Seres Therapeutics has signed an agreement with its commercialization partner Nestlé Health Science to sell the remaining rights to its microbiome pill and focus on developing a second drug for transplant patients, the company announced Thursday morning.
The financial terms won’t be disclosed until the deal has closed, CEO Eric Shaff told Endpoints News. But a “substantial upfront payment” from the sale will help extend the company’s cash runway by a year, into the fourth quarter of 2025, he said. It will also allow Seres to pay off its $110 million debt, plus interest, to Oaktree Capital Management, which sent a notice of default to the company last month.
The news comes just over a year after the company’s approval of its drug Vowst. The pill contains bacterial spores purified from human stools and is designed to restore healthy gut microbes to sick patients struggling to recover from recurring infections of a dangerous bacteria, C. difficile.
With some doctors already using fecal transplants to treat such infections, the arrival of Vowst was heralded as a medical breakthrough. But despite the drug’s $17,500 list price, so far, the company has been selling it at a loss. Seres reported an $18.9 million net loss for 2023 on $19.6 million in sales that it split with Nestlé.
The two companies first agreed to jointly develop and commercialize Vowst in 2021. Nestlé has led the sales effort since it was approved by the FDA in April last year, while Seres has made the drug.
“We intend to transition manufacturing responsibility, some of the facilities, some of the contracts, and some of our people to Nestlé as part of this transaction,” Shaff said. The company cut 160 employees, about 40% of its staff, in November. Shaff said the numbers for further downsizing haven’t been finalized.
Seres once had broad ambitions to develop microbiome drugs for numerous conditions, including cancer and inflammatory bowel disease. Its scope has narrowed over the years, and Shaff said that its current focus is on a program that’s “adjacent” to Vowst.
“We’ve seen with Vowst that you can repair a disrupted microbiome,” Shaff said. The new treatment, SER-155, is being tested in patients who have received hematopoietic stem cell transplants. “They’re undergoing all sorts of insults to their microbiome — antibiotics, radiation, chemo — and the idea is that if you can help these patients restore and repair microbiome, that they might be less susceptible to infections.”
About half the 50 patients in the Phase 1 study will get a placebo, which Seres hopes will give the company an early glimpse of the approach’s potential efficacy when it wraps up this fall.
“With Vowst, we clearly demonstrated that we have the ability to successfully develop new therapeutics with a profound clinical impact,” Shaff said. “We are confident that we can do it again.”