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

Hello, and welcome to the Seres Therapeutics Phase Ib Cohort 2 results call. [Operator Instructions] I would now like to turn the conference over to Marella Thorell, CFO. You may begin.

Thank you, and good morning. Our press release with the company's SER-155 Phase Ib cohort 2 study results became available at 7:00 a.m. Eastern Time this morning and can be found along with slides, which we will refer to during this call in the Investors and News section of the company website under the Events and Presentation link beneath the webcast link. Additionally, the company has posted an updated corporate presentation to our website, incorporating these results. I'd like to remind you that we'll be making forward-looking statements including regarding potential benefits of any of our product candidates, the timing and results of our clinical studies and data readouts, development plans, commercial opportunities, our planned strategic focus and other statements, which are not historical facts. Actual results may differ materially. Such statements are subject to important factors, risks and uncertainties such as those discussed under the caption Risk Factors in the company's quarterly report on Form 10-Q filed on August 13, 2024, and other documents filed with the SEC. On today's call with prepared remarks, I'm joined by Eric Shaff, Seres' President and CEO; Dr. Lisa von Moltke, Chief Medical Officer; and Dr. Matthew Henn, Chief Scientific Officer. Additional members of the management team will also be available during the Q&A portion of the call. With that, I'll pass the call to Eric.

Thank you, Marella, and good morning, everyone. This morning, we were pleased to announce highly encouraging clinical results from the placebo-controlled cohort 2 from our Phase Ib study evaluating SER-155, our program in patients undergoing Allo-HSCT. Let me start with why we are so excited by the SER-155 cohort 2 data and what it could mean for the company and most importantly, for patients. And it revolves around the fact that we believe there are factors that make us susceptible to serious infections such as the significant increase in chronic diseases, leaky gut issues, aging with the population and obesity, antibiotic resistance, immunosuppressive drugs and others. Modern medical intervention has created significant improvement in patient care across many disease areas. However, therapeutic progress and innovation while often life-saving can also diminish the capacity of the immune system to fight infection. In light of that context, we believe that the idea of intervening with our live biotherapeutics to significantly reduce the risk of infection becomes an even more important and potentially powerful approach. Following our success in recurrent C. diff infection with the FDA approval of VOWST, we have worked to continue applying our technology in a particularly extreme or acute example of this need, which is in patients undergoing Allo-HSCT. A major factor for these patients is complications including sometimes death from bloodstream infections. We need solutions that are novel and bloodstream infections in medically vulnerable patients are the start. Today's data release, we believe is a highly encouraging result but also strengthens our conviction for something much bigger as we consider both adjacencies to Allo-HSAT, where we believe we can potentially help patients more broadly. On the results we are announcing this morning, our data showed that the administration of SER-155 was associated with significant decreases in both bloodstream -- bacterial bloodstream infections and systemic antibiotic exposure as well as lower febrile neutropenia in each case as compared to placebo through 100 days post-transplant. We are also pleased to report that SER-155 was generally well tolerated in cohort 2, consistent with what we saw in the first study cohort and what we have seen in prior studies with other series live biotherapeutic candidates. I'd like to spend a moment framing the potential implications of these results for our key stakeholders, patients, health care professionals and the health care system. Allo-HSCT patients are undergoing a cancer treatment regimen that significantly impacts the patient's immune system and leaves them uniquely susceptible to serious and potentially fatal infections. Mortality rates have been estimated at 7.5%, and morbidity is significant despite the common use of antibiotic prophylaxis often causing hospital readmissions and increasing time in intensive care units. We believe patients, their doctors and payers could benefit from a therapeutic like SER-155. Based on the positive study data, we believe that SER-155 program has the potential to address frequent serious and potentially fatal infections in the estimated 40,000 Allo-HSCT recipients annually worldwide, up to 45% of whom contract bloodstream infections during the transplant process. The study results support our path forward to pursue SER-155 development in Allo-HSCT and potentially for autologous HSCT, which represents another approximately 40,000 patients annually worldwide. Beyond HSCT, there are additional populations at high risk of frequent and serious GI derived bloodstream infections and pathogen-associated negative clinical outcomes such as antibiotic exposure in febrile neutropenia, and we plan to explore development of SER-155 for these patients as well. I'd now like to pass the call to Lisa to review the results in more detail.

Thank you, Eric. SER-155 is a live biotherapeutic product specifically designed to target the unmet medical needs in Allo-HSCT of gastrointestinal derived bloodstream infections as well as pathogen-associated negative clinical outcomes such as fever during neutropenia and antibiotic exposure. While we believe the study was properly designed to detect potential signals of clinical activity, I will note that as a Phase I study, it was not statistically powered for any specific outcome, nor was it constructed to allow for multiplicity adjustments. Exploratory hypothesis testing was conducted at the 2-sided alpha equals 0.05 level on the study's specified outcomes. SER-155 was evaluated in a Phase Ib study in patients undergoing Allo-HSCT following a diagnosis of AML or other hematologic malignancy. The procedure and related complications are depicted on Slide 4 of the slide deck posted to our website. During this procedure, the recipient patient may receive high doses of chemotherapy and radiation therapy to kill cancer cells and prepare the patient's bone marrow mark to receive donor stem cells. During the immediate period following the transplantation, patients are severely immunocompromised and due to the effects of conditioning regimens and antibiotics, patients often develop a highly disrupted gastrointestinal microbiome, resulting in functional deficiencies. These patients may experience pathogen overgrowth in the GI tract. As a result of these factors and coupled with the diminished integrity of the GI epithelial barrier, Allo-HSCT patients experienced significantly increased risk of bloodstream infections and other pathogen associated complications. This patient group is also susceptible to graft versus host disease. Now turning to our SER-155 Phase Ib study, as seen on Slide 5. The study included 2 cohorts. In 2023, we reported promising data from the open-label cohort 1 that showed SER-155 was generally well tolerated and resulted in a successful drug strain engraftment and a reduction in pathogen domination in the GI microbiome relative to a historical control cohort. These data provided mechanistic evidence supporting the clinical intent of SER-155 to prevent GI derived bloodstream infections. Study cohort 2 utilized a randomized, double-blinded one-to-one placebo-controlled design to further evaluate safety, drug strain engraftment and the incidence of gastrointestinal and bacterial bloodstream infections as well as related medical consequences such as febrile neutropenia and antibiotic exposure. Incidence of GvHD was also tracked. The study collected stool samples for drug pharmacology analysis, and Matt will discuss those data shortly. A summary of the study patient disposition can be seen on Slide 6. Cohort 2 included 45 patients in the intent-to-treat population with 34 receiving and continuing through to transplant and followed through day 100. Data from this modified ITT group who also received Allo-HSCT were available from 20 patients who received SER-155 and from 14 patients who received placebo. In terms of the patient population, as shown on Slide 7, the median age in cohort 2 was 63, and most subjects had acute myeloid leukemia, acute lymphocytic leukemia, myelodysplastic syndrome or myeloproliferative neoplasia as their primary disease and most received reduced intensity conditioning pre-transplant. Majority of patients received peripheral blood cells from a matched unrelated donor. We will now move to the top line clinical study results, beginning with safety, which is depicted on Slide 8. The study's prespecified Day 100 time point covers a period associated with a high rate of infections and other complications. SER-155 was generally well tolerated throughout this period. Recall that these patients are highly immunocompromised, and a major aim was to confirm that they could be dosed with a live biotherapeutic. So we were very pleased to observe this safety profile. The 2 most common AEs that occurred most frequently in SER-155 treated subjects were diarrhea and 86% of SER-155 treated subjects versus 74% in placebo and nausea in 62% versus 53%, respectively. The most common SAEs in the study were infections as expected in this patient population. There were no SAEs attributed to study drug. So there were no SUSARs. No SER-155 species were identified in any culture from any subject. There were 3 deaths prior to HSCT day 100, one subject in the SER-155 arm and 2 subjects in the placebo arm. The cause of death in the 155 arm was veno-occlusive disease. Both deaths on the placebo arm were associated with BSI events with one having an ultimate cause of death listed as multi-organ failure. One additional subject in the SER-155 arm died after HSCT day 100 of idiopathic pneumonia syndrome following a severe COVID pneumonia. No deaths were considered related to SER-155. Now moving to the efficacy results, which are summarized on Slide 9. There were a number of meaningful outcomes in the secondary end points. As shown on Slide 10, patients administered SER-155 experienced a significantly lower rate of bacterial bloodstream infections compared to the placebo group as measured through HSCT Day 100. In the SER-155 arm and based on the modified ITT population, 2 out of 20 patients experienced a BSI versus 6 out of 14 in the placebo arm. This corresponds to an odds ratio of 0.15 with a p-value of 0.0423. The organisms isolated from the blood cultures appear on the slide. These are organisms that are of GI or possibly of GI origin in HSCT patients. Febrile neutropenia is another common complication experienced by Allo-HSCT patients. During the weeks following the transplant procedure, patients may be severely neutropenic and can experience fevers, often as a result of an underlying infection. As shown on Slide 11, during the 100-day observation period, febrile neutropenia occurred at a lower incidence in SER-155 treated patients versus placebo patients. With 13 of 20 or 65%, experiencing febrile neutropenia as compared to 11 of 14 or 78.6%, respectively. In clinical practice HSCT patients who experience a BSI or febrile neutropenia are aggressively treated, often with broad spectrum antibiotics. As you can see on Slide 12, in our study, we observed a meaningfully lower mean cumulative exposure to systemic antibacterial and antimycotics therapies. With SER-155 treated patients being administered these drugs for a mean duration of 9.2 days versus 21.2 days for placebo patients. When we adjusted for the time on study, as illustrated on Slide 13, the results remained highly meaningful. With an exposure rate of 0.090 in the SER-155 group versus 0.305 in the placebo group. We believe these data show additional potential benefit of SER-155 treatment and the potential to reduce antibiotic use could help reduce the development of antibiotic resistance. We also observed 6 cases of gastrointestinal infections in the study, which were all C. difficile infections, which are common in this patient population. We saw 4 cases or 20% in the SER-155 arm and 2 cases, 14.3% in the placebo arm. Notably, SER-155 was optimized to target specific pathogenic bacteria, which are known to be associated with BSIs and antimicrobial resistance in Allo-HSCT patients and not C. diff. Further, criteria for diagnosing CDI varied across sites according to institutional practice, which limits the ability to compare across arms. Consistent with recent changes in the standard of care for Allo-HSCT and the increasing use of post-transplant cyclophosphamide as part of prophylactic therapy for GvHD, the rates of GvHD in the study were low. 2 cases of grade 2 acute GvHD were observed in each arm and no cases of grade 3 or 4 acute GvHD were observed in the cohort. In summary, we are pleased with the results of this Phase I study. The data met expectations for a positive outcome based on the safety profile observed and the evidence across several endpoints, suggesting that SER-155 has the potential to meaningfully reduce bacterial bloodstream infection risk in this population. Based on this data, we are eager to advance SER-155 to the next stage of development for Allo-HSCT and explore opportunities in several additional patient populations. With that, I will now pass the call to Matt.

Thank you, Lisa, and good morning. I will summarize currently available data from our pharmacology analyses. Cohort 2 pharmacology data and endpoints were examined as compared to results from the placebo arm of the study as well as relative to a historical control cohort. Cohort 2 of the SER-155 Allo-HSCT trial, we evaluated a number of pharmacology parameters, including the kinetics and magnitude of SER-155 bacterial strain engraftment into the gastrointestinal tract and the abundance and overgrowth of potentially harmful bacteria, including those that can harbor antimicrobial resistance in the GI. The peer-reviewed literature and our preclinical studies support that the abundance of pathogen in the gastrointestinal tract is associated with severe bloodstream infections and other negative pathogen-related clinical outcomes that Allo-HSCT patients often experience. As seen on Slide 14, SER-155 strains are found to rapidly and robustly engrafted into the gastrointestinal tract following the administration of SER-155. The magnitude and kinetics of drug strain engraftment in cohort 2 were similar to what we observed in cohort 1 and consistent with our expectations. Notably, drug strain engraftment was observed at the start of HSCT conditioning and through neutropenia, the period when patients are meaningfully immunocompromised and at their greatest susceptibility to GI derived bloodstream infections. As well as out to day 100 post-HSCT, the period of time during, which clinical efficacy endpoints were evaluated. Now I'll turn to the analysis of pathogen abundance and domination in the gastrointestinal tract as seen on Slide 15. In cohort 2, the ability to detect pathogen domination, i.e., the relative abundance of a pathogen in the GI of greater than 30% in the placebo arm and differences between the study arms was constrained due to the limited number of placebo stool samples and a resulting in balance in the number of available stool samples between the arms. Unfortunately, approximately 48% of intended stool samples from the 14 placebo subjects were not available due to mis-samplings or collection and shipment issues, a much greater number than those available from the SER-155 treated subjects. Observed pathogen domination events were low in both the placebo and SER-155 arms with no significant differences identified between arms for the pathogen families evaluated. In a comparison of the prevalence of pathogen domination in SER-155 cohort 2 versus a larger Allo-HSCT historical control cohort that comprised subjects that were both sampled at similar time points as the SER-155 Phase Ib cohort 2 subjects and had microbiome data produced in the same protocols. Pathogen domination in SER-155 treatments was substantially lower at the time points evaluated. In summary, the study met our primary pharmacology drug strain engraftment endpoint and other pharmacology data reviewed to date are encouraging. Specifically, we observed clear engraftment of SER-155 strains into the gastrointestinal tract and the prevalence of pathogen domination in SER-155 treated subjects was low compared to the historical control cohort. These data suggest that drug strain engraftment may result in lower levels of pathogen domination, a factor that has been associated with increased risk of BSIs and other pathogen-related negative clinical outcomes, including patient survival in this patient population. The SER-155 Phase Ib study was a translationally rich study, and we look forward to our continued assessment and future release of pharmacology data from this study, including host plasma biomarkers that are associated with additional targeted mechanisms of action of the drug and that we also anticipate, will inform development of our live biotherapeutics pipeline in immune-related diseases. I'll now turn the call back to Eric for closing remarks.

Thanks Matt. As you heard from Lisa and Matt, we are excited about the study results shared today. We are particularly encouraged by the consistency of related clinical measures based on the observed impact on the rate of GI derived bloodstream infections, systemic antibiotic exposure and febrile neutropenia. The study data support the continued development of SER-155 and Allo-HSCT, a patient group at exceptionally high risk of serious infection and with a substantial need for new treatment approaches. As next steps, based on the positive SER-155 Phase Ib results and significant unmet need, we plan to seek a breakthrough therapy designation and engage with the FDA regarding advancing development of SER-155 and Allo-HSCT. More broadly, we believe that our SER-155 Phase Ib study data further validate the promise of our live biotherapeutics and our corporate strategy to bring new treatments to medically vulnerable groups. Bacterial infections represent a major unmet need in multiple patient groups, and we believe a substantial commercial opportunity exists for Seres to address serious bacterial infections and infection-related negative clinical outcomes. These represent large patient groups, including autologous HSCT patients, CAR-T recipients, cancer patients with neutropenia, solid organ transplant recipients and individuals with chronic liver disease. Seres wholly owns global worldwide rights for commercializing SER-155 and our pipeline candidates, including SER-147, and we believe the product opportunities could be very meaningful. Furthermore, we believe our pipeline candidates have the potential to not only protect individuals against bacterial infections but also deliver value more broadly in the fight against the proliferation of antimicrobial resistant pathogens. We look forward to continuing to keep you updated on our progress. Operator, we can now open the call up for questions.

[Operator Instructions] Your first question comes from the line of John Newman with Canaccord.

Congrats on the clinical data here. It's really interesting. I had a question on the pathogen domination. Regarding that, I'm wondering, were you able to see any sort of a trend or kind of pull out any interesting information when you compare 155 to placebo, obviously, there were some challenges with some of the placebo samples. But I'm just curious if there's anything that you were able to learn from the data that you have in hand at this point in addition to the comparison to the historical cohort?

John, thank you for the question. So I'm going to hand it to Matt, but I'll start just by reiterating the fact that there was a real diminution in the available samples in the arm as compared to placebo. So maybe Matt can comment further.

Yes. So John, we saw an overall low abundance across the study in terms of the pathogen domination events. And of course, that then bore out when we looked at 155 treated subjects versus the historical control. We are in the process now of going deeper into the data to understand what those dynamics look like on a day-by-day basis on a patient-by-patient basis. And we'll be mining that data over the coming time. But at this time, we don't have additional key insights with respect to that. We focused to date on those predefined endpoints.

And then one additional question regarding future development here. Obviously, you've stated that you're going to meet with the agency and talk to them about breakthrough and the -- I'm sure you'll discuss with them the potential for a new study but I'm just curious, just in terms of trial design for a potentially pivotal study, what do you view as the strongest aspect of SER-155 in terms of the potential endpoints that you can explore in a pivotal study?

Yes. John, great question. Maybe I can ask Lisa to comment.

Yes. So just as you noted, we'll be talking to the agency about their view on that. But from our standpoint, the BSI rate is very impressive. And we would target something important as being about 20%. We obviously saw quite a bit more than that in terms of a delta in this study. So -- and it's the endpoint with the greatest impact on patient for health and outcome. So that's what we're thinking now.

Your next question comes from the line of Joseph Thome with TD Cowen.

Congrats on the data here. So maybe just in your initial experience here, what have you learned about sort of the patients and maybe what you would be looking to enroll in a subsequent study? I think one thing that popped out was on Slide 7 that it looks like more of the placebo patients on average, maybe received post-transplant treatment for GvHD, which I could see could potentially kind of impact the results there. I guess, is there a way to standardize these patients across sites? Or is there just a little bit of inherent variability? And then second was on the incidence of CDI, just obviously, given your experience in this space that kind of pops out. Based on what you know on the SER-155 strains, is there a mechanistic rationale for why you'd be seeing CDI? Or is this really just small numbers and kind of differences between sites and how they characterize that?

Yes, Joe, and thank you for 2 great questions. On the first, I'm going to ask Lisa to comment. On the second, I'll ask for Matt's perspective. I will start by just reminding you and everyone else in general that 155 was designed for Allo-HSCT patients. A VOWST was designed for recurrent C. diff. patients. And there is intentionality as to how we think about both a donor derived versus a cultivated product as well as the strains that we include. But maybe Lisa can start with your first question.

Yes. So you're correct. This population does have some inherent variability. On the question of PTCy, I think that, that may, in some respect, take care of itself just because we're seeing that it's just becoming ubiquitous. I will point out that we did do a subgroup analysis in the population that received just PTCy, and we still get a really meaningful delta. If you just look at patients who got PTCy and look at the BSI difference. So but that is also something that if we saw a small differences in something like that post analysis, we could do a subgroup analysis or sensitivity analysis, Alternatively could stratify ahead of time. But I don't think that that's going to be as much of an issue since I don't think we're going to be seeing -- there's not many people left who are not getting it. So the second question on CDI. I mean our view of the data is that the arms look essentially the same. You know that from what we know from working with VOWST that the way you diagnose and the algorithm for diagnosis of C. diff makes a huge difference. And because our sites use their local practice and that meant they could be using PCR-based or toxin-based or even other kinds of algorithms, there was a lot of variability. And so we undoubtedly have patients who are carriers mixed in. But I think on the question of design, I'll turn it to Matt at that.

Yes, so I mean, Eric hit on the top line, right, which is VOWST is not optimized for bacteria that commonly are observed in the GI and SER-155 was optimized to target enterobacteriaceae and enterococci bacteria that do are common in this particular patient population. Importantly, SER-155 is a cultivated consortia of 16 strains that's manufactured from clonal cell banks. And through that design process, we can really optimize the drug to go after very specific pharmacologies. And just to give you an example, to design 155, we screened over 140 different strains that represented over 100 different bacterial speech, many of which are not actually even known to the world because they're in our culture collection and haven't been cultivated before. We were able to then select a set of specific strains that we thought were very strong and well optimized to decolonize in particular VRE and CRE, and C. diff was not one of the bacteria that we were designing the drug to go after.

Your next question comes from the line of Tessa Romero with JPMorgan.

This is Caroline Pocher on for Tessa Romero, JPMorgan. Just 2 from us. Were there any differences in efficacy or safety of 155 between any clinically relevant subgroups in the study? And then I just have a follow-up.

Caroline, maybe I'll ask Lisa to take that one.

Yes. That -- it's a great question. The subgroups that we've looked at so far, no difference in terms of certainly not in safety. We just didn't really have any safety events, and I mentioned the ones that were most common in the prepared remarks. I think with regard to efficacy, if we look, for example, at the subgroup that just received PTCy, what we see is still that the results are holding and that you still get deltas well over 20% in terms of BSI levels.

Okay. Great. And then just one more from us. On safety, can you just talk a little bit about generally when these SAEs and AESIs were observed?

Yes. That's a great question. The bulk of the action on the infection front happens in that first 30-day window, and it's actually the first few weeks. And that's during the period right after transplant. These patients are very neutropenic. That's when the BSI occur, that's when fevers occur during that period of neutropenia. Both of our events were in that window.

[Operator Instructions] Your next question comes from the line of Jeff Jones with Oppenheimer.

Congrats on the data. In terms of the infections observed, there's the bloodstream infections and then in the SAE table, you also referenced infection on infestations and a different number as well for infections in the AEs a special interest. Could you give us a little bit more detail on the types of infections you're seeing in these different classifications and the clinical relevance there?

Yes. So the infections, the main group of infections were things related to sepsis and our main category of BSI. We also had C diff events, urinary tract infections, cellulitis, COVID and CMV reactivation. Those were the main things they tended not all to occur at the same time points, as you can imagine, viral things tend to happen later. The bacterial things that we already discussed happened sooner but those were the main things. And the AESIs, I think they're following the same kind of pattern with regard to bloodstream infections being a major -- the major thing.

Okay. Great. And in terms of next steps and as you think about what a either a Phase II or a pivotal study might look like. Can you give us any feel for what you think the size and time frame for that study might look like? And obviously, it's ahead of talking to the FDA. So I understand that.

Yes, Jeff, great question. I'll start, maybe Lisa can comment too, and I'll start where you landed it off, which is we don't speak for the FDA, and honestly, we do engage with the FDA and get their point of view. But with these results, as I think Lisa mentioned in a prior question, we could envision a tractable next study with perhaps a delta of, say, 20% in looking at BSIs, which gives us attractable set of patients, right? So where we've got a number of different scenarios that contemplate what that looks like in terms of time and cost but we think it's manageable. We've been through this before with VOWST, and what was SER-109. So we've got the experience in thinking through these scenarios and working with the agency. But certainly, we won't get ahead of -- we won't get ahead of those conversations.

Your next question comes from the line of Keay Nakae with Chardan.

Yes. Just a question again on next steps. Maybe ask that question slightly differently. But do you feel like you know enough about the performance of SER-155 in this patient population, that you'd be comfortable that the next study could be a registrational study? Or do you feel like you need to explore a little bit further in a Phase II?

Yes. I guess it's the -- there's maybe a similar answer, which is while we don't want to get ahead of the FDA, the key dimensions that we will think about as we assess this, are the unmet need in the space. The safety of -- or the relative safety parameters of the program and are there signals of efficacy and we are in a position following this data set where we feel positively about those 3 dimensions, but maybe Lisa can comment further.

Yes. I think it's a great question, obviously, pending the FDA, but it doesn't have to be categorically also Phase II or Phase III. There are plenty of designs where you could imagine an interim analysis that allows you to morph from something that is initially sized as a Phase II, but could morph into a Phase III.

I'll add one last thing too. Keep in mind, we evaluate the pharmacokinetics of this drug, so the engraftment of the drug strains, and we have confidence in our dosing strategy coming out of this study, which is obviously important for the next study.

[Operator Instructions] As there are no further questions at this time, I would like to turn the call to management for closing remarks.

Thank you, operator, and thanks, everyone, for joining us this morning. We are pleased with this result, and we look forward to providing future updates. Hope everyone has a great rest of the week. Thanks.

This concludes today's conference call. We thank you for joining. You may now disconnect your lines.