Seres Therapeutics, Inc.

Good morning, ladies and gentlemen, and welcome to the Series Therapeutics Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Dr. Carlo Tanzi of Investor Relations.

Thank you and good morning. Our press release with the company's second quarter 2021 financial results and a business update became available at 7 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 relating to the timing, enrollment, and results of our clinical studies, the anticipated safety profile of our products, regulatory approval, the success of our agreement with Nestle, the sufficiency and availability of cash to fund operations, and the promise and potential impact of any of our microbiome therapeutics. 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 am joined by President and Chief Executive Officer Eric Schaaf, Chief Financial Officer David Arkowitz, and Chief Scientific Officer Matthew Henn. During the Q&A portion of the call, we will also be joined by our Chief Medical Officer, Lisa Valmolke, and Dr. Terry Young, our Chief Commercial and Strategy Officer. And with that, I'll pass the call to Eric.

Thank you, Carlo, and good morning, everyone. The last several months have been an eventful period for CERES. We have made substantial progress advancing our LEAD-0109 program towards a BLA filing for recurrent C. difficile infection. We signed an important SIR 109 co-commercialization agreement with Nestle Health Science covering the North American region. We obtained top-line clinical results for our SIR 207 program, and we have also continued to make clinical development progress with SIR 155 and SIR 301, our next-generation rationally designed pipeline candidates. Last month, we held two conference calls focused on our CDI and ulcerative colitis programs, and today we intend to keep our remarks relatively brief. I will begin today with SIR 109. Our top corporate priorities are to complete the required SIR 109 safety database through our ongoing open-label study and to prepare for a high-quality BLA filing. We are very pleased with our progress with the enrollment of the Open Label Study, and we are on track to achieve the full 300 patient target later this quarter. Our organization is also preparing for a successful commercial launch. To support this effort, in early July, we entered into an agreement with Nestle Health Science to jointly commercialize CR109 in the United States and Canada. We believe that through this agreement, CERES is well positioned to effectively bring CER-109 to patients suffering from recurrent CBI. The transaction also provides CERES with substantial capital to drive the continued development of our earlier stage pipeline of microbiome therapeutics, including CER-301 and CER-155, our preclinical stage programs, as well as our platform capabilities. Under the terms of the Nestle agreement, Ceres received an upfront license payment of $175 million and is eligible for an additional $125 million upon FDA approval of CER-109 and $10 million upon approval in Canada. The agreement includes sales target milestones, which, if achieved, could total up to $225 million. Upon commercialization, Ceres will be entitled to an amount equal to 50% of the commercial profits. We are very pleased with this transaction from both a strategic and financial perspective. As you may remember, Nestle previously owned ex-North American rights to CR109 based on our 2016 deal. There are considerable efficiencies and benefits to a global approach to commercializing CR109 in terms of marketing, pricing and reimbursement, executing an effective global regulatory strategy, and other aspects of launch that will maximize value. Nestle has been a great collaborator to CIRES, and we look forward to continuing to work closely with them moving forward. We expect CIR-109 to become the first ever FDA-approved microbiome therapeutic. CIR-109 approval and launch would represent a landmark event for the field, and in addition, we believe that CIR-109 represents a substantial commercial opportunity for CIRES. Each recurrence of CDI has been estimated to result in approximately $34,000 in direct healthcare expenses. The recurrent CDI population includes approximately 170,000 cases in the U.S., and we believe we have the opportunity to address this entire patient group. Since announcing our positive CR109 Phase III data last summer, we've observed a steady increase in the awareness and excitement of the medical community for this product. The substantial interest in CR109 has also been seen in the enrollment of our ongoing open-label study, and in fact, July was our highest month of enrollment to date. The SIR-109 open-label study is now approaching full enrollment, and we believe to achieve target enrollment late in the third quarter. The FDA has requested that six months of safety follow-up from this study to be included in the safety database. Completion of this database will support a SIR-109 VLA filing, and this would represent completing a major requirement to potentially enable SIR-109 to become the first-ever FDA-approved microbiome therapeutic. In addition to SIR-109, we are advancing a pipeline of additional investigational microbiome therapeutics. Last month, we reported top-line clinical results from our SIR-287 Phase IIb study. The SIR-287 Phase IIb study did not demonstrate clinical benefit in patients with mild to moderate UC. The results of the study were unexpected, and we are now focused on obtaining microbiome results from that study. We expect these data to provide us with a much deeper understanding of the study outcome and why the results were so different from the prior Phase 1B study data. In addition, these results will provide us with valuable information that will provide insights to inform continued development of our pipeline, including SIR 301, our next generation investigational candidate for ulcerative colitis. As we have successfully done with our SEER-109 program, in the coming months, we intend to perform an in-depth scientific analysis of all Phase IIb study results, learn from the data, and determine what modifications to implement in our future microbiome therapeutic development efforts. I'll now pass the call to Matt to discuss our earlier stage pipeline programs.