With 1st microbiome drug approved, Seres slims R&D efforts and workforce
After securing the first-ever approval for an oral microbiome therapy in April, Seres Therapeutics is facing some tough choices, resulting in a restructuring that will claim 41% of staff.
The Cambridge, Massachusetts-based company plans to refocus on commercialization of Vowst, which was approved by the FDA to prevent recurrence of Clostridioides difficile infection. Completion of a phase 1b study for SER-155 to reduce the risk of gastrointestinal infections, bacteremia, and graft versus host disease (GvHD) in immunocompromised patients will also be a priority going forward.
That means other programs will be sidelined and Seres plans to shed staff. The workforce reduction will impact about 160 people, Seres said in a third-quarter earnings report Thursday. The reductions will take place across the organization.
Seres plans to scale back all non-partnered research other than the SER-155 program that is partnered with the Memorial Sloan Kettering Cancer Center, according to the company’s pipeline. Seres had touted two programs in ulcerative colitis, a phase 2b study for SER-287 and a phase 1b for SER-301, in the second-quarter earnings presentation posted in August.
The reprioritization and workforce reduction will result in an annual cash savings of $75 million to $85 million in 2024, Seres said. The staff cuts will be associated with a one-time charge of $5 million to $5.5 million in the second quarter.
“Given the realities of this challenging financial environment for biopharmaceutical companies, we believe that concentrating our resources on VOWST offers an attractive opportunity for targeted revenue growth, while operating in a more capital efficient manner,” CEO Eric Shaff said in a statement.
Seres touted “a great start” for Vowst, which booked $7.6 million in sales based on 506 units during the third quarter. The company reported a net loss of $47.9 million for the period, compared to a loss of $60 million for the same quarter a year earlier.
Left behind at Seres will be extensive proprietary microbiome therapeutic drug development capabilities, plus “know-how” that could someday support R&D efforts again. The company also has a “valuable intellectual property estate” for the development of microbiome therapeutics.
The third quarter ended with $169.9 million in cash and equivalents on hand, enough to last into the fourth quarter of 2024.