Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Thursday, Chardan Capital Markets adjusted its stance on Seres Therapeutics (NASDAQ:MCRB), shifting the rating from Buy to Neutral and setting a price target of $6.00. This change comes as the company awaits a partnership to proceed with the Phase II trial of its drug candidate, SER-155. With a market capitalization of just $72.3 million and a steep 50% decline in stock value year-to-date, the company faces significant challenges. Seres Therapeutics recently released its first-quarter financial results for 2025, revealing an increase in cash and equivalents to $58.8 million, up from $30.8 million at the conclusion of the previous fiscal year. According to InvestingPro analysis, the stock appears undervalued at current levels.
The company’s financial position is bolstered by an anticipated $25 million payment from Nestlé, linked to the VOWST sale set for July 2025. This inflow comes at a crucial time, as InvestingPro data shows the company is quickly burning through cash, with a concerning debt burden of $91.6 million and a weak current ratio of 0.94. This inflow, which includes $1.5 million earmarked for employment-related obligations, is expected to fund operations into the first quarter of 2026. Seres Therapeutics is in discussions with the FDA regarding the development of SER-155 for use in allo-HSCT (allogeneic hematopoietic stem cell transplantation). The FDA has recommended a Phase II standalone trial followed by a single pivotal trial.
The proposed Phase II trial aims to enroll approximately 248 participants, focusing on the prevention of bloodstream infections (BSIs). An interim analysis is planned once half of the participants reach their primary endpoint, roughly 12 months after enrollment begins. Positive interim results could lead to further discussions with the FDA and may influence clinical trial designs for related patient populations.
Seres Therapeutics is preparing to submit the Phase II protocol to the FDA in the upcoming weeks and will complete preparations for the trial’s initiation. However, additional capital from a partnering entity is needed before the trial can commence. Chardan Capital Markets has therefore chosen to adopt a cautious approach, downgrading the stock rating to Neutral with a reverse-split adjusted price target of $6.00, as the company’s next steps hinge on securing a partnership to fund the advancement of SER-155 into Phase II studies. For deeper insights into Seres Therapeutics’ financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in our Pro Research Report.
In other recent news, Seres Therapeutics reported a significant improvement in its financial performance for Q1 2025, achieving a net income of $32.7 million compared to a net loss of $32.9 million in the same quarter last year. This turnaround was largely attributed to a $50 million installment payment from Nestle (NSE:NEST). The company also managed to reduce its research and development expenses to $11.8 million from $19.5 million and general and administrative expenses to $11.9 million from $14.9 million year-over-year. Seres Therapeutics is advancing its SER-155 product, which has received a breakthrough therapy designation and is expected to submit a Phase II study protocol to the FDA soon. The company is actively engaging in partnership discussions to support the development and commercialization of SER-155. Despite positive earnings, the stock experienced a decline but rebounded in premarket trading, reflecting mixed investor sentiment. Analysts have shown interest in the company’s strategic initiatives and ongoing regulatory interactions. The company plans to continue its cost management efforts while exploring additional partnership opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.