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Seres Therapeutics, Inc. (MCRB)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 showed tighter cost control: net loss from continuing operations improved to $19.9M from $26.2M YoY; diluted EPS was -$2.27 vs -$3.46 in Q2 2024 .
  • The company filed the SER-155 Phase 2 study protocol with the FDA in May and expects feedback to finalize the design, with an interim analysis ~12 months after initiation; commencement is funding-dependent .
  • Balance sheet liquidity: cash and equivalents were $45.4M at quarter-end; after receiving a $25M installment from Nestlé in July (offset by $1.4M in employment-related payments), management projects runway into Q1 2026 .
  • EPS modestly beat Wall Street consensus for Q2 2025 (-$2.27 actual vs -$2.49 estimate); revenue continues to be negligible/no commercial revenue post-VOWST divestiture; focus shifts to BD/partnership transactions as near-term stock catalysts . Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Submitted SER-155 Phase 2 protocol to FDA following constructive engagement; design includes an adaptive interim analysis and global participation potential .
  • Cost discipline: R&D ($12.9M) and G&A ($10.3M) decreased vs Q2 2024, narrowing operating loss and net loss from continuing operations .
  • BD momentum and optionality: co-CEOs emphasized active discussions on partnerships, out-licensing, and even merger structures to secure capital; “aim to leverage Seres’ expertise and track record of successfully bringing a live biotherapeutic product to the market” .

What Went Wrong

  • No product revenue; ongoing dependence on external financing and non-operating income (Nestlé reimbursements under TSA) while advancing SER-155 .
  • Cash runway still limited despite July installment; operations only funded into Q1 2026 absent a significant capital event; management continues to evaluate cost reductions .
  • Program timing remains contingent on funding; Phase 2 initiation is explicitly “funding dependent,” creating execution risk and potential estimate uncertainty .

Financial Results

Income Statement and EPS vs prior periods and estimates

MetricQ2 2024Q1 2025Q2 2025
Research and Development ($USD Thousands)$15,806 $11,821 $12,939
General and Administrative ($USD Thousands)$13,065 $11,888 $10,253
Manufacturing Services ($USD Thousands)— $3,527 $1,689
Total Operating Expenses ($USD Thousands)$28,871 $27,236 $24,881
Net Income (Loss) from Continuing Ops ($USD Thousands)$(26,196) $32,682 $(19,855)
Diluted EPS – Continuing Ops ($USD)$(3.46) $3.75 $(2.27)
Consensus EPS – Continuing Ops ($USD)—$(1.27)*$(2.49)*
Consensus Revenue ($USD)—$10,000,000*$0*

Values retrieved from S&P Global*.

Balance Sheet and Liquidity KPIs

MetricQ4 2024Q1 2025Q2 2025
Cash and Cash Equivalents ($USD Thousands)$30,793 $58,849 $45,379
Total Assets ($USD Thousands)$139,810 $164,182 $143,800
Total Stockholders’ Equity ($USD Thousands)$13,784 $50,465 $32,950

Other Operating KPIs

MetricQ2 2024Q1 2025Q2 2025
Other Income – Reimbursement from Nestlé ($USD Thousands)—$6,309 $3,490
Total Other Income, net ($USD Thousands)$2,675 $59,918 $5,026
Weighted Avg Shares – Diluted7,575,620 8,714,701 8,743,733
EBITDA ($USD Thousands)—$(26,160)*$(23,822)*

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayThrough Q1 2026“Fund operations into Q1 2026” (as of March/May 2025) “Fund operations into Q1 2026” (post July payment) Maintained
SER-155 Phase 2 Protocol2025“Submit protocol to FDA in coming weeks” (May 7) Protocol submitted in May; FDA feedback expected to finalize design Achieved/Updated
SER-155 Phase 2 Interim Analysis12 months post-initiationAnticipated interim readout within ~12 months Anticipated interim readout within ~12 months; start is funding-dependent Maintained (with funding caveat)
Nestlé InstallmentJuly 2025Expect $25M installment in July $25M received in July; $1.4M employment obligations paid concurrently Achieved

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Regulatory/Clinical (SER-155)FDA supported BSI reduction at Day 30 as primary endpoint; recommended Phase 2; Breakthrough designation granted Phase 2 protocol submitted to FDA; adaptive design; 248 participants; interim analysis planned Progressing to execution (protocol filed)
BD/Capital StrategyPursuing strategic partnership to accelerate next study; cash into Q1 2026 Active discussions on partnerships, out-licensing, mergers; top priority to obtain capital Intensifying; broader structure optionality
European EngagementEBMT feedback supportive; KOL enthusiasm for participation EU KOLs “absolutely excited” to participate; global study intent Strengthening EU clinical interest
Pipeline Beyond SER-155SER-147 IND-enabling; SER-603 in IBD; biomarker work recognized IST underway for irEC; continued exploration of IBD partnerships Steady, leveraging biomarker insights
Cost DisciplineR&D/G&A down YoY in Q4 2024; focus on lead program R&D and G&A down again YoY in Q2; manufacturing services reimbursed under TSA Sustained opex control
LeadershipNestlé-related board changes noted Co-CEO transition effective Aug 1; July announcement Management refresh complete

Management Commentary

  • “We are in active discussions with multiple parties seeking capital and other resources... including partnerships, out-licensing deals, mergers, and other structures to access capital” — Co-CEOs Thomas DesRosier and Marella Thorell .
  • “Guided by our constructive FDA feedback, we submitted a Phase II protocol to the FDA… well powered, placebo-controlled… interim results within twelve months” — Marella Thorell (prepared remarks) .
  • “Our immediate top corporate priority is to obtain capital… we are in active discussions with multiple parties…” — Marella Thorell .
  • “A banker suggested… maybe we would be interested in leading a roll up… perhaps a merger… we continue to be in multiple discussions” — Thomas DesRosier .
  • “As of June 30, 2025, Seres had $45.4 million in cash and cash equivalents… expects to fund operations into the first quarter of 2026” — Press release .

Q&A Highlights

  • BD structure and financing optionality: management is evaluating partnerships, out-licensing, mergers; a merger with another LBP company is under active discussion, with emphasis on substantial financial support and leveraging Seres’ regulatory/manufacturing expertise .
  • European clinical scope: robust EU KOL engagement; management expects a global Phase 2, with EMA engagement at the appropriate time; clinicians eager to participate given unmet need .

Estimates Context

  • Q2 2025 EPS beat: actual -$2.27 vs consensus -$2.49; beat of $0.22. EPS consensus based on 4 estimates; revenue consensus $0 reflecting no commercial revenue post-divestiture . Values retrieved from S&P Global*.
  • Q1 2025 context: actual diluted EPS $3.75 vs consensus -$1.27 driven by the $52.2M gain on sale and other income; highlights estimate volatility tied to non-operating items . Values retrieved from S&P Global*.
  • EBITDA: Q2 2025 actual -$23.8M; Q1 2025 actual -$26.2M, reflecting operating loss and limited offset from reimbursements; margins not meaningful without revenue base. Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Regulatory execution advancing: Phase 2 protocol submission de-risks near-term development; interim analysis ~12 months post-initiation presents a clear data readout catalyst once funded .
  • Funding is the gating factor: near-term stock path likely driven by BD/financing outcomes; a partnership or merger could materially extend runway and enable Phase 2 start .
  • Cost control is working: opex reductions narrowed YoY losses; continued TSA reimbursements help offset manufacturing service expenses while transition activities wind down .
  • Balance sheet: $45.4M cash at Q2 end and July $25M installment push runway to Q1 2026; however, additional capital is needed for Phase 2 initiation and broader pipeline .
  • Clinical positioning: strong Phase 1b efficacy (77% relative risk reduction in BSIs) and supportive biomarkers make SER-155 a compelling candidate in high-need allo-HSCT; global KOL interest supports study enrollment .
  • Execution risk remains: dependence on external funding and lack of product revenue mean estimates will be sensitive to non-operating items; watch for FDA feedback on the Phase 2 protocol and BD progress as near-term catalysts .

Values retrieved from S&P Global* where marked.