Seres Therapeutics (MCRB) Q2 2024 earnings summary

Executive summary

• Entered agreement to sell VOWST business to Nestlé Health Science for up to $335M, including $100M upfront, $75M in installments, $60M prepaid milestone, and up to $275M in future milestones, pending stockholder approval.

• VOWST asset sale expected to close within 90 days of August 5, 2024, providing significant cash to retire debt and support pipeline advancement.

• Post-transaction, focus will shift to advancing SER-155 and other wholly-owned live biotherapeutic candidates for high unmet need indications, including chronic liver disease and metabolic disease.

• SER-155 Phase 1b Cohort 2 data readout expected in September 2024, targeting prevention of GI-derived infections in allo-HSCT patients.

• Restructuring plan in late 2023 reduced workforce by 41%, with more than a third of employees to transition to Nestlé post-sale.

Financial highlights

• Q2 2024 net loss was $32.9M, compared to net income of $46.6M in Q2 2023, mainly due to a $125M milestone payment in 2023.

• R&D expenses for Q2 2024 were $17.9M, down from $46.8M year-over-year, reflecting restructuring and lower manufacturing costs.

• General and administrative expenses fell to $16.1M from $28.1M year-over-year.

• Cash and cash equivalents stood at $71.2M as of June 30, 2024, down from $128.0M at year-end 2023.

• VOWST Q2 2024 net sales were $14.4M, up 43% sequentially; Seres recorded a $6.6M share of net loss from the collaboration.

Outlook and guidance

• Cash runway expected into Q4 2025 if the Nestlé transaction closes and installment payments are received; otherwise, current cash funds operations into Q4 2024.

• Pending positive SER-155 Cohort 2 data in September 2024, a global pivotal study may be initiated, potentially as a single registrational trial.

• IND readiness for SER-147, targeting metabolic and liver diseases, anticipated in H2 2025.

• Pipeline prioritization will focus on high unmet need, commercial potential, and rapid clinical proof of concept.

• Additional funding will be required to support ongoing operations and development beyond this period.