Seres Therapeutics, Inc.

a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Dr. Carlo Tanzi of Investor Relations. Please go ahead.

Thank you and good morning. Today, before market opens, We issued a press release with our third quarter 2025 financial results and business updates available on the investors and news section of our website. We've also posted an updated corporate presentation. Before we begin, I'd like to remind everyone that we're making forelooking statements, including statements around the results of our current or planned clinical trials, studies, and data readouts, our product candidates and their potential benefits, development plans, and potential commercial opportunities, interactions with and feedback from the FDA, our ability to secure an R&D or other partnership and or generate or obtain additional capital, financing, or other resources, our plan's strategic focus and operating plans, cost reduction actions and anticipated benefits and cash runway, the timing of and the foregoing, and other statements which are not historical facts. Actual results may differ materially due to various risks and uncertainties, and other important factors described under risk factors in our recent SEC filings. We undertake no obligation to update these statements except as required by law. On today's call with prepared remarks are Mirela Thorell, our co-chief executive officer and chief financial officer, and Dr. Matthew Henn, our chief scientific officer. Additional members of the management team, including Tom DeRosier, co-CEO and chief legal officer, Terry Young, chief commercial and strategy officer, and Dr. Dennis Walling, SVP of clinical development, will be available during the Q&A portion of the call. And with that, I'll turn the call over to Mirella.

Thank you, Carlo, and good morning, everyone. We made good progress during the quarter. Our immediate priority remains advancing CR155, our lead investigational oral live biotherapeutic for the prevention of bloodstream infections, or BSIs, in adults undergoing alloHSCT into a Phase II study. We believe that results in this study, if positive, could represent a very meaningful value creation event for the company. CR155 represents a first in class mechanistically differentiated approach to address infections, including bloodstream and antimicrobial resistant infections, which are among the causes of mortality in medically compromised patients. In the Phase 1B study, treatment with CR155 led to an impressive 77% relative risk reduction in bacterial bloodstream infections, along with decreased antibiotic exposure and febrile neutropenia. The therapy is designed to decolonize gastrointestinal pathogens, improve epithelial barrier integrity, and restore immune balance. addressing root causes to prevent BSIs and therefore reduce antibiotic use, antimicrobial resistance, and often severe or fatal outcomes. Based on our analysis of the commercial opportunity, we believe that CR155 could transform how alloHSCT patients are managed and result in meaningfully improved patient outcomes. In September, we obtained further constructive feedback from the FDA on the CR155-LOHSCT program, which has received breakthrough therapy designation, phase two protocol. Based on the feedback received, we are pleased to have alignment on multiple key study parameters, including study size, dosing regimen, primary efficacy endpoint, and the interim analysis plan. we do not believe there are any gating items to commencing the study from a protocol standpoint and are incorporating FDA feedback into the protocol. Notably, given the planned study design and our experience in this therapeutic area, we expect to be able to efficiently generate Phase II data in alloHSCT patients, and we estimate that we will obtain meaningful placebo-controlled clinical results from a planned interim analysis within 12 months of study initiation, with commencement being funding dependent. Beyond the initial alloHSCT indication, we see significant expansion potential across other medically vulnerable populations, including autologous HSCT patients, cancer patients with neutropenia, CAR T therapy recipients, and other medically compromised patients such as those in the ICU who face similar infection risks and unmet needs. Collectively, these represent a multi-billion dollar commercial opportunity in patients facing high unmet need and where there has been limited therapeutic innovation. As Matt will discuss, we also have an ongoing investigator sponsored study at Memorial Sloan Kettering Cancer Center evaluating CR155 in an indication beyond infection that is of high interest, and we look forward to obtaining initial clinical results in early 2026 that may highlight the potential of CR155 in immune-related negative clinical outcomes. While we advance CR155 phase two study startup activities, we continue our efforts to seek capital in order to initiate the study and support our broader portfolio of product candidates with applications in inflammatory diseases. Advancing CIRA 155 is our top priority and we continue to strive to obtain the resources needed to move the program forward. During the quarter, we also implemented targeted cost reduction measures including a workforce reduction of approximately 25% to extend our cash runway and focus resources on core development priorities. We believe that the cost reduction actions, the resultant operating runway extension, will provide us with additional opportunities to advance our strategic priorities. With that, I'll turn it over to Matt.

Thank you, Marilla. CIRES continues to execute its R&D strategy with efficiency and discipline, with a focus on expanding the reach of CIR-155 and building on key clinical insights to advance our broader biotherapeutic pipeline. Our recent successes in clinical translation and leveraging external collaborations, as well as securing non-dilutive funding, allows us to evaluate important new opportunities for CIR-155 in additional patient populations. We are thrilled to have recently announced that CERES has received a non-dilutive award from the Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator, or CARB-X, of up to $3.6 million. This award represents the second CARB-X grant to CERES and will support the development of an oral liquid formulation of CR-155, which is intended to expand future access to this biotherapeutic in medically vulnerable patients who cannot easily swallow capsules. including patients in intensive care units and some pediatric and elderly patients. Furthermore, we believe that this CARB-X award underscores the global recognition of the potential of our biotherapeutic approach to address antimicrobial resistance, a major global public health issue, and a top strategic priority for CARB-X. Additionally, at the recent ID Week Conference, CIRES presented new post-hoc analyses from our CIR-155 Phase 1b study in alloHSCT, which provided deeper insights into bloodstream infection patterns, antimicrobial resistance, and clinical outcomes across treatment groups. These data further support CIR-155's differentiated mechanism and its potential to reduce serious infections in patients with limited therapeutic options. Also notably, our collaboration with Memorial Sloan Kettering Cancer Center on an investigator-sponsored trial initiated by a clinician evaluating SIR-155 in patients with immune checkpoint inhibitor-related enterocolitis, or IREC, continues to progress, and the study is currently enrolling subjects. IREC is among the most frequent and severe immune-related adverse events in recipients of immune checkpoint inhibitor therapy and can be observed in up to 50% of patients, with rates varying based on cancer drug and treatment regimen. 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 shown in our preclinical studies and clinical pharmacology data to be positively impacted by SIR-155. IREC can be a serious condition characterized by diarrhea, abdominal pain, cramping, dehydration, and blood in the stool, and may progress to more serious complications such as bowel perforation, toxic megacolon, or death. Management of IREC includes corticosteroids and other immune-suppressive drugs and can require withholding immune checkpoint treatment. We expect data will be available from this study early next year. We also continue to explore potential R&D partnerships to advance the development of our investigational live biotherapeutics in inflammatory and immune diseases, including ulcerative colitis and Crohn's disease. These represent large patient populations with a continued need for new mechanisms of action, in particular therapies that can target epithelial barrier-driven inflammation and that are not immunosuppressive. Clinical and preclinical data generated through support from the Crohn's and Colitis Foundation support the potential use of our biotherapeutics to address these unmet medical needs and provide a new approach to treat these conditions, either as a monotherapy or combination therapy. We continue to advance our novel biotherapeutics using highly focused, data-driven approach and look forward to continuing collaboration with our clinical and academic partners to bring important new therapies to patients in need.

Thank you, Matt. I'll now turn to the third quarter financial results. As a reminder, Ceres has classified all historical operating results for the Voust business within discontinued operations in the consolidated statement of operations for the comparative periods presented, and there was no ongoing activity in this quarter related to the discontinued operations. Ceres reported net income from continuing operations of $8.2 million in Q3 2025 as compared to a net loss from continuing operations of $51 million in the third quarter of 2024. The results this quarter are comprised of a $22.5 million loss from operations offset by a $27.2 million gain on the sale of Vaust resulting primarily from the $25 million installment payment received as expected from Nestle during the third quarter. R&D expenses for this quarter were $12.6 million compared to $16.5 million in the third quarter of 2024, reflecting lower personnel and related costs, a decrease in platform investments, and a reduction in clinical expenses resulting from the completion of the SEER 155 Phase 1B study. G and A expenses were $9.5 million in the quarter compared to $12.7 million in Q3 2024, driven primarily by lower personnel and related expenses, including IT-related expenses. As of September 30, 2025, Ceres had $47.6 million in cash and cash equivalents. Based on the company's current cash position, remaining vouched transaction-related obligations, and current operating plans, we expect to fund operations through the second quarter of 2026. To summarize, we are disciplined in managing our expenses and continue to work towards securing additional capital to support development activities. In early 2026, we expect to obtain additional CR155 clinical results, which could highlight therapeutic opportunities in a new patient population. We have also made progress advancing CR155 preparation activities to conduct a robust Phase II study, commencement of which is funding dependent. Based on the design of the phase two study and the scope of the opportunity, we believe that positive study results, if achieved, could lead to tremendous value creation. Operator, you may now open the call for questions. Thank you.

At this time, I would like to remind everyone in order to ask a question, press start and the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of John Newman of Canaccord. Please go ahead.

Hi there. Good morning. Thanks for taking my question. You know, you have some really interesting commentary on this IST at Sloan Kettering for immune checkpoint-related enterocolitis. I wonder if you could just talk to us a little bit more about Anything you can tell us regarding the study design and also how you view the commercial opportunity there?

Sure. John, thank you for the question. We're very excited about the study as well. MSK initiated this study and we're pleased to be looking at one of what could be potentially many different applications for CR155. As you know, there's a significant unmet need in this patient population, and so we're eager for the results as well. To elaborate a little bit more on the design of the study, I'd like to turn it over to Dennis, and he can share a little bit about the significant impact to patients who are on ICI of the IREC side effect. Dennis?

Yes, thank you, Mirela. IREC is one of the most frequent and severe immune-related adverse events that patients experience in immune checkpoint inhibitor therapy. Up to 50% of patients with rates varying depending on the cancer treatment and regimen used can experience IREC. IREC can be a very serious condition, as Matt previously described, characterized by symptoms including diarrhea and abdominal pain, cramping, dehydration, blood in the stool, and can progress to more serious complications such as bowel perforations, toxic megacolon, or even death. And the patients who experience IREC are treated with corticosteroids and other immunosuppressive drugs and also have to withhold their immune checkpoint inhibitor therapy. So the impact of this condition is significant and affects a significant number of patients undergoing this type of treatment. So this is the... importance of why the study was originally designed and set up by the collaborator at MSK the study is a small phase one open label study the readout from this study is expected to occur in early 2026 and will be comprised primarily of safety data drug pharmacology data and and diarrhea symptom response data, following these patients through approximately six weeks on the study for those who have received the SIR-1554 IREC. Our hope is that we could see an impact on the diarrhea symptoms and certainly, patients who would have improvement in their diarrhea symptoms without needing additional immunosuppressive therapy medications would be a very meaningful finding. So that type of a clinical outcome paired with the safety data and the drug pharmacology mechanistic data would be extraordinarily useful for us to help us plan and inform for any future clinical development opportunities in this new indication.

Great. Thank you, Jen. John, I just want to spend a minute to ask Terry to comment on the second aspect of your question regarding the commercial opportunity.

Thanks, Marilyn. Good morning, John. Thanks again for the question. As Dennis outlined, and this is a very common side effect of a very commonly used class of medications across many tumor types in oncology, perhaps best evidence by Petruda Net Sales last year of almost $30 billion and growing at 18% versus 2023. So these are highly used agents, growing, will continue to grow, particularly as biosimilars become available in the class. In terms of the patient impact, just double-clicking a little bit on what Dennis said, it's not uncommon for patients to have to either pause or discontinue their cancer treatment altogether to go down this detour of addressing the enterocolitis. It frequently drives them into the hospital. It's also a key limitation on physicians' choice of using combination therapies, which may be highly effective for treating the different tumors they're trying to address. But there's this nervousness or anxiety about using combination therapy or even increasing the dose to address the cancer. So we feel like we have a big problem here and a very nice solution to address it. We're very eager to get the data.

Thanks, Gary.

Your next question comes from the line of Joseph Tom of TD Cohen. Please go ahead.

Good morning, and thank you for taking my questions. Maybe just a couple on the potential partnership deals. Can you talk a little bit about how much capital you would need to get to that initial CER 155 data within the 12 months of study initiation? And then I guess secondly, anything that you can do to kind of convey confidence that you'll be able to achieve something within the next six months within your targeted cash runway. And then maybe last, if you're able to comment, there obviously was a report during the quarter that Nestle made a takeout offer. Are you able to comment on if that was authentic and maybe why that wasn't an appropriate choice at that time? Thank you.

Great. Good morning, Joe, and thank you for the question. So, first of all, just to talk a little bit about the design of the Phase 2 study. Importantly, that interim analysis, 12 months after the study starts, will allow us a capital-efficient and timely recovery of data and we were pleased to get feedback from the FDA that they were in alignment with that approach. As to the specific capital needs, we haven't guided on that other than to say that the timing of that and the way that we've designed the study, we do feel that we'll get meaningful safety and efficacy data given the the patient count in this study at that IA point. We continue to make obtaining a partnership or another source of capital as our highest priority for CR155, our lead candidate. So we are continuing to have interactions and looking at a variety of different sources from which that capital could be obtained. So while we can't comment on any specifics as to status, it remains our most important priority. With respect to your last question, we just make it a practice not to comment on rumors, Joe, so I can't comment specifically on that.

Thank you. Thank you.

That ends our Q&A session and we appreciate your participation. I will now turn the call back over to the management for closing remarks. Please go ahead.

Thank you. Thanks everyone for joining us this morning and have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.