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MCRB

Seres Therapeutics NasdaqGS:MCRB Stock Report

Last Price

US$5.59

Market Cap

US$693.6m

7D

16.0%

1Y

-12.5%

Updated

16 Aug, 2022

Data

Company Financials +
MCRB fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance0/6
Financial Health4/6
Dividends0/6

MCRB Stock Overview

Seres Therapeutics, Inc., a microbiome therapeutics platform company, engages in developing bacterial consortia that are designed to functionally interact with host cells and tissues to treat disease.

Seres Therapeutics, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Seres Therapeutics
Historical stock prices
Current Share PriceUS$5.59
52 Week HighUS$11.69
52 Week LowUS$2.50
Beta3.13
1 Month Change54.85%
3 Month Change67.37%
1 Year Change-12.52%
3 Year Change63.45%
5 Year Change-57.26%
Change since IPO-89.13%

Recent News & Updates

Aug 03

Seres Therapeutics GAAP EPS of -$0.70 misses by $0.10, revenue of $1.22M

Seres Therapeutics press release (NASDAQ:MCRB): Q2 GAAP EPS of -$0.70 misses by $0.10. Revenue of $1.22M (-76.8% Y/Y). CEO comment: “We were delighted to report positive confirmatory safety and efficacy data from our SER-109 ECOSPOR IV study in recurrent C. difficile infection, which help complete the FDA’s predefined safety database requirements for investigational product SER-109. These ECOSPOR IV data are consistent with our prior ECOSPOR III study and we expect them to complete the SER-109 Phase 3 development program. These data form the basis for our recently initiated rolling BLA submission, which we expect to complete in the coming weeks. In addition, we continue to advance our commercial readiness activities with our collaborator, Aimmune Therapeutics, Inc., a Nestlé Health Science company, in advance of our expected launch in the first half of 2023. We also recently strengthened our balance sheet with a $100 million registered direct equity offering to further support our efforts to prepare for a successful SER-109 product launch.”

Jul 12

Seres Therapeutics: The Good And The Challenging

Seres' $100 million share placement with strategic partners, including Nestle, helps stabilize the share price. The C. difficile market - how big is it? Who can compete with the Seres/Nestle (Aimmune Therapeutics) global rollout for C. difficile recurrence? Seres has had two share price crashes and one share price spike since listing. These three events have resulted from bad (twice) and good (once) news from clinical trials. Seres' immediate future rests on one of two kinds of events: Success with the launch of SER-109 for C. difficile infection recurrence and/or success with future clinical trials. Both seem possible, but there's always risk. To succeed in a new field of biotech, a company needs a profitable product to help fund the pipeline. SER-109 for treating recurring C. difficile looks like it might be the enabling product. Last year I wrote four articles on the prospects for major microbiome company Seres Therapeutics (MCRB), and this year I’ve written two more articles. Surely that's enough, but here I am again with another update. My reason for yet another article is to respond to a critical article recently published by Sage Advisors. A real strength of Seeking Alpha is that different viewpoints about companies get aired regularly. For biotech investment in particular this often leads to very different interpretations of what is reality for companies that are not profitable and burning cash. This describes Seres accurately and yet I argue that dramatic change (for the better) may be close. If I'm correct this is an opportunity for substantial capital gain in the near term that's substantially derisked. Here I explain why. Sage Advisors has three principal concerns about Seres. These revolve around the size of the market for C. difficile recurrence (small?) and competition (crowded?), along with Seres potential lack of a pipeline beyond SER-109. Recurrent C. difficile infection is not a small market The CDC has a useful website concerning C. difficile infection. C. difficile is a bacteria that causes severe diarrhea and inflammation of the colon. People are at most risk if they are taking antibiotics. It's a big deal for hospitals and aged care facilities. Immunocompromised people are at special risk. In fact C. difficile is the No. 1 healthcare-associated infection in the US (and it’s a global problem). The CDC states that one in six people who have had a C. difficile infection will become reinfected within two to eight weeks. Recurrent C. difficile is a major medical problem for hospitals and aged care facilities. Both of these markets are huge. I’ve given some indication of the market in an earlier article. Is Seres Therapeutics really ahead of the pack? Any healthcare problem that involves major costs to the healthcare system has companies interested in developing solutions. Addressing recurrent C. difficile infection is such a problem. Sage Advisors indicated a group of companies seeking to develop products in this area. There are several fine companies with products under development, but I don’t see that these companies have the competitive advantages that Seres enjoys at this stage. Four of the companies that Sage Advisors highlight include: 1. Acurx Pharmaceuticals (ACXP) has an interesting small molecular weight new class of antibiotic, Ibezapolstat, which has fast track FDA designation for treating C. difficile infection. Initial results are striking but involve just 10 patients. New drug chemistries need to be shown to be safe before they get FDA approval. 2. Ferring is a Swiss company that's owned by a single shareholder. The company has a microbial suspension that's delivered via an enema. This is an interesting company which could be competitive, although mode of delivery of the product might be less attractive to US patients than the Seres pills. 3. Adiso Therapeutics is a clinical stage biopharma company with strong academic connections in Ireland, Scotland, Australia and the US. Its ADA024 product is a single strain live biotherapeutics which modulates inflammation. It's manufactured from a clonal bacterial isolate. It's an oral product in Phase 1b trial for C. difficile recurrence. 4. Destiny Pharma (DEST:LON) has an oral formulation NTCD-M3 which is a non-toxigenic strain of C. difficile which is claimed to compete with normal C. difficile and hence prevents C. difficile infection after antibiotic treatment has ceased. The non-toxigenic strain is claimed to temporarily colonize the gut while the microbiome gets re-established after antibiotic treatment for C. difficile infection. The claim is that reinfection by C. difficile is substantially suppressed in a Phase 2 trial. The company is preparing for a Phase 3 trial. Emerging companies are not the only players interested in C. difficile, but it's becoming a bit of a graveyard with now two major pharma companies failing in Phase 3 trials. Pfizer is the latest to fail with a C. difficile vaccine strategy which missed its primary endpoint in a March 2022 announcement. The goal was to prevent occurrence of primary C. difficile infection after three doses of the Pfizer vaccine, which involves genetically modified versions of the C. difficile toxins A and B. Pfizer hasn’t given up because secondary endpoints of reduced severity of C. difficile infection and prevention of medically attended C. difficile infection suggest a possible path for success of the vaccine. However the hoped for protection from infection is not at this stage a possibility. Before Pfizer, Sanofi (SNY) gave up on its C. difficile vaccine development after its Phase 3 trial failed to prevent primary C. difficile infection after three doses of its vaccine. The path to market for SER-109 The partnership between BioNTech (BNTX) and Pfizer (PFE) in developing a new generation mRNA vaccine for addressing the COVID pandemic, has shown the power of bringing together outstanding innovation (BioNTech) with manufacture and global marketing (Pfizer) of Comirnaty, which has been one of two highly successful COVID vaccines in the West. I’ve discussed elsewhere the power of the Nestle partnership that Seres has consolidated through global marketing rights for C. difficile recurrence and also inflammatory bowel disease with Nestle Health Science subsidiary Aimmune Therapeutics. Seres also has another partnership with Bacthera, which is a JV between Chr. Hansen (OTCPK:CHYHY) and Lonza (OTCPK:LZAGY) with strong expertise in anaerobic bacterial culture. Does Seres have a pipeline problem? The short answer is of course Seres has a pipeline problem because it doesn’t even have its first product yet. The pipeline will solidify when it does have a product and it can mitigate the endless need for cash that unprofitable biotechs have. From the above discussion about SER-109 and C. difficile reinfection, the first product seems close. Seres Ulcerative Colitis program (Ser-287 and SER-301) has struggled, but so did SER-109 until they worked it out. A feature of the Ulcerative Colitis program is that if success with clinical trials is achieved, the product is already partnered with Nestle’s gastrointestinal subsidiary Aimmune Therapeutics. This is highly unusual. Seres raises $100 million in direct stock offering Very recently Seres raised $100 million in a direct stock offering, which caused me some dismay initially. I really don’t like biotech companies that wait until their stock price is really damaged before raising cash at a discount, which tends to drive the share price lower. This seemed at first sight to be a perfect example of letting your friends in at a massive discount to real value (the price was $3.15/share) at a time when there's likely to be a substantial uplift in price with FDA approval for a major drug seemingly close. It seemed like a dilution that existing shareholders (me included) don’t need. However on closer reading of the announcement, perhaps it's a little more complicated. The explanation concerning use of funds raised revealed more details. The net proceeds from the offering are ~$96.8 million. Here's the use of funds statement: The Company intends to use the net proceeds from the Offering for commercial readiness and manufacture of SER-109 for the U.S. market, including expanding longer-term commercial manufacturing capacity, advancing the clinical development of SER-109 for the EU market, and other general corporate and working capital purposes. The Company believes that its existing cash, cash equivalents and investments, together with the net proceeds from the Offering, will fund its operations for at least 12 months from the date of the prospectus related to the Offering filed with the Securities and Exchange Commission (the "SEC") on June 30, 2022.” This puzzled me because I was aware that FDA approval of SER-109 triggers a $125 million payment from Nestle. So why raise an additional $100 million? The above release explains that the $125 million payment is expected in the first half of 2023, but there's no certainty that the company will receive these funds. Perhaps the anticipated FDA approval has more wrinkles to come and so the company is raising $100 million as a precaution? It looks like there is a further $25 million available under an existing loan term subject to FDA approval of SER-109. So if the company receives FDA approval it shall have raised $100 million that will not be needed for the purpose proposed. In today’s mad world maybe that's prudent. It does indicate that the company seems not to worry too much about existing shareholder dilutions. Existing shareholders didn’t get a chance to participate (other than a select few). The named investors are the usual suspects, being experienced funds who know what they're doing in this space. Investors of note are Seres founder (in 2012) Noubar Afeyan’s Flagship Pioneering and Nestle Health Science. Nestle has a major commitment to SER-109 and inflammatory bowel disease therapies through two commercialisation agreements, one for the rest of the world (ex US and Canada) ($120 million upfront and potential total value of $1.9 billion and a second (July 2021) for the US and Canadian markets. The good news is that since the announcement about the $100 million fund raise, Seres share price has risen (latest close $4.05). Having a further additional $150 million after FDA approval would take Seres runway significantly beyond the next 12 months, perhaps assisting other projects in the Seres portfolio. Challenges The Seres chart below shows the history of the company since listing in June 2015. Starting out full of hope about unlocking the field of microbiomics, the company rode high through until June 2016, when a setback occurred with the failure of a Phase 2 trial of SER-109 and the share price fell from $34 to $10. There followed a long period in the wilderness until Seres reported good results for a Phase 3 trial of SER-109 in August 2020, which took the share price from under $4 to $24 and then $34. The share price then drifted back to $20 before crashing again to ~$7, this time on a failed Ulcerative Colitis Phase 2 trial of SER-287 in July 2021. This price crash was eerily similar to the setback with SER-109’s failed Phase 2 trial in 2016. Since then the share price has declined, although with a small increase in November 2021. Really good confirmatory news from another Phase 3 trial showing a second excellent outcome for SER-109 on C. difficile recurrence in June 2022, but it barely moved the share price from a year low of $2.50. The share price remains in the doldrums at $4.05 although there are signs that the very recent capital raising (at $3.15/share, see above) might bring new confidence in the stock. MCRB stock price since listing on NASDAQ (Seeking Alpha)

Jun 30

Seres Therapeutics stock slips on $100M stock offering

Seres Therapeutics (NASDAQ:MCRB) shares dropped ~8% pre-market after the microbiome therapeutics company launched a $100M offerinf of common stock. Then offering consists of 31,746,030 shares of common stock issued at $3.15/share. Gross proceeds is estimated to be ~$100M. The offering included participation by Federated Hermes Kaufmann Funds, Flagship Pioneering, Heights Capital Management, Janus Henderson Investors and Nestlé Health Science, as well as other new and existing investors. It is expected to close on July 5, 2022.

Jun 16
Is Seres Therapeutics (NASDAQ:MCRB) Using Too Much Debt?

Is Seres Therapeutics (NASDAQ:MCRB) Using Too Much Debt?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

MCRBUS BiotechsUS Market
7D16.0%1.8%4.5%
1Y-12.5%-22.2%-8.9%

Return vs Industry: MCRB exceeded the US Biotechs industry which returned -19.6% over the past year.

Return vs Market: MCRB underperformed the US Market which returned -9.6% over the past year.

Price Volatility

Is MCRB's price volatile compared to industry and market?
MCRB volatility
MCRB Average Weekly Movement15.2%
Biotechs Industry Average Movement12.5%
Market Average Movement7.6%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.1%

Stable Share Price: MCRB is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 15% a week.

Volatility Over Time: MCRB's weekly volatility (15%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
2010333Eric Shaffhttps://www.serestherapeutics.com

Seres Therapeutics, Inc., a microbiome therapeutics platform company, engages in developing bacterial consortia that are designed to functionally interact with host cells and tissues to treat disease. The company’s lead product candidate is the SER-109, an oral microbiome therapeutic candidate that has completed Phase III clinical trial for the treatment of clostridium difficile infection (CDI). It is also developing SER-155, a cultivated bacteria microbiome drug, which is Phase Ib clinical trial to reduce incidences of gastrointestinal infections, bloodstream infections, and graft versus host diseases in immunocompromised patients receiving allogeneic hematopoietic stem cell transplantation and solid organ transplants.

Seres Therapeutics, Inc. Fundamentals Summary

How do Seres Therapeutics's earnings and revenue compare to its market cap?
MCRB fundamental statistics
Market CapUS$693.56m
Earnings (TTM)-US$103.14m
Revenue (TTM)US$136.66m

5.1x

P/S Ratio

-6.7x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MCRB income statement (TTM)
RevenueUS$136.66m
Cost of RevenueUS$141.89m
Gross Profit-US$5.24m
Other ExpensesUS$97.91m
Earnings-US$103.14m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.83
Gross Margin-3.83%
Net Profit Margin-75.48%
Debt/Equity Ratio219.6%

How did MCRB perform over the long term?

See historical performance and comparison