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Edited Transcript of MCRB earnings conference call or presentation 5-Nov-19 1:30pm GMT

Q3 2019 Seres Therapeutics Inc Earnings Call

Cambridge Nov 14, 2019 (Thomson StreetEvents) -- Edited Transcript of Seres Therapeutics Inc earnings conference call or presentation Tuesday, November 5, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Carlo Tanzi

Seres Therapeutics, Inc. - VP of IR & Corporate Communications

* Eric D. Shaff

Seres Therapeutics, Inc. - President, CEO & Director

* Matthew R. Henn

Seres Therapeutics, Inc. - Executive VP & Chief Scientific Officer

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Conference Call Participants

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* Chris Shibutani

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* Christopher Lawrence Howerton

Jefferies LLC, Research Division - Equity Analyst

* Holly Samantha Barra

Goldman Sachs Group Inc., Research Division - Business Analyst

* Justin Reid Zelin

Canaccord Genuity Corp., Research Division - Associate

* Matthew Cornell Biegler

Oppenheimer & Co. Inc., Research Division - Associate

* Vernon Tolentino Bernardino

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2019 Seres Therapeutics Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to turn the call over to your speaker today, Mr. Carlo Tanzi, with Investor Relations. Thank you. Please sir, go ahead.

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Carlo Tanzi, Seres Therapeutics, Inc. - VP of IR & Corporate Communications [2]

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Thank you, and good morning. Our press release with the company's third quarter 2019 financial results and a business update became available at 7 a.m. Eastern Time 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'll be making forward-looking statements relating to the timing, enrollment and results of our clinical studies, regulatory approval, the promise and potential impact of any of our microbiome therapeutics, the sufficiency of our cash and cash equivalents to fund operations and the availability of additional cash resources. Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of 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; and Dr. Matt Henn, Seres' Chief Scientific Officer; and also Dr. Kevin Horgan, our Chief Medical Officer, will be available during the Q&A portion of the call. And with that, I'll pass the call to Eric.

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [3]

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Thanks, Carlo, and good morning, everyone. 2019 has been an important year of focus and advancement for Seres. And as we move into the final months of the year, we are pleased to note that we are in a stronger position to deliver on our mission to advance our microbiome therapeutics platform and to execute on the development of our promising pipeline of drug candidates. To summarize some of our accomplishments. We have focused our pipeline on our highest priority programs, modified the SER-109 Phase III study to expedite top line results, initiated our SER-287 and SER-401 clinical studies, entered into a collaboration with AstraZeneca in immuno-oncology, nominated our SER-301 lead candidate and strengthened our balance sheet with a $61 million equity raise.

More recently, we further strengthened our balance sheet with access to up to an additional $50 million in debt financing. All these efforts lay the foundation for Seres to execute on a data-rich 2020 that we believe could be transformative for the company. Seres differentiated core competencies include our field-leading R&D capabilities and deep domain expertise in microbiome therapeutic drug discovery, manufacturing and clinical development. We are able to identify key signatures in the microbiome associated with disease and design tailored oral therapeutic microbial candidates aimed at improving patient outcomes by establishing a healthy and more diverse microbiome.

Turning now to an update on our development programs. Let me begin with SER-287, which is in a potentially pivotal Phase IIb study in patients with mild-to-moderate active ulcerative colitis. SER-287 is an orally administered, biologically-derived live drug candidate, comprised of commensal bacterial spores derived from the healthy human gastrointestinal tract. Our objective with SER-287 is to develop a first-in-class microbiome therapeutic that modulates the microbiome and microbe-associated metabolites in UC patients. This approach is intended to reduce the impact of a dysfunctional microbiome as a trigger and amplifier of inflammation. We believe this drug candidate has the potential to result in significant improvements in patient outcomes by providing a novel non-immunosuppressive treatment option for this serious disease. A prior completed SER-287 Phase Ib proof-of-concept study demonstrated a statistically significant difference in the clinical remission rate between patients treated with vancomycin followed by daily SER-287 for 8 weeks compared to the placebo group. In that study, we observed a 40% remission rate with SER-287 versus 0% with placebo. Following those encouraging initial clinical results, we obtained additional microbiome, metabolite and transcriptomic data sets that provide mechanistic insights associated with the observed clinical therapeutic activity. Changes in both species and metabolites were identified as associated with treatment and clinical remission consistent with published data from the human microbiome project. Importantly, the safety profile for SER-287 was highly favorable with no imbalance in adverse events, seen in patients administered to -- administered SER-287 compared to placebo.

Supported by these compelling data, we subsequently initiated this ongoing SER-287 Phase IIb ECO-RESET study. Based on written FDA feedback, we believe that this study could serve as 1 of 2 pivotal studies to support product registration. In addition, our feedback from the European Medicines Agency Committee on Human Medicinal Products also indicated the ECO-RESET could serve as 1 of 2 registrational studies to support a European regulatory marketing application.

The SER-287 ECO-RESET study is a randomized placebo-controlled 3-arm induction trial designed to enroll 201 patients with active mild-to-moderate ulcerative colitis, who have failed the prior therapy. In first of 3 arms, patients receive vancomycin pretreatment, followed by 10 weeks of the same daily regimen used in the arm of the Phase Ib trial that showed the highest clinical remission rate. In the second arm, patients also receive vancomycin pretreatment, followed by 2 weeks of the same SER-287 daily regimen as in the first arm, followed by 8 weeks of a lower dose. In the prior Phase Ib trial, engraftment, the germination and vegetative growth of SER-287 bacteria in the gastrointestinal tract, was seen to plateau after 2 weeks of SER-287 administration. So this arm evaluates a regimen based on our mechanistic learnings from this study. In the third arm, patients receive only placebo. ECO-RESET is primarily an induction study. However, the effects of SER-287 as a maintenance therapy will also be evaluated. We continue to recruit patients for this study, and we now have over 100 sites open across the U.S. and Canada and 70% of these sites have screened patients to date. We expect to have top line data in the second half of 2020, well within the company's cash operating runway.

I'll now turn to the SER-109 ECOSPOR III Phase III study. SER-109 is an orally administered biologically-derived drug candidate designed to restructure the microbiome to increase the diversity of commensal microbes in patients with recurrent C. difficile or C. diff infection. SER-109 was designed using bioinformatics insights, suggesting that a complex spore ecology includes Keystone organisms that could address the underlying depletion in commensal microbes. SER-109 is an ecology of bacterial spores, enriched and purified from healthy screened human donors. We employ a robust manufacturing process that includes steps that inactivate vegetative bacteria, including species such as E. coli, which has been linked with FMT. Indeed, last week, New England Journal of Medicine published a report describing cases of drug-resistant E. coli bacteremia that were transmitted by FMT, an unapproved and unregulated procedure, included one that led to an unfortunate patient death.

Also, just yesterday, Seres attended an FDA meeting focused on the use of FMT for C. diff infection and other diseases. The meeting presentations and discussions have reaffirmed our conviction in the dire need for an FDA-approved microbiome therapeutic. The meeting highlighted the risks associated with unregulated FMT. We came away further encouraged in the advantages of our purified spore-based approach that uses both extensive donor screening and rigorous product purification. We believe that both these steps are essential to ensure product safety. We continue to enroll the ECOSPOR III trial, which is evaluating efficacy and safety in 188 patients with recurrent C. diff infection. Importantly, all patients enrolled in ECOSPOR III are required to test positive for C. diff cytotoxin to ensure high-quality data by enrolling only patients with an active C. diff infection. ECOSPOR III is a randomized placebo-controlled study where all patients are treated with standard of care antibiotics to address the qualifying acute C. diff infection, and subjects then receive either SER-109 or placebo. The primary endpoint compares the C. diff recurrence rate in subjects who receive SER-109 versus placebo up to 8 weeks after dosing.

We continue to make steady progress with the study in the face of widespread continued use of unapproved and unregulated FMT to treat C. diff infection. As of October 31, this study was more than 85% enrolled, and we expect to report top line study results in mid-2020. We are nearing full enrollment for ECOSPOR III, and we are very excited by the potential for this program.

I will remind you that SER-109 has both breakthrough therapy and orphan drug designations from the FDA. We are very much looking forward to seeing the stop -- top line study results. Based on prior discussions with the FDA, we believe this study, if successful, has the potential to be a single pivotal study supporting product registration. However, this would depend on the strength of the data and additional safety data may be required. If successful, SER-109 could represent a major breakthrough for patients suffering from recurrent C. diff infection, considered 1 of the top 3 most urgent antibiotic-resistant bacterial threats in the U.S. according to the Centers for Disease Control. It is also the leading cause of hospital-acquired infection in the U.S. and is responsible for the deaths of approximately 29,000 Americans each year.

Furthermore, we believe that positive results from ECOSPOR III would provide definitive clinical validation more broadly for the promise of microbiome therapeutics.

I'd like to now pass the call to Matt to discuss our immuno-oncology programs, and our next-generation development candidate, SER-301.

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Matthew R. Henn, Seres Therapeutics, Inc. - Executive VP & Chief Scientific Officer [4]

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Thanks, Eric. I'll begin with SER-301. We have made excellent recent progress with SER-301. This is a next-generation, rationally-designed live microbiome therapeutic candidate for the treatment of ulcerative colitis. SER-301 was designed using our in-human reverse translational drug discovery and development platform that leverages insights from our clinical studies. We believe that our next-generation drugs, like SER-301 may provide important benefits that include optimization of microbiome therapeutic candidates, pharmacological properties for target disease and streamline drug product manufacturing. We are pleased to report today that we have finalized the design of SER-301 and nominated a candidate that incorporates specific defined commensal bacterial species. The consortia of bacteria in SER-301 are designed to modify the microbiome and microbiome-associated metabolites in the gastrointestinal tract to favorably impact UC relevant anti-inflammatory and immune pathways and to improve epithelial barrier integrity. The design of SER-301 incorporates insights on microbiome biomarkers and microbial-mediated functional pathways associated with clinical remission and endoscopic improvement from our SER-287 Phase Ib study. Further, bacterial species selected for inclusion in SER-301 have been confirmed to engraft across human subjects. The SER-301 consortia has demonstrated the capacity to modulate disease-relevant cellular mechanisms in human cell-based screening assays and in vivo models. SER-301 is manufactured in Seres' in-house GMP facility, and we are moving quickly to transition SER-301 to clinical development to evaluate safety and efficacy in patients with ulcerative colitis. We expect to initiate clinical development in early 2020.

Moving now to SER-401. SER-401 is an orally administered, biologically-derived live microbiome therapeutic candidate, comprising bacteria that reflects the bacterial signature in the gastrointestinal microbiome associated with response to checkpoint inhibitor immunotherapy. In collaboration with the Parker Institute for Cancer Immunotherapy and the MD Anderson Cancer Center, we continue to enroll our SER-401 randomized, placebo-controlled Phase Ib study. This study will enroll 30 patients with metastatic melanoma. All patients received nivolumab, an FDA-approved anti-PD-1 therapy. And are randomized at a 2:1 ratio to either SER-401 or placebo. The study will evaluate safety, clinical response and various potential biomarkers of response that include microbiome signatures of response. We will specifically examine tumor biopsies to evaluate immunological activity and other potential pharmacodynamic biomarkers. We expect to report SER-401 Phase Ib study results in the second half of 2020. In addition, under our collaboration with AstraZeneca, SER-401 may be studied in combination with AstraZeneca compounds targeting various cancers. The collaboration is combining Seres microbiome drug discovery and manufacturing expertise, with AstraZeneca's extensive oncology experience to evaluate the potential of microbiome therapeutics to improve clinical response when used in conjunction with checkpoint inhibitor therapies.

In addition, this collaboration seeks to further delineate the microbiome biomarkers of immunotherapy response and the patients most amenable to such treatment as well as elucidate additional mechanistic targets for microbiome combination therapies. In addition to the $20 million we receive over 2 years, AstraZeneca will also reimburse all research activities related to the collaboration. Under the agreement, we maintain rights to oncology-target -- targeted microbiome therapeutic candidates, and AstraZeneca will have the option to negotiate for rights to those programs and other inventions arising out of the collaboration. We believe this collaboration will contribute to providing validation of microbiome therapy in oncology.

I'll now pass the call back to Eric.

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [5]

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Thanks, Matt. Turning now to an overview of the financials. And I'll note that additional detail is included in the press release issued earlier this morning. Seres reported a net loss of $16.4 million for the third quarter of 2019 as compared to a net loss of $21.9 million for the same period in 2018. The third quarter net loss was driven primarily by clinical and development expenses, personnel expenses and ongoing development of the company's microbiome therapeutics platform. The lower level of cash used in the third quarter, relative to prior quarters, is the result of the streamlining of our investments and focusing of our pipeline implemented earlier this year. Seres ended the third quarter with approximately $83.8 million in cash and cash equivalents. This figure does not include capital that we obtained with our recent debt financing. We obtained $25 million upon the closing of the agreement late last month, and we could also have access to up to an additional approximately $25 million with the achievement of certain milestones. The company's cash resources are expected to fund operating expenses and capital expenditure requirements, excluding net cash flows from future business development activities or potential incoming milestone payments into the second quarter of 2021. This cash way -- this cash runway does not include a $10 million SER-301 Phase I milestone payment that Seres would be entitled to next year as part of our Nestlé Health Science collaboration.

Importantly, we believe our resources are sufficient to enable the company to reach the multiple significant R&D milestones we're looking forward to in 2020. We have made considerable progress this year across all areas important to building a sustainable company. We have refocused our clinical strategy and made important advances to these programs. In addition, we have partnered with AstraZeneca to further elucidate the potential of microbiome therapeutics to augment immuno-oncology treatment for cancer. We have streamlined our operations, implemented disciplined financial management and added key skills and experience to our Board of Directors. Importantly, we have strengthened our balance sheet with a $61 million equity financing and secured up to $50 million in debt funding to support our R&D efforts.

We are closing out 2019 on strong footing. And looking ahead, we anticipate a data-rich 2020 with important milestones and data readouts.

Before opening up the call to your questions, I want to take this opportunity to thank the patients and clinicians involved in our studies, our supportive investor base and our dedicated and passionate team here at Seres. Operator, let's open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Chris Shibutani.

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Chris Shibutani, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [2]

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My first question is, can you help us understand the trend for enrollment in the pivotal SER-109 trial? Just looking at what you disclosed previously, at the end of April, 135 patients or so out of 188 were enrolled, and now you've reported that at the end of October, there were 160. So just extending this without knowing any trend, one would think that another 6 to 7 months might be needed for enrollment. Can you provide any color on that?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [3]

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Sure. So there certainly is variability in month-to-month enrollment, and we've provided our current estimate, which is based on the latest transfer top line study results. So we've had some months that are softer, we've had some months which are more firm. In the last couple of months, we've been pleased that the trend is really positive. But we're pleased that the study is really now close to fully enrolled. We disclosed this morning that we're over 85% enrolled. So that really allows us to narrow the focus of our projections. And look, I'd say that we are very happy to be in the last lap of this clinical study. And we're really looking forward to next year's clinical results. This -- as the FDA meeting yesterday, I think, further evidenced, there continues to be an unmet medical need for patients in this space, and it's a need that we think that SER-109 could really fill. So we're pleased to be towards the end of the study, and we're very pleased to be preparing for top line results next year.

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Chris Shibutani, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [4]

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Got it. And we have a second question on SER-287. Can you talk about the pros and cons of potentially starting a second potentially pivotal trial for SER-287 before the current potentially pivotal trial is complete?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [5]

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Yes. I would say, we are focused on the IIb study, which, as we've said, could be 1 of 2 pivotal studies based on feedback from the FDA. I would point out that we're really looking to replicate the data that we saw on the Ib study, both in terms of the top line clinical results as well as some of the really interesting microbiome analysis, which correlated with those top line clinical results. So there's more to learn. And I would say that we -- as you remember, we've designed the study with both a dose, which replicates the dose that was most efficacious in the Ib study as well as a step down dose. So it's unlikely that we would move forward with a second pivotal study before seeing the results of this IIb study, which we're really focused on.

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Operator [6]

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Your next question comes from Terence Flynn with Goldman Sachs.

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Holly Samantha Barra, Goldman Sachs Group Inc., Research Division - Business Analyst [7]

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This is Holly on for Terence. For the SER-401 Phase Ib data expected next year. What are you hoping to see in order to advance that program? And can you remind us why you chose melanoma as the first indication? And if you considered exploring other tumor types?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [8]

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Sure, Holly. Thanks for the question. I'm going to ask Matt to comment; and Kevin, if he can get on the line to maybe provide his views as well.

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Matthew R. Henn, Seres Therapeutics, Inc. - Executive VP & Chief Scientific Officer [9]

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Sure. So basically, first, with respect to why metastatic melanoma? There's been various different publications over the past couple of years that have explored how the microbiome is associated with improved response to checkpoint inhibitor therapies. And several of those studies point to a potential response in the context of metastatic melanoma. We have developed preclinical data sets in-house that have looked at several different cancer types and metastatic melanoma in the models we're using is an area where we have been able to recapitulate important preclinical results, which give us confidence in that particular cancer type. As part of our collaboration with AstraZeneca, one of the fundamental components of that collaboration is to generate data and acquire data for other potential cancer types and other therapies, and so that's an ongoing area of investigation to identify where the next best opportunities are with respect to a microbiome therapeutic in combination with an immune checkpoint inhibitor.

In terms of the Phase Ib study, in that particular study, we are, first and foremost, evaluating safety of SER-401. And then we are looking at efficacy in the context of the ability to improve response, and that we are measuring using various RECIST measurements for measurements of response. And then in addition, we will be basically looking at what the microbiome dynamics are post-treatment with SER-401, and understanding how those changes modulate host immunological properties. And in particular, we're acquiring tumor biopsies, which will allow us to look at specific immunological responses at the tumors themselves.

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Operator [10]

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Your next question comes from Mark Breidenbach with Oppenheimer.

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Matthew Cornell Biegler, Oppenheimer & Co. Inc., Research Division - Associate [11]

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This is Matt on for Mark. So Eric, with the spotlight now on donor-derived therapies from that New England Journal Paper, you mentioned, have you had any additional interactions with the FDA? I mean have they voiced any concerns around your process?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [12]

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Yes, Matt, let me answer that. I'm glad you brought up the question because there -- as I think most people are aware, but if you're not, there was a forum at the FDA yesterday that talked about FMT. And overall, I thought it was a good discussion. You heard a number of different points of view. I think it's helpful for the FDA to hold these types of forums, particularly following some of the safety issues that we've seen with FMT. And there were a number of different issues or questions that were addressed, including headwinds to enrollment created by FMT, which is something that we've long talked about. But look, Seres' position is that in light of the recent reports of serious adverse events with FMT, the policy of enforcement discretion really could be revisited. It may not be in the best interest of patient safety. But in any case, you heard multiple points of view that strongly agree that when an approved therapy is available, that enforcement discretion may not be appropriate. So I think the idea of safety is one that's on everyone's minds, and it's one in which we think that we are well situated to provide a solution for patients. I do want to -- I'll ask Matt to comment on some of our processes from a manufacturing perspective and why we think we're differentiated from some of the concern that you heard yesterday.

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Matthew R. Henn, Seres Therapeutics, Inc. - Executive VP & Chief Scientific Officer [13]

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Sure. Thanks, Eric. So SER-109 is a highly purified composition of spores from commensal bacterial Firmicutes. And as such, it's a fundamentally different product than FMT. The donor screening protocol that we use in combination with our GMP manufacturing process to fractionate and purify the spores of SER-109 yields a drug product that does not contain any vegetative bacteria, including E. Coli, and pro-carcinogenic bacteria that have been associated with FMT safety risks in the past. In addition, our manufacturing process, in a very meaningful way, removes other impurities that are inherent in FMT and may have unknown safety risks. And importantly, we've conducted validation studies to demonstrate reduction of viruses, parasites, other stool components, and we've actually have posters on our website that even speak to that. And lastly, SER-109 drug product is released under rigorous GMP identity purity and potency assays that include bioburden testing. In that bioburden testing, we would pick up any potential problems that were with a particular product.

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Matthew Cornell Biegler, Oppenheimer & Co. Inc., Research Division - Associate [14]

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Got it. And then maybe just a quick housekeeping question. So the updated cash runway that you've guided. Does that include the new debt facility?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [15]

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It does, Matt. So into the second quarter of 2021 includes the $25 million, which is the first tranche of the debt that we received in closing the transaction last month.

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Operator [16]

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Your next question comes from Chris Howerton with Jefferies.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [17]

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I guess, the first question that I want to start with is related to 301 and getting to the IND stage. What are the gating factors to getting to that IND? And what are the boxes that you have to check from now until the filing of that? And then a follow-up to that is, should we expect a similar early clinical program similar to 287 for 301? Or should we expect a more traditional type of drug development pathway? And then I have a couple more as well.

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [18]

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All right. Well, let's start with the first couple, Chris. And on 301, I'd say that a number of the gating items towards moving to clinical initiation, Matt talked about, and certainly the most significant, we're nominating the consortia itself as well as some of the CMC activities that are on the critical path. I'll ask Matt to comment on that. We have not talked about the design of the study yet. But I can tell you that we're in the final stages of designing and finalizing that clinical study. So let me ask Matt to comment and then we can take it from there.

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Matthew R. Henn, Seres Therapeutics, Inc. - Executive VP & Chief Scientific Officer [19]

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Yes. So we've moved -- as I noted earlier, we've moved SER-301 to our lead nomination stage. So we have finished our design of the composition. And that particular consortia is in manufacturing, as we speak, and is nearing completion. And as soon as we have all the requisite appropriate stability data, et cetera, as you know, are required for regulatory filings, we will initiate our filings. In terms of the Phase Ib trial itself, we expect to initiate, as we said, the Phase Ib in early 2020. This trial is intended to assess SER-301 safety. But in addition, we will be evaluating efficacy and drug activity using various microbiome, metabolomic and disease-relevant host readouts.

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [20]

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And Chris, I'd just add, we are incredibly excited about moving forward with SER-301. We've talked, I think, in-depth in the past about the benefits of our biologically-sourced platform, providing insights into our synthetic platform, including some of the learnings that we have from our 287 Ib study, which have been incorporated into the design of SER-301. So we're excited, our partners at Nestlé are excited and we're looking forward to moving this as quickly as possible.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [21]

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Great. So in terms of 109, and just kind of related to the enrollment question asked earlier. What gives you confidence in the timing of the 109? Or is it coming in the middle of next year?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [22]

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Yes, Chris, I think I provided some comments before, and -- but we're more than 85% enrolled in this study. And we think that, that allows us to really narrow the bands of our projections and gives us confidence in that projection. So we're excited to be, as I said, at the final stages of clinical enrollment, and we're even more excited about the opportunity for top line results, not only for this program, but really we think that this will be a significant moment, not just for Seres, but for the microbiome space. So we're excited to be moving forward.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [23]

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Great. And the last one is related to your debt financing that you did. What would trigger those additional $12.5 million tranches?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [24]

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Yes, Chris, we provided, I think, a fair amount of detail in the 8-K that we filed last night. But basically, we haven't disclosed exactly what they are, but you can envision that with positive clinical progress, the opportunity to access additional funds would be unlocked. And we think that it's really -- we're pleased to have done this transaction. We think it's a great way to opportunistically support the financial health of the company, provides additional runway, given where our stock price is we think that this cost of capital is highly attractive. So we think -- based on the terms of the transaction, we're pleased about moving forward with that as well.

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Operator [25]

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Your next question comes from John Newman from Canaccord.

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Justin Reid Zelin, Canaccord Genuity Corp., Research Division - Associate [26]

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This is Justin dialing on for John. Congrats on the progress for the quarter. And I just had a question on 109. Have you had any additional interactions with the FDA on whether data from the ECOSPOR trial would be sufficient for filing of BLA? If you could give some color there?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [27]

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Yes, thanks for the question. We have not. I'll reiterate what we've said in the past, which is we are extremely pleased with the opportunity to provide top line results next year in this study. And based on the fact that it's a breakthrough therapy, it's an orphan therapy, based on some of the unmet medical need that I thought was highlighted yesterday at the FDA meeting with positive top line clinical results, we will be very pleased to engage with the FDA in the dialogue about next steps, next year after we get those top line results.

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Operator [28]

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Your next question comes from Vernon Bernardino from H.C. Wainwright.

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Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [29]

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And congrats on the progress. Most Of my questions have been asked and answered. But just one question I have is, you have additional cash as -- and you're focusing on the current programs, including initiation of 301. Any activities that could lead to the advancement of other product candidates now that you have a little bit of cash?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [30]

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Yes, Vernon. And thanks for the question. The answer is, we are highly focused right now. And we think that next year's milestones, including the 2 late-stage milestones, will be -- we believe, potentially transformative, not only for the company, but also for the industry. And I think that's a tremendous responsibility. So we are continually evaluating how we're deploying capital in the most effective way to treat patients and to reward shareholders. And I'd say that's not a static exercise. It's continually ongoing. If there's ways in which we can move the science forward, the medicine forward, we will explore those ways, but I can tell you that as of now, we're highly focused on executing on these 2 late-stage clinical results that we think will be significant for the field. We've -- as I've said, we found a way to work with AstraZeneca in an resource efficient way. There are other opportunities that we have available to us. But again we're focused on our late-stage clinical results, which we think will be potentially transformative for the field.

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Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [31]

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Do you anticipate with the expenses you have ramped down so far, with the programs you've identified and the cuts earlier and last year that you anticipate any further operating expense efficiencies? Or if that's all built in now and just largely a little bit forward to second quarter 2021?

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [32]

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I think, Vernon, you saw a fairly significant reduction from the burn that we had in Q1 and earlier versus where we've been in the last couple of quarters. Our expectation is that, that's the model for going forward, and I think that's how we get into the second quarter of 2021. So we continue to invest in the best methods, the best investments to help patients and provide a return to shareholders. So that's where we're focused.

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Operator [33]

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I am showing no further questions at this time. I would like to now turn the conference back to the company.

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Eric D. Shaff, Seres Therapeutics, Inc. - President, CEO & Director [34]

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Thank you, operator. And thank you for your continued interest in Seres Therapeutics, and we look forward to keeping you apprised of our progress. Have a great morning and a good week. Thanks.

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Operator [35]

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Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.