​Seres Therapeutics: Microbiome Pioneer

MoneyShow |

Image via Nicola Fawcett/Wikimedia

Seres Therapeutics (MCRB) is a leading pioneer in microbiome therapeutics developing a novel class of biological drugs, notes small cap expert Tom Bishop, editor of BI Research.

These drugs are designed to treat disease by restoring the function of a dysbiotic (dysfunctional) microbiome (the balance of healthy bacteria and other microorganisms that dwell in the gut and other places which ironically play a very important role in keeping a person healthy).

When the microbiome gets out of balance you can develop things like irritable bowel disease, colitis, Crohn’s or Clostridium difficile (c. diff. or CDI).

Nestle Health Science is collaborating with Seres on this in exchange for the rights outside of North America via an upfront payment of $120 million with additional milestone payments of up to $1.9 billion possible plus royalty payments on all future sales.

Seres is also collaborating with Memorial Sloane Kettering, the University of Pennsylvania and St. Joseph’s on other applications. Experts in the field from no less than Johnson & Johnson (JNJ) believe this science could also work on diabetes, cancer and autoimmune diseases.



Seres had a healthy $202 million in the bank as of March 31 after burning through $28 million in Q1. It reported a loss of $25.5 million after reflecting $3 million in revenue recognized from its collaboration with Nestle Health.

R&D expense was $20 million due to expenses related to the microbiome programs, both clinical (SER-109, SER-262, and SER-287) and preclinical. Seres is working to initiate a new SER-109 trial now that it believes it knows what went wrong with the first trial.

Called ECOSPOR III, the study will enroll 320 patients with half getting SER-109 (at a dosage 10-fold higher than the prior study, administered over a 3-day period) and half getting a placebo.1

The study is expected to be initiated in mid-2017, with success evaluated at 8 weeks and 24 weeks.

Phase 1b studies for SER-287 (ulcerative colitis) and SER- 262 (primary C. difficile colitis) are both on track to wrap up in the second half of this year. Note there are 700,000 people with ulcerative colitis and 700,000 with Crohn’s and only about 30% respond to current therapies.

So, we have a couple horses in this race, but for now, the stock has been rather listless. I remain a believer in this pioneering technology. Remember Seres is the first to conduct trials in this field. The shares are a Speculative Buy.

Tom Bishop edits BI Research. He developed the roots of the BI Ranking while earning his MBA in finance from Cornell University.

Subscribe to Tom Bishop's BI Research here…

About MoneyShow.com: Founded in 1981, MoneyShow is a privately held financial media company headquartered in Sarasota, Florida. As a global network of investing and trading education, MoneyShow presents an extensive agenda of live and online events that attract over 75,000 investors, traders and financial advisors around the world.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JNJ Johnson & Johnson 140.68 -0.11 -0.08 6,827,734 Trade
MCRB Seres Therapeutics Inc. 10.45 -0.48 -4.39 122,371 Trade

Comments

Emerging Growth

Liberty One Lithium Corp

Liberty One Lithium Corp is a mineral exploration company engaged in acquisition and development of high grade lithium brine deposits.

Private Markets

Quants Inc

Quants, Inc, a California Corporation, develops, markets and operates financial technology platforms and alternative investment products offering sophisticated risk management since 2010. The Company has primarily sharpened its focus with…

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…