Q1 2025 Seres Therapeutics Inc Earnings Call
John Newman, John Newman, Tessa Romero, John Newman, Tessa Romero, John Newman, Tessa
Desiree: Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the series to the Therapeutics' first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise.
Desiree: After this because remarks, there will be a question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad.
Speaker Change: If you would like to withdraw your question, again, press this star one. I would now like to turn the conference over to Dr. Carlo Tanzi of Investor Relations. You may begin.
Carla Tanzi: Thank you and good morning. Our press release with the company's first quarter 2025 financial results and business updates became available at 7 a.m. Eastern time of this morning and can be found on the investors and new section of the company's website.
Carla Tanzi: The company has also posted an updated corporate presentation to the website. I'd like to remind you that we'll be making forward-looking statements, including statements about the timing and results of our clinical studies and data readouts.
Future Product Candates, Clinical Development Plans and Commercial Opportunities
Communications with feedback from or submissions to the FDA.
Carla Tanzi: upcoming presentations, future payments related to the valve sale, operating plans, and our future cash runway, our ability to secure partnerships and or generate or obtain additional capital or financing.
Carla Tanzi: Our Plan Strategic Focus, anticipated timing of any of the four-gloin or other statements which are not historical facts.
Carla Tanzi: Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties which are discussed under the risk factor section of our recent SEC filings. Any four-looking statements made on today's call represent our views as of today only. We may update these statements in the future but we disclaiming the obligation to do so.
Speaker Change: On today's call, with prepared remarks, I'm joined by Eric Shaff, Seres President, CEO
and Marella Thorell, Chief Financial Officer.
Speaker Change: Additional Members of the Management Claim, including Dr. Matthew Henn, Chief Scientific Officer, Dr. Terry Young, Chief Commercial and Strategy Officer, and Dr. Dennis Walling, Senior Vice President of Clinical Development, will be available during the Q&A portion of the call. And with that, I'll pass the call to Eric.
Thank you, Carlo, and good morning everyone.
Speaker Change: Today, I'll share business highlights from the first quarter and provide an update on our progress advancing to your 155.
Speaker Change: During our recent full-year 2024 results call, we provided an in-depth review of our programs and recent data, and therefore, we will keep our remarks more abbreviated today and focus on progress updates.
Thank you.
Speaker Change: Advancing 0155 into the next stage of development in ALO-HSTT remains our top corporate priority and we are making significant progress towards initiating the next clinical study.
Speaker Change: As a reminder, our Phase 1B study showed that Seres 155 Administration resulted in a 77% relative risk reduction in bloodstream infections compared to placebo.
Speaker Change: This represents a highly meaningful outcome in this high-risk ALO-HCT patient population.
Speaker Change: We also observed a favorable safety profile in this study consistent with the favorable safety profile we've seen historically across our live biotherapeutic product platform.
Speaker Change: The clinical results generated today underscored the potential of 0155 to redefine the standard of care for ALO and HSCT recipients and the many other vulnerable patient groups at risk of bloodstream infections.
Speaker Change: We believe that developing 0155 and other live biotherapeutics to prevent infections in L-O-H-S-C-T and other adjacent patient groups, including autologous H-S-C-T patients, cancer patients with neutropidia.
Speaker Change: CAR-T recipients, individuals with chronic liver disease and solid organ transplant recipients could represent significant improvement for patients and multiple substantial commercial opportunities for series.
Speaker Change: Last month, members of our team attended the recent European Society for Blood and Mero Transplantation Conference, and we obtained an encouraging commentary from the transplant community that provides support for our mission and echoes what we've heard from the US-based physicians.
Speaker Change: Health Care providers emphasized that preventing bloodstream infections remains a major clinical challenge and new approaches are desperately needed.
Speaker Change: Many physicians also expressed enthusiasm for both the safety and efficacy results observed in our 0155 Phase 1B Study.
Speaker Change: Importantly, many also communicated their interests in participating in further CR-155 Development Efforts.
Speaker Change: Our plan phase two study is expected to include multiple sites in Europe , so it is certainly encouraging to hear the support from European physicians.
Speaker Change: Additionally, our poster received the best clinical poster award from the EDMC Scientific Organizing Committee, providing external validation of both the patient need for 0155 and the rigor of our site.
Thank you for watching.
Speaker Change: We also reported compelling exploratory translational biomarker data that reinforced the intended mechanisms of action of 0155.
Speaker Change: The data support that's 0155 strengthens gut epithelial barrier integrity and induces immune to how many are stasis, findings that align with the observed clinical efficacy.
Speaker Change: These results further demonstrate the broader potential for live biotherapeutics to address inflammatory and immune diseases.
Speaker Change: Guided by Constructive FDA feedback, including recently received wherein the FDA recommended that we conduct a standalone Phase II study as our next step, we plan to submit a 0155 Phase II study protocol to FDA in the coming weeks.
Speaker Change: Our aim is to achieve a time and capitalization path to clinical data.
Speaker Change: We are pleased with the productive interactions we've had with the FDA, which have been facilitated by zero one-size-size having breakthrough therapy designation.
Speaker Change: and we are incorporating FDA's feedback into the design of the Phase II study protocol.
Speaker Change: As a result of our interactions with the FDA, we believe that we have the information needed for a rigorous phase 2 protocol design.
Speaker Change: The study is expected to be well-powered, placebo-controlled, and target enrollment of 248 participants undergoing ALO HSTT with a primary endpoint of preventing of bloodstream infections.
Speaker Change: We anticipate incorporating an adaptive design and the interim data analysis when approximately half of the enrolled participants have reached the primary end point.
Speaker Change: Based on our preliminary operational plans and anticipated enrollment rates, we believe we could obtain interim results within 12 months of study initiation.
thereby rapidly informing next steps in the AlloHSCT development and pursuit of additional clinical development opportunities targeting adjacent patient populations such as autoHSCT.
Speaker Change: If successful, we think the efficacy and safety parameters of the Phase II study could be used to support the design of what we anticipate being a single registrational study for approval of CIR155 in all of H-H-S-E-T.
Speaker Change: As we prepare for the Phase II study, we are moving forward with operational activities to support study initiation and execution, including having selected the CRO, commencement of study startup activities, and manufacturing clinical trial material.
Speaker Change: In parallel with these internal efforts, we are actively engaging in partnership discussions.
Speaker Change: As previously discussed, we would seek to collaborate with an entity that can provide financial support and that would help series realize the full clinical and commercial value of tier 1.5.
Speaker Change: As you know, the biotech financing environment remains challenging and we believe that obtaining the support of an external party who can provide financial and other resources is our best option to move to your 155 forward and achieve the next clinical data milestone.
John Newman, John Newman,
Speaker Change: Regarding our broader strategic goals, we believe 0155 and other live biotherapeutics have significant potential not only in the HSCAT patient population, but also in additional patient groups at risk of bloodstream infections, including other blood cancer patients, CAR-T recipients.
Speaker Change: Solid Organ Transplant Recipients, Individuals with Chronic Liver Disease, and Individuals in the ICU and Long-Term Care Facilities [inaudible]
Speaker Change: I also want to highlight the potential that we see for live biotherapeutics to address various gut-related inflammatory and immune diseases such as IBD, including ulcerative colitis and
Speaker Change: In each of these diseases, the gut epithelial barrier is known to be compromised and this has been identified as a core component of underlying pathology.
Speaker Change: During the first quarter, we presented exploratory biomarker data from our Phase I study showing that 0155 was associated with improved epithelial barrier integrity and lower concentrations of various plasma biomarkers associated with systemic inflammation.
Speaker Change: such as Interführer on Gamma, TNF Alpha, IL-17, and IL-8 in the HSCP Perry Transplant Period, which is the period from the end of the first 0155 treatment course, through to Neutrophil and Graffman.
Speaker Change: Additionally, at the recent Digestive Disease Week Conference, we presented data that could help identify and stratify patient subgroups most appropriate for a live biotherapeutic intervention, and that could facilitate clinical development efforts in IBD and other immune-related diseases.
Speaker Change: We were very pleased to have received a poster of distinction award in the microbiome and microbial Therapeutics subgroup at D-D-W.
Speaker Change: We continue to assess options, including through potential partnerships, to further evaluate these exciting I and I opportunities.
Speaker Change: With that, I'll now turn the call over to Marella to review the financial results.
Thank you, Eric, and good morning everyone.
Speaker Change: I'll start by noting that we have classified all historical operating results for the vowsed business within discontinued operations in the consolidated statement of operations for the comparative period presented, being the three months ended March 31st, 2024.
Speaker Change: There's no ongoing activity in the current period related to Discops.
Speaker Change: Series reported net income from continuing operations of $32.7 million in Q1 2025 as compared to a net loss from continuing operations of $32.9 million in the first quarter of 2024.
Speaker Change: The net income in 2025 is primarily driven by the previously announced $50 million installment payment received from Nestle in January of this year, consistent with the company fulfilling its transition obligations.
Speaker Change: Reflecting Lower Personnel Expenses, A Decrease in Platform Investments, and Lower Costs Related to the CR-155 Phase 1-B Study [inaudible]
Speaker Change: General and administrative expenses were 11.9 million in the first quarter a decrease from 14.9 million in Q1 2024, driven primarily by lower personnel and contractor expenses.
Speaker Change: As of March 31st, 2025, we had cash and cash equivalents of $58.8 million in dollars.
Speaker Change: We are due a second installment payment of approximately $23.5 million net after deduction for employment-related obligations from Nestle in July of this year.
Speaker Change: We remain in compliance with the Transition Service Agreement terms and therefore anticipate receipt of this payment as expected.
Speaker Change: Based on our current cash balance, the expected installment payment from Nestle in July and our current operating plans, we expect to fund operations into the first quarter of 2026 .
John Newman, Paul
Speaker Change: On April 21st of this year, we affected a one-for-twenty reverse stock split of our common stock.
Speaker Change: Retreating of our common stock on the NASDAQ Global Select Market commenced on a split adjusted basis on April 22nd, 2025.
Speaker Change: Yesterday we were notified by the NASDAQ listing qualification staff that we have now regained compliance with the bid price requirement.
Speaker Change: We remain highly disciplined in our financial management, ensuring that we are prioritizing activities that advance our clinical and strategic goals and looking for means to preserve cash without compromising the achievement of these goals.
Speaker Change: As is prudent in today's challenging financing climate, we continue to explore sources of capital in addition to partnerships to provide potential optionality for financing our phase 2 study.
I'll now pass the call back to Eric. Eric.
Thanks, Marella.
Eric Shaff: To summarize, we are making significant progress advanced to your 155, bolstered by encouraging clinical and mechanistic data, constructive regulatory feedback, and the clear unmet medical need identified by key opinion leaders and clinical experts.
Eric Shaff: We are moving with speed and focus to submit our Phase II Protocol to the FDA in the coming weeks, and to prepare for the next clinical study.
Eric Shaff: We are also making progress in our efforts to secure a partnership to capture the potential substantial therapeutic and commercial opportunities.
Eric Shaff: I look forward to sharing additional updates as we advance our objectives in the months ahead and continue to attend medical and scientific conferences to increase awareness of an enthusiasm for 0155. Operators, you can now open the call up for questions.
Speaker Change: Thank you. We will now begin the question and answer session. If you have doubt in and would like to ask a question, please press far one on your telephone keypad to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not immune when asking your question. Again, press star 1 to join the queue.
Speaker Change: And our first question comes from the line of Tessa Romero with JP Morgan. Your line is open.
Speaker Change: Good morning, team. This is Caroline Pocher, I'm for Tessa Romero. Thanks for taking our questions. Just two from us. First, all the partnership discussions being gated by progress around the next steps for 0155. In other words, our prospective partners looking for the protocol to be submitted or the trial itself to be initiated before finalizing the deal and then I will follow up.
Thank you. Thank you.
Speaker Change: Yeah, Caroline, thanks for the question and good morning. Without getting too deep into the play by play of our partnership discussions, let me offer a couple things. One is...
Speaker Change: Let's call it regular. We have been in contact with FDA, including as recently as last week, right? So we're as...
The news reports are-
Speaker Change: You know, sometimes, I don't know, dire as it relates to what's happening in FDA, I can tell you that we're getting feedback on our design of the next study. We're incorporating that feedback and we think we have a path so as it relates to our discussion with partners. Thank you very much.
Speaker Change: We think that's a significant positive. In terms of gating items to start the study, we have said before and I'll reiterate today that the securing of a partnership for us is
Speaker Change: The key long lead time item for moving forward with this study. We're moving forward with all the key items that we have to do in terms of securing a CRO and manufacturing clinical material for the next study and taking about side activation.
Speaker Change: So, we're doing the things that we need to do to be in a position to move but the partnership itself for us will be engaged in an item for initiating the study itself.
Speaker Change: Okay, great. And then can you outline your proposed power and assumptions for the phase two study of SCR155 and provide a little more clarity as to what you mean by an adaptive design in the context of the phase two study?
Thank you.
Speaker Change: Sure, so let me start and maybe I'll pick it over to Dennis to comment and you know I think we're not in a position to share the stats themselves we're in a position to share the stats themselves.
It is a standalone Phase II study.
Speaker Change: but we do think that the powering included in our design.
Speaker Change: We'll allow us to use data from this study for both the efficacy and safety components of an overall package for submission to the FDA if we're successful.
as it relates to the design of an interim look. [inaudible]
Speaker Change: Let me offer a couple comments. One is that, as we said in our prepared remarks, the timeline to get that read we think is approximately 12 months.
Speaker Change: and that should give us a pretty good sense of where we're pointing in terms of efficacy, so we're excited about that. But maybe I can ask Dennis to comment further on that question.
Dennis Walling: Yes, thank you. So we think that the adaptive design with the interim analysis is an opportunity to get an early look at our efficacy and safety data.
Dennis Walling: Way that we can begin to engage with the FDA earlier.
Dennis Walling: with discussions around what a potential pivotal phase 3 program might look like.
Dennis Walling: So, the plan would still require that we have that end of phase two meeting conversations, but the interim analysis allows us a big head start to get to those conversations with the FDA early.
Great, thank you so much.
Thanks for the question, Caroline.
Speaker Change: Our next question comes from the line of Joseph, Tom with TD Cobbett. Your line is open.
and many more. Thank you. Thank you.
Joseph Thong: Hi there. Good morning. Thank you for taking my questions. Kind of similar, but obviously there have been a lot of FTA changes and to receive your initial advice. And so is the department that you're working with.
Joseph Thong: Were there any large staffing changes there? And if anything, it almost seems like the new administration would be more supportive of microbiome therapeutics So just kind of curious if you have had any any sort of changes in dialogue either positive or seems like not negative And then is there any additional information that you can share regarding partnership discussions that give you confidence that you'll be able to get this done kind of by the end of the year and your current cash runway guidance?
Joseph Thong: and do you think the partner would want input on the phase two protocol at all? Thank you.
Joseph Thong: Yeah, Joe. Thanks for the questions. On the first one, maybe I answered part of it in my last comments, but...
Joseph Thong: You know, it's hard for us to speak about FDA in general . . .
Joseph Thong: or the environment in general. What we can talk about is our own interactions, and our own interactions have been highly constructive and regular, and certainly we were concerned about it. We continue to monitor it, but we've been in regular contact with FDA, and we've gotten...
Joseph Thong: Robust-specific feedback from them which has been useful in us determining how we think about moving forward.
Speaker Change: Now, remember, we have breakthrough designation, so we think that, you know, and this is just my speculation, I think that's probably helpful. I'm in the FDA on the heels of our Phase 1B results.
Speaker Change: Determined that based on the omit need and the early clinical signals.
Speaker Change: that Sir 155 was worthy of that designation. And so perhaps that is helpful in thinking about prioritization of work, but again we don't speak for the FDA. I all I could say is that we've been pleased with the interactions that we've had to date.
Speaker Change: and it allows us to move forward the way that we had hoped that we would. On the partnership dynamics and maybe timing, you know, look, it's hard to predict, I would say, based on our experience.
It's not always a linear.
Speaker Change: Line between starting a process and ending a process, so it's a little bit difficult for me or challenging for me to opine Joe. All I can tell you is that we are making progress.
Speaker Change: We are having discussions in terms of our design and our feedback from FDA.
with our partners, our potential partners. Thank you.
Speaker Change: and we're also mindful of our catch resources and time, and so we are moving forward with absolute urgency and you can expect us to continue to do that.
Thank you.
Speaker Change: Great, thank you. And then maybe just on the face too, itself, just that we are, I understand the, the Interim analysis. I guess when that occurs, do you have the optionality to like increase the size of the study if? [inaudible]
Speaker Change: You want more information, and obviously given that you do have the breakthrough therapy designation, do you think there's a path for the FDA could say let's just expand this phase two and make the phase three confirmatory, or do we kind of know that a phase three would need to be the base case here? Thank you
Speaker Change: Yeah, Joe, thanks for the question, and maybe I'll start, no, invite.
Speaker Change: Dennis to comment, too. You know, it's a little tricky. We're careful not to speak for the FDA.
Speaker Change: There will be optionality as it relates to information that we could learn from the interim and how we might use it.
Speaker Change: either for 155 or as we've said beforehand, taking about adjacencies from ALO and to say auto.
R Expectations
Speaker Change: is that the data that we get from this Phase II study will help inform...
Dave
Speaker Change: Phase 3 Study or Epivital Study, and that overall package will be used for licensure. But we don't speak for the FDA. We are very careful not to get ahead of them. And so, you know, as usual, we'll follow the data in consultation with them as we have in the past and a little in the future. But Dennis, any other comments on that one?
Dennis Walling: But yeah, I think it's important to understand that this Phase II study design is appropriately powered for a very...
Robust and, you know, large data sets.
Dennis Walling: that we will be able to analyze. And so the optionality at the interim is important to understand is that we do have the opportunity to make decisions if necessary at that time point.
But the other important thing to understand is that ...
We expect...
Dennis Walling: that this data from the phase two will be supportive of the total package that the FDA would evaluate for a potential approval, and as they're excited, it's premature to...
Thank you.
Dennis Walling: Speak for the FDA is what they might want to do or not, but we are expecting to have robust engagement and conversations with them at the interim level, and at the end of the phase two, to complete a pivotal phase three design that would get us to in approval. Thank you very much.
Thank you. Thank you so much. Thanks for the questions, Joe.
Dennis Walling: And our last question comes from the line of John Newman with Canacourt. The line is open.
Thank you.
John Newman, Tessa Romero
Speaker Change: Hi guys, good morning. Thank you for taking my question. I just had two actually in terms of the phase two study.
Speaker Change: and the primary endpoint. Could you talk about how much follow-up?
the FDA might be looking for [inaudible]
Speaker Change: And just curious, if this particular study would be designed for you to be able to follow up for overall survival, or if that would be something that you would maybe add as a secondary endpoint in the phase three, or simply follow up as observation. Thanks.
Speaker Change: Yeah, thanks for the question. Maybe I'll start and then this can kick in. So, just at a high level, as we said before, we have engaged with the FDA. They provided feedback to us that we have incorporated into our design.
Speaker Change: We expect to hear back. But again, the partnership for us really is the gating item in moving forward, but maybe Dennis comes from it specifically on the followed version.
Speaker Change: So, as we've said before, the FDA has given us breakthrough therapy designation on the end point of bloodstream infection reductions, and that is our intended primary end point in this phase two study.
Thank you.
Speaker Change: You know, the protocol is still being finalized. Obviously, we are going to be, you know,
Speaker Change: Looking at a number of different things that could be potential . . .
Advocacy Signals, and as well as 60.
So...
at this point in time. Um, um,
Yeah, we'll have to...
Let's see what the data shall. Hello.
at the
Speaker Change: Phase 2, and then have those discussions with the FDA about what they are the appropriate types of efficacy measures we would evaluate the Phase 3.
Speaker Change: Great. Thank you. This is Matt here as well. I give you one other piece of information regarding that. I mean, as you know, we owe you design rigorous studies that are that are that are data rich. And there are large cohort studies that have shown associations of the gastrointestinal microbiome with with survivability in this patient population. And so we'll obviously be collecting the kind of data to look for signal there. But as Dennis said, the protocol is still in development with respect to those types of information.
Okay, great. Thank you very much.
Thanks for the question.
Speaker Change: That concludes the question and answer session. I would like to turn the call back over to the Management for closing remarks.
Speaker Change: So, thank you operator for your help this morning, and thanks to everyone for joining today's call, and we look forward to our continued engagement. Thanks, have a great morning, and have a great rest of the week.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you all for joining and you may now disconnect.