Seres Therapeutics on track for its second revolutionary microbiome product

Bloodborne infections are the next mountain for microbiomic products to climb

So many bugs make up a microbiome

The microbiome is now firmly established as a new scientific discipline, which addresses the 100 trillion microbes that regard each of us humans as home. It is early days as the various habitats that humans provide for microbes get discovered. Our gut is the most studied home for microbes and the connection between gut microbes and various aspects of a healthy human are becoming clearer. Here I address medical aspects of the microbiome, before focusing in on the potential for new classes of medicine from emerging microbiome companies. The article is mostly an update on my two previous articles (here and here) concerning Seres Therapeutics (NASDAQ:MCRB), because my take is that Seres continues to lead the pack with exciting new developments. Having expressed confidence, I acknowledge that the investment community remains blissfully unaware of the revolution that is unfolding and Seres remains in a fragile state.

There are a lot of microbiome companies

It is now acknowledged that the microbes in our gut are not passive passengers but they interact with us in many ways. There are a number of companies that emphasise microbiomic credentials, but most of them end up selling probiotics with questionable impact. Very few companies take their probiotics to clinical trial.

Zoe

Zoe is an interesting company and it has respectable presence (eg papers in top journals, Nature Medicine ). They use smart science to provide advice about diet, which includes the influence of your diet on your gut microbiome. They are not a pharmaceutical company developing microbiomic products (ie living bacteria) to address disease. The microbiomic assessment is interesting but it is used to provide insights into better diet. Effectively Zoe claims superior advice on improving your health through diet, based on their combination of microbiome analysis, blood testing, blood sugar monitoring and analysis of what you eat.

Pendulum Therapeutics

Pendulum was founded in 2013 in California. It’s founders have a strong pedigree in microbiomic science. Pendulum also has quality investors both from sophisticated VC stage investors (eg Khosla Ventures), as well as industry players (eg Mayo Clinic and Fonterra Co-Operative Group Ltd (NZE:FCG), a New Zealand-based dairy co-operative company, with a strong research presence including in microbiomics). Pendulum has a special focus on glucose control via their GLP-1 Probiotic. They have a Phase 2 trial investigating impact of daily GLP-1 Probiotic consumption on food craving and plasma GLP-1 levels.

Treat Therapeutics

To show how trendy the microbiome has become, consider Treat Therapeutics, a 4 year old UK startup focused on improving the health of dogs with probiotics based on a microbiome sample assessment. The science is credible, but it is still a probiotic pitch which involves one of 4 products. There is some logic to the products, but it is definitely a microbiomically-leveraged probiotic play.

Focus on microbiomic products

The above is just a snapshot from a significant number of companies that use the microbiome as part of their positioning. None are stock market listed and so they are not available to most investors.

Paying attention to your gut bacteria is an important angle to focus on for healthy eating. This is a critical issue for Western societies, but the microbiome is but one of a number of issues that impact body health.

My focus on the microbiome from an investment perspective relates to finding companies seeking to develop microbiomic products that can address/cure health issues that are intractable in modern medicine. The microbiome has both “good” and “bad” microbes (bacteria, viruses and fungi). Most studies focus on the gut microbiome because it impacts many bodily functions. The “good" bacteria get involved with making food more available (eg digesting fibre), while “bad” bacteria make for upsets. Another critical role that the gut microbiome’s microbes get involved with is the body’s defence (immune) system. There are both “good” and “bad” bacteria involved with managing the body’s immune system. Our immune system is like an army. Like any army it is crucial to have the army do the job it needs to do and, most importantly, to go back to base when an invader is conquered. A well adjusted microbiome helps in this process, while diseases with messed up immune function (eg inflammatory bowel diseases) undoubtedly have a microbiomic component which keeps the army (immune system) on attack, including the patient’s own body.

Other areas where the microbiome is relevant include a significant focus on the role of the gut microbiome in brain health, but it remains early to have a sense of what microbiomic products in this area might look like and what kinds of metrics will be used to evaluate progress in this area. US literature listing PubMed records 2712 publications on the microbiome and brain in the past 12 months. These include some excellent reviews concerning, for example, how the gut microbiome interacts with the brain in terms of emotional and cognitive performance. There is optimism that new treatments will come through understanding changes that happen in the brain as a result of microbiome changes. Looking at the publications cited in PubMed provides a fascinating insight into factors involved in gut (microbiome)-brain interactions including age, diet, stroke, accidents etc.

There is only 1 company with a FDA approved oral microbiome product

To bring you back to earth from the exciting stuff mentioned above, it is important to note that at the start of 2025 there is but a single oral microbiomic product (Seres VOWST for preventing recurrence of CDI) that has been approved by the US FDA (in 2023), a key gatekeeper for new medicines.

I’ve covered previously the story of Seres’ growth and how it developed VOWST to prevent recurrence of the worst hospital and aged care facilities infection. Here is a link to a report with more details about the development of VOWST and its impact.

In my above-mentioned article, in addition to discussing the new product VOWST, I mentioned a concerted attempt to destroy Seres through a sustained shorting attack which almost succeeded. The share price remains to this day below $US1. A consequence of the short attack has been that unfortunately for Seres it has had to sell its VOWST product to Nestle (OTCPK:NSRGF). Nestle was already a major funder of the VOWST program, but success with the FDA left Seres dangerously low on cash. The challenge for an emerging biotech company (even a 15 year old one!) is to remain solvent. Seres received a $US50 million instalment from Nestle in early 2025, with a final payment of $US 25 million expected in July 2025. These payments allow Seres to proceed with its SER-155 clinical program through early 2026.

The sale of the VOWST rights to Nestle is not a total disaster as I indicated in a second article in November 2024. The thing is that while the VOWST product is a revolutionary new product, it is a primitive microbiomic product because the live bacteria comprising VOWST have been purified from donors. The next Seres product (SER-155) involves a mix of bacteria that have been cultured in a fermenter. For lots of reasons this has to be the future for live microbiomic products (rather than from stool donors). Exiting the manufacture of VOWST has meant a substantial downsizing and refocusing of Seres business.

Seres Q4 2024 earnings call transcript and 2025 AGM

On March 13 2025 Seres presented its Q4 2025 Earnings Call and also announced its AGM 2025 for April 10.

I covered a lot of detail on the new direction for Seres after sale of VOWST in my previous (November 2024) Substack concerning Seres Q3 2024 results. The key developments were focus on SER-155, a new generation microbiomic product composing bacteria grown in fermenters rather than purified from donors. The second key development is a switch to focus on life threatening bacterial and fungal infections in the blood. Only one quarter later Seres has presented significant progress concerning its SER-155 program with Breakthrough designation added to SER-155’s already Fast Track designation.

With lots of interaction with the FDA, Seres expects to submit a draft protocol to the FDA in Q2 2025. The plan is for a primary efficacy endpoint of reduction in bloodstream infections at 30 days post allogeneic hematopoietic stem cell (allo-HSCT) transplant. Seres is discussing other patient populations impacted by bloodstream infections. This additional planning for SER-155 is expected to be part of strategic partnership discussions to accelerate the SER-155 studies.

The most exciting discussion on the Q4 2024 call concerned exciting biomarker results which start to bring into focus for microbiomic treatment, patients living with inflammatory bowel disease, including Ulcerative Colitis and Crohn’s disease. These opportunities would substantially extend market opportunities beyond the already substantial allo-HSCT patient market.

On March 13 Seres also presented a Proxy Statement for consideration at the April 10 2025 AGM. This is a comprehensive document covering 8 proposals, including election of Directors, approval of auditor and 2025 Incentive Award Plan, but probably most substantively a proposal to approve a reverse stock split of between 5:1 and 50:1 at the discretion of the Board. This includes the discretion of the board not to do a split. This is a single decision point relevant to maintaining NASDAQ listing (share price above $US1).

Seres AGM April 10 2025

As indicated above the March 13 2025 Proxy statement and AGM announcement included an important issue to be decided at the AGM concerning the ability of Seres to maintain its NASDAQ listing. Stocks listed on the NASDAQ need a stock price above $1 and Seres has struggled to achieve this over the past 12 months; it has a May 6 2025 deadline from NASDAQ to correct this Stock price shortfall.

A significant short attack has kept up the pressure, with 9.88% of Seres stock still shorted today. The Board faces a decision as to whether to delist from NSADAQ and list on for example the pink sheets, or to undergo a reverse stock split to maintain its NASDAQ listing by ensuring that the share price stabilises above $1. The recommendation at the AGM is to give the board the option to choose either not to undergo a reverse stock split or to choose a number (between 5:1 and 50:1) to reduce the number of shares on offering. The board has made clear that this proposal is NOT part of a strategy to take the company private. The board acknowledges that a reverse split may discourage a takeover attempt, but this is not a reason for the proposal. The board explicitly states that it is not aware of any attempts to take control of the company. They emphasise that it is about maintaining the NASDAQ listing.

There is interesting disclosure of majority share ownership of Seres, with 3 owners with more than 5% of common stock and Directors and Executive officers holding 4.7%. The three substantial owners are :

· Entities affiliated with Flagship Pioneering 13.3%. Regarding Flagship ownership, all shares are controlled by Noubar Afeyan.

· FMR LLC 12.5%. Boston based FMR LLC is one of the largest global asset managers and it is ~40% owned by Abigail Johnson, family and affiliates, with the remainder of shares owned by current and former executives. Regarding the Seres shares owned by FMR LLC, it appears that Abigail Johnson has the sole discretion over these shares.

· Nestle SA 12.5%

The above is a curiously concentrated ownership and control of 43% of the Seres (MCRB) shares.

Seres has a high quality board of 9 members. Several members have deep history with major Seres shareholders.

Three have strong associations with Noubar Afeyan’s Flagship Pioneering :

CEO Eric Shaff was VP Corporate Finance at Momenta Pharmaceuticals, another company in Noubar Afeyan’s Flagship Pioneering stable;

Stephen Bereson Seres Board Chairman has a long history with Flagship Pioneering; he has been a Managing Partner since 2017;

Paul Biondi is a Managing Partner & President Pioneering Medicines at Flagship Pioneering since 2019.

Hans-Juergen Woerle is a recent Seres Board appointee (February 2025) who has served as Chief Medical Officer and Chief Scientific Officer at Nestle Health Science SA since November 2018. He joined the Seres board and the Science & Clinical Development Committee as part of rights granted to Nestle as a result of their equity investment as part of the VOWST transaction.

Microbiome companies seeking new approvals from regulatory bodies (FDA or EMA)

Modern medicine struggles with diseases that arise from the immune system getting out of control and attacking the body when it should be back at base. It is now clear that the microbiome is involved with this, especially with diseases involved with the integrity of the gut wall. This is crucial because a “leaky” gut can mean bacterial infection of the blood (through bugs escaping from the gut into the blood), which can be life threatening and is hard to treat.

There are two companies (Seres Therapeutics (NASDAQ:MCRB) and MaaT Pharma (MAAT.PA)) with microbiomic products in advanced development for the above blood born bacterial issues. Seres is working towards a Phase 2 or Phase 2/3 trial in the US with a cultured bacterial product SER-155 which they hope will lead to FDA approval. MaaT Pharma has a successful Phase 3 trial in Europe with MaaT013 which is a donor-derived microbiomic product. It expects to submit for EMA (European Medicines Agency) approval in June 2025.

In this article I’ve focused on updating the Seres story, but I note that Maat Pharma, which had its IPO November 2021 on the Euronext Paris regulated market (ticker MAAT.PA) has interesting recent developments, although its current products are donor-derived rather than cultured products. While MaaT Pharma’s stock performance is less disastrous than that of Seres, it is still down 32% year on year and down 55% since listing. For those wishing to get a sense of the MaaT Pharma business, it has recently completed a Euro13 million raising and summarised the current status of the business, which makes interesting reading.

Conclusion

As I’ve indicated in this article, the microbiome has now begun the transition from a research-based field to having a portfolio of products in the biotech/medical areas. It is still very early days and there are no really well established public microbiome companies. There are lots of companies using microbiomics for marketing purposes and a few companies with links to major companies that have an eye on an emerging clinical microbiomic market. Currently Nestle is probably the biggest company with an interest (and substantial holding in Seres) in commercialising this area of living microorganisms as medicines. It remains to be seen how Nestle performs as it takes Seres VOWST product to global markets. Also for the future is what role (if any) Nestle will have in the next phase of the Seres business. Owning 12.5% of the business and a seat on the board would suggest that Nestle has a serious interest in Seres success. I’ll breathe easier as a Seres investor if/when the company’s future is clearer and the shorters disappear. I’m still of the view that success for Seres is pretty important for the future of microbiomics as a new and vibrant area of medicine.

I’m not a financial advisor but I’ve lived the biotech startup world personally, so I know the game. I hope that my comments about Seres might be of interest to you and your financial advisor at the risky end of a biotech portfolio, if you are brave enough to play in this space.