Seres Therapeutics, Inc. Q4 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Seres Therapeutics' 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dr. Carlo Tanzi, of Investor Relations. Please go ahead.

Thank you, and good morning. Our press release with the company's fourth 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 would like to remind you that we will be making forward-looking statements relating to the timing, enrollment, and results of our clinical studies, potential regulatory approval, and the promise and potential of our microbiome therapeutics. Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of our recent SEC filings. Any forward-looking statements made on today's call 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, with prepared remarks, I'm joined by President and Chief Executive Officer, Eric Shaff; Chief Medical Officer, Dr. Lisa von Moltke; and Chief Scientific Officer, Dr. Matt Henn. Dr. Terri Young, Chief Commercial and Strategy Officer, and Dr. David Ege, Chief Technology Officer will also be available for the Q&A portion of the call. And with that, I'll turn the call over to Eric.

Thank you, Carlo, and good morning everyone. 2020 was a pivotal year for Seres as we moved an important step closer to realizing our goal of translating microbiome insights into an entirely new class of medicines. The year was highlighted by positive data from our Phase 3 SER-109 ECOSPOR III study in patients with recurrent C. diff infection, marking our transition towards becoming a fully integrated commercial organization. Since then, we have been taking actions necessary to file a SER-109 BLA submission, and preparing for a successful commercial launch following FDA approval. As an organization, our top priority right now is to obtain the required SER-109 safety database by completing our ongoing open-label study. We are also continuing supportive market assessment work, including primary research with physicians and payers, and pricing and reimbursement analyses. Furthermore, we have been scaling our market education efforts, including the hiring and training of an MSL team. We recognize that as we are working in an entirely new field of medicine, there is understandably a knowledge gap in the healthcare community regarding the broad and important role of the microbiome in health and disease. We are looking forward to continuing to engage with patient groups, physicians, and payers to educate the market about the substantial value of our microbiome therapeutic approach. We have also made strides to increase our drug supply capacity. Our SER-109 process is already at commercial scale, and we have activities underway to expand our production capacity with the goals of ensuring that we are able to meet future commercial demand, and assume rapid and broad uptake into the recurrent CDI population, as well as support our expanding clinical trial activity. In addition to SER-109, we are advancing a pipeline of additional investigational microbiome therapeutics, led by SER-287, our Phase 2b candidate for ulcerative colitis. SER-287 has the potential to transform the management of this disease, intended to provide an effective alternative treatment approach that is well tolerated and non-immunosuppressive. We are very pleased to report today that the SER-287 Phase 2b study has achieved target enrollment of 201 subjects, and we look forward to reporting top line data in midyear. With that, I'll now turn the call over to Lisa.

Thanks, Eric, and good morning everyone. I'll begin with a review of our SER-109 program. Last summer, we achieved our efficacy endpoint in patients with recurrent C. difficile infection, showing a substantial absolute reduction of recurrent infection compared to placebo at eight weeks post-treatment. We are currently finalizing the ECOSPOR III data through the final 24-week time point. These results reflect the final categorization of all subjects in the protocol-specified intent-to-treat population following study completion and full unblinding. This completed analysis reflected minimal changes from the interim analysis and demonstrated a remarkable sustained clinical response rate of approximately 88% at eight weeks post-treatment. The primary endpoint showed an absolute reduction of recurrence of CDI of 27% compared to placebo at eight weeks post-treatment, which is a relative risk reduction of 69%. Study results show that SER-109 administration resulted in similar efficacy when examined by groups stratified by age or by prior antibiotic therapy. Additionally, the data demonstrates that SER-109 efficacy is maintained over the duration of the 24-week study. From a tolerability perspective, we were also extremely pleased with the Phase 3 study data. We observed a highly favorable safety profile, with SER-109 reflecting a need for a substantial change in the space, and we believe our SER-109 Phase 3 data represents a substantial advancement over the standard of care, with the potential to transform how CDI is managed. Furthermore, we believe that SER-109 has the potential to improve treatment of CDI, a disease that results in the death of over 20,000 people in the U.S. each year. In October of last year, we presented our preliminary SER-109 Phase 3 study results at the College of Gastroenterology Annual Scientific Meeting. And we plan to present additional data at medical meetings later with mechanistic support for the efficacy observed in the Phase 3 study. And Matt will discuss those data in more detail. We look forward to submitting the remarkable SER-109 Phase 3 results for this novel treatment modality to a leading journal for publication. Importantly, SER-109 ECOSPOR III study results far exceeded the efficacy threshold communicated to us by the FDA. We expect this single study to provide the efficacy basis for a SER-109 BLA filing. The FDA position is that at least 300 patients will be required for a SER-109 safety database to support the BLA, and we continue to enroll our ongoing SER-109 open-label study in patients with recurrent CDI. We expect this study to fulfill the remainder of our required safety database. We are working closely with multiple sites across the U.S. and Canada. Now, let's turn to our ongoing SER-287 Phase 2b study in patients with mild to moderate ulcerative colitis. SER-287 is an orally administered drug candidate comprised of commensal bacterial spores isolated 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 to treat ulcerative colitis. We believe that SER-287 may provide a much-needed non-immunosuppressive treatment option for UC. SER-287 is intended to reduce the impact of a disruptive microbiome, as both a trigger and an amplifier of inflammation. We believe that SER-287 has the potential to be used as both a monotherapy and potentially also in combination with other approved agents. Data from the Phase 1b study demonstrated that SER-287 administration was associated with high rates of clinical remission, endoscopic improvement, modulation of the gastrointestinal microbiome, and a favorable safety profile. These results and data supporting the underlying mechanisms of action were recently highlighted as the cover article in the January 2021 print edition of the peer-reviewed journal, Gastroenterology. To remind you, the SER-287 Phase 2b ECO-RESET study is a randomized placebo-controlled three-arm induction trial in 201 patients with active mild-to-moderate ulcerative colitis who have failed prior therapy. In Arm A, patients receive a short course of vancomycin followed by a 10 weeks of daily regimen that was used in the arm of the previous 1b study 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 Eric mentioned, we have achieved target enrollment, with several patients remaining in the screening process. In an acceleration of our previous expectation, we now expect top line study results from ECO-RESET in mid-2021. We believe that SER-287 will result in a significantly higher rate of patients achieving clinical remission than those administered placebo. We believe that the safety profile of our microbiome therapeutic approach, based on commensal healthy bacteria, is a major advantage, and anticipate that the safety profile of SER-287 will be highly favorable, particularly as compared with the current standard of care which can be immunosuppressive. We expect that if we are able to achieve this clinical profile and with an orally administered therapy, SER-287 would represent a highly attractive new medicine. SER-287 has the potential to provide mild-to-moderate UC patients, representing a majority of all UC patients, with an effective treatment alternative that is non-immunosuppressive. The SER-287 study will also be important to inform our broader multi-product and longer-term effort to develop transformative new medicines for inflammatory bowel disease, and more broadly modulating host immunity. The development of the microbiome therapeutic field remains in its adolescence, and as a learning data-driven, science-based organization, we expect that Seres will gain important insights both from our pending Phase 2b clinical data and from mechanistic data coming later this year that could inform the further development of SER-287, as well as that of SER-301, and our future composition designed to modulate host inflammation and immune pathway signaling. With that, I'll now turn the call to Matt.

Thank you, Lisa, and good morning everyone. We are aware that we are having some sound issues and we are resolving that. So, I'll continue. Seres continues to invest significantly in our reverse translation discovery and development platform that can delineate at high resolution microbiome biomarkers from human clinical data and integrate these data with preclinical assessments using human cell-based assays in in-vitro, ex-vivo, and in-vivo disease models to evaluate drug mechanism of action and to design consortia of bacteria with specific pharmacological properties. We reported results from SER-109 Phase 3 pre-defined microbiome readouts earlier this year at the Keystone Microbiome Symposium that confirmed the drug candidate's mechanism of action. The Phase 3 study data demonstrated that SER-109 bacteria species rapidly engraft into the gastrointestinal tract. Engraftment was observed as early as one week post-treatment and found to be durable through 24 weeks. The presence of SER-109 bacteria was significantly greater in subjects that received SER-109 versus placebo, and all differences were maintained in all sub-population analyses. SER-109 administration also rapidly shifted the gastrointestinal metabolic landscape, including a significant decrease in primary bile acid and an increase in secondary bile acids, providing a mechanistic basis for both the inhibition of C. difficile spore germination and vegetative growth. Notably in early time point samples, C. difficile and other bacterial pathogens known to harbor antibiotic-resistant genes were significantly more prevalent in placebo-treated subjects. These data confirm observations from Seres' prior trial that SER-109 resulted in a reduction of other clinically relevant bacterial pathogens. The detailed mechanistic learnings obtained from SER-109 combined with our ability to link these learnings to clinical outcomes and confirm observations in human subjects in a non-clinical setting to demonstrate causality has proven immensely beneficial. We are already applying this knowledge to the design of future microbiome therapeutic compositions. Moving now to our SER-301 program, SER-301 is a next-generation orally dosed, rationally designed cultivated microbiome therapeutic candidate for the treatment of ulcerative colitis. The consortium of bacteria in SER-301 is designed to modify the microbiome and microbe-associated metabolites in the gastrointestinal tract to reduce the presence of pro-inflammatory bacteria and modulate pathways linked to gastrointestinal inflammation and epithelial barrier integrity in patients with ulcerative colitis. SER-301 is designed using Seres' reverse translational discovery and development platforms. The design incorporated learnings from the SER-287 Phase 1b study related to the bacterial species and the microbiome functional signatures associated with clinical efficacy. Additionally, the design incorporated insights on the engraftment dynamics of different bacteria and also the association of specific bacteria with the modulation of inflammatory and immune pathways in human subjects that have been observed across our broader clinical portfolio and confirmed using our non-human cell-based assays and in vivo models. In November of 2020, we announced the dosing of our first patient in our SER-301 Phase 1b study in adults with mild-to-moderate ulcerative colitis and enrollment is ongoing. The study is being conducted in Australia and New Zealand with a target enrollment of 65 patients in total. The objectives for the study are to evaluate drug safety and pharmacokinetics, and further to evaluate clinical remission and other measures of efficacy as secondary endpoints. The Data Safety Monitoring Board recently reviewed preliminary safety data from the first set of patients enrolled, and we are encouraged to see that the drug tolerability has been favorable. Turning to our Phase 1b study for SER-401, SER-401 is an orally administered microbiome therapeutic candidate comprised of the bacteria associated with the response to checkpoint inhibitor immunotherapy. Our objective with SER-401 is to enhance the efficacy of approved immunotherapies by modulating the patient's immune response to these medicines. As we have previously discussed, the SER-401 study has been impacted by COVID-19 and enrollment has therefore been slower than anticipated. We are currently evaluating our SER-401 development plan with our study collaborators. Now, moving to SER-155, SER-155 is an orally dosed rationally designed cultivated microbiome therapeutic candidate designed to prevent mortality due to gastrointestinal bacterial infections, bacteremia, and graft versus host disease in immunocompromised patients receiving allergenic hematopoietic stem cell transplantation. SER-155 builds on our expertise in both infectious disease and immunology, and it's designed to prevent bacterial infections, particularly those that harbor antibiotic-resistant genes and the onset of graft versus host disease. The SER-155 program is supported by CARB-X grant that provides financial and operational support. We are making continued progress advancing SER-155 into the clinic in collaboration with our partners at Memorial Sloan Kettering Cancer Center, and we expect to submit an IND during the first half of this year. We continue to resource our microbiome pipeline with a number of indications beyond both SER-155 and SER-301, which over time will serve as a product engine for our growing commercial organization. Our clinical programs and our reverse translational discovery platforms continue to provide meaningful insights into the underlying mechanisms by which microbes in the GI tract engage with pathogenic bacteria and human cells and tissues to impact disease. Moreover, advances in Seres microbial cultivation and bioprocessing know-how and commercial scale GMP capabilities continue to broaden access to the diversity of microbes in the human GI tract that can be harnessed in potential new product candidates and development programs. With that, I'll now turn the call back to Eric.

Thanks, Matt. And we are aware that we lost a piece of Lisa's section, and I think we lost her when she was talking about the facts from a tolerability perspective for SER-109. We were extremely pleased with the Phase 3 data, and observed a highly favorable safety profile with SER-109, where adverse events were similar to placebo. I will transition to our financials; our fourth quarter and full-year P&L are included in this morning's press release, so I won't reiterate them here. Seres ended the year 2020 with approximately $303.4 million in cash, cash equivalents, and short and long-term investments. We enter 2021 in a position of strength, poised for growth as we continue to advance our pipeline and transition to a fully integrated commercial organization. Seres is building upon our microbiome platform leadership position and driving forward a multi-product clinical pipeline led by SER-109. We believe that our SER-109 ECOSPOR III results provide validation and support for the broader series pipeline and our capabilities in this new area of medicine. Seres has advanced unique platforms that are being deployed for the development of microbiome therapeutics. These technologies and our proprietary scientific insights have already generated a pipeline of promising microbiome therapeutic candidates, each targeting a serious medical condition, and each providing the potential to fundamentally transform how diseases are treated. Our top priority is preparing for a high-quality BLA submission for SER-109, as well as readying the company for a successful commercial launch for what we expect will be the first FDA-approved microbiome products. We are continuing to advance what we believe to be a highly promising pipeline, led by SER-287. In addition, we intend to continue to invest in core microbiome drug discovery and CMC capabilities to ensure that Seres is well-positioned to continue to lead the microbiome therapeutics field in these important areas. We expect 2021 to be an eventful year for the company. We are looking forward to continued enrollment in our SER-109 open-label study, and progress with pre-commercial, top-line results from the SER-287 Phase 2b study, advancement of our multiple earlier-stage clinical programs, and further strengthening our microbiome platform capabilities, enabling us to bring the next wave of therapeutic candidates into the clinic. Seres has a strong and experienced team in place, and we are working with urgency to achieve our goals and fulfill our mission of transforming the lives of patients worldwide with revolutionary microbiome therapeutics. We look forward to keeping you informed on our progress. With that, Operator, we'll open up the call now to questions.

Thank you. Our first question comes from Ted Tenthoff with Piper Sandler. You may proceed with your question.

Great, thank you very much. Congrats on all the update. And looking forward to the ulcerative colitis data, I think that's going to be an interesting indication to expand the applicability of the technology. Quick question, I'm not sure if I missed it because of the line breaking up a little bit. But what is the latest with respect to 109 enrollments in the open-label extension study? And can you give us a sense for when that might be complete or you might report data on that. Thanks, Eric.

Yes, Ted, good morning, and thanks for the question. So, maybe just as a reminder, when we announced preliminary top line data in August, we had said that we had 105 subjects on the dose that was, of course, successful in the Phase 3, and then a number of patients that are enrolled into the open-label from the ECOSPOR III study. So, what we said was that the FDA had asked us to have at least 300 subjects on therapy. We are moving forward with the open-label study in order to fulfill that request. We continue to make progress enrolling patients, increasing the number of sites. I will say that we started a little bit more slowly than I would have liked, perhaps partly due to the pandemic. But we're really seeing a lot of positive momentum and traction in the last period of time. So, we're very encouraged about getting this done. Just as a reminder, we know that we can execute on this, in part based on the fact that the FDA has allowed us to include the first recurrent subjects into the study, which of course increases the number of available subjects. As we mentioned, and I think this might have gotten lost in Lisa's comments, one of the largest stool bank providers has announced that they're winding down operations. But really more than anything, Ted, it's the profile itself. It's the safety and the efficacy. And we are continuing to add sites. So we're getting closer to the point where we've got a sense of the slope of the curve. I will say it's improving significantly, and I think we'll be in a position to provide more specific guidance at some point soon.

That's really helpful, Eric. I appreciate the information. Could you explain the process regarding the open-label extension data and the BLA filing? Specifically, will you be un-blinding the data, reporting it, and then filing, or will you be providing that data in another manner? Just a bit more detail on the mechanics behind the transition to the BLA filing would be great. Thanks a lot.

Sure, Ted. And maybe I'll ask Lisa to comment. Just to start, as a reminder, we do have a breakthrough therapy designation with SER-109, so we are in dialogue with the FDA around the path forward. But maybe I can ask Lisa to comment about the mechanics of the open-label and folding that into the BLA process.

Yes, sure. We have been cleaning data and preparing the BLA shells and everything as we've been going along. So, we anticipate when we get our last patients out of that open-label, we'll be able to immediately execute on the final analysis and drop that into the BLA. So we're setting it up to seamlessly be able to roll into the BLA as fast as humanly possible in terms of calculating and getting things in.

Sounds good. Thanks so much for the update, everybody.

Thanks for the question, Ted.

Thank you. Our next question comes from Joseph Thome with Cowen & Company. You may proceed with your question.

Hi there. Thank you for taking my questions. I know you detailed it a little bit for us, but if you could just give me a little bit more detail on sort of the initial physician response that you're seeing in terms of the data from SER-109. Is there a specific portion of the data package that physicians are finding compelling or how long do they want to see this response last? And then on SER-287, how should we be thinking about a go-forward decision here? Is there a specific clinical response rate that you're looking for? I think it was mentioned additional mechanistic data are expected potentially later this year. What are the inputs that you're looking for there to make that decision? Thanks.

Yes, Joe, good morning, and thanks for the questions. I'm going to ask Lisa to comment on the physician response. I mean I’ll just start by saying, obviously, with recurrent C. diff this is a field that hasn't seen meaningful innovation in quite some time. The feedback that we've gotten from our KOLs and from our PIs has been incredible. But let me ask Lisa to comment further on that, and then we can comment on 287 and how we're thinking about defining success.

Yes, this has been an efficacy result that the field has never seen for C. diff in terms of 88% of people after eight weeks continuing to be free of recurrence. And so, that right away is important. We know that when recurrences happen they tend to happen very quickly. But in addition, our data is showing that not only are we good at eight weeks, 12 weeks, we now can see that that durability of response goes out to 24 weeks. We're looking forward to getting that data out there. So, that plus the safety profile has really been a complete package. And it's not an understatement to say that people are seeing this as a paradigm shifter.

And then, Joe, I think your second question related to 287. And for us, and again I'll ask Lisa to comment more completely, but there’s obviously the clinical data, there’s the microbiome analysis that as part of our approach we think really go hand-in-hand. And it’s one of the reasons that we’re still excited about the SER-109 result, was not only do we have the 109 clinical data, the safety profile, but as Matt talked about, we've got the microbiome analysis that really corroborates the clinical result. But from my perspective, as we continue to work in this field it just is so clear that there is an opportunity to help patients, particularly in the mild-to-moderate segment with an approach which is safe, which is effective, and which is oral. The number of agents that are on the market or in development can carry with them significant side effects, including immunosuppression. And what we have heard is that there really is an opportunity for a non-immunosuppressant approach for these patients. But maybe I can ask Lisa to comment more completely on 287.

Yes. And there’s a real gap, especially for the mild-to-moderate patients between standard therapies and then there's a gap, and you get into these big-gun immunomodulators and biologics. There’s a lot of patients who really are not fully controlled or well controlled on standard therapies. And we've heard that if we could have an orally administered non-immunosuppressive agent, this is exactly what these patients are looking for. So, we're very excited to get the readout for 287.

Excellent. Thank you, and congrats again on the progress.

Thanks for the question. And we look forward to participating in the conference later today.

Thank you. Our next question comes from Mark Breidenbach with Oppenheimer. You may proceed with your question.

Hey, good morning guys, and thanks for taking the question. Not to harp too much on the open-label trial, but I was wondering if you could give us an update on how many trial sites are now open for enrollment and with the open biome quarantine shipping hold in place, can you give us a sense for what courses are still competing for enrollment when it comes to C. diff patients?

Yes, Mark, we've got about 70 sites that are up, which is of course significantly higher than what we had in the Phase 3 study, the ECOSPOR III study. We've got a target of over 100, and we have been making steady significant progress. As I said before, we are doing this in the midst of the pandemic. And even though the pandemic is really trending in the right direction, particularly from the infectious disease side of things, we're competing for resources at clinical sites with some of the COVID clinical work, but what I can tell you that we're highly, highly encouraged with our momentum and the slope of the curve. As we continue to get closer to our target, again north of 100, I think we'll have a better sense of the slope of the curve and be in a better position to provide definitive guidance. Lisa, anything else to add on that?

Nope. I agree completely. Once we get to sort of a steady state, we'll be able to model out more exactly when we think that the trial will finish.

Yes, Okay. That's helpful. And with respect to ECO-RESET and SER-287, assuming ECO-RESET is successful, can you give us a sense for what a second pivotal trial might look like, at least in terms of size, scale, and endpoints, and whether or not it would look very different from the current ECO-RESET study?

Yes, Mark, we haven't guided as to the next study. What I'll say is that we think there's an incredible opportunity with our approach, not only in 287 but 301. That's what's so interesting to us is that there's a first in class, best in class approach, where we've got two significant shots on goal, each of which is unique and represents significant opportunities in their own right. So, whereas we haven't guided on the next step on 287, we think that it's important to recognize that we've got both 287 and 301 which are moving forward. We'll see what the data says, and we’ll see what it shows, but obviously as we think about the paradigm moving forward, we're preparing for success in both.

Okay, fair enough. Thanks for taking the questions and congrats on the progress.

Thanks, Mark. Thanks for the question.

Thank you. Our next question comes from Terence Flynn with Goldman Sachs. You may proceed with your question.

Great. Thanks for taking the questions. I was just wondering, Eric, if you can give us any sense of what's embedded in your OpEx guidance for timing of your sales force build? And again, maybe where you stand with specifically I know the MSL teams at the leading edge of that, but just as that fully hired yet at this point, or is there still more to do? And then any early feedback you guys can share from payers. It sounds like you're starting to have some of those conversations, but would just be curious, any insights you can provide there? Thank you.

Yes, Terence, thanks for the question. Great question, we have not provided guidance on OpEx or burn. What I will say is that we're continuing the efforts to move forward and preparing to commercialize the product. Maybe I can ask Terri to comment on some of the feedback that we're hearing from the payer universe, but let me kind of tick-off your question. From an MSL perspective, we have started, I wouldn't say that it's complete, but we've made a lot of progress. And since the top line result, the preliminary top line results in August, we're in the process of bringing MSLs on board, and we're in the process of training them. But maybe I can ask Terri to comment on the last part of your question as it relates to the feedback from the payer universe. Do we have Terri?

Sorry, I'm here. I'm muted. So payer feedback to date really indicates that they realize this is a defined population relative to other areas that they actively manage. So they're really not actively managing it today. They definitely see the unmet need in this disease state, and they're very receptive to a product that can more effectively treat these difficult to manage patients and prevent recurrences that involve additional hospitalizations and antibiotic use. Those whom we've engaged today specifically indicate a willingness to pay for innovation in this category. In fact, I would point you to Slide 13 in our current corporate slide deck filed today, which shows that payers have SER-109 a very high value rating, really in the same neighborhood as some life-saving HCV medications. And finally, I would say with the ECOSPOR III data, we have a very strong clinical value story to share and I look forward to engaging this important customer set with the actual profile SER-109.

Thanks for the question, Terence. Why don't we take the next one?

Thank you. Our next question comes from Chris Howerton with Jefferies. You may proceed with your question.

Great, thanks so much for taking my questions, and congratulations across the board, lots of progress. So, I guess for me, I have most of my questions on the SER-287 study. So with respect to the 287 readout here I think one of the things that's puzzling to me is what kind of the expected performance might be on the placebo arm. Obviously, you had 0% clinical remission in your previous study, and some more recent results have demonstrated a little bit higher of a placebo response in this mild to moderate patient population. So it would be helpful to get your thoughts on what the expected performance might be there. The second question that I would have is just kind of thinking a little bit closer to Mark's question around what the go-forward strategy would be, is that what is the company's view of induction versus maintenance of remission? And if there would be an opportunity for maintenance therapy, if the induction results were not what you would have hoped or expected for? And then, the third question that I have is with respect to manufacturing, I think the comments you made Eric, were around the idea that your process is at the scale that you would like it to be. But the capacity is not where you would like it to be with respect to commercial scale. So what is the process like to get to the scale that you would like? And I think in particular, I'm interested in knowing if there's anything associated with tech transfers, opening up new sites or things of that nature? Thank you.

Yes, Chris. Good morning, and thanks for the questions. Maybe I can let me ask, let's go through these. And let me ask Lisa to comment on her thoughts related to the placebo arm in this patient population for 287.

Sure, to your point, we do not expect a placebo response rate of 0. I think we've worked with some KOLs to try to get a sense of what could be expected, we're using central reads in terms of endoscopy at baseline. So, that certainly helps ensure disease to start with. We also are allowing patients in this study who failed biologics. So obviously, that portion of the patients is going to mean that they're not in this group necessarily that has a higher rate of spontaneous improvement. So, we do know that it will be likely higher, potentially higher than you might see in moderate to severe, but I think we'll be watching closely to see if it looks like what’s been seen in a little lower given the factors that I mentioned.

Yes, so Chris, let's do the second question related to strategy induction versus maintenance. I think it's worth just reminding folks that the Phase 2 is designed to inform both induction and maintenance, and we have, I think the travel and former opportunity in maintenance, right based on the drug mechanism of action, we believe that there's a potential to have an impact on both induction and maintenance. I will say we're looking first for induction. But by no means does that preclude other approaches, including maintenance, potentially including combination therapy. I think that the safety dimension of our approach, or what we expect will be the safety dimension of our approach, really brings up some interesting options for these patients that obviously have needs on both the safety and efficacy side of things. I think, Chris, the last question related to manufacturing. What I'll say is that we feel very good about where we're at. Of course, with the Phase 3 results, we expect to launch the product, right? So we are building the capacity to be able to support that responsibility to the patients, and it's something that we take very seriously. So obviously, even though we are at commercial scale, we will be looking to continue to augment our capacity, ensuring that we can reliably supply products, not only on the commercial side but also in what is a growing pipeline, both on the biological side as well as the synthetic side of the house. And there is, we think, unique capabilities in both sides of that.

Okay, very good. Yes, thanks, Eric. I have a quick question about the 287; could you provide some insight into how many patients you expect to have previously used biologics?

Yes, we certainly will provide that kind of information when we readout, but we're really not ready to discuss that or have actually an accurate information probably outside the immediate.

Okay, all right. Well, like I said, I really appreciate the taking the questions and congratulations. Thank you.

Thanks for the questions.

Thank you. Our next question comes from John Newman with Canaccord. You may proceed with your question.

Hi, guys. Thanks for taking my questions, and congrats on the progress, especially with 287 enrollment. Some great news. I had two questions, the first one is, back when we were awaiting the initial SER-109 readout last summer, there was a lot of discussion among investors about the role of vancomycin and whether that would actually in and of itself affect recurrent C. difficile. Of course, the study turned out to be wildly successful. Just curious if you can comment on whether the vancomycin preconditioning that you're using for the SER-287 study would have any effect just on its own action, and also if the agency has commented at all there? And then, the second question I have is if you could just confirm that part of the reason that the study has been able to sort of pick up enrollment is due to the greater availability of endoscopy as COVID-19 starts to wane. Thank you.

Yes, John, thanks for the question. Let me answer the second one, and then I'm going to ask Matt to comment on the vancomycin piece, but so the reasons for - I think Lisa can help me with this one as well, but we were incredibly pleased to be at a point of hitting target enrollment today. You might remember, I think many others might remember that when the pandemic first hit in the spring in March and April, there was kind of a seasoning of clinical activity, and it wasn't clear at that point whether we would be able to enroll this study. I am incredibly pleased that we're at a point now of reaching target enrollment. We think that there are a number of factors that contributed, John. One is of course, as you mentioned, the rebound or maybe improvement in the availability of endoscopies; we require endoscopies as part of our clinical protocol, and that was really shut down in April and May and continues to improve, that's first. The second is we really do think that there was a benefit from the 109 study, even though it’s a different patient population; just to the validation of the platform we think was really helpful. Third is certainly the need in the space, just as Lisa mentioned beforehand, that the fact that 287 is intended to serve a patient population before the biologics and there really is a significant need there. The last comment I would just make is I think the reason that we're here is that we just had an exceptional effort and performance from our team. I think that we've got a group of folks that are incredibly dedicated to seeing our programs through, and they faced adversity that a lot of folks haven't faced beforehand in the clinical paradigm, and they deserve a ton of credit for that. Lisa, unless you've got something else to add, maybe I can ask Matt to comment on the vancomycin question.

Yes, John. Good morning. Yes, so it's a great question about the vancomycin preconditioning treatment and its potential impact on the outcome. Of course, we use that preconditioning as a means to open an ecological niche in the microbiome of patients we are treating to allow the engraftment of the bacteria in our drug, which are Gram-positive. We know that vancomycin is particularly active against Gram-positive bacteria, and it has shown to yield benefits when combined with our therapy. That’s the basis of that therapeutic treatment on the front that vancomycin preconditioning prior to the therapeutic treatment with SER-287. We use oral vancomycin because it's a non-absorbed antibiotic with a very strong safety profile that's well understood. In terms of its potential impact, several publications have explored the use of antibiotics as a treatment for ulcerative colitis, and the results have not been supportive of their efficacy when used alone. That said, there has been recent evidence indicating that vancomycin, when used in a standalone treatment for ulcerative colitis, could actually lead to negative outcomes because of the disruption it causes in the microbiome. So it's crucial we are combining that preconditioning to open the niche but then following that with our therapeutic treatment, which restructures the microbiome to elicit the desired therapeutic response.

Okay, great. Thank you very much.

Thanks for the question, John.

Thank you. And I am not showing any further questions at this time. I'll now like to turn the call back over to the Company for any further remarks.

So, thank you, Operator. And thanks, everyone, for your time. As I mentioned beforehand, recognizing that we had a little bit of a technical disruption, we will make sure that the transcript is available, and we look forward to connecting with each of you soon. Thanks. Be well, be safe, and have a great week.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.