Seres Therapeutics in Three Words: Undervalued Microbiome Innovator

There are 40 trillion bacteria living in our body and the majority of them are in our gut. Most bacteria are desirable, peaceful, and even necessary for daily tasks like digestion and the production of nutrients.

Yet there are also some really nasty bacteria, which can cause serious problems like inflammation, diarrhea, or even death. When the body gets exposed to these, we typically try to kill them as quickly as possible using powerful antibiotics.

Antibiotics normally work, though their usage is creating some significant longer-term problems. The bad bacteria are becoming more resistant to antibiotics. That means that the good bacteria get wiped out, while the nasty ones get stronger, proliferate, and continue to lead to problematic symptoms. Using antibiotics is kind of like dropping napalm on a neighborhood; but the smartest villains have created a heat-shield to selectively protect themselves.

This is where Seres comes in. As the world’s first publicly-traded microbiome company, it looks to restore the healthy balance of the gut by introducing a multifunctional consortium of bacteria through an orally-administered pill. Rather than using antibiotic napalm, Seres is introducing a consortium of kind new neighbors who will collectively lobby to get rid of the problematic jerks.

The company’s flagship drug VOWST just won FDA approval to treat the recurrence of one of the world’s most deadly bacterial diseases: Clostridium difficile infection (aka “CDI” or “c-diff”). In cases where the initial antibiotic treatment didn’t sufficiently kill the CDI bacteria, VOWST introduces a spore-forming population of more than 50 bacterial strains to restore the microbiome to a balanced state.

VOWST received Orphan Drug and Breakthrough Designation and was formally FDA approved in April 2023. It has been co-developed and is being co-commercialized through a strategic collaboration with Nestlé Health Science, who splits the commercial profits with Seres 50/50 on a global basis. Nestle contributed a development milestone payment of $120 million in January 2016 and another $125 million for VOWST’s FDA approval in 2023. Seres has also secured up to $250 million through a debt facility with Oaktree and is sitting on $230 million of cash on its balance sheet. It’s in good shape for the scale-up and doesn’t seem to be in any trouble of cash burn that would require a secondary offering.

Seres was founded in Boston in 2011 by Flagship Pioneering, the same VC firm who founded Moderna (Nasdaq: MRNA). It went public in 2015 and now employs 431 people.