Seres Therapeutics, Inc. (MCRB) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Seres Therapeutics Phase III Update Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Carlo Tanzi, Head of Investor Relations.

Thank you, and good morning. Our press release and accompanying slide presentation, with the positive results of the company's SER-109 Phase III study and a business update, became available earlier this morning and can be found on the Investors and Media section of the company's website. I'd like to remind you that we will be making forward-looking statements relating to the SER-109 regulatory approval time line, the market and commercial opportunity for SER-109, the potential for SER-109 to transform the treatment of recurrent CDI, the need for additional safety data to support regulatory approval, the validation of Seres' platform and its impact on a broad range of diseases. Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section and elsewhere in 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, I'm joined by Eric Shaff, Seres' President and CEO; Dr. Lisa von Moltke, Chief Medical Officer; and Dr. Matt Henn, Chief Scientific Officer. Terri Young, Chief Commercial and Strategy Officer, is available for the question-and-answer portion. We are also happy to be joined by Dr. Mark Wilcox, Professor of Medical Microbiology of the University of Leeds and a leading expert in C. difficile infection. And with that, I'll pass the call to Eric.

Thank you, Carlo. And good morning, everybody. We are very happy to share with you today our positive top line results from our Phase III ECOSPOR III trial of SER-109 in patients with recurrent C. diff infection. I'd like to begin with some brief context for what these data mean for Seres and the microbiome field more generally, and then Lisa will discuss the Phase III study results in more detail. Seres has been pioneering the development of microbiome therapeutics, an entirely new field of medicine, since the inception of the company almost 10 years ago. Seres' path, as is often the case with new treatment modalities, has certainly not been without challenges and complexities. But importantly, we persevered and have gained critical scientific knowledge along the way. We believe that it is these data-driven scientific learnings, combined with the creativity and tenacity of our team, that led to the significant results that we are reporting today. First, some brief background on C. difficile infection or CDI. This debilitating and too often deadly disease is one of the most urgent bacterial infectious diseases in the United States and around the world. CDI is a leading cause of hospital-acquired infection in the U.S. The disease dramatically reduces quality of life for many and is responsible for the deaths of more than 20,000 Americans each year. The SER-109 top line Phase III data we recently obtained represent a best-case scenario, and we are elated by the results. Not only did the data demonstrate a highly statistically significant and clinically meaningful treatment benefit that exceeded the statistical thresholds for efficacy previously discussed with the FDA, we also observed a favorable safety profile. The combination of results we have obtained are rarely seen in late-stage clinical studies. Our study evaluated the multiply recurrent CDI population. This is the segment of patients with disease that historically has been particularly difficult to treat, and these patients are known to be at the highest risk of CDI recurrence. The efficacy results seen in this group of patients were profound, with 88.9% of patients in the SER-109 arm of the study experiencing a sustained clinical response when measured at 8 weeks. We believe that this is clearly a remarkable outcome, and this result is the ultimate testament to the scientific rigor that we have employed as well as our deep understanding in developing microbiome therapeutics. Along with the attractive clinical profile we observed, SER-109 is easily administered as an oral capsule. Overall, with this convenience and the clinical data we have obtained, we believe that we have a winning clinical profile and the potential to fundamentally transform the treatment of recurrent C. diff infection. In addition to the direct relevance of our ECOSPOR III results to CDI, we believe that these data have deep significance to Seres' overall platform and product pipeline as well as to the microbiome therapeutic field more generally as a potential new drug modality. Interest in the microbiome has grown substantially over the past decade. However, clinical development studies in the field have too frequently been characterized by small, underpowered studies and anecdotal findings where interpretation of results is more challenging. The SER-109 ECOSPOR III study results are very different. The positive top line results we've reported are based on a large, thoughtfully designed and well-conducted Phase III study that have been discussed with the FDA in advance and that incorporated key learnings from our prior development work. Many of these findings were recently included in an article published in clinical infectious diseases. As Lisa will further discuss, we expect that these data may serve as the efficacy basis for a BLA submission to the FDA. Microbiome therapeutics are not a distant future promise, but a very real and very promising treatment modality that is here now. I'll now pass the call to Lisa to discuss the ECOSPOR III results in more detail as well as our next steps with the FDA. Lisa?

Thanks, Eric. So SER-109 is an investigational oral microbiome therapeutic designed to break the cycle of recurrent CDI. The product candidate is an ecology of Firmicute spores, which germinate into bacteria that are known to have a dominant role in gastrointestinal health, and more specifically prevent the germination and growth of C. difficile spores. Our Phase III study, ECOSPOR III, enroll patients with multiple recurrent disease using the criteria of toxin testing. Our study subjects have been treated with either vancomycin or fidaxomicin for 10 to 21 days as per investigator discretion. Subjects were then randomly assigned 1:1 to either SER-109 or matching placebo, which was administered orally daily for 3 days. Subjects were stratified by age, so those 18 to 64 years old, or 65 and older, and by the antibiotic they receive for CDI. The primary end point was the proportion of subjects who had CDI recurrence by 8 weeks after dosing. The medical literature indicates that the majority of recurrent CDI cases happen within the first 6 weeks. The 8-week time point used in ECOSPOR III was selected based on feedback from FDA, and this time point has been used in many CDI studies. The CDI recurrence was determined by the return of diarrhea, the need to reinitiate CDI antibiotics as per investigator judgment and confirmation of the clinical diagnosis with a positive toxin test. Patients enrolled in ECOSPOR III reflected the recurrent CDI population. For example, in the SER-109 arm, 55.6% were 65 or older, 68.9% were female, 72% were treated with vanco and 56.7 were on their second recurrence. And now for the top line results. I am very pleased to report that this Phase III study clearly met the primary end point with a highly statistically significant reduction in C. diff recurrence rate. We observed that 41.3% of patients who received placebo recurred, versus only 11.1% of patients in the SER-109 group. This was a highly statistically significant result with a p value of less than 0.001. The results indicate a dramatic and clinically meaningful treatment efficacy delta of 30.2%. The relative risk of recurrence for SER-109 compared with placebo was 0.27, reflecting a substantial benefit for patients, and these numbers also translate into a numbers needed to treat the NNT of approximately 3. Another way to view the results is to examine what can be termed the sustained clinical response rate, which is the percentage of patients who remain free of CDI at 8 weeks. Using this metric, as noted previously by Eric, SER-109 treatment had a sustained clinical response in 88.9% of SER-109 subjects versus only 58.7% of subjects in the placebo arm. Importantly, our efficacy results also substantially exceeded the criteria determined in consultation with the FDA for efficacy based upon a single pivotal study. Specifically, in prior written correspondence, the FDA had indicated that our study results should demonstrate that the upper bound of the 2-sided 95% confidence interval of the recurrence rate ratio for SER-109 versus placebo be less than 0.833. As I mentioned, we observed a relative risk of 0.27. The 95% upper bound of the 95% confidence interval of this value was 0.51. So our data far exceeded the bar provided by the FDA. We only recently obtained SER-109 study results, and today, we have focused on the top line results. I can comment that the results across the age and antibiotic strata were evaluated and are similar to the overall top line results. We plan to present additional study results at a future medical meeting and in a publication. With the strength of our Phase III results in hand, we intend to meet with the FDA later this year to review our data, discuss the path forward to a BLA submission as well as any potential additional requirements. It is possible that the FDA may ask for additional numbers of patients exposed to SER-109, given the previous advice we have received from FDA of needing to have treated approximately 300 patients with a specific dose to be marketed. We currently have a safety database with the SER-109 Phase III dose of approximately 105 subjects. Between now and when we expect to file the BLA next year, we anticipate adding many additional subjects in the open-label portion of the study, and we will include data from these subjects in the safety data portion of the BLA. In addition, the FDA recently accepted our proposal to include a broader group of recurrent CDI patients, including those with a first recurrence in this open-label study. We believe that enrollment in the open-label portion of the study going forward will accelerate, given the strength of our Phase III data and the fact that the largest provider in the U.S. of FMT has halted shipments as of several weeks ago. At our upcoming Breakthrough Therapy Designation meeting with FDA, we will discuss whether any additional safety data may be required in the context the very favorable safety profile we have observed for SER-109 in the Phase III study reported today, as well as in the earlier SER-109 clinical studies, and for that matter, in all of the other clinical studies we have conducted with our microbiome drug candidates. Based on what we learn in this meeting, we will further define and refine our anticipated timing for a BLA filing. Now moving back to the ECOSPOR III results and safety. I am also happy to report that SER-109 was very well tolerated. Based on our data through week 8, SER-109 was associated with an adverse event profile similar to placebo. Patients administered SER-109 had no treatment-related serious treatment-emergent adverse events. The most commonly observed TEAEs were GI disorders, the majority of which were mild to moderate in nature and included things like flatulence, abdominal distension and abdominal pain. These AEs were observed in a similar portion of patients in the placebo arm. It is important to note that our SER-109 manufacturing approach includes important steps to purify spores from the bacteria that are active in preventing the germination and growth of C. diff. We believe that our process substantially reduces the risk of transmission of infectious agents, including nonspore bacteria, parasites, fungi and viruses, and this contributed to the favorable safety profile seen in the study. SER-109 has obtained Breakthrough Therapy and Orphan Drug Designations, and we look forward to near-term meetings with the FDA to discuss our exciting study results as well as the requirements to submit a BLA. It is our sincere hope and aspiration to be able to offer an effective and safe new treatment option to these patients that could make a meaningful difference in their lives. And I'll now pass the call to Matt.

Thank you, Lisa. I will briefly comment on Seres' scientific approach that led to the development of SER-109 as well as our other promising microbiome therapeutic candidates. Since its inception, Seres has invested aggressively in building field-leading unique platforms and capabilities for the discovery and development of microbiome therapeutics, a novel drug modality. Our reverse translation discovery platform incorporates analysis of high-resolution microbiome biomarkers from human clinical data and preclinical assessments using human cell-based assays and in vitro, ex vivo and in vivo disease models customized for the development of microbiome therapeutics. These capabilities are complemented by advanced cultivation, fermentation and drug formulations as well as GMP manufacturing and quality assessment for both spore-based and vegetative cell-based consortia. These tools and technologies enable novel scientific insights on how microbes in the human gut interact with one another and with human cells and tissues and further enable the delineation of drug pharmacokinetics, pharmacodynamics, and the derivation of drug mechanism of action. SER-109 is a first-in-class microbiome therapeutic designed to harness the functional metabolic power of Firmicute bacteria to restructure a susceptible microbiome and prevent the germination and growth of C. difficile through multiple mechanisms that include nutrient competition and modifying the metabolic landscape of the gastrointestinal track to the conversion of primary bile acids to secondary bile acids that negatively impact C. difficile survival. Our nonclinical -- our clinical and nonclinical data support that SER-109 contains the active bacteria in preventing C. difficile germination and vegetative growth, and further, that modulating the microbiome to treat disease can be achieved with the delivery of a consortia of active bacteria and does not require the delivery of a full spectrum microbiota that may increase the risk of infection or have other undesirable pharmacological properties. In the coming months, we look forward to obtaining a substantial amount of microbiome and metabolomic and functional data from the SER-109 Phase III study. Through the analysis of these data, we expect to continue to deepen and understand the specific mechanisms of this investigational drug, and we expect this information to further strengthen our drug discovery capabilities and platforms as we deploy these to advance the clinical development of our current pipeline and explore new disease targets amenable to treatment with our microbiome therapeutic technology. I'll now pass the call back to Eric.

Thanks, Matt. Based on the data Lisa and Matt just summarized, we believe that in SER-109, we have a very compelling profile that includes significant efficacy, favorable safety, oral administration and an innovative disease-modifying mechanism of action that targets the root cause of CDI. We believe SER-109 is highly differentiated from other approved treatments for CDI as well as from unapproved approaches such as fecal microbial transplant or FMT. There are serious questions regarding the use of FMT, and uptake has been limited to an intervention of last resort. FMT is often administered by invasive colonoscopy, which is costly and undesirable to patients. Further, the clinical profile of FMT remains poorly characterized. Finally and most importantly, there are serious safety concerns with FMT. The FDA has issued multiple safety alerts related to the risk of infectious pathogen transmission, including the virus associated with COVID-19. Last month, the country's largest distributor of FMT announced that all products distributed should be quarantined and that further shipments have been halted. Clearly, a better approach is needed. And based on our ECOSPOR III data, we believe that SER-109 has the potential to transform the care of patients with recurrent CDI. As Lisa mentioned, we will immediately seek a Breakthrough Therapy Designation meeting with the FDA to discuss advancing SER-109 through a BLA submission, and ultimately, if approved, to market. We intend to work with great urgency to bring SER-109 forward as quickly as possible to patients in need. From a commercial perspective, we believe that a substantial opportunity exists for SER-109. The recurrent CDI population includes approximately 170,000 patients in the U.S. Furthermore, we expect that SER-109 pricing will reflect the innovation of this product candidate as well as the significant value that SER-109 may bring to patients into the health care system. The expenses associated with recurrent CDI are substantial, and each recurrence has been reported to cost approximately $34,000. In addition, each recurrence prevented may also prevent a lengthy hospital stay, not to mention addressing the approximately 20,000 deaths that occur in the U.S. each year from CDI. Over the past months, Seres has been preparing for ECOSPOR III's success. We have conducted a number of projects to support the successful future potential commercialization of SER-109 if approved. Earlier this year, we hired Terri Young as Chief Commercial and Strategy Officer. Terri brings to Seres over 20 years of commercial and marketing leadership experience, having successfully led the growth of several important biopharmaceutical products. She is very well suited to lead our commercial efforts, whether we launch SER-109 ourselves in the U.S. or partner with an established company with a capacity to effectively serve the marketplace. Beyond SER-109, we believe that the ECOSPOR III results provide validation and support for the broader Seres pipeline and our core capabilities. Seres has advanced 9 commoditized unique platforms and capabilities for the development of microbiome therapeutics. These technologies and our expertise and proprietary scientific insights are deployed for development of our drug pipeline of other microbiome therapeutic candidates, including SER-287, SER-401, SER-301 and SER-155, each targeting a serious disease. These investigational drugs are being developed for ulcerative colitis, cancer and bacteremia and graft-versus-host disease in immunocompromised patients. We have previously highlighted our promising SER-287 Phase Ib data in ulcerative colitis, and we were pleased to see that those results were just recently accepted for publication in the Journal of Gastroenterology. We continue to make progress in the enrollment of our SER-287 Phase IIb ulcerative colitis study, and we eagerly look forward to those clinical results. Beyond these indications, we are also evaluating potential drug development opportunities in a number of other disease areas where we believe our technology can be effective. We believe that we are ideally suited to apply these capabilities and the scientific knowledge we have gathered to effectively advance the microbiome therapeutic modality. Specifically, Seres has developed unique core capabilities and expertise, including in drug discovery and CMC that are being applied to current and future programs. Our differentiated capabilities will be applied to advance our mission of identifying and deploying promising new microbiome therapeutics for serious diseases. We believe that the success we have seen with SER-109 is an indication of the promise of our technology. With that, operator, we'll now open the call to questions.

[Operator Instructions] You have your first question from the line of Chris Shibutani from Cowen.

This is Pam on for Chris. Congratulations on these results. I know the team has been waiting a long time, as investors have been. Can you take us through some of the best- and worst-case scenarios for time to potential approval and launch? Specifically, how long do you think it will take to get enough safety data, now that the field can see that it's effective in this one trial?

Yes, Pam, thanks very much for the question. So for us, really, the next step is partnering with the FDA, right? This is a breakthrough designated program. As we said in our remarks, we will immediately move to a breakthrough meeting with the FDA. We'll meet as soon as possible, and we'll determine the right next step to get this drug to patients. Our view is that with this data set, both the efficacy but also the safety, combined with the unmet medical need in the space, we think that we have an unusually strong case for the FDA as to why additional safety exposures can be addressed, for example, in a post-marketing setting. But we do think that we can address whatever requirements may ensue. We have the open-label study up, which is already active in about 45 sites. We've got another 40-plus sites that are planned and perhaps can be expanded to additional sites. We noted in our comments that we have recently become aware that the largest stool bank has stopped shipping and ask customers to quarantine material. But really, most importantly, if I were a patient or a provider and I saw these results, with a type of effect and safety and really innovation that hasn't been seen in this space in a long time, I would strongly consider this program. And maybe I might ask Professor Wilcox just to provide his commentary on that as a provider.

Yes. Thank you. So I think not beat around the bush, these results are very impressive. I don't think you could expect, quite frankly, for a more impressive set of results in such a difficult to treat group of patients. You see what you could expect from standard antibiotic therapy reflected in the placebo results. So this is a delta of 30% or so improvement. That's crude improvement, but it's actually a relative improvement in recurrence of nearly 75%, so -- which is extremely impressive. Recognize the need obviously for a sufficient safety database to satisfy everybody: patients, Seres and the FDA. And so I think it's really important to move up speed to do just that so that hopefully this exciting product can move forward to be available for patients.

Got it. Super helpful. If I can squeeze in 2 last questions here, I'd really appreciate it. So first, for Seres, what would you be looking for in a partner? Would you be looking for an established company like Merck, which is promoting Dificid in the setting or something completely different? And for Dr. Wilcox, a very straightforward question, we hope. But is this drug as effective as FMT and safer?

Yes, Pam, let me deal with the first one, and then I think your second question was to Mark. So on the first, there's really 2 dimensions that we think about as it relates to the drug and how we move forward. The first is, what's the best way, what's the quickest way, the highest quality way in which we can reach patients. And that is a key dimension that drives us. The second dimension is, how do we think about value and returning value to our stakeholders? So maybe it sounds a little bit generic, but those are the key dimensions that drive us. I will say that we have made some of the long lead time investments to be able to have the choice of marketing this ourselves. Obviously, you've seen that the addition of Terri into our leadership team is indicative of that. But we're really driven by the best way to get this drug to patients and value where that will drive our decision-making going forward. And maybe I can ask Mark to comment, I think, on your second question.

Yes, thanks. So I think in answering this question, I mean, the simple answer is yes, this is at least as effective as FMT. And for the following reasons, I would suggest it's more effective. Well, we can't actually answer the question robustly because, of course, we need a head-to-head comparison. However, the reason why I say with some confidence that I think this is probably more effective is that if you look at FMT studies that have been rigorously carried out, and to be rigorous about such a study, you need a comparator and you need blinding. Unfortunately, the -- only a minority of FMT studies meet such rigor. And if you look at systematic review data for those studies that do not meet that rigor, you see an efficacy rate of mid-80s, mid- to high 80s percent. However, the crucial bit of information is if you look at the studies that are more -- much more rigorous of FMT compared with typically a placebo, you see efficacy rates in the 60s percent. And those are the data we should be comparing SER-109, these results today, with that figure, so 60-something percent versus 89%. Now I can't -- it's not a direct comparison. I cannot prove a statistically significant difference, but I take that 20-odd percent at least difference between those rates any day of the week. So that's why I reiterate, I think these are very exciting results and are about as good as it gets for such a difficult-to-treat patient group with CDI over.

Your next question comes from the line of John Newman from Canaccord.

And I just wanted to make sure it's loud and clear, I congratulate you on a very, very well-designed and executed study. I think we can clearly see the results here, a great job all around. I just had 2 questions. The first one is, can you talk about the design of the study in terms of allowing all patients, potentially including the placebo, to continue on the open label? Or will you look to enroll patients that haven't participated in the study? And the second question I had is actually related to ulcerative colitis. And that is, Eric, given that we've seen some data for fecal matter transplant now in both C. difficile and in ulcerative colitis, in both cases we've seen some efficacy there, do you see a read-through based on the results here today for SER-109 to suggest that indeed this approach could be very effective in ulcerative colitis as well?

Yes. John, let me -- thanks for the questions. And maybe I can ask Lisa to take the first one in terms of the study design and maybe some comments around the open label. And then we can talk about read-through, and I might ask for Matt's comments on that as well. But let's start with Lisa and the design of the open label.

Sure. So the open label so far as you've indicated is -- had folks that have been on placebo rolling over, but it will now include de novo patients, if you will, including patients with the first recurrence. FDA was amenable to opening up that inclusion criteria, so that will allow those folks to go straight into that open-label study as well.

And then, John, maybe I can ask -- or I can answer the second question, which is thinking about maybe the broader platform and how this is impactful. And for us, we think that this is a critical moment for the space. I think that as we've talked about, there have been starts and stops in the microbiome space, and to us, what we've been waiting for is really late-stage clinical data and then line of sight to a BLA. And I think that's what we're providing with these SER-109 results. As it relates to 287, we had very encouraging Ib data set, both clinically, the microbiome analysis. As you think about FMT, obviously, given the chronic nature of UC, it's hard to envision FMT as a viable commercial approach, but we haven't really talked about the safety considerations therein either. So we are excited by our prospects with SER-287 but it's not so much from FMT or not so much on hope. It's really on our Ib data set. The microbiome analysis that points really in the same direction as the clinical analysis, our metabolite analysis, which also points in the same direction. And we're really excited about how we move forward. And maybe I can ask Matt to comment on that. But the other piece of this, maybe Matt can comment on this, too, is we're proud of the scientific rigor that we've taken to the 109 journey, right? We had a setback in our Phase II. We were rigorous scientifically in examining what the reasons for that setback were. We had a hypothesis, which we built into the design of the Phase III. We tested that hypothesis, and we have the results that we have today. So we think that we've built an engine which can replicate this and the learnings can be accrued and applied, both -- not only in Matt's organization but also in CMC, clinical and beyond. But maybe I can -- I just get off a lot there, so maybe I can ask Matt to comment on the question as well.

Yes. I mean, I think all I'd add there is SER-109 and SER-287 are both biologically derived consortia of bacteria. And I think what we have learned definitively in the SER-109 Phase III study is that reduced complexity consortia that contains the key active bacteria can have a profound impact on restructuring the microbiome and leading to the key changes that are needed to have a meaningful impact on disease. And as Eric said, we have developed over the years very robust and rigorous scientific, data-driven capabilities that allow us to really intersect and examine key biomarkers, et cetera, to understand our drug. And so while SER-109 targets an acute infectious disease and SER-287 targets a chronic inflammatory disease, I think our SER-109 results certainly provide increased confidence in our 287 program, and importantly, our other assets, which also include rationally designed consortia such as SER-301 and SER-155.

Your next question comes from the line of Mark Breidenbach from Oppenheimer.

And congrats on these very vindicating results, really nice job. First question is focused kind of on the safety database. I think I heard Lisa say there were 105 patients currently included. And just to clarify, is this in addition to the 182 patients from ECOSPOR III? And I guess I'm also wondering if the safety database requirement could be fulfilled with healthy volunteers in addition -- as opposed to C. diff patients?

Yes. So Mark, thanks for the question. And the 105 is inclusive of the active patients in the Phase III study. As we've said before, we think that we will be able to satisfy safety requirements, but the real next step is to talk to the FDA, right? With this data set and with this profile, we think we have an unusually strong case as to why we could fulfill additional safety requirements post-marketing, but we'll engage with the FDA and we'll see. They've been a great partner for us. We've got breakthrough designation, so that will happen, we believe, soon. Maybe I can ask Lisa to comment further on the dynamics of the open label.

Yes. So the open-label study will, we think, pick up in terms of pace in allowing us to get more exposures at the Phase III dose. In addition to that, we're going to have a lot of supportive data at our other doses and in our other trials that I think FDA will look at in the aggregate. The fact that the -- again, the fact that we're in an atmosphere right now where FMT is no longer an option for patients, I think, is going to make a big difference in the dynamics of that open-label study. And you may recall that there was a meeting with FDA back in November that was called because of the fact that there were concerns about FMT, but FMT was also impeding enrollment into controlled clinical studies. So we anticipate that the trial will actually enroll much more quickly than we've seen to date.

Yes. Mark, maybe I can -- Lisa mentioned the fact that one of the largest FMT providers was really pausing their shipments and quarantining material. Maybe we can ask Professor Wilcox just to comment on safety as it relates to FMT. I think it would be helpful to his perspective, too.

Yes, thank you. So I understand, of course, why FMT gained in popularity as much as it did. And indeed, it provided a platform for the concept that microbiome restoration, at least in the short term, did have a significant amount to offer, too, in the context of C. diff infection. But it's always concerned me that we don't actually fully know what we're doing when we're transplanting one patient's gut microbiome into another. And the roles of the gut microbiome are far-reaching and are involved in cancers, metabolic diseases including diabetes, obesity, hypertension. The list goes on and on. That doesn't mean we know exactly what the microbiome is doing, but we know that it's involved. So that -- you can understand why that would leave me at least, and a significant number of others, concerned about long-term safety. But then the short-term safety issues that the FDA have been particularly focused on, for obvious reasons, added another really unwelcome dimension. And I think it's fair to say that if you are absolutely rigorous with screening, donor selection screening, sample preparation and so on, and there's always this theoretical risk you could be transplanting something harmful in the short term and we've seen those examples, and we've seen the deaths that have been notified about that. But the crucial thing, of course, here is that you can only screen for what you know. And prior to the appearance of hepatitis C, we couldn't screen blood samples, blood donations for hepatitis C. Of course, we didn't know it existed. Prior to the pandemic, we couldn't screen for SARS-CoV-2, of course. But what's the next book? Well, I don't know what it is. You don't. No one on this line knows what the next book of concern is. All you can say is there will be one, almost guaranteed there'll be one and there'll be another and so on. And okay, the way the pandemic happened, we got a big alert, but how did you translate that big alert into clinical practice? Well, you did it by saying stop as opposed to, "You can confidently do this test and confidently exclude the chance that this virus is in these samples." Because if we've been able to do that, then the FMT program could have restarted, and it hasn't 6 months into the pandemic. So it's a significant concern about a therapeutic intervention when you're giving more than you need. Now more might just be unnecessarily more, but that more may be harmfully more as well.

Thanks, Mark. Appreciate the perspective. And maybe I'll just ask Matt to comment further. We really do think that this is a point where there may be some additional visibility in the fact that we think that in this space, in the microbiome space, CMC is a strategic asset. That's not something that you can really access kind of on a commoditized basis. And maybe I can ask Matt just to comment on how we feel that our approach is differentiated in the space.

Yes, sure. As I mentioned earlier, SER-109 is designed to contain the active bacteria and our manufacturing process seeks to purify those active bacteria from starting material. And importantly, that manufacturing process includes important inactivation steps where we inactivate and have clearance data demonstrating that we inactivate various vegetative bacteria, fungi, viruses, all similar to those related to the health risks that you've -- safety reports you've seen released by the FDA. So we -- our manufacturing process accomplishes something that screening donors alone just cannot do. And it mitigates against the type of challenge that Mark is indicating, meaning something you may not know about and can't screen for.

It's super helpful. Very quickly, maybe a follow-up or 2. I've asked about this before, but I was wondering if Lisa could give us an update on the screening failure rate for patients who came in initially diagnosed with C. diff, but failed to be confirmed with a toxin assay. And the other quick question I had is, where are you in terms of your discussions with European regulators? And can we anticipate any milestones from Nestlé related to a future BLA filing?

Yes. So I can tell you that the reason for screen -- the biggest reason for screen fail in the ECOSPOR III, the lack of ability to form the toxin. It was the major cause of screen fail. We're not -- I haven't been able to give a number yet, was substantial. And I'll turn it back to Eric with regard to the milestones.

Sure. Yes. So Mark, we are partnered with Nestlé ex North America. They've been a great partner for us. We're delighted to work with them on bringing this forward. So as you can imagine, we will be discussing with them. We have been discussing with them next steps in terms of European regulatory process. And we'll keep you updated when there's an update on that. We have not disclosed additional consideration as part of the agreement, but there are additional -- there is additional consideration ahead as it relates to both continued development and commercialization.

Your next question comes from the line of Terence Flynn from Goldman Sachs.

Congrats on the data. Maybe a couple for me. Just was wondering if you have any early read on the durability beyond week 8 that you could share. And then Dr. Wilcox, was wondering what you'd want to see on durability, that secondary end point through 24 weeks to be clinically significant. And then the second part of my question related to the market opportunity. Just wondering if you can remind us about how many FMTs are performed in the U.S. each year. And then on the pricing side, it sounds like you're assuming or we should assume a price above Dificid and bezlotoxumab. It seems like those maybe aren't the best relevant pricing analogs, but just wondering if you agree with that.

Okay, Terence. Let me make sure I caught them all. Just on the durability, maybe Lisa, and then Mark can quickly comment. And then I can move on to the other question.

Yes. Very quickly, I can tell you, out to 12 weeks it looks almost identical.

And then, Mark, I think the question to you is, what are you -- what will you be looking to see?

Yes. Okay. So I mean, ideally, of course, there's very few, if any, extra recurrences. But you see, I'm quite confident that that's what we'll see. I mean you just heard Lisa's comments, which are reassuring for us. That's only a 4-week extra, but I'll take that. But what you see with C. diff recurrence is you see the great preponderance of recurrences occur in the first 4 weeks after end of therapy. So -- and indeed, there's -- typically, there's an exponential decay in the risk of recurrence. So I would have expected that the great majority of the few recurrences that occurred here, the 11% of patients who had recurrences would have been early on and you just then get virtually none. You've just heard no extra, which would move from 8 to 12 weeks. Well, I would be very surprised if you suddenly saw a spike between 12 and 24. In fact, I find it hard to believe, and I'd be looking for -- have they all been put on antibiotics or something else? Because you just would not expect a late signal, given such early impressive efficacy.

So Terence, let me move -- your second question was around the number of FMTs. There's not great data in the field, but it is worth noting that FMTs are typically used as an intervention of last resort. We think that the market opportunity is significantly greater than FMTs. One of the largest stool banks publishes on their website a number of shipments that they made until recently. That doesn't account for the home-brew, so to speak, approaches. But we really think that this therapy is -- the opportunity for the therapy is significantly more broad than just FMT. As it relates to price, Terence, I would agree with your comment that I'm not sure that the therapy that you mentioned are great comps. As we think about efficacy and safety and oral administration and the innovation of this product, we think that this is really an opening of a new modality. And that's how we'll think about price. And of course, we're thinking around the context of the value that it creates for the system, and I think both are significant.

Your next question comes from the line of Chris Howerton from Jefferies.

Again, just like everyone else, obviously, congratulations, Eric, to you and the team. You guys have really stuck with it, and so happy to see the really positive results this morning. So I think most of the questions that I would have had have been asked, but I guess the 2 or maybe 3 that I have of mine would be, are there any other requirements outside of safety and efficacy, for example with respect to CMC, that you expect to need to complete in order to move towards a BLA? Secondarily, I think you said that there's 170,000 recurrent C. diff patients. And I was just curious if that number includes just the first recurrence, or how that might change your perspective on the opportunity if it was to include a label for just first recurrence. And then third would be for Terri. We had a little bit of discussion with respect to thinking about partnership versus going at your own. And if you were to develop a commercial team to detail this and market within the United States or perhaps North America more broadly, what would that team look like?

Yes. Chris, thanks for the question. Let's go one by one. So in terms of requirements, again, we really need to meet with the FDA. That's our intention. We have -- beyond the safety consideration, we've got a robust CMC package. We are at a commercial scale. But we'll have to meet with them and discuss what requirements are needed to move forward. In terms of the label, of course, the label will be determined in a negotiation with the FDA at the end of the process. We are encouraged by the fact that we recently asked the FDA to include -- to allow us to include first recurrence in the open-label study. As Lisa mentioned in her opening remarks, they agreed with that. We think that that's a positive data point. So the second or greater reference is a subsegment of the 170,000 patients. But certainly, we think that there's a strong case for a recurrent label. And then lastly, for Terri, I would say, again, I think I mentioned this at the end of my comments. But this is the type of drug that we think we could launch based on a reasonably sized sales force and infrastructure of folks that target certain ID and certain GI physicians. So let me ask Terri to comment on her initial thoughts as we consider that path.

Sure. Thanks, Eric. And Terence, it's nice to sort of meet you. So we will...

It's Chris, but that's okay. It's Chris.

Apologies, apologies. We will be seeking to, obviously, begin our commercial build on the back of this tremendous data, right? And I will really be seeking and expect to procure a high caliber of commercial leadership for this team. If you think about the data that we've seen and the market that we have here that is really start for clinically meaningful innovation, we have a lot to do, but it's an amazing medicine to bring to patients. SER-109 demonstrates a 90% sustained clinical response with an NNT number of 3. And if you haven't yet done so, I encourage you to benchmark that to the numbers needed to treat of other recent biopharma innovations over the past decade. We have an amazing value proposition, and I think any commercial leader would be excited and thrilled to join the Seres team. So reasonably sized sales force out of the gate, I'm thinking about building out both my marketing and value access and pricing capabilities, those are my initial priorities. And you may know finally that I have worked across the Philadelphia, Jersey, New York and Cambridge biopharma ecosystems now. So I plan to leverage that very broad network as well as the strength of Seres' reputation and the profile that I just mentioned to recruit the best talent possible.

Absolutely. And I'm sorry, Eric, maybe just one last quick question for -- obviously, this is a breakthrough designation and clearly efficacious results. But this would be, I think, the first microbiome-based therapeutic. So what are your thoughts about the likelihood of an advisory committee being required?

Maybe I can ask Lisa to comment on that.

Yes. I mean, I think we would assume until we hear otherwise that, that is a high likelihood. And so in our plans, we will start preparing for that kind of event. And in the event it doesn't happen, that's fine.

Okay. All right. Well, again, congratulations.

Thanks, Chris, for the questions. Operator, I believe that's -- I'm told that's our last question. So we want to thank everyone for joining us this morning during this exciting time. And we look forward to keeping you updated on our progress. Have a great day. Thanks very much.

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