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Seres Therapeutics, Inc. (MCRB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered net income from continuing operations of $8.20M, driven by a $27.22M gain on the VOWST sale installment; operating loss was $22.48M as the company remains pre-revenue aside from $0.35M in grant revenue .
  • EPS (diluted, continuing ops) was $0.94, a strong beat versus Wall Street consensus of $0.425; revenue of $0.35M fell well below the $5.88M consensus as Seres has minimal revenue while transitioning; consensus values retrieved from S&P Global* .
  • Constructive FDA feedback aligned key Phase 2 SER-155 study parameters (size ~248, dosing, primary endpoint, interim analysis in ~12 months); commencement is funding-dependent, with cost actions and a ~25% headcount reduction extending cash runway to Q2 2026 .
  • Strategic update highlights: CARB-X awarded up to $3.6M to support a liquid formulation; an investigator-sponsored SER-155 study in immune checkpoint inhibitor-related enterocolitis (irEC) continues enrolling with initial results expected early 2026 .

What Went Well and What Went Wrong

What Went Well

  • “We obtained further constructive feedback from the FDA… alignment on multiple key study parameters… and the interim analysis plan.” Management expects meaningful Phase 2 interim results within 12 months of study initiation .
  • The CARB-X grant (up to $3.6M) supports a SER-155 liquid formulation to broaden patient access (ICU, pediatric, elderly), underscoring global recognition of antimicrobial resistance priorities .
  • Q3 profitability (continuing ops) driven by VOWST installment payment; R&D and G&A declined YoY due to program completion and lower personnel/platform costs, demonstrating discipline on operating expenses .

What Went Wrong

  • Revenue remains minimal ($0.35M grant), with the model reliant on financing and partnership to launch Phase 2 SER-155; commencement remains explicitly funding-dependent .
  • The quarter’s positive EPS was non-operational, largely stemming from VOWST sale accounting; core operations posted a $22.48M loss, highlighting dependence on non-recurring gains .
  • Persistent capital needs and a challenging biotech environment; management did not guide to specific capital amounts and declined to comment on market rumors, which may prolong uncertainty for Phase 2 start .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)— — — $0.351
Net Income from Continuing Ops ($USD Millions)$(51.04) $32.68 $(19.86) $8.20
Diluted EPS – Continuing Ops ($)$(6.69) $3.75 $(2.27) $0.94
Loss from Operations ($USD Millions)$(29.17) $(27.24) $(24.88) $(22.48)
Gain on Sale of VOWST ($USD Millions)— $52.18 $0.19 $27.22

Notes: Revenue lines were not present (—) in Q1 and Q2 statements; net income and EPS reflect discontinued ops reclassification and VOWST sale accounting .

Operating Expenses ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
R&D$16.46 $11.82 $12.94 $12.62
G&A$12.71 $11.89 $10.25 $9.48
Manufacturing Services— $3.53 $1.69 $0.74
KPIs and Balance SheetQ3 2024Q1 2025Q2 2025Q3 2025
Cash & Cash Equivalents ($USD Millions)$30.79 $58.85 $45.38 $47.64
Total Liabilities ($USD Millions)$126.03 $113.72 $110.85 $99.78
Stockholders’ Equity ($USD Millions)$13.78 $50.47 $32.95 $43.70
Q3 2025 vs EstimatesConsensusActual
Revenue ($USD Millions)$5.88*$0.35
EPS (Diluted, Continuing Ops) ($)$0.425*$0.94
# of Estimates (Revenue / EPS)4* / 4*—

Disclaimer: *Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCompany-levelInto Q1 2026 (as of Q2 2025) Through Q2 2026 (as of Q3 2025) Raised runway
SER-155 Phase 2 Protocol StatusProgramProtocol submitted; feedback expected (Q2) Finalizing protocol after constructive FDA feedback; alignment on parameters; start funding-dependent (Q3) Advanced; clarified alignment
SER-155 Phase 2 InterimProgramInterim analysis anticipated ~12 months post-initiation (Q2) Interim within ~12 months post-initiation; engagement with FDA envisioned; funding-dependent (Q3) Maintained timeline; reiterated dependency
Cost Actions / WorkforceCompany-levelOngoing evaluation of cost reductions (Q2) Implemented targeted cost reductions incl. ~25% workforce reduction (Q3) Implemented

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
FDA engagement on SER-155FDA recommended standalone Phase 2; plan to submit protocol; aim for adaptive interim analysis Protocol submitted; anticipating FDA feedback; constructive interactions Constructive feedback; alignment on key parameters; finalize protocol Positive regulatory alignment
Capital/BD strategyPartnership is gating item; exploring options amid tough financing environment Active discussions incl. partnerships, out-licensing, mergers Priority to secure capital; no specific guidance; declined rumor comment Continued focus; urgency maintained
SER-155 clinical narrative77% BSI risk reduction; translational biomarker support ASCO/DDW biomarker data; payer/HCP interest; global sites IDWeek post-hoc analyses; liquid formulation grant; global unmet need reiterated Reinforced efficacy/tolerability story
irEC (immune checkpoint enterocolitis)Concept framed; translational rationale IST underway at MSKCC Enrollment progress; early 2026 readout; commercial relevance highlighted Broadening beyond infection
Cash runwayInto Q1 2026 Into Q1 2026 (pre-July payment) Through Q2 2026 post cost actions and payment Improved runway
Organization/leadershipReverse split; regained Nasdaq compliance Co-CEO transition; board changes 25% workforce reduction to focus priorities Streamlining

Management Commentary

  • “We made good progress… alignment on multiple key study parameters… We estimate meaningful placebo-controlled clinical results from a planned interim analysis within 12 months of study initiation, with commencement being funding-dependent.” – Marella Thorell (Co-CEO/CFO) .
  • “We are thrilled to have… a CARB-X award of up to $3.6M to support a liquid formulation of SER-155… intended to expand future access to medically vulnerable patients.” – Matthew Henn (CSO) .
  • “Considering [cost-reduction] actions and our current operating plans, we expect to fund operations through the second quarter of 2026.” – Co-CEOs statement in press release .
  • “We continue our efforts aimed at securing the funding needed to conduct the Phase 2 study… If [interim] results are consistent with our prior successful Phase 1b study… we believe this milestone should be a significant value-creating event.” – Co-CEOs statement in press release .

Q&A Highlights

  • irEC study details: small Phase I open-label at MSKCC; readout early 2026 focusing on safety, pharmacology, and diarrhea symptom response; goal of reducing need for additional immunosuppression .
  • Capital needs and timing: management did not guide a specific amount; emphasized interim analysis design as capital-efficient; reiterated highest priority to secure capital and avoided commenting on market rumors .
  • Commercial relevance of irEC: high prevalence and severity across tumor types; treatment detours including hospitalization; potential to enable more aggressive combination therapies; cited scale of ICI market .

Estimates Context

  • Q3 2025 EPS: Actual $0.94 vs consensus $0.425; beat driven by non-operational gain on VOWST sale installment ; consensus values retrieved from S&P Global*.
  • Q3 2025 Revenue: Actual $0.35M vs consensus $5.88M; miss reflects minimal revenue in the transition period; consensus values retrieved from S&P Global*.
  • With Phase 2 funding-dependent and minimal near-term revenue, estimates will likely sensitize to timing of study start and potential non-dilutive funding.

Disclaimer: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 headline EPS beat masks core operating loss; the path to value creation is through SER-155 Phase 2 initiation and interim efficacy in ~12 months post-start; timing hinges on capital .
  • Regulatory risk has moderated: FDA alignment on key Phase 2 parameters is a positive inflection for SER-155 advancement .
  • Liquidity improved (runway through Q2 2026) via cost actions and installment payment, but execution requires partnership/financing; monitor BD updates closely .
  • Pipeline optionality expanding: irEC IST (early 2026 data) provides a second clinical catalyst that could broaden the SER-155 narrative beyond infection prevention .
  • Near-term revenue remains negligible; expect estimate revisions to reflect non-revenue drivers (study timing, grants, TSA-related reimbursements in other income) .
  • Trading lens: catalysts include Phase 2 start announcement, BD deal terms (structure and non-dilutive components), and irEC readout; stock likely reacts to funding clarity and regulatory milestones .
  • Risk factors: capital markets dependency, going-concern considerations, and the need to translate Phase 1b signals into robust Phase 2 efficacy; maintain focus on interim analysis design and enrollment pace .