Sign in

You're signed outSign in or to get full access.

ST

Seres Therapeutics, Inc. (MCRB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 printed a positive continuing-operations net income of $32.7M and diluted EPS of $3.75, driven by the $50M Nestlé installment and a $52.2M gain on the VOWST sale; R&D ($11.8M) and G&A ($11.9M) declined meaningfully YoY .
  • Against Wall Street consensus, reported EPS was a significant beat versus the Q1 2025 EPS estimate of -$1.27, while revenue was not recognized in continuing operations (consensus $10.0M) as transition-service reimbursements were booked in other income rather than revenue .
  • Regulatory path advanced: FDA endorsed a Phase 2 as next step and supported the BSI reduction at 30 days post-HSCT as the primary endpoint; Seres expects to submit the Phase 2 protocol in the coming weeks .
  • Liquidity improved: cash was $58.8M at quarter-end, with an expected net ~$23.5M July payment from Nestlé and runway into Q1 2026; the 1-for-20 reverse split restored Nasdaq bid-price compliance—near-term catalysts include ASCO data and protocol submission .

What Went Well and What Went Wrong

What Went Well

  • Strengthened financials from strategic actions: “The net income in 2025 is primarily driven by the previously announced $50.0 million installment payment received from Nestlé” and a VOWST sale gain of $52.2M .
  • Regulatory traction and study design clarity: “Guided by recent constructive FDA feedback… we are preparing for a well-powered, placebo-controlled Phase 2 study, with a planned interim analysis” .
  • External validation and clinician engagement: SER-155 Phase 1b data received awards; “European clinicians also communicated their interest in participating in the further development of SER-155” .

What Went Wrong

  • Funding remains a gating item: “As previously noted, the Company requires additional capital to support the SER-155 Phase 2 study,” and management reiterated partnership is the key gate to study initiation .
  • Limited operating revenue visibility: No continuing-operations revenue line was reported; manufacturing services expenses ($3.5M) were offset via reimbursement recorded in other income ($6.309M), complicating revenue comparability .
  • Execution reliant on partner optionality: Q&A emphasized partnership timing uncertainty and protocol input from a potential partner, adding process risk and timeline variability .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Income - (IS) ($USD Millions)-$51.0 -$15.7 $32.7
Diluted EPS - Continuing Operations ($USD)-$0.33 —$3.75
Research & Development ($USD Millions)$16.5 $12.8 $11.8
General & Administrative ($USD Millions)$12.7 $12.5 $11.9
Manufacturing Services Expense ($USD Millions)—$3.5 $3.5
Cash And Equivalents ($USD Millions)$66.8 $30.8 $58.8

YoY comparables (continuing ops):

MetricQ1 2024Q1 2025
Net Income - (IS) ($USD Millions)-$32.9 $32.7
Diluted EPS - Continuing Operations ($USD)-$4.50 $3.75
Research & Development ($USD Millions)$19.5 $11.8
General & Administrative ($USD Millions)$14.9 $11.9

Consensus vs Reported (Q1 2025):

MetricConsensusReported
Primary EPS ($USD)-$1.27*$3.75
Revenue ($USD Millions)$10.0*— (continuing ops; reimbursements booked in other income)

*Values retrieved from S&P Global.

KPI snapshots (SER-155 Phase 1b, cohort 2, through Day 100 post-HSCT):

KPIPlaceboSER-155Delta
Patients with confirmed BSI (%)42.9% (6/14) 10.0% (2/20) 77% relative risk reduction
Mean cumulative antibacterial/antimycotic exposure (days)21.1 9.2 -11.9 days (p=0.0494)
Febrile neutropenia incidence (%)78.6% 65.0% Lower incidence

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SER-155 Phase 2 protocol submissionQ2 2025Draft protocol in Q2 2025 Submit in “coming weeks” Clarified timing
Primary endpoint for next study30 days post-HSCTFDA supportive Reaffirmed Maintained
Cash runwayInto Q1 2026Into Q1 2026 Into Q1 2026 Maintained
Nestlé installment paymentJuly 2025$25M less ~$1.5M obligations Expect receipt in July 2025 Maintained
Nasdaq complianceApril–May 2025Bid-price deficiency noted in Nov 2024 Regained compliance after 1-for-20 reverse split New status update

Earnings Call Themes & Trends

TopicQ3 2024 (Prev)Q4 2024 (Prev)Q1 2025 (Current)Trend
Regulatory feedback & next studyPlanning single registration possibility; filing for designations FDA recommends Phase 2; supports 30-day BSI endpoint Protocol submission in coming weeks; well-powered, placebo-controlled with interim Increasing clarity and momentum
Partnership & financingSeeking partner; engaged MTS Advancing discussions; run-rate lowered post VOWST Partnership is gating item; urgency stressed Critical path dependency
Clinical validation77% RRR BSI; safety profile reinforced Biomarker data reinforce MOA External awards (EBMT Best Clinical Poster); EU site interest Broadening external validation
Cash & runwayCash $66.8M; runway into Q4 2025 Cash $30.8M; runway into Q1 2026 post $50M installment Cash $58.8M; July payment pending; runway re-affirmed Stabilizing with milestones
Listing & corporate actionsNasdaq bid-price deficiency letter —1-for-20 reverse split; compliance regained Resolved listing risk (for now)

Management Commentary

  • “Advancing SER-155 through the next stage of development remains our top corporate priority… preparing for a well-powered, placebo-controlled Phase 2 study, with a planned interim analysis” — CEO Eric Shaff .
  • “The net income in 2025 is primarily driven by the previously announced $50.0 million installment payment received from Nestlé” — Q1 press release .
  • “We plan to submit a SER-155 Phase 2 study protocol to FDA in the coming weeks” — CEO prepared remarks .
  • “Based on our current cash… we expect to fund operations into the first quarter of 2026” — CFO Marella Thorell .

Q&A Highlights

  • Partnership is the gating item: “The securing of a partnership for us is the key long lead time item for moving forward with the study” .
  • Adaptive design and interim analysis: Interim read ~12 months post-initiation to engage FDA early on pivotal design options .
  • FDA interactions constructive: Breakthrough designation helps engagement; feedback has been “highly constructive and regular” .
  • Endpoint clarity: Primary endpoint will be bloodstream infection reduction at 30 days post-HSCT; broader safety/efficacy endpoints tracked .
  • Safety database expectations: Past precedent suggests robust exposure requirements; discussions evolve with the safety profile and population .

Estimates Context

  • Q1 2025 EPS consensus: -$1.27 vs. reported +$3.75 — a major beat, primarily due to non-operating items (Nestlé installment and gain on VOWST sale) .
  • Q1 2025 revenue consensus: $10.0M vs. no continuing-ops revenue line item reported; reimbursement for transition services recognized in other income ($6.309M), complicating direct revenue comparability .
MetricQ3 2024Q4 2024Q1 2025
Primary EPS Consensus Mean ($USD)-$1.56*-$4.19*-$1.27*
Revenue Consensus Mean ($USD Millions)$25.8*$0.0*$10.0*
Primary EPS - # of Estimates6*5*4*
Revenue - # of Estimates6*6*5*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat was non-operational: the print was turbocharged by the Nestlé installment and VOWST-sale gain; underlying OpEx trends are improving but recurring revenue remains unrecognized in continuing ops .
  • Near-term binary-lite catalysts: protocol submission (weeks), ASCO SER-155 data (May 30–June 3), and the July Nestlé installment should support sentiment and liquidity .
  • Execution hinges on partnership: management is aligning design with FDA, but partner timing remains the gating item for initiating Phase 2—monitor deal progress closely .
  • Regulatory path de-risking: FDA’s support for the 30-day BSI endpoint and Phase 2 recommendation increases clarity around the registrational trajectory .
  • Clinical story strengthening: Cohort 2 BSI reduction (77% RRR), antibiotic exposure cuts, and biomarker evidence reinforce mechanism and potential standard-of-care impact in allo-HSCT .
  • Listing risk mitigated: reverse split and regained Nasdaq compliance reduce mechanical overhangs as the company pursues strategic options .
  • Watch cash runway and OpEx discipline: $58.8M cash plus July funds and reduced R&D/G&A provide runway into Q1 2026; further financing or partnership remains a key variable .