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Operator: Thank you for holding, and welcome everyone, to the Seres Therapeutics Fourth Quarter 2022 Conference Call. . Thank you. I will now turn the call over to Dr. Carlos — Carlo Tanzi of Investor Relations. Dr. Carlo Tanzi, please go ahead.

Carlo Tanzi: Thank you, and good morning. Our press release for the company’s fourth quarter 2022 financial results and a business update became available at 7:00 a.m. Eastern Time this morning and can be found on the Investors and News section of the company’s website. I’d like to remind you that we’ll be making forward-looking statements, including the potential approval and launch of investigational microbiome therapeutics, SER-109, and its status as a first-in-class oral therapeutic. The anticipated indication for SER-109, the availability of product supply, the potential for microbiome therapeutics to protect against infection, the use of cash to fund operations 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 Eric Shaff, Seres’ President and CEO; David Arkowitz, Chief Financial Officer; Dr. Lisa von Moltke, Chief Medical Officer; and Dr. Terri Young, Chief Commercial and Strategy Officer. During the Q&A section, Dr. Dave Ege, Chief Technology Officer; and Dr. Matthew Henn, Chief Scientific Officer, will also be available to answer questions. With that, I’ll pass the call to Eric.

Eric Shaff: Thank you, Carlo, and good morning, everyone. Seres continues to make excellent progress advancing our microbiome therapeutics pipeline. I’ll begin with SER-109. We are highly focused on securing FDA approval for SER-109, our lead microbiome therapeutic candidate for recurrent C. difficile infection, and the FDA’s PDUFA action date for this program is April 26. As we approach the FDA’s expected decision, we are also continuing our work to execute a successful commercial launch pending approval. With SER-109 we believe we may have an opportunity to transform the management of recurrent C. difficile infection and provide a meaningful new therapeutic option for patients. Our optimism is supported by compelling data from our Phase III studies.

This includes data showing high levels of durable efficacy and a well-tolerated safety profile. This clinical profile is accompanied by patient — by a patient-friendly oral route of administration. Furthermore, we believe that our proprietary pathogen inactivation process may provide SER-109 with important safety advantages. In addition to the impact that SER-109 may have for recurrent CDI, the approval of this investigational therapeutic would also be significant as this could be the first ever oral microbiome therapeutic approved by the FDA. SER-109 could represent the beginning of a broader application of microbiome-based approaches across multiple medical conditions, and we believe that Seres is well positioned to continue to lead this pioneering effort.

As we approach the FDA PDUFA decision date of April 26, our interactions with the agency continue to be highly active and, we believe, constructive. We remain on track with a priority review process, and we are optimistic about the pending approval decision. Our organization and our collaborator, Nestlé Health Science, continue to make excellent progress preparing for the SER-109 commercial launch pending a favorable approval decision. We expect to be prepared to commercially launch in the weeks following an approval. In a few minutes, Terri will provide more detail on commercial readiness activities. As we prepare for a potential SER-109 launch, we have also continued to build our SER-109 drug supply while enhancing future supply capacity.

Our goal has been to create supply to meet SER-109 market demand in all anticipated uptake scenarios, and we believe we are on track to achieve this goal. In addition, we are focused on ensuring that we have sufficient supply in the years post launch. In late 2021, we entered into a collaboration with Bacthera designed to augment our drug supply capabilities as well as to provide another layer of redundancy. I’m pleased to report that our plan in working with Bacthera is proceeding well and on track. Our CMC teams are working together in an integrated manner, and we anticipate that Bacthera will be ready to begin to produce commercial drug product in 2024 for release in 2025 as the expected number of patients treated with SER-109 expands. I’ll now pass the call over to Lisa.

Lisa von Moltke: Thanks, Eric. We are now within 2 months of SER-109’s PDUFA date. And as you might expect, this is a busy period for the organization as we approach a potential approval decision. During the last several months, we have also continued to publish SER-109 clinical data. And alongside our collaborator, Nestlé Health Science, we have continued to make excellent progress advancing appropriate educational efforts with physicians. I’d like to highlight several recent SER-109 publications that we believe further illustrate the efficacy and safety profile observed in clinical trials. We believe that SER-109 is differentiated not only by the magnitude of the efficacy observed but also by the duration of activity. In October, additional data from the Phase III ECOSPOR III study were published in the Journal of the American Medical Association, and we presented these results at the IDWeek and American College of Gastroenterology 2022 annual meetings.

These data showed that prevention of recurrent CDI was apparent as early as 2 weeks post administration and that SER-109 activity was durable with recurrence rates continuing to be markedly different from placebo at 24 weeks. We believe that the efficacy results observed, including the durability data, are clearly differentiated compared to other reported study results and highlight the substantial clinical benefit that SER-109 could provide, if approved. Last month, we announced the publication of 2 noteworthy SER-109 papers in JAMA Network Open. One summarized the results of the SER-109 Phase III ECOSPOR IV study. ECOSPOR IV was designed to provide additional safety information in adults with recurrent CDI who were treated with standard of care antibiotics — and then SER-109.

This was a 24-week study that included 263 enrolled subjects with a history of recurrent CDI, including individuals that had experienced only a single recurrence of CDI. Overall, the safety profile through 24 weeks of follow-up indicated that SER-109 was well tolerated. This was consistent with the safety profile observed in the placebo-controlled ECOSPOR III study. We also evaluated CDI recurrence rates in ECOSPOR IV. At the 8-week endpoint, 91.3% of patients remained free of recurrence, supporting positive data from the SER-109 placebo-controlled ECOSPOR III study. Our data also showed that the response was durable out to the final 24-week endpoint. Importantly, similar results were observed in all subgroups, including those with a single recurrence of CDI.

We believe the ECOSPOR IV data provide additional evidence indicating that SER-109 may provide clinical benefit to a broad population of recurrent CDI patients. Earlier this year, we also published another notable manuscript in JAMA Network Open based on secondary data from the ECOSPOR III Phase III study, which showed that SER-109 administration was associated with a rapid and steady improvement in health-related quality of life, an important patient-reported outcome as compared to placebo. Now moving to SER-155, which is being developed to reduce the risk of infection, including antimicrobial-resistant infections and graft-versus-host disease in individuals receiving allogeneic stem cell transplant. Protecting vulnerable individuals from infection is an area of particular interest to Seres, and we believe that microbiome therapeutics may provide a novel approach to addressing infection with potential widespread clinical utility in medically compromised populations.

The ongoing SER-155 Phase Ib study is being conducted in individuals undergoing treatment for hematologic malignancies, such as leukemia. The study is designed to evaluate safety and drug pharmacology, including the engraftment of SER-155 in patients’ gastrointestinal tracts. In addition, data are being collected on the reduction in abundance of bacterial pathogens in the GI tract and to evaluate clinical outcomes, including rates of bloodstream infections and acute GvHD. The SER-155 Phase Ib study includes 2 cohorts. Cohort 1 included 13 subjects that received SER-155 and was designed to assess safety and drug pharmacology, including assessing engraftment of drug bacteria in the GI tract. Earlier this year, we reported that the study’s Data and Safety Monitoring Board had reviewed available Cohort 1 clinical data in a preplanned analysis and had cleared advancement to the second study cohort.

We are now enrolling subjects in cohort 2. In parallel, we continue to analyze the pharmacology data from cohort 1, and we expect to report preliminary safety and pharmacology data in May 2023. With these pending data, we hope to observe clear evidence that SER-155 bacteria have successfully engrafted and that these bacteria are resulting in the intended pharmacological effects. We look forward to continuing to provide updates as we execute this important study. And with that, I will now pass the call to Terri.

Teresa Young: Thanks, Lisa. The commercial organization is energized and excited about the upcoming potential approval of SER-109. We have been working closely with our collaborators at Nestlé Health Science as an integrated team and are now nearing full launch readiness. We believe the SER-109 market opportunity is substantial. In fact, we estimate that there will be approximately 156,000 cases of recurrent CDI in the U.S. this year alone. This disease is significantly debilitating and isolating for patients with mortality rates estimated at over 20,000 deaths per year. Current treatment options are suboptimal, and health care practitioners and patients are eager for better solutions that can provide high levels of efficacy in a well-tolerated oral formulation.

SER-109 represents a product profile that uniquely meets patient and prescriber needs for prevention of recurrent CDI. If approved, we believe that SER-109 has the potential to transform how recurrent CDI is managed, resulting in far better patient outcomes as well as greatly reducing the burden that this disease is placing on our health care system. Our preparations for the potential SER-109 commercial launch are proceeding according to plan. I’ll also remind you that, last December, we held a webcast investor event, where we discussed our launch plans in some detail and the substantial commercial opportunity in recurrent CDI. The Seres and Nestlé teams have been executing on a number of pre-commercialization activities, including the market education that Lisa discussed, continued engagement with payers and expansion of Nestlé’s existing field sales infrastructure.

Specifically, Nestlé recently hired a hospital selling team of 20 to profile the top volume hospitals across the country during the remainder of our prelaunch phase. Post approval, this team will also cover the infectious disease specialty, and we will deploy the existing 150-person Gastroenterology sales force at Nestlé. Finally, the Nestlé payer field team continues their preapproval information exchange efforts with payers and have already engaged with payers covering more than 150 million lives. The feedback we have received so far is encouraging. Overall, I am pleased with the status of both companies’ launch preparations, and we stand ready to execute immediately if we receive a favorable FDA decision. With that, I’ll now turn the call to David to provide an overview of our financials.

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David Arkowitz: Thanks, Terri. The details of our fourth quarter and full year financials are included in the press release issued this morning, so I won’t reiterate all the figures here. Seres ended the fourth quarter of 2022 with approximately $181 million in cash, cash equivalents and marketable securities. Regarding our efforts and resources over the near term, we continue to be focused on a number of critical SER-109-related activities which include continuing to ramp up manufacturing operations for commercial supply internally and with our partner, Recipharm, including building up SER-109 commercial inventory, as well as expanding longer-term SER-109 product supply capacity through our Bacthera collaboration and in conjunction with Nestlé, continuing and accelerating launch readiness activities.

We also continue to invest to advance and expand our pipeline with a focus on infection protection opportunities and further build upon and enhance our platforms and capabilities. As we have already expanded our capabilities across much of our organization, we expect our expenses leading up to the SER-109 approval and launch to grow modestly. In summary, the company continues to be well resourced to execute effective SER-109 commercialization activities pending FDA approval and to drive our ongoing development and preclinical programs. We will also continue to efficiently deploy resources to advance our research platforms. I’ll now turn the call back to Eric.

Eric Shaff: Thank you, David. This is an exciting period for Seres as we near the potential approval of SER-109, which would be a tremendous milestone for the company and for the entire field. We approach the PDUFA date confident in the data provided to the FDA and well prepared to effectively execute a product launch pending approval. In addition to SER-109 and SER-155, we are also advancing additional promising earlier-stage microbiome therapeutic candidates. With these programs, we believe that there are significant opportunities to help additional multiple medically compromised patient groups, such as those with cancer neutropenia, cirrhosis and solid organ transplant patients. Over the course of the year, we look forward to providing you with progress updates on SER-109, SER-155 as well as our additional microbiome therapeutic programs. With that, I will conclude our prepared remarks and open the call up to questions.

Operator: . Mark Breidenbach with Oppenheimer.

Mark Breidenbach: Congrats on recent progress. Just a couple of quick ones for me. First of all, can you comment on the current stockpile of SER-109 you have available immediately upon potential launch — approval and launch. And maybe just also comment on the in-house manufacturing capacity versus what additional capacity Bacthera could add on top of what you guys can already make. And then the second question is really just maybe aimed at David. I’m wondering, in addition to the $125 million milestone that would come with potential approval in April, if you’re expecting any additional development or commercial milestones from Nestlé in 2023 that we should be keeping our eyes out for.

Eric Shaff: Yes, Mark, and thank you for the questions. Let me start with the first one, and we’ve got Dave Ege on the line, and I’ll ask him to provide his perspective, too. So in terms of stockpiling of inventory or maybe preparing for launch, what we have said is that we’ve been working on this process for some time. We’re pleased to be taking our Phase III process to launch, and we have been preparing for a number of different launch scenarios. So we’re really pleased with where we are. and we expect to be well prepared for the approval and then for launch thereafter. In terms of the divide of in-house versus what we would with CDMOs, maybe I can ask Dave to comment further on that.

David Ege: Sure. Thank you, Eric. And Mark, thanks for the question. Yes. So as it relates to the in-house and the Bacthera, so it’s been our strategy for quite some time that, as Eric mentioned just a moment ago, we’re bringing our Phase III process forward to launch. It’s adequate in scale and volume to meet the near-term forecast that we have together with Nestlé. And by design, Bacthera, as was mentioned earlier in the call, will start producing material ahead of the facility approval in 2024. And we anticipate an approval of — for that material to reach the market in 2025. So that’s augmenting capacity as the market grows as well as providing redundancy with what we had internally and with Recipharm currently.

Eric Shaff: And we’re really pleased with where we are with Recipharm and our relationship and the work that we’ve done with them. Mark, maybe on your second question, I can ask David to comment.

David Arkowitz: Yes. Thanks, Mark. So as you indicated, and as we have talked about, we are eligible for $125 million milestone from Nestlé upon SER-109 approval. The other cash flow that we expect relates to SER-109 commercial supply that we have been producing leading up to approval and thereafter. And we have been doing that at our cost. We will sell that inventory to Nestlé at or around approval, and then thereafter, there’ll be kind of — think about it as a steady cadence of purchases by Nestlé from a supply standpoint. So that will provide an initial bolus of cash coming in and then a steady supply thereafter.

Operator: John Newman with Canaccord.

John Newman: I just wondered if you could talk to us a little bit more about the initial launch targeting for SER-109. I know that you’ve got a really interesting focus on the outpatient setting. And just curious if you could talk just a little bit more about the types of physicians that you’ll be targeting initially.

Eric Shaff: Yes, John, let me start and then I’ll ask Terri to comment. But I would say that, for some time, we’ve been doing quite a bit of research and interaction with health care providers. Terri and I, with our partners in Nestlé, have spent quite a bit of time recently with a number of different folks. And I can tell you there’s a lot of excitement around the potential of SER-109. I think the idea of having a new tool to help patients in this space when it’s been so long without something that is effective, that is something that is — has a favorable safety profile, something that is, in particular, oral and scalable, we can kind of hear the hunger in the voices of those treating physicians for something new. But maybe, Terri, you can comment further on that.

Teresa Young: Sure. With the Gastroenterology sales force that Nestlé is currently deploying with one of their in-line products, we’ll be leveraging that sales team to reach their existing Gastroenterology targets, where they already have deep long-standing relationships. At launch, we’ll deploying that sales team. And we’ll also be, via that sales force, to reaching a small number of other physician extenders in those offices, NPs and PAs, for example, and other high-volume positions. So that’s the Gastroenterology outpatient sales force. I also mentioned that we recently stood up a hospital selling team that will be profiling and then ultimately selling to the largest institutions across the country that see the highest patient volume of recurrent CDI patients.

That team will, in addition, call on infectious disease physicians because, as we know, most of those ID physicians spend the vast majority of their time within the walls of the hospital. Now as a reminder, we’re targeting the hospitals, not to target the inpatient business, but as you said, rightly pointed out, rather the what I call the hospital to home segment, patients who may begin antibiotic therapy in the hospital, who are then discharged to complete their antibiotic regimen and then would also take SER-109 on the back of the completion of that regimen, therefore, in the outpatient setting. So that gives you a flavor of the type of physicians that we’ll be calling on post-approval, and we are finalizing our call plans currently as we approach the PDUFA date with our colleagues at Nestlé Health Science.

I hope that helps. Thanks, John.

Eric Shaff: Thanks for the question, John.

Operator: Ted Tenthoff with Piper Sandler.

Edward Tenthoff: Great. Certainly excited for the PDUFA date as well. I guess my question is without an AdCom, and I’m not sure that you’re at this point yet, but when it comes to label discussions, how can the conversation go around first recurrence, second recurrence, how important do you ultimately think that’s going to be to the launch and the initial success of 109?

Eric Shaff: Yes, Ted. Thanks for the question. I might ask both Terri and Lisa to comment. I will always preface our comments with — we don’t speak for the FDA and nor do we to speak to the label discussion. We have said — continue to believe that the right approach here is a recurrent label, right? And as we’ve said beforehand, physicians tend to look at this field in 2 different categories. One is a primary occurrence and the second is recurrence. And when someone has a recurrence, their microbiome has been injured to the point where they’re susceptible to future recurrences. But maybe I can ask Lisa on the regulatory side or the label side to comment on importance and then Terri can speak from the commercial side, too.

Lisa von Moltke: Yes. No. So as Eric said, we have based our desire to have the broad label on the fact that clinicians see this as a homogeneous disease once you get into the recurrent population, but it’s also based on the FDA’s own guidance. If you look at the FDA’s labeling guidance, they go into quite a bit of extensive detail on situations where pathophysiology is the same and risk benefit can be also then assumed to be the same as a reason for why they would deviate, if you will, from the exact details of how something was run in a trial. There was also a JAMA paper last spring actually reviewing the number of times that FDA does do that. And it is very — it’s fairly common. So we feel very confident given the fact that the community — the medical community already views this as a similar situation, whether you’re in first or current recurrence, whatever.

We know that’s what the pathophysiology is, and the agency has a history of looking at things with that lens. So I’ll turn it to…

Eric Shaff: Yes, Ted let’s get back to your question, which is do we think it will be important, and maybe Terri can comment on that.

Teresa Young: Absolutely. I mean, sure, the recurrent population, as Lisa said, is seen as a fairly homogenous population. And I think the person who summarized that best with Dr. Carl Crawford, in the investor event that I referenced in my prepared remarks back in December, where he described this fork in the road. So it’s clearly also important, having the broad label and being able to serve a broad population because as you look at the epidemiology of the disease, quite a few of our patients are considered in that first recurrence pool, right? So we’re very eager to finalize our label with the FDA and determine our path forward from there.

Edward Tenthoff: Great. That’s super helpful. And good luck with everything. I know you guys are going to put a lot of work getting ready.

Teresa Young: Thank you, Ted.

Operator: Chris Shibutani with Goldman Sachs.

Stephen Sloan: This is Stephen on for Chris. I was wondering if you could comment on what Q1 metrics that you and Nestlé plan to share during the early launch that we and investors can track the launch. And also related to that, will prescription trend data be available through services like ?

Eric Shaff: Yes. Thanks for the question. I’ll start, and maybe Terri can add some color. We have not gotten to the point where we’ve disclosed what the launch metrics will be. We are in the process of working through that with our partners at Nestlé. We have said, and we can reiterate that there are 156,000 cases of recurrent C. diff in the U.S., and I think our enthusiasm has only grown based on our recent interactions with HCPs. But maybe, Terri, you can comment further on how we think about metrics, and then we will be coming to the Street in the relative short term with a set of parameters that we expect to provide.

Teresa Young: Yes. I think the only thing I can say to build on that is maybe to tackle your second question, which is around the availability of prescription data. We’re not anticipating that, that would be broadly available because we are, as I’ve mentioned previously, going to be very careful and deliberate with our distribution partner selection. We are working with a small number of very experienced specialty pharmacies in order to provide the best in-class patient experience when physicians and patients begin to use SER-109. So we really want to control that experience. And so one way to do that is by being very selective with distribution partners. Thanks for the question.

Operator: Peyton Bohnsack with TD Cowen.

John Bohnsack: This is Peyton on for Joe. Congrats on very productive last year, I was guessing just maybe the first one, how are you thinking about pricing, especially given that is now available? Are you guys are waiting for being comparable for course?

Eric Shaff: Yes. Thanks for the question. So I think the way we would say it is, we don’t think that there are great comps in the space for 109. And as we talked about actually at the Cowen conference yesterday, really what we think about when it comes to price is value, what kind of value are we delivering to the patient in terms of efficacy, in terms of safety, in terms of route of administration. And in the recurrent C. diff space, there just hasn’t been the type of profile that we have with SER-109. And as Terri and I have interacted with HCPs, I think that, that resonates with us, that this is different, right? And the type of value and the type of innovation that we’re delivering is not comparable to standardized FMTs, not to antibodies, not to other types of antibiotics.

It just is different. So we are in the process of working with our partners at Nestlé to finalize a price that is reflective of the value that we can provide but also represents the opportunity to deliver value to the system. If patients recur, they’re more likely to recur again. And if you think about the cumulative costs of recurrence upon recurrence, these can be really sick patients, and they can have comorbidities. So if you can stop that cycle of recurrence, you can create value for the patient, you can create value for the system. We think we can create value for shareholders. That’s a win-win. So that’s how we’re thinking about it.

John Bohnsack: Great. That’s really helpful. I mean I guess now moving on to the SER-155 program, and we’re looking forward to the data update in May. Could you maybe comment about like the level of excitement and feedback for the therapy you’ve seen at the initial sites and in cohort 1? And maybe give a range about how quickly you’re thinking cohort 2 can be enrolled based off that feedback and what you’re thinking about in terms of success for cohort 2.

Eric Shaff: Yes. Maybe I’ll ask Lisa to comment on both, Peyton. I mean we have a lot of excitement. I’ll tell you, there’s a disproportionate amount of our time, energy — and if I think — yours and others focus on 109, but we think that 109 is really just going to be giving up the story as it relates to the microbiome and our ability to help patients. So 155 is up next. We were really pleased to clear the preplanned DSMB at the end of the year and go into cohort 2. We were really careful and deliberate with the first cohort knowing that this is a fundamentally more complex patient population than what we’ve dealt with in the past. But we have increased the number of sites into the second cohort, and we do expect to move more quickly. But maybe Lisa can comment more on the excitement within our partners on the HCP side as it relates to 155.

Lisa von Moltke: Yes. The excitement really has been very sustained. I mean this is a big problem, both infections and GvHD are big problems in this population. And there are no great options. And I think we’re doing this trial on the backdrop of a time when antimicrobial resistance is also really coming to the fore as an issue for patients who need a lot of antibiotics, and that’s certainly this population. So we have a lot of interest, and we expect that interest to continue to fuel enrollment in cohort 2. And you asked about the kinds of things we’re looking for. I think there’ll be some of the same things we’ll be looking for in cohort 1, including the engraftment and function of the bacteria, pathogen reduction in the GI tract as well as clinical sequelae such as reduction in neutropenia and fever, potential reduction in infection and reduction in bloodstream infections in particular.

Eric Shaff: And maybe we can ask Matt just to comment. As usual, Peyton, our microbiome analyses and our clinical studies, we think, are incredibly important data sets. And maybe Matt can comment on how we think about the one that’s coming up with 155 in the first cohort.

Matthew Henn: Sure. I think Lisa hit on the key points. But from a pharmacological data perspective, we really are focused on some of the key mechanisms of action of the drug. So of course, engraftment is going to help inform our dosing strategies in this particular population. And as Eric and Lisa pointed out earlier, we had a favorable report from the Data Safety Monitoring Committee with respect to cohort 1. So of course, observing drug on board and having that favorable safety profile will be something we’ll be looking for. And then in terms of actually trying to understand the drug’s pharmacology with respect to infection, we will be looking at the reduction in bacterial pathogens. And of course, that has significant meaning on a couple of different fronts.

One, as we reduce that abundance, we would anticipate decreasing the likelihood of translocation events. So the bacteria moving from the gastrointestinal tract into the bloodstream to lead to bloodstream infection, as well as the potential reduced patient-to-patient transmission. So we’ll be looking at those types of factors. And of course, SER-155 is a designed consortia that was optimized for a certain set of pharmacological properties that include this passage of abundance but as well as protecting and repairing the epithelial barrier. And so we’ll be looking for those types of signatures in the data as well.

Eric Shaff: Thanks for the questions, Peyton.

Operator: There are no further questions at this time. It is now my pleasure to turn it back over to management for final remarks.

Eric Shaff: So thank you, operator, and thank you all for joining us this morning. We look forward to keeping you updated on our progress. Thanks again, and have a great week.

Operator: This concludes today’s call. We thank you for your participation. You may now disconnect.