or signals you are specifically looking for in cohort 2 or CER155 around these key secondary endpoints that you've talked about today. I had a little bit.

Tessa Romero: Can you provide a framework for how we should think about what a potential pivotal study might look like if cohort 2 is successful? You know, just try to get that kind of how do you risk that trial design might be on the backside of cohort 2 and also how fast do you think you could get that pivotal study up and running? Thanks so much. That's good morning and thanks again for the questions.

Tessa Romero: Let me start and maybe I'll pass it over to Lisa. I think we lost a little bit of audio at the end there, but I think I heard most of the question. So the first question was around, how do we think about quantifying signal in the in an endpoint? I assume on the efficacy side in the suffering right now. The second question was how quickly could we get to a next study?

Tessa Romero: And if it were pivotal, what does it kind of look smell feel like in terms of time cost and so forth? So if I didn't butcher your questions test, maybe I can start and Lisa can go from there and you know, I would start by just saying and reminding folks that, you know, we, this is a phase 1b study. So the primary endpoints are, of course, safety and the pharmacology that I can imagine.

Tessa Romero: We do have the benefit of having a placebo arm roughly 25 patients per cohort. So we are looking to see signals and, you know, as always, our studies tend to be pretty data rich. So maybe I can pass it to Lisa to talk about the parameters of the study and perhaps your questions about where we go with positive data. Yeah, test, good morning. We have not been specific about the actual deltos that we're looking for, but I think we can go through the endpoints.

Tessa Romero: And starting with something like neutropenia and fever, where rates are very, very high, we have a chance to be able to see a very meaningful decrement just because it's so prevalent. Something like bloodstream infections, which are less frequent, we still think we would be able to see a meaningful difference, but obviously the delta would not be the same, same thing for GI infections, same thing for a QGVHD. With regard to the infectious endpoints, the other thing we're looking for is consistency, right?

Tessa Romero: We're wanting to see that if we see a change in neutropenia and fever, we're also seeing a change in antibiotic starts as well as BSI's. So the consistency of that picture as well as then looking at the passage in abundance data, which mechanistically we believe would under why those findings will really be important. So it's the individual endpoints, yes, but it's also the consistency of the picture that we see that paints, you know, the idea that we're doing what we want to do.

Tessa Romero: And the next question was around, how do we think about a registration study? Yeah, and I think what we would want is a study that builds on our experience with vows in that when you have a meaningful clinical delta, you can run an efficiently sized trial, and that's what we'd be looking for. So we have some idea of the kind of safety database that the agency wants. So we would be using that experience to build a pivotal study.

Tessa Romero: You could imagine on the same scale as the vows pivotal study, as well as expecting a safety database requirement of about 300 total. Really helpful. Thanks for taking our questions. I'm sorry about my audio. No problem. Thanks for the question, Steph.

Edward Tenthoff: Next question comes from the line of Ted Tenthoff with Bipersunder. Your line is open. Great.

Edward Tenthoff: Thank you for taking my question and looking forward to the date in September. I'm kind of looking forward a little bit. As you were walking through the profile, I was thinking, would it make sense for 155 in Carti therapy and could it help with some of the challenges in terms of CRS and CVHC that's seen, especially with some of the new alogenetic therapies that are coming down the pipe. Just the thought I had of wondering what you're obviously view of that opportunity.

Edward Tenthoff: Thank you. Yeah, Ted, great question. Let me hand it to Lisa. Yeah, we absolutely think there could be applicability in Carti both on from the infectious complications, as well as the immunologic issues that you've just outlined. And I think that's the beauty of this trial, which is the ongoing trial, which is that we believe mechanistically it applies to Carti as well as auto transplants and another. There are indications where there's chemotherapy.

Edward Tenthoff: Hey, Ted, one additional point, too, which is, you know, you've known us for a long time and we've been really focusing on that core mechanisms and biologies both around the ability to prevent pathogens from colonizing and then decolonize as well as the FI barrier and inducing immune tolerance. And I think something that's really important in the context of our technologies, we're bringing a novel approach forward. That's not immunosuppressive, and I think that's particularly important in many of these different patient populations where we see challenges such as infections and other immune responses.

Edward Tenthoff: So, and Ted, just one more thing. There was a recent meta-analysis that came out in nature medicine that actually looked at the kinds of problems that Carti patients have that actually cause mortality. And the surprise in that paper was that infections are still an amazingly important issue, and that more than 50% of the deaths are being attributed not to ICANNs or to other things that are a bit more exotic, but to just infections. So, there's still a lot of work to be done on just that kind of fundamental issue. So, great. Thank you for that at this whole color.

Edward Tenthoff: Looking forward to the data, and I'm excited to hear more about the new 147 program. Thanks, Ted. Thanks for the question.

Payton Bonfack: Next question comes from the line of Payton Bonfack with TD Cowen. Your line is open. Good morning. Hi, this is Payton on the Joe, and thanks for taking our questions. I guess a real quick one on SIR-155's digital design. I know that you mentioned it's going to most likely be a global trial. So, could you talk about whether or not there are data sets for kind of the package and domination? I know there's a reference data set that you guys tend to use is from MSKACP, and whether or not you think there's any difference in the types and amount of package and for... Totally, and then I'm off.

Payton Bonfack: Sure, Peyton, thanks for the question and maybe I'll ask Matt to comment, I mean, but before he does, just to make sure that we're level setting right. One of the really interesting aspects of this study is the first cohort for those that might not be aware, where we had, we looked at pathogen domination in comparison as Peyton mentioned versus a reference cohort that we had established with the partnership of MSK. And there's some really interesting initial early signals around lower pathogen incidence, domination incidence, that we might have thought based on that reference cohort, including one that was 11 subjects and it was actually a transitory event.

Payton Bonfack: So, you know, that's one of the reasons that we're so excited about this upcoming second cohort, particularly with the placebo control, but maybe Matt can comment further on your question. So yeah, so there is global data around pathogen abundance, and I would point you to a New England Journal of Medicine article that was published, and obviously we'd be happy to share that, but there was work conducted there across major transplant centers globally, including Asian as well as European centers and other centers in the US.

Payton Bonfack: Series actually helped support some of that work, and the data are consistent across the globe. The reason we use the reference cohort data set that we've developed with MSK is because we've put a lot of energy and time into collection of that, and so it's a very, very high quality data set that we feel highly reflects what those rates look like, but those trends are observed in the global data sets as well.

Payton Bonfack: And then you had a problem. Yeah, I did. So, I guess kind of, could you go into any additional details about this when the ACE-1B cohort data, not the placebo control cohort case data is positive? What are the next steps with the agency? What still needs to be required for actually initiating these studies? Do you have the back instruments put together? Yeah, I get the easy answer that I can hand it to the Lisa.

Payton Bonfack: The easy answer of course is it depends what the data shows, right? We always follow the data and that has been our experience, including with what was then 109 now. That was, we were thrilled with the result then, and but of course, we followed the data, including our discussions with the agency, but maybe Lisa can comment a little bit more specifically around what the process looks like. Yeah, we would be going to them to actually discuss the data and the next study as well as for designations around orphan drug and breakthrough.

Payton Bonfack: And obviously, we can't do too much until we actually get the data and then start to construct the argument. But you can imagine we've given all of that a lot of thought and clearly on the breakthrough side and orphan drug we've done that before. So, we feel that that's a fairly straightforward kind of request coming from our experience. Great. That's extremely helpful. Thanks for taking our questions. Thanks for the questions, Peyton.

Jeff Jones: And last question comes from the line of Jeff Jones with Open Heimer. Your line is open. Hi, this is Fei for Jeff. We have a couple of questions. First, can you share how you think of the line post-of-ost, like what the criteria you're using to decide when programs to bring back online and what drop you to select one for seven at the first program to bring back. We have some to follow up.

Jeff Jones: Thank you. Yes, so I, thanks for the question. I think the question was around, how do we decide to prioritize our programs perhaps in what we expect will be the closing of the message transaction and our ability to focus more on the pipeline. And so, I think there's some element of our process that Terry mentioned in her prepared remarks, as we think about on that need, as we think about where our technology has a, you know, call it an unfair advantage, or all that the other approaches.

Jeff Jones: And there's a lot of excitement that we have in terms of our, you know, technology based on our experiences out. You know, this is a disease where companies have for many years tried to innovate. And it's had, you know, limited success. We were successful in developing a therapeutic which was highly efficacious while tolerated and oral. And we think that that's really a precedent that we could take forward into adjacencies and, and 0155 is the next step for us, which is one of the reasons we're so excited about the upcoming readout.

Jeff Jones: You know, 147, maybe I can ask Matt to talk about mechanistically why that's next on the list. But certainly, in our opinion, if we are successful with 155, it really opens up adjacencies where we can move, we think quickly with 155, with 147 and based on the cultivated side of our, of our manufacturing platform, where we have a backbone of bacterial strains that we utilize as part of our therapeutics and then can switch out additional strains based on what we're hoping to do functionally.

Jeff Jones: We think we've got the opportunity to move quickly. So maybe I can ask Matt to comment further. Yeah, so I mean, seriously, the company has always been data driven. And that's at the heart of how we make our decisions, whether it be the scientific data, the clinical data, or the commercial data. And that's what we put into play as we think about prioritizing the various diseases. We are, we are highly focused as a company in settings of medically compromised patients where we know there's a highly disrupted microbiome in the gastrointestinal track, which leads to functional deficiencies that are linked to various different disease outcomes.

Jeff Jones: And what we've done at the company is, is done a lot of work to understand which of those functional pathways we are can successfully target with our drugs and actually modulate. And that information is based on both preclinical and clinical data. And so when we looked across the spectrum of diseases, we saw, we saw real opportunities where basically the peer-reviewed literature had strong support for a microbiome connection. We've been able to confirm those kinds of results and we're moving those forward.

Jeff Jones: So chronic liver disease is an example of that where we think there's a really nice line up with basically what we believe our technology can do. We see a path clinically and we see a meaningful commercial opportunity. Well, that's what I'll just say is that, you know, with our ability to move quickly and we also bring a mindset of soak. We are deploying our capital and our resources in areas where we think there's the greatest opportunity for return and that of course is the idea behind the 155 readout and hopefully what happens after that so that is our approach.

Marella Thorell: Great. Thank you. Very helpful. And for 5050 profit loss sharing, we'll continue as well, pass the deal closing through for quarter 2025 as you mentioned. We know that that one has turned profitable this quarter so can you speak to whether this anticipated to continue or if the profit this quarter was associated with any one time like that. Yeah, maybe I can ask Marella to comment on the parameters of this past quarter and maybe what we expect going forward.

Marella Thorell: Yes, thank you for the question. Excuse me. The the profit this quarter was a combination of two things. Number one was the overall collaboration loss for the enterprise of vows, which is the net sales left the cogs left the marketing expenses incurred by Nestle and that was a loss for the period. The component that put us into a profit was the profit that we recognize on the transfer of inventory to Nestle when they sell that onto a third party.

Marella Thorell: Going forward that second component profit on inventory after the deal closes will no longer be an element of manufacturing operations will transfer over to Nestle. We're providing some support through a transition services period, but we will no longer recognize profit. So that element will be gone from the from the results. So it would really just be a matter of the product profit and loss that we will absorb in the proxy, which we plan to publish in the coming days.

Marella Thorell: We will include an estimate for what that collaboration profit or loss will be for the period in which will continue to share. And then as of closing in the closing balance sheet, we will record a liability for an estimate of what that profit or loss sharing for the period will be and will adjust that each quarter. So you should think about the collaboration loss going forward in comparison to that one piece that 6.6 million loss components of this quarter's results.

Marella Thorell: Very helpful. Thank you so much. Thanks for taking our question. Thanks for the question. There are no further questions at this time. I turn the call back over to the management for closing remarks. Thank you operator and thanks to everyone for joining us this morning. We appreciate your time and we look forward to keeping you updated as we go. Thanks very much and have a great week. This concludes today's conference call.

Operator: You may now disconnect .