On March 2, 2020 Seres Therapeutics, Inc., (Nasdaq: MCRB) reported fourth quarter and full year 2019 financial results and provided an operational update (Press release, Seres Therapeutics, MAR 2, 2020, View Source [SID1234555072]).

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"Throughout 2019, we reinforced Seres’ leadership in microbiome therapeutics and advanced our robust pipeline toward multiple near-term readouts and secured an immuno-oncology collaboration with AstraZeneca. We also strengthened our balance sheet by adding approximately $100 million of new capital to support our R&D programs through important milestones expected in 2020, including two late stage clinical readouts," said Eric Shaff, President and Chief Executive Officer of Seres. "We are excited by the potential of SER-287 for ulcerative colitis and SER-109 for recurrent C. difficile infection. Both of these therapeutic candidates could represent first-in-class treatments with potential to fundamentally transform disease management. These readouts may also serve to further validate the tremendous promise of our microbiome therapeutics approach."

Mr. Shaff continued: "We have been steadfast in our commitment to completing a rigorous SER-109 Phase 3 study in a well-defined patient population and using an objective endpoint in order to generate valid, clinically meaningful study results. We are pleased that the ECOSPOR III study is nearly fully enrolled and we eagerly look forward to results in the middle of this year."

Program and Corporate Updates

SER-109 Phase 3 ECOSPOR III study in recurrent C. difficile infection: SER-109 is an orally-administered, biologically-derived, live microbiome therapeutic candidate designed to restore the depleted, or dysbiotic, gastrointestinal microbiome of patients with recurrent C. difficile infection. Seres’ SER-109 manufacturing process inactivates vegetative bacteria and other potential pathogens that have been linked with FMT-associated disease transmission. Seres believes that this manufacturing process, which is unique to Seres, provides a critically important safety advantage. Enrollment in the Phase 3 ECOSPOR III study is over 95% complete. All ECOSPOR III patients are required to undergo a rigorous C. difficile cytotoxin diagnostic test to confirm active C. difficile infection, both at entry into the study and at completion of treatment. The study is evaluating the efficacy and safety of SER-109 in 188 patients with recurrent C. difficile infection. Seres expects to report top-line results from ECOSPOR III in mid-2020. Based on discussions with the FDA, Seres believes that ECOSPOR III has the potential to be a single pivotal study supporting product registration. However, this would depend on the strength of the data, and additional safety data may be required.

SER-287 Phase 2b ECO-RESET study in ulcerative colitis: SER-287 is an oral, biologically-derived microbiome therapeutic candidate designed to normalize the gastrointestinal microbiome of individuals with ulcerative colitis. Seres continues to enroll the SER-287 Phase 2b ECO-RESET induction study in patients with active mild-to-moderate ulcerative colitis. The SER-287 Phase 2b ECO-RESET study is expected to enroll approximately 201 patients and Seres expects to report top-line results in the second half of 2020. Based on FDA feedback, Seres expects that with positive Phase 2b study results, the study could serve as one of two pivotal trials to enable a SER-287 Biologics License Application (BLA) submission.

SER-301 clinical candidate for ulcerative colitis: Seres has nominated SER-301, a rationally designed, fermented microbiome therapeutic as a clinical candidate for ulcerative colitis. Next-generation, rationally designed microbiome therapeutics may provide important benefits that include the optimization of pharmacological properties for targeted diseases and streamlined manufacturing. The consortia of bacteria in SER-301 is designed to modify the microbiome and microbe-associated metabolites in the gastrointestinal tract to modulate anti-inflammatory immune pathways and to improve epithelial barrier integrity in patients with ulcerative colitis. The Company has initiated clinical development activities for a SER-301 Phase 1 study in patients with ulcerative colitis and plans to enroll subjects in Australia and New Zealand. Seres is entitled to a $10 million milestone payment associated with the Phase 1 SER-301 clinical study initiation from its ongoing collaboration with Nestlé Health Science.

SER-401 Phase 1b study in metastatic melanoma: SER-401 is an orally-administered, biologically-derived, live microbiome therapeutic candidate comprising bacteria that reflect the bacterial signature in the gastrointestinal microbiome associated with patient response to checkpoint inhibitor immunotherapy. The ongoing placebo-controlled Phase 1b study, which is supported by the Parker Institute for Cancer Immunotherapy and The University of Texas MD Anderson Cancer Center, is evaluating the potential of SER-401 to improve clinical response to nivolumab, an approved anti-PD-1 checkpoint inhibitor therapy, and will evaluate tumor biopsies and various biomarkers. Seres expects to obtain SER-401 Phase 1b preliminary study results in the second half of 2020.

Financial Results

Seres reported a net loss of $70.3 million for the full year of 2019, as compared to a net loss of $98.9 million for the prior year. Seres reported a net loss of $18.8 million for the fourth quarter of 2019, as compared to a net loss of $21.3 million for the same period in 2018. The fourth quarter net loss figure was inclusive of $7.6 million in recognized revenue associated primarily with the Company’s collaborations with Nestlé Health Science and AstraZeneca.

Research and development expenses for the fourth quarter of 2019 were $21.0 million, as compared to $24.8 million for the same period in 2018. The research and development expenses were primarily related to Seres’ microbiome therapeutics platform, the clinical development of SER-109 and SER-287, as well as the Company’s immuno-oncology efforts.

General and administrative expenses for the fourth quarter were $5.8 million, as compared to $7.5 million for the same period in the prior year. General and administrative expenses were primarily due to headcount, professional fees and facility costs.

Seres ended the fourth quarter with approximately $94.8 million in cash, cash equivalents and investments, an increase sequentially from the $83.8 million reported for the end of the third quarter. The fourth quarter cash position included the second of three $6.7 payments from AstraZeneca related to the Company’s ongoing immuno-oncology agreement, as well as the first tranche of $25 million received upon the closing of the previously announced debt agreement.

Based on the Company’s current operating plan, cash resources are expected to fund operating expenses and capital expenditure requirements, excluding net cash flows from future business development activities or potential incoming milestone payments, into the second quarter of 2021.

Conference Call Information

Seres’ management will host a conference call today, March 2, 2020, at 8:30 a.m. ET. To access the conference call, please dial 844-277-9450 (domestic) or 336-525-7139 (international) and reference the conference ID number 6751427. To join the live webcast, please visit the "Investors and Media" section of the Seres website at www.serestherapeutics.com.

A webcast replay will be available on the Seres website beginning approximately two hours after the event and will be archived for at least 21 days.