Seres Therapeutics, Inc. Q1 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the Seres Therapeutics Q1 Earnings Conference Call. At this time all participants are in a listen mode. After the speaker presentation, there will be a question-and-answer session. I must advise you that this conference is being recorded today, May 7, 2020. I would now like to hand the conference over to your speaker for today, Dr. Carlo Tanzi of Investor Relations. Carlo, please go ahead.

Thank you, and good morning. Our press release with the company's first quarter 2020 financial results and a business update became available at 7:00 A.M. Eastern Time this morning and can be found on the Investors & Media section of the company's website. I'd like to remind you that we will be making forward-looking statements relating to the timing, enrollment, and results of our clinical studies, regulatory approval, the promise and potential impact of any of our microbiome therapeutics, the sufficiency of our cash and cash equivalents to fund operations, and the availability of additional cash resources. Additional resources may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of our recent SEC filings. Any forward-looking statements made on today's call represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. On today's call, I'm joined by Eric Shaff, Seres' President and CEO; Lisa von Moltke, Chief Medical Officer; and Matt Henn, Chief Scientific Officer. With that, I'll pass the call to Eric.

Thanks, Carlo, and good morning, everyone. During the last several years, Seres has been working hard to advance a new treatment modality with our microbiome therapeutics platform. We are now entering a period where we expect to obtain important clinical study results. These results, including from our upcoming SER-109 Phase III study for C. diff infection, have the potential to provide definitive validation of the microbiome approach. We believe that positive clinical data will clearly demonstrate that the time for microbiome therapeutics has arrived and will help to highlight the potential for this new treatment modality across multiple serious diseases. COVID-19 continues to have an impact on Seres as it has on the rest of society. We are closely monitoring the impact to all aspects of our business, and we are making the necessary changes to our business to ensure that our operations continue and that our employees and those involved in our clinical studies remain safe. Seres' administrative employees continue their work outside of our offices, and laboratory R&D and manufacturing activity remain ongoing, with modifications made that prioritize employee safety. As an example, amidst COVID-19 protocols, we successfully completed a SER-301 fill run at our Cambridge facility last week. Overall, while how we work has changed, we have adapted, and we are pleased to continue advancing our pipeline and moving the business forward despite the complexity associated with the pandemic. Seres' immediate focus and priority is on our SER-109 program. We have recently completed enrollment of our SER-109 Phase III ECOSPOR III study, and we are now eagerly looking forward to reporting top line results in the middle of this year. Later this month, on March 27, and ahead of the SER-109 data readout, Seres' management and an external subject matter expert will host a SER-109 investor event. We plan to provide a deeper discussion of the burden of C. diff infection and discuss the need for effective and safe new treatment approaches. We will also review the ongoing SER-109 Phase III study and the potential to fundamentally change the treatment of C. diff. We recently welcomed Dr. Lisa von Moltke as our Chief Medical Officer. Lisa joined the company after an extensive career leading clinical teams at prominent biopharma companies, including Alkermes, Sanofi Genzyme, Millennium, and Takeda. We are very happy to have Lisa onboard. I'll now pass the call to her to review our clinical programs.

Thanks, Eric. I'll start with an update of SER-109, and this is definitely an exciting time for me to be joining the company. As Eric mentioned, the study has completed enrollment, and our clinical team is working hard to prepare for the pending readout. Our SER-109 program aims to meaningfully improve the treatment options available for recurrent C. difficile infection. Today's treatments for this debilitating disease have important limitations: antibiotics, while effective in treating an acute C. difficile infection, ultimately leave patients at risk of future recurrences because they do not address the damage done to the microbiome. Unapproved fecal microbiota transplant, known as FMT, is also widely used for recurrent C. difficile infection under an FDA enforcement discretion policy. We've closely studied all available clinical evidence supporting FMT, and we, along with leading experts in the field, recently published a peer-reviewed paper on this topic in the journal Open Forum Infectious Diseases. In summary, the degree of clinical efficacy of FMT and the safety of FMT have not been well established. The clinical data supporting FMT have been limited by the small size, open-label trial designs, and inconsistent methods and amounts of product administered. As a result, we simply don't have an adequate understanding of the degree of efficacy of FMT. Furthermore, there are serious questions about the risk of transmission of infectious disease through this approach. We believe that rigorously conducted clinical studies, such as our ongoing SER-109 Phase III trial, will provide definitive clinical evidence and potentially enable the availability of new, well-characterized, and FDA-approved treatments for this serious disease. SER-109 is an orally administered drug candidate designed to restructure the microbiome and prevent recurrent C. difficile infection. SER-109 was designed based on our understanding of the disruptions to the microbiome observed in individuals that are at risk of receiving a C. difficile recurrence. SER-109 has been developed specifically to address these deficiencies. Now our SER-109 manufacturing process fractionates and purifies bacterial spores and inactivates vegetative bacteria and many potential pathogens. This includes pathogens linked to FMT-associated disease transmission, such as drug-resistant E. coli, and viruses like SARS-CoV-2. We believe that our unique SER-109 manufacturing process provides a critically important safety advantage for our products. Based on SER-109 clinical and microbiome data, we have obtained both breakthrough therapy and orphan drug designations from the FDA. SER-109 is now being evaluated in a randomized placebo-controlled Phase III study in patients with recurrent C. diff infection. All ECOSPOR III study subjects are treated with standard of care antibiotics to address the qualifying C. diff infection, and subjects are then randomized one-to-one to receive either SER-109 or placebo. We completed enrollment with 182 subjects. All patients enrolled in ECOSPOR III are required to test positive for C. diff cytotoxin. We have taken this rigorous step to ensure that we have enrolled only patients with an active C. diff infection, and not those who are simply carriers of the C. difficile bacterium. The cytotoxin assay will also be used to confirm on-study recurrences. The ECOSPOR III primary endpoint compares the C. diff recurrence rate in patients who received SER-109 versus placebo at up to eight weeks after dosing. We aim to obtain clinically compelling results, showing that patients who receive SER-109 have a meaningfully lower rate of recurrence compared to those on placebo. In addition, we hope to observe a favorable safety profile, as we've seen with all Seres' microbiomes clinical data thus far. Based on FDA discussions to date, we believe that if we obtain compelling results, the ECOSPOR III study may support SER-109 product registration. However, this would depend on the strength of the data and additional safety data may be required. Our clinical team is working to prepare for database lock and analysis of the study results this summer. Operational progress has been steady, and only three patients still need to achieve the eight-week endpoint. We have been conducting quality control and study data on an ongoing basis, and we are well prepared for data lock and analysis of the study results. Now on a personal note, it is exciting to be awaiting data pertaining to the treatment of such an intractable disease, and with an approach that holds so much potential promise for patients with this as well as other serious conditions. Now, let me turn to our SER-287 program, which is an ongoing Phase IIb study in patients with mild to moderate, clinically active ulcerative colitis. SER-287 is an orally-administered biologically derived drug candidate comprised of commensal bacterial spores derived from the healthy human gastrointestinal tract. Our objective with SER-287 is to develop a first-in-class microbiome therapeutic that modulates the microbiome and microbiome-associated metabolites in ulcerative colitis patients. SER-287 is intended to reduce the impact of a dysfunctional microbiome as a trigger and amplifier of inflammation. Moreover, we believe that SER-287 may provide a much-needed non-immunosuppressive treatment option for this serious disease. To remind you, the 287 Phase IIb ECO-RESET study is a randomized placebo-controlled 3-arm induction trial designed to enroll 201 patients with active, mild to moderate ulcerative colitis, who have failed prior therapy. In Arm A, patients receive a short course of vancomycin preconditioning, followed by 10 weeks of the same daily regimen that was used in the arm of the Phase Ib trial that showed the highest clinical remission rate. In Arm B, patients receive vancomycin preconditioning followed by two weeks of the same SER-287 daily regimen used in Arm A, followed by eight weeks of a lower dose. In Arm C, patients receive placebo. As we previously reported, the COVID-19 pandemic has had an impact on our currently enrolling clinical studies, including the SER-287 Phase IIb trial. The SER-287 Phase IIb study is approximately 60% enrolled based on the original 201 patient target. Enrollment continues to be adversely impacted by the COVID-19 pandemic, and multiple clinical sites have halted endoscopies and other nonessential medical procedures. We continue to evaluate various options for study execution in light of the situation. Our overall goal is to obtain a high-quality, clinically meaningful data set that provides a clear assessment of the drug's clinical profile and allows us to make a data-driven decision on further development. ECO-RESET remains open, and we continue working to enroll patients. Our clinical team has implemented a number of mitigation strategies aimed at maintaining forward progress, including providing increased clinical support to clinical sites and additional flexibility regarding data capture. We also continue to evaluate various options, including potential trials design modifications consistent with our overarching goals of obtaining a high-quality, clinically meaningful data set expeditiously. Now moving to SER-401 in our oncology portfolio. SER-401 is an orally administered biologically derived microbiome therapeutic candidate, comprising bacteria reflective of the microbiome signature associated with response to checkpoint inhibitor immunotherapy. With SER-401, we are targeting an increase in efficacy of checkpoint inhibitor immunotherapy and improvement in patient outcomes. In collaboration with The Parker Institute for Cancer Immunotherapy and MD Anderson Cancer Center, we continue to enroll a randomized, placebo-controlled Phase Ib study of SER-401. The study was designed to enroll 30 patients with metastatic melanoma. All patients received nivolumab, an FDA-approved anti-PD-1 therapy, and are randomized at a 2:1 ratio to either SER-401 or placebo. The study will evaluate safety, clinical response, and various potential biomarkers of response, including microbiome signatures of response. We plan to examine tumor biopsies to evaluate immunologic activity and other potential pharmacodynamic biomarkers. The SER-401 study remains open, but COVID-19 has slowed enrollment. And we, along with our collaborators, are assessing potential changes to the study plan. Now, I will hand the call over to Matt.

Thanks, Lisa. I'll begin with our inflammatory disease programs. SER-301 is our next-generation rationally designed fermented microbiome therapeutic candidate for the treatment of ulcerative colitis. Next-generation drugs like SER-301 may provide important benefits, including optimized pharmacological properties and streamlined manufacturing. SER-301 was designed using Seres' powerful in-human reverse translation, drug discovery, and development platform. We have developed deep expertise regarding computational analysis, culturing, functional screening, and manufacturing. Our approach integrates data from emerging microbiome research and insights from our own in-human clinical trial data. These combined insights have driven the identification and development of disease targets that are druggable by our technology and the design of our therapeutic candidates. The consortium of bacteria in SER-301 is designed to modify the microbiome and microbe-associated metabolites in the gastrointestinal tract in order to modulate anti-inflammatory immune pathways and improve epithelial barrier integrity in patients with ulcerative colitis. SER-301 is produced using our advanced fermentation, formulation, and delivery platform. It includes strains delivered in spore form as well as strains fermented in non-spore form or vegetative, and is delivered using enterically coded technology designed to release in the colon. Notably, this first-ever product candidate is comprised of both spore and non-spore bacteria, which is an important technological achievement. This formulation requires several manufacturing innovations, and we are pleased that we have been able to move this novel product candidate forward. We continue to make progress working to initiate a SER-301 Phase Ib clinical study in patients with ulcerative colitis. The study will be run in Australia and New Zealand, and pending regulatory approvals, we expect to start patients later this year. Moving now to SER-155. SER-155, an orally delivered, rationally designed fermented microbiome therapeutic candidate, that we have decided to move forward toward clinical development. SER-155 builds on our expertise in infectious disease and immunology. It is designed to prevent mortality due to gastrointestinal infections, bacteremia, and graft-versus-host disease in immunocompromised patients, including patients receiving allogenic hematopoietic stem cell transplantation. Since the SER-155 program's inception, increasingly compelling data based on human cell-based assays, in vivo disease models, and clinical data support advancing the product candidate forward. Somatic stem cell transplant patient data from our collaborators at Memorial Sloan Kettering Cancer Center demonstrates a clear relationship between the gastrointestinal microbiome and clinical outcomes. We expect that the SER-155 clinical program will provide insight into the potential for microbiome therapeutics to improve outcomes in stem cell transplant patients, and also further our understanding of the potential for our technology to treat bloodstream infections more broadly in immunocompromised patients, including in individuals infected with multidrug-resistant bacteria, such as Vancomycin-resistant enterococci, and carbapenem-resistant enterobacteriaceae. The SER-155 program is supported by a CARB-X grant that provides meaningful financial and operational support through Phase Ib clinical development. We plan to advance the program into a Phase Ib study later this year in collaboration with Memorial Sloan Kettering. I'll now pass the call back to Eric.

Thanks, Matt. Turning now to an overview of our recent financials. Seres reported a net loss of $19.9 million for the first quarter of 2020, as compared to a net loss of $24.3 million for the same period in 2019. The first quarter net loss was driven primarily by clinical and development expenses, personnel expenses, and ongoing development of the company's microbiome therapeutics platform. The first quarter net loss was inclusive of $8.2 million in recognized revenue associated primarily with the company's collaboration with Nestlé Health Science and AstraZeneca. Additional financial information regarding the quarter can be found in our press release that we put out this morning as well as our 10-Q that we intend to file later today. Seres ended the quarter with approximately $75.1 million in cash and cash equivalents. The company's 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. This cash runway does not include a $10 million SER-301 Phase I-associated milestone payment that Seres would be entitled to as part of our Nestlé Health Science collaboration. We are all very excited about the period ahead. Positive late-stage clinical results could fundamentally transform Seres as well as the microbiome therapeutics field. We look forward to taking your questions. Operator, please let's now open up the line.

Your first question comes from the line of Chris Shibutani with Cowen.

Can you talk about whether 109 would be considered suitable for product registration and included mention of the potential for additional safety data that may be required, particularly in the context of COVID-19 and this morning's release shared some additional reminders of the FDA's attentiveness to concerns around FMT. Can you share with us a little bit more about what kind of potential safety data may be required? Are you able to anticipate any of this? And in particular, as it regards maybe demonstrating proof of the inactivation of COVID-19, just broadly speaking, is that something that would be reasonable to contemplate? And is that anything that you can already be doing? In other words, the safety, additional information add to your timelines? Or are you kind of already anticipating some of that work?

Yes, Chris. I missed the first part of your question. I don't know if that was just my line or yours. But I think I've got the gist of it. So, let me start it. I'm going to ask Matt to comment. And if we don't answer it completely, we can come back to it. So, in terms of where we end up with top line results in the middle of this year, you may remember that when we redesigned the study, we noted and have continued to note that the FDA in discussions provided the benchmarks for statistically what would provide a single pivotal study. And that we would engage in discussions with them around the next steps in terms of safety, right. And I would say that in the time that's passed, in my mind, the playing field has changed in some sense as it relates to safety. First, because of the patient deaths that happened over the summer from FMT. The FDA meeting that was held in November as a consequence of that death. And then we've seen additional safety issues earlier in March, and most recently, as I think you noted, Chris, the FDA noted a warning about the potential transmission of COVID through stool, right. We believe that our approach is differentiated because of our CMC process and the inactivation steps that we've taken that we've always taken. We've talked about safety for some time. I think it's unfortunate that these safety events and the general environment of the sensitivity of the safety around COVID, I think, is now perhaps putting us to the tipping point where those safety, and inactivation steps and that differentiation is maybe becoming more clear. But we do think that our approach is most consistent, most aligned with patient safety, because we think that the donor screening is necessary but insufficient, right? It's inherently reactive, and COVID is a great example of that. We have been in discussions with the FDA around our approach. We noted in our press release that we put out on March 30th, that we have been in discussions with the FDA. Our view is that the FDA considers us different from FMT. And how this all plays out, we'll see. Obviously, we're focused on achieving the right top line results and then engaging with the FDA thereafter. Maybe I can ask Matt to comment, and Chris, I know I missed the first part of your question, so we can come back if we miss something.

Chris. Yes, I mean, I think Eric hit on all the key points. I will emphasize the point that our view is that donor screening alone is insufficient, in that SER-109 is fundamentally different from FMT. And this results from two factors, one factor being that the manufacturing process fractionates the spores-forming bacteria, which we believe to be the active component, and that has the benefit of isolating those spores and removing vegetative bacteria that can lead to infections, such as those reported in the various FDA reports as well as importantly, the ability to knock back various viruses and other potential agents of unknown origin at a given time. So that ethanol process is very selective for the spores and purifies our product to remove those safety threats.

Great. No, that's helpful. And then if I can just follow up quickly on 287, can you just remind us where you are in terms of the stage of that trial? It sounds as if unsurprisingly, COVID-19 has had some headwinds relative to conducting that at the original pace you hoped to. Is the 3-arm study that you've been doing where you're aiming for 201 patients, are you thinking that you would continue to keep the protocol with that many patients and just potentially have the readout of the top line results delayed? Or is there some leeway within that study design to keep things on track and modify the protocol with perhaps smaller patient numbers? Talk to us about how you're prioritizing adjusting in this context that we're in currently?

Yes. Chris, thanks for the question. Let me start, and then I'm going to ask Lisa to chime in and provide her commentary. As we said, we certainly have been impacted by the pandemic as it relates to SER-287, and specifically the availability of endoscopies, right. A number of our trial sites have shut down as it relates to offering endoscopies that's deemed nonessential procedures, more typically, the large academic centers. We do have smaller GI-focused practices that continue to be open. So we continue to screen and we continue to enroll, but certainly not at the same rate where we were earlier in the year. So, Chris, where we are now is evaluating, and there are a number of different dimensions at play. As you remember, the IIb, we were told by the FDA, it could be one of two pivotal studies, which is, of course, important. But we're also thinking about the availability of data, time, and all of that is coming together into a number of different scenario analyses that are currently underway. That analysis continues. Obviously, some of it depends on how quickly the world gets back to not necessarily the state that it was but in a state where endoscopies are more freely available. We're starting to see a little bit of daylight relating to that. So, the analysis continues. I will say that where we are today is 60% enrolled with a 3-arm study as compared to the Ib study, where we had 4 arms, we already have significantly more subjects in than we had in the Ib. We care about quality, data sets, both clinical and microbiome, and we're confident that we will get quality data from this no matter what the choice ends up being. But that's how we're thinking about it. Lisa, can you add anything that I may have missed?

Yes. I think, as you've pointed out, we are engaged in numerous activities simultaneously and are collaborating closely with the sites to support their efforts and explore new methods to achieve their goals. We are certainly considering potential trial designs and what they might entail, with the aim of developing a data set that quickly clarifies the nature of the drug we have. Additionally, as Eric mentioned, this environment is constantly changing. For instance, we've observed that Florida is beginning to reopen some of its medical sites this week. Therefore, we will be undertaking much of this concurrently and evaluating it in real time.

Great. Thanks. We look forward to the May 27 event to help everyone get on the same page to understand those top line results midyear.

And your next question comes from Terence Flynn with Goldman Sachs.

Hi, thanks for taking the question. This is Missy on for Terence. With respect to the midyear 109 data, can you be any more specific about the timing? Is it reasonable to expect that in early June? And at that point, will you be in a position to disclose if you think the data will support approval or if it will require any additional conversations with the FDA?

We are guiding to midyear. We have guided and we will continue to guide the midyear. I think that we're in an incredibly privileged position as a company, given this unprecedented pandemic, to be able to deliver this critically important top line result on time and on plan. We're grateful for that. That doesn't mean that there's not a considerable amount of work that needs to be done and has been done to put us in this position. Our clinical group has been very hard at work finalizing enrollment, cleaning the data, accessing data, liaising with sites, with PIs and KOLs. So, there's a lot to do between now and then. But we will continue to guide to midyear. As it relates to next steps, I think we have historically said, and I'll reiterate today, we're focused on seeing this top line results and then engaging with the FDA afterward. Remember that this is a breakthrough orphan-designated program, so we really look forward to that engagement and the next steps, giving this time to hopefully patients as quickly as possible.

Your next question comes from Mark Breidenbach with Oppenheimer.

This is Matt on for Mark. Eric, I'm just wondering if you've noticed any headways from COVID in sourcing donor material or the donor-derived products at least? And has there been any changes or amendments to the manufacturing protocol since the outbreak? And then, I guess, how confident are you if there were changes that those changes won't, in any way, affect potential BLA filing for SER-109?

I think it's an important one. There's probably a couple of different dimensions to your question. The first is how are we as it relates to clinical supplies? I can tell you that we're in a very good spot in terms of our clinical supplies. As we've noted, we continue to move forward with our operations, both not only on the R&D side but also on the CMC side. The fact that we were able to do this drug fill last week in Cambridge amidst the COVID-19 protocols, I think it's just a great accomplishment by the team and is indicative of how we're moving forward amidst a lot of adversity, right. As it relates to sourcing of biological material, again, we feel good about where we are as it relates to the studies and our availability of supplies. We have been in discussions with the FDA. We are instituting the right adjustments to ensure that we're being as field-leading in our donor screening protocols as we need to be. But I think it just gets back to the point, and maybe I can have Matt to comment on this as well, that as it relates to SER-109, as it relates to FMT, and as it relates to approaches in the recurrent CDI space, donor screening is necessary but insufficient, right? It is inherently backward-looking, and as we think about not only COVID-19, but the next virus that comes along, we know that we are differentiated. Our process is unique, and we believe most consistent with patient safety because we have the inactivation steps in our process. Matt, do you want to comment further?

Yes. Matt, as Eric noted, we have not had any product impacts owing to the COVID pandemic. We have always precluded the donor screening side of things. We have always precluded travel to countries and regions where diarrheal diseases are endemic, including countries such as China. We've always had a rigorous screening protocol for individuals who might fall ill, ensuring that they're not included in the collection process. So we've been very proactive on the donor screening side of things. But again, importantly, it's really our manufacturing process and the purification and fractionation process of spores that really allows us to isolate what we believe to be the key active component for treating this disease, from acute spore-forming bacteria, and exclude vegetated bacteria that are potentially a problem and can lead to infections as well as viruses. I will also point folks to the fact that we did recently publish some data on the previous SER-109 trial, where we released the various inactivation data from our manufacturing process, which shows we removed bacteria such as coronaviruses.

That's helpful. And then maybe just tagging along with one of the prior questions on ECO-RESET, you did mention potentially amending the trials' protocol, is touching the primary endpoint to get rid of endoscopy something that you're considering? And then I guess it is, how much do you think that would affect the quality of the data?

Yes. Matt, it's hard for us to comment in a lot of detail on that. Obviously, endoscopies were part of our clinical protocol. We do think that they are an important objective measure. The FDA has provided guidance, which indicates that they intend to be flexible amidst the pandemic. On the other hand, it was somewhat light in terms of specifics. So, we are considering all alternatives and options, including, by the way, forging forward, but as the study was originally planned. But those are the types of considerations that we're thinking about right now.

On SER-109, can you comment a little bit on the benefits of a breakthrough therapy designation during a COVID-19 pandemic? Whether the benefits are now? Or maybe you expect any benefits in the year or two ahead? Because I think one company in another state mentioned that, that enabled them to keep their facilities open, for example. And then secondly, I may have missed it because I missed part of the call, but could you talk about how you think about powering your studies for 287 or 401? If you do have to do modifications, how much impression do you actually have to maintain clinically interpretable study results?

Thank you for the questions, Gbola. Regarding your first point, I believe it’s probably a combination of factors, and some of it is still developing, so it’s challenging to provide specific details. Beyond just the breakthrough status, we see a considerable need for a drug in this area. The FDA's decision to hold a meeting in November following the patient death indicates their interest, especially considering the subsequent safety concerns and warnings linked to FMT and potential COVID transmission. This suggests that the FDA is actively seeking new solutions. While we don’t represent the FDA, we view this as significant, perhaps even more than the breakthrough designation. We maintain a proactive and strong relationship with the agency. The concept of enforcement discretion has faced considerable scrutiny, and we will continue to address this, particularly in light of favorable data from our clinical study. Regarding the 401 and 287 studies, Gbola, we are continually assessing both. We are particularly focused on the powering of the studies. The 401 study is an Ib study, while 287 is a IIb study, which makes their goals and objectives somewhat different. This is a key aspect as we explore alternatives, particularly if there are options beyond the current approach.

Our next question comes from John Newman with Canaccord.

I apologize if this question has already been asked, but just curious to what type of a benefit you believe you would need to show in order for the SER-109 recurrent C. diff study to be a pivotal study with the FDA? Second question I have is a little bit more philosophical one. So, I think you have very appropriately included a positive C. diff toxin test that is required for enrollment into your study, which I think will significantly increase the robustness of the results. The question I have is, given that some doctors in the hospital setting may still utilize a PCR-based test do you believe that if physicians see that your drug is beneficial for those with the positive C. diff toxin test, that they will also feel comfortable using it for those where they have a positive PCR test?

Yes, John, what do we need for success for 109? In our view, it's about a few key factors. One is achieving results that are both statistically significant and clinically meaningful. We expect the drug to be safe, as there is a considerable unmet medical need in this area. On the efficacy side, we are acquiring toxin, which we believe will provide us with the clearest, most interpretable, and most reliable data set. Evidence suggests that this is a condition with significant unmet medical needs. Regarding safety, we plan to report the top-line results and engage with the FDA following the end-of-Phase-III study to decide on the next steps. As I previously mentioned, the landscape has evolved in recognizing safety as a crucial aspect in this disease, particularly considering that FMT is not an optimal treatment option. For the second question, John, we believe toxin is essential and should offer the clearest and most reliable data. Whether doctors will continue using PCR in their practices remains undecided; however, we expect that our label will not be restricted to toxin and will not hinder clinical use.

Your next question comes from Vernon Bernardino with H.C. Wainwright.

Just wondered if you could remind us, when was the last 109 patient enrolled? And regarding the effects of COVID-19 on the microbiome, what have you seen as far as patients with recurrent C. diff that the presence of a coronavirus in the microbiome? And its progression during the patient's own independent reconstitution of their microbiome? What changes have you seen as far as the microbiome during eight weeks of infection of coronavirus, if you could? If there's any data out there?

We announced that we were closing the study at the end of March with 171 subjects, but we actually randomized the 172nd subject after that announcement. Regarding your question about COVID, I'll have Matt provide some insights. Since this is blinded data, I'm not sure if I fully understood your question, but Matt, could you share what we know?

Yes. So, two things. First off, we completed enrollment with 182 subjects in the existing trial.

Sorry, 182.

Sorry, could you please repeat your question about COVID? I apologize, but it was hard to hear the question.

Sure. It's not specific to the trial itself, but I'm curious about the impact of COVID-19 on the microbiome. I'm interested in the reconstitution of the microbiome in patients who have experienced COVID-19. What changes have you observed in the microbiome during an eight-week period, starting from their diagnosis? I'm trying to understand if this might have influenced the results seen in the last patients, especially considering the virus may have been present as early as December or definitely by January and February concerning the clinical trial results for 109.

Sure. Okay. Sure. Thanks for repeating the question. I think it's really too early to speak definitively about the impacts of the COVID virus on the modification to the microbiome. There has been very minimal information published to date around this. And so I think there's really limited information, and anything we were to say would be speculation at this point. What I can say is based on the data that I have seen published to date, which is a single study, that I would not anticipate COVID-19 having a big impact on the bacteria that we are looking to repopulate in the guts.

Okay. And then one last question, if I may. Any ideas about something like SER-155 and its potential in something like acute respiratory distress syndrome?

Matt, you want to take that?

Yes, sure. So, SER-155 is a fermented rationally designed microbiome therapeutic, which is targeted for Allo-HSCT patients receiving stem cell transplantation. We've developed this drug to decolonize key pathogens in the GI tract that lead to bacteremias, improve epithelial barrier integrity to reduce translocations, as well as modulate host immune responses to reduce graft-versus-host disease. We do know that the modulation of the microbiome in the gastrointestinal tract can have systemic effects from an immune perspective. Again, I'd come back to, I think if there's an interesting potential opportunity to think about microbiome therapeutics, and how they may impact COVID infection and immunological cascades in the lung. But that's an active area of work.

Yes. And Matt, thanks for the clarification on my first answer. The enrollment is 182. And Vernon, thanks for the questions.

Your next question comes from Roger Song with Jefferies.

I have three questions. First, as you may be aware, Rebiotix recently reported positive top-line data for CDS. I'm curious about how you believe this data will affect the regulatory pathway for 109 and the competitive landscape in CDS.

Yes, Roger, thank you for your question. Generally speaking, positive data is beneficial for patients and the industry as a whole. However, there weren't many specifics to respond to, so it's difficult for me to provide detailed insights. I will say that we are particularly excited about sharing our data mid-year, more so than any other data out there. We consider ourselves a scientifically rigorous company and believe that this field requires robust data, which we are committed to delivering. There is a significant need in this area, which is why many companies are exploring new strategies. We believe our approach is distinct, particularly in our use of the spore fraction and the thoroughness of our study and cytotoxin requirements, which should result in the most interpretable and reliable data set. Moreover, concerning safety, which is a top priority today, we believe our CMC process aligns closely with patient safety. Thus, we anticipate a pivotal year in the microbiome field, with our data release being a central focus.

Yes, that makes sense. We are all looking forward to some positive news for the entire microbiome space. The second question is very interesting. Regarding SER-301, I believe this is the first time you mentioned that the consortium will include non-spore form bacteria. I am curious about how significant you expect the clinical results for SER-301 to be compared to 287 biological resources, mainly consisting of spore-form bacteria.

Yes. First, I want to acknowledge the significant technological achievement by our team, both in R&D and our CMC group, in reaching this point. Matt, could you provide additional comments on that question?

Sure. So, SER-301 was designed based on critical preclinical insights based on human cell-based assay screens as well as disease model data sets. We integrated those into our design of the drug and importantly, information about the engraftment dynamics, meaning the population of bacteria in the gut post-treatment with a microbiome therapeutic into the design. That required us to include strains in the composition that were both good at forming spores and strains that were not so good at forming spores. As Eric said, I think we're pretty excited about those advances, both for SER-301, but also, I think that gives us an incredible amount of flexibility as a company moving forward in terms of future products and kind of the bacteria that can be included in those compositions.

Got it. Okay, great. So, just helpful for the engraftment dynamic and so on. And then my last question, Matt, is it's good to see you have additional pipeline candidates, 155. I'm just curious about your strategic plan to advance this candidate beyond Phase Ib if the data is supportive. It's okay if you think it's a little too early to comment, but I'm interested in your current thoughts.

Yes. It's early, but let me make a comment on this. Since Matt is leading this program, I'll ask him to comment as well. This is an important year for the company, and we've been very careful in how we allocate capital recently. We try to be as efficient as possible. We've managed to accomplish quite a bit thanks to some outstanding partners, including our support from Nestlé, especially with SER-301, as well as our collaborations with AZ and I/O, and with CARB-X and MSK on 155. This allows us to effectively allocate our resources to 109 and 287 and to plan for success in those two late-stage programs. We're pleased to advance these significant opportunities in the microbiome across various disease areas, where we believe we can help patients. I can ask Matt to comment on this further.

Yes, in response to Eric's point about SER-155, we have closely collaborated with our partners at Memorial Sloan Kettering, who are leaders in understanding the microbiome's impact on clinical outcomes for patients undergoing hematopoietic stem cell transplants. Additionally, our partners at CARB-X have been very supportive of this program and are backing it through Phase Ib. SER-155 is an intriguing program for several reasons: it builds on our scientific expertise and insights into the microbiome. As we consider our future pipeline, we aim to leverage critical insights from our clinical trials and published human data, focusing on significant microbiome biomarkers and targetable diseases. For SER-155, we have developed a composition that we believe could significantly affect mortality rates in immunocompromised patients and reduce graft-versus-host disease. The potential for SER-155 is particularly important in addressing issues like bacteremia and the rising problem of antibiotic resistance, which presents a genuine opportunity to advance microbiome therapeutics for immunocompromised patients more broadly and to help combat antibiotic-resistant bacteria.

And your next question comes from Justin Zelin with Canaccord.

Most of my questions have been actually been asked and answered. But just curious if you can just briefly touch on how your platform is differentiated versus some other competitive programs in the space?

Yes, Justin, it's somewhat of a general question. Look, I would say the following. I think that this is going to be an incredibly important year for the microbiome. And we get the question quite a bit, what is it that really moves the needle in this space? What moves hearts and minds? And in our mind and in our view, what really is likely to move the needle is late-stage data. It's line of sight to a BLA, and visibility that the microbiome is here to help patients today. Not 10 years from now, not sometime in the future, but today. In that respect, we are believers that if this space is as big as we think it will be, there's opportunities for multiple approaches to help patients. And that's really why we're here. What I will say is that we've been at this for some time. It's a new field. We've learned quite a bit. We feel strongly that we have key capabilities, which we've invested in over a significant period of time, which put us in the best position to be successful, not only to achieve clinical data but following clinical data, right? In particular, I would point to our microbiome sciences group under Matt, as well as our CMC capabilities, which I think are probably an underappreciated aspect of this space. CMC is not a commodity. There's aspects of growing the drugs beyond just our approach on biologically sourced side of the house. As I said before, the technological achievement associated with 301 and 155, I think, are considerable. So, I think that we've got the tools in place to put us in the position to leverage positive results and then take the company forward, increasing our probability of success as we think about areas within infectious disease, areas within inflammatory bowel disease, areas within immuno-oncology, and there's a lot of opportunity there. There's a lot of unmet medical need to help patients, and we feel strongly that we'll be in a very good position to apply these capabilities forward. Maybe I can ask Matt to talk about our reverse translational capabilities based on human data sets, which, again, I think is a key point. There's only so much you can learn from an animal. The best way to test a human microbiome is in the human microbiome. We're humble in this new space as we move forward, but we also know that we have clinical data sets from human experiments, which put us in the position to learn and move forward. Matt, do you want to comment?

Yes, I mean, Eric hit on a lot of key points, and I'll emphasize, we launched the company back in 2011. Since then, from inception, the company was focused on building a reverse translational platform, which would enable us to leverage human data sets and key clinical insights to identify drug targets for this novel modality, and then design drugs that can target those and evaluate them. I think some key differentiators for the company, one, we've been for a long time investing heavily in the generation of a strain library, which we have now a very large collection of strains of bacteria. They've been isolated from both healthy and diseased individuals. These strains have been rigorously characterized using various different functional-based assays to define their characteristics. With our strain library as well as key critical insights from our human studies, we have been able to refine our reference databases that we use to detect bacteria in human subjects, and that's really important because it increases both the specificity and the sensitivity of our analyses and our ability to detect changes in the microbiome in terms of which bacteria and functional metabolites and other functional signatures are changing. We've really gone from the beginning, putting in place an end-to-end capability from target identification, which starts with these clinical human data sets, building a biorepository of samples through key strategic collaborations, the ability to understand the various different bacteria, grow them, culture them, and study them in unique ways, such as using human cell-based assays. We've developed a whole host of different assays that we use as well as then improving the animal models that we use to then confirm that we're actually targeting various different disease pathways. Each of these pieces intersect and come together, I think, to provide unique capabilities as a company. And then that is only carried forward to our manufacturing, as Eric said. We have an active area of research and development in our manufacturing capabilities and the ability to bring — actually design fermented strains forward with the key characteristics.

And we have no further questions at this time. I'll turn it back over to the presenters for any closing remarks. Presenters, please proceed with your closing remarks.

All right. Thank you, operator. Sorry, I was on mute. Thank you, operator. Thanks for your continued interest in Seres. We hope you are able to join our SER-109 investor event on May 27. Be safe. Be well. Have a great day. We'll talk soon. Thanks very much.

Ladies and gentlemen, that does conclude today's conference. We thank you for your participation and ask that you please disconnect at this time.