Earnings call transcript: Seres Therapeutics reports larger-than-expected Q2 loss

Seres Therapeutics Inc. (MCRB) reported a larger-than-expected loss for Q2 2025, with earnings per share (EPS) at -$2.27, significantly below the forecast of -$0.09. The company’s stock experienced a minor dip, reflecting investor concerns about the earnings miss. Despite this, Seres highlighted progress in its development pipeline, particularly with its SER-155 program.

Key Takeaways

• Seres Therapeutics reported a Q2 2025 net loss of $19.9 million, an improvement from the $26.2 million loss in Q2 2024.
• EPS was -$2.27, compared to a forecast of -$0.09, resulting in a significant earnings miss.
• The company is advancing its SER-155 program, which showed promising results in reducing bloodstream infections.
• Stock prices saw a slight decline, trading at $14.01 in premarket, down 1.89%.

Company Performance

Seres Therapeutics showed improvement in reducing its net loss year-over-year, with a Q2 2025 net loss of $19.9 million compared to $26.2 million in the same quarter last year. The company has been focusing on cost reduction, which is evident from the decreased research and development, and general and administrative expenses. InvestingPro data shows a current ratio of 2.11, indicating sufficient liquid assets to meet short-term obligations, though the company is quickly burning through cash. These efforts are part of Seres’ strategy to extend its cash runway and continue its operations into 2026.

Financial Highlights

• Revenue forecast: $5 million
• Net loss: $19.9 million (compared to $26.2 million in Q2 2024)
• Research and development expenses: $12.9 million (down from $15.8 million in 2024)
• General and administrative expenses: $10.3 million (down from $13.1 million in 2024)
• Cash and cash equivalents: $45.4 million as of June 30, 2025

Earnings vs. Forecast

Seres Therapeutics reported an EPS of -$2.27, significantly missing the forecast of -$0.09. This 2422.22% negative surprise reflects a challenging quarter for the company, although it marks an improvement from previous losses. The earnings miss is notable compared to historical trends, indicating potential challenges in meeting market expectations.

Market Reaction

Following the earnings announcement, Seres Therapeutics’ stock saw a slight decline. The stock was trading at $14.01 in premarket, down 1.89% from its last close of $14.28. With a beta of 2.89, the stock shows significantly higher volatility than the broader market. This movement places the stock within its 52-week range, which has seen a high of $26.4 and a low of $6.53. The market’s reaction suggests cautious sentiment among investors, likely due to the significant earnings miss. For deeper insights into MCRB’s valuation and financial health metrics, including 8 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking forward, Seres Therapeutics is focusing on its SER-155 development, targeting a Phase II study with approximately 248 participants. The company is actively seeking capital through partnerships, out-licensing deals, and potential mergers to support its strategic initiatives. Analyst targets range from $6 to $20 per share, reflecting mixed opinions on the company’s prospects. The guidance for future quarters indicates continued challenges, with EPS forecasts remaining negative at -$4.41 for FY2025.

Executive Commentary

"We are making good progress advancing SER-155 to enable readiness for the Phase II study," stated Morella Thorel, Co-CEO and CFO. This sentiment was echoed by Tom DeRosier, Co-CEO and Chief Legal Officer, who emphasized the FDA’s enthusiasm for microbiome opportunities. Dennis Walling, SVP of Clinical Development, highlighted the significant unmet need for treating bloodstream infections in the alloHSCT population.

Risks and Challenges

• Continued financial losses could strain cash reserves.
• The competitive landscape in biotherapeutics remains intense.
• Regulatory hurdles could impact the timeline for product approvals.
• Market volatility and investor sentiment may affect stock performance.
• Potential delays in clinical trials could impact strategic goals.

Q&A

During the earnings call, analysts inquired about potential deal structures and the global study design, including European countries. The company confirmed positive feedback from European key opinion leaders and is exploring merger opportunities with other microbiome companies. These discussions highlight Seres’ strategic focus on expanding its market reach and enhancing its product pipeline.

Full transcript - Seres Therapeutics Inc (MCRB) Q2 2025:

Conference Operator: Good morning, and welcome to the Seres Therapeutics Second Quarter twenty twenty five Results and Business Update Call. At this time, all participants are in a listen only mode. A question and answer session will follow the prepared remarks. Please note this call is being recorded. I would now like to turn the conference over to Doctor.

Carlo Tanzi of Investor Relations. Please go ahead.

Carlo Tanzi, Investor Relations, Seres Therapeutics: Thank you, and good morning. Our press release with the company’s second quarter twenty twenty five financial results and business updates became available at 7AM Eastern Time this morning and can be found on the Investors and News section of the company’s website. The company has also posted an updated corporate presentation to the website. I’d like to remind you that we’ll be making forward looking statements, including statements about the timing and results of our clinical studies and data readouts, future product candidates, clinical development plans and commercial opportunities, communications with, feedback from or submissions to the FDA, operating plans and our future cash runway, future obligations related to the valve sale, our ability to secure a business development deal, partnerships and or generate or obtain additional capital or financing, our planned strategic focus, anticipated timing of any of the foregoing and other statements which are not historical fact. 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 with prepared remarks, I’m joined by Morella Thorel, Co CEO and CFO and Matthew Penn, Chief Scientific Officer. Additional members of the management team, Tom DeRosier, Co CEO and Chief Legal Officer Teri Young, Chief Commercial and Strategy Officer and Dennis Walling, M.

D, Senior Medical Senior Vice President of Clinical Development will also be available during the Q and A portion of the call. And with that, I’ll pass the call on to Morello.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Thank you, Carlo, and good morning, everyone. Today, we’ll share recent business highlights, progress on SER-one 155 development activities and an update on our efforts to obtain additional resources to enable continued advancement of our programs. Seres has continued making meaningful progress toward our mission of bringing novel live biotherapeutic products to patients in need. Our efforts and results to date have clearly demonstrated both the therapeutic power of this modality with highly compelling clinical data sets and two breakthrough therapy designations achieved and Seres capabilities to successfully obtain FDA approval. Looking ahead, we are optimistic about the promise of our live biotherapeutics to provide transformative clinical benefits to patients, including for serious infections and inflammatory diseases that affect a large patient populations.

We have advanced preparation of SER-one hundred fifty five for the next stage of development. As a reminder, our previously completed SER-one hundred fifty five Phase Ib study provided highly promising results that supported continued development. The study showed that SER-one hundred fifty five administration resulted in a seventy seven percent relative risk reduction in bloodstream infections compared to placebo in patients undergoing allogeneic hematopoietic stem cell transplant or Allo HSCT resulting in a number needed to treat of three to prevent one bloodstream infection. This represents a compelling outcome for this high risk patient population in need of better options. SER-one hundred fifty five was generally well tolerated in the study consistent with the placebo like safety profile we’ve seen historically across our live biotherapeutic product platform.

The clinical results generated to date underscore the potential of CR-one hundred fifty five to redefine the standard of care for Allo HSCT recipients and many other vulnerable patient groups at risk of bloodstream infections. Guided by our constructive FDA feedback, we submitted a Phase II protocol to the FDA. We are pleased with the productive interactions we’ve had with the FDA to date, which have been facilitated by CR-one hundred fifty five having breakthrough therapy designation. The FDA has remained highly engaged and has indicated that they will provide further feedback on the protocol in the near future, which we expect will support finalizing the study design. The proposed Phase II study is designed to be a well powered placebo controlled study with an enrollment goal of approximately two forty eight participants undergoing Allo HSCT and with the primary endpoint of prevention of bloodstream infections.

The study employs an adaptive design with an interim data analysis once approximately half of the enrolled participants have reached the primary endpoint. Based on our operational plans and anticipated enrollment, we believe we could obtain interim results within twelve months of study initiation, thereby rapidly informing next steps in Allo HSCT development, including potential engagement with the FDA on the design of a registrational study. Those data could also support the pursuit of additional clinical development opportunities targeting adjacent patient populations at elevated risk of bloodstream infections such as patients undergoing autologous HSCT. We believe these indications as well as additional target populations that we have discussed in the past represent multiple substantial commercial opportunities for Seres. If successful, we expect that the results from the planned Phase two study would represent a very meaningful value inflection point for the company and could support advancing to a single registrational study for approval of CR-one hundred fifty five in allo HSCT.

In conjunction with the development of the study protocol, we have continued to progress operational preparations for the study, including commencing study startup activities with our CRO and advancing the manufacture of clinical supply. We are optimistic about the prospects for SER-one 155 and our broader pipeline. We are also mindful of the capital and resources required to effectively advance these programs as well as the continued challenging biotech environment. Our immediate top corporate priority is to obtain capital to enable our promising development candidates starting with CR-one 155 to progress to meaningful clinical milestones. The types of transactions we are evaluating include partnerships, out licensing deals, mergers and other types of structures with counterparties who could provide capital and other resources and which aim to leverage Seres expertise and track record in successfully bringing a live biotherapeutic product to the market.

We are in active discussions with multiple parties aiming to secure a deal. In conjunction with these efforts, we also continue to evaluate potential cost reduction actions to extend our cash runway. With that, I’ll turn the call over to Matt to discuss recent scientific progress.

Matthew Penn, Chief Scientific Officer, Seres Therapeutics: Thanks, Mirella. I’d like to review some of our recently presented data from our SER-one hundred fifty five and additional biotherapeutic programs. At the May ASCO meeting, we presented new exploratory biomarker data from the SER-one 155 Phase 1b study. These biomarker data provided evidence of the potential of SER-one hundred fifty five to promote immune reconstitution following allo HSCT through the modulation of homeostatic cytokines and peripheral T cell expansion. The results highlight the potential of role of SER-one hundred fifty five in promoting peripheral T cell recovery and immune reconstitution to support favorable outcomes post allo HSCT.

Based on the SER-one hundred fifty five clinical results to date, as well as our other mechanistic data, we believe that SER-one hundred fifty five could provide benefit to a range of patient populations at risk of bloodstream infections and other conditions. I’d like to also provide an overview of our recent activities focused on the development of our live biotherapeutics for the treatment of inflammatory and immune diseases. In May, we presented data at the Digestive Disease Week conference that reported the identification of biomarkers that can identify patients with microbiome driven disease and that can predict response to both existing IBD therapeutics and live biotherapeutic interventions. We were pleased to see that our poster entitled Candidate Biomarkers of Microbiome Disruption for Patient Selection or Stratification in Clinical Trials of Microbiome Therapies in Ulcerative Colitis received a Poster of Distinction Award in the microbiome and microbial therapy subgroup. We believe that the findings presented support the potential of live biotherapeutics as a novel treatment of reality for gut related inflammatory and immune diseases and suggest that sizable patient subpopulations well suited for this approach may be identified.

In conjunction with the partnership opportunities that Morella mentioned, we are exploring potential R and D partnerships to advance our development of our investigational live biotherapeutics in inflammatory and immune diseases, including ulcerative colitis and Crohn’s disease. These conditions impact large patient populations and biotherapeutics could provide a therapeutic approach that is highly differentiated from other drugs that are currently in use or in development with opportunities for both monotherapy and combination therapy. Additionally, the company is collaborating on an investigator sponsored trial with Memorial Sloan Kettering Cancer Center to evaluate the use of SER-one hundred fifty five for immunotherapy related enterocolitis also referred to as iREC. Seres is providing investigational product for the study. IREC is among the most frequent and severe immune related adverse events and recipients of immune checkpoint inhibitor therapy and is observed in thirty five percent to fifty percent of patients undergoing this cancer treatment.

Immune checkpoint inhibitors can cause a wide range of immune related adverse events with links to T cell biology and epithelial barrier inflammation, biological functions known from our preclinical studies and clinical pharmacology data to be positively impacted by SER-one 155. Positive data from this study would provide further support for the expansion into additional indications likely well suited for our biotherapeutic approach. With that, I’ll turn the call back to Merle.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Thank you, Matt. I’ll now turn to second quarter financial results. As a reminder, Seres has classified all historical operating results for the Voust business within discontinued operations in the consolidated statements of operations for the comparative periods presented and there was no activity in this quarter related to discontinued operations. Seres reported a net loss from continuing operations of $19,900,000 in Q2 twenty twenty five as compared to $26,200,000 in the 2024. Research and development expenses for this quarter were $12,900,000 compared to $15,800,000 in the 2024, reflecting lower costs related to the completion of the SER-one 155 Phase 1b study, lower personnel expenses and a decrease in platform investments.

General and administrative expenses were $10,300,000 in the quarter compared to $13,100,000 in Q2 twenty twenty four, driven primarily by lower personnel and related expenses including IT related. In July, we received the 25,000,000 installment payment due from Nestle as expected. As of 06/30/2025, we had cash and cash equivalents of $45,400,000 Based upon our current cash balance, the $25,000,000 payment received, voused transaction related obligations and current operating plans, we expect to be able to fund operations into the 2026. We have implemented and continue to evaluate potential cost reduction actions to extend our cash runway. As I conclude, Tom, I and the entire Seres team would like to take a moment to acknowledge and thank Eric Schaff for his significant contributions to the company over the past decade.

During Eric’s tenure, Seres led the maturation of the biotherapeutic field and successfully delivered the first ever FDA approved oral microbiome therapy to patients. We are pleased to continue benefiting from Eric’s perspective as he remains a member of the Seres Board. We also welcome Rob Rossello, an Executive Partner at Flagship Pioneering, who will be joining our Board as Paul Biondi, also of Flagship, transitions off. We thank Paul for his service on the Board. To summarize, we are making good progress advancing SER-one 155 to enable readiness for the Phase II study.

We are also progressing our efforts to secure capital and resources to enable the continued development of CR-one 155 that could capture substantial therapeutic and commercial opportunities. Operator, you may now open the call for questions.

Conference Operator: Your first question comes from the line of Joseph Thome with T. D. Cowen. Please go ahead. Your line is now open.

Joseph Thome, Analyst, T.D. Cowen: Hi, there. Good morning and thank you for taking my questions. Maybe the first one just on the potential deals. You obviously indicated a various amount of options with different structures here. I guess, how will you decide the best structure for Seres when finishing up a deal, a potential deal going forward?

What would be the ideal structure for the team, and the investor base, in your opinion? And then second, I saw on the corporate deck that you highlighted encouraging feedback from European physicians on SER-one 155. I guess is there plans to include the EU in the Phase II? And do you believe that the EMA would accept the trial design that you’ve been going back and forth on with the FDA? Thank you.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Great. Good morning, Joe, and thank you for your questions. First, with respect to the structure of a BD deal, yes, we are exploring a number of different structures and there are many types that could make sense for the company. In the first instance, we’re looking for an opportunity that provides capital to meaningfully advance our SER-one 155 program. There also are various capabilities that counterparties bring that would be helpful and additive to our resources and experience, for example, experience conducting a global study.

There are also structures we mentioned mergers as a potential where we could also leverage or the counterparty could leverage the expertise and success that Seres has had getting a product approved through the FDA in the microbiome field. But I’ll also offer my Co CEO, Tom, to provide his thoughts.

Tom DeRosier, Co-CEO and Chief Legal Officer, Seres Therapeutics: Yes, sure. Thanks, Marella. Hey, Joe. As you recall for months, we’ve been talking about our one hundred fifty five partnership process and that continues. We are having discussions with companies about somewhat simple partnership process with one hundred fifty five.

But interestingly, during that process, a banker called us and suggested that maybe as the leader in the space with all the success we’ve had with FDA that maybe we would be interested in leading a roll up of the microbiome company space. That seemed to us to be a bit too complex, but it did get us thinking that perhaps a merger with a live biotherapeutic company with clinical stage assets and a new different set of investors might be an interesting thing to explore, particularly a company who needs our expertise in clinical and regulatory manufacturing. So we actually reached out to a few and coincidentally or maybe not coincidentally, one reached out to us and we continue to be in multiple discussions on such a merger. Of course, your question, what would be best for us, we are certainly looking for substantial financial support for what we’re doing. And in any such of a merger process, we would need to have it be financeable.

But we’re optimistic given the activity that we have going now. We’re optimistic that we’ll have a deal to decide whether to do and maybe multiple deals to pick from. I’d also say it’s been really interesting to hear Commissioner McCarray talk about the importance of microbiome, healthy microbiome in the health of the population. And we’re excited that FDA is so excited about the microbiome opportunity. So we remain optimistic as Morella said the market is tough out there, no guarantees, but we’re going to continue to work hard on our BD process.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Thanks Tom. And your second question regarding EU feedback. Yes, we’ve had robust interaction with EU KOLs. These two studies will be a global study including European countries. Importantly, the design of the Phase two study is very robust.

It’s well powered. And so we are excited about the potential receptivity of EMEA, whom we will engage at the appropriate time regarding the study design. But I’ll ask Dennis if he has any further comments to add.

Dennis Walling, Senior Vice President of Clinical Development, Seres Therapeutics: Yes, thank you, Morella. I would like to add that we did have a number of engagement conversations with KOLs in the EU and we heard the same message that we have heard from our US based KOLs that is bloodstream infections in this alloHSCT population are still a major problem and a major unmet need. And every one of them was absolutely excited to be able to participate in a study looking at SER-one 155 with such a novel approach to a problem that has not been solved yet.

Matthew Penn, Chief Scientific Officer, Seres Therapeutics: Perfect. Thank you so much.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Thank you, Joe.

Conference Operator: That concludes our Q and A session. I will now turn the call back over to the management for closing remarks.

Morella Thorel, Co-CEO and CFO, Seres Therapeutics: Thank you very much for joining the call today and have a great day.

Conference Operator: That concludes today’s call. Ladies and gentlemen, thank you all for joining. You may now everyone, have a great day.

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