Seres Therapeutics Inc (MCRB)

[Cosa]

This is bad news. Seres will be going backwards to a clinical stage company. The only long term benefit will be whatever Royalty deal they can secure for VOWST. With the deal they currently have in place Nestle already has 50% of the rights. They have already paid $175M upfront and another $125M after the approval. So currently Nestle is in for $300M. On the PR today the terms say any new deal will basically terminate the previous deal. So the remaining $225M milestone payments are out. How much is the remaining 50% rights worth? Maybe they will try $500M with new milestone payments + a small percentage or sales?

But in the end if you look at where Seres is today, they have about $125M cash runway (This is with the $300M they got the past 2 years). So even if they get a $500M, it will only take about 2 years for that money to be gone. The cost of RD is really expensive. SER-155 is still in phase 1!

Seres entered into an agreement with Nestlé Health Science in July 2021 to jointly commercialize SER-109 in the U.S. and Canada. Under the terms of the agreement, Nestlé Health Science will use its global pharmaceutical business, Aimmune Therapeutics, and will assume the role of lead commercialization party. Seres has received an upfront license payment of $175 million and will receive an additional $125 million upon FDA approval of SER-109. The agreement also includes sales target milestones which, if achieved, would total up to $225 million. Seres will be responsible for development and pre-commercialization costs in the U.S. Upon commercialization, Seres will be entitled to an amount equal to 50% of the commercial profits.

Source: https://ir.serestherapeutics.com/news-releases/news-release-details/seres-therapeutics-announces-confirmatory-results