Yahoo Finance Seres Therapeutics Inc (MCRB) Q1 2024 Earnings Call Transcript Highlights: Strategic Insights ...
Net Sales: VOWST Q1 net sales were $10.1 million.
Units Sold: 642 units of VOWST sold during Q1.
Gross-to-Net Reductions: Estimated at approximately 15% for Q1.
Inventory Levels: Approximately two weeks of VOWST inventory in the channel at specialty pharmacies, consistent with end of last year.
VOWST Supply Purchases: $7.4 million worth of VOWST supply purchased by Nestle from Seres in Q1.
Payments Received: $8.7 million in payments from Nestle related to prior quarter purchases.
Total VOWST Loss: $14.3 million in Q1, with Seres' share being $7.1 million.
Collaboration Expenses: Decreased from the prior quarter due to lower external costs and prior period adjustments.
R&D Expenses: $21.7 million in Q1, reduced from $44 million in the same period in 2023.
G&A Expenses: $15.5 million in Q1, down from $22.5 million in the same period in 2023.
Cash Position: $111.2 million as of March 31, 2024, compared to $128 million at the end of 2023.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
FDA approval of VOWST marked a significant milestone for Seres Therapeutics Inc (NASDAQ:MCRB), establishing its leadership in the microbiome therapeutic field.
Successful commercial launch of VOWST for recurrent C. difficile infection in collaboration with Nestle Health Science, showing initial adoption and positive impact on patients.
Recent refinements in launch execution by Nestle, including retraining sales teams and expanding HCP call lists, have led to a noticeable acceleration in VOWST net sales during March and April.
Encouraging clinical data from SER-155 Phase 1b cohort 1, showing favorable tolerability and potential efficacy in preventing infections in immunocompromised patients.
Strong financial position with $111.2 million in cash and cash equivalents, providing runway through upcoming SER-155 Cohort 2 data readout and into Q4 2024.
Negative Points
Lower than expected growth in VOWST sales during the first quarter of 2024 compared to Q4 2023, prompting a need for accelerated demand.
Dependence on Nestle's execution for VOWST commercial success, as indicated by the need for significant refinements in their sales strategy.
Potential financial instability highlighted by a notice of default from lender Oaktree regarding a milestone payment dispute with Bacthera.
High reliance on future sales performance and additional capital raise to continue funding operations and research initiatives.
Challenges in expanding VOWST usage beyond the multiply recurrent patient group to include those with first and second recurrences.
Q & A Highlights
Q: Could you remind us if there were any price changes for VOWST this year, and what's occurring with gross prices? A: Eric Shaff, President and CEO of Seres Therapeutics, mentioned a 6% price increase at the end of last year, bringing the wholesale acquisition cost to $18,550. Teresa Young, EVP and Chief Commercial and Strategy Officer, added that Nestle has refined the execution of their sales strategy, which is crucial for accelerating VOWST's market performance.
Q: Can you discuss the efficacy endpoints for SER-155, particularly what investors should focus on for the upcoming data readout? A: Eric Shaff highlighted the focus on engraftment and safety in the ongoing Phase 1b study of SER-155. Lisa von Moltke, EVP and Chief Medical Officer, emphasized looking at the decrease in incidence of neutropenia, fever, and bloodstream infections, which could indicate broader applications for SER-155 beyond the current study population.
Q: How should we think about the launch trajectory of VOWST over the next few quarters, especially considering the flat net sales quarter-over-quarter? A: Eric Shaff expressed optimism about achieving growth based on recent sales improvements in March and April. Teresa Young noted that Nestle's adjustments in their sales strategy are expected to drive further acceleration in VOWST's performance.
Q: Can you speak to any cost modifications resulting from the revised sales strategy and efforts from Nestle? A: Eric Shaff indicated that Seres Therapeutics is actively managing costs while ensuring they do not compromise clinical development plans or the growth potential of VOWST. Marella Thorell, CFO, mentioned ongoing efforts to optimize costs in collaboration with Nestle.
Q: Regarding SER-155, given the current strength of your balance sheet and the importance of VOWST, how likely are you to partner out SER-155 opportunities? A: Eric Shaff explained that while specific plans for partnering SER-155 were not disclosed, the company is actively considering various options to support the program and enhance shareholder value, keeping in mind both short-term and long-term benefits.
Q: What is the status of the inventory increase on the balance sheet and the transition to Bacthera for manufacturing? A: Marella Thorell addressed that the inventory buildup is in anticipation of transitioning manufacturing to Bacthera, aiming to ensure continuity and support for VOWST's market demands.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
