Seres sells Vowst microbiome therapy to Nestlé to repay debt

Seres Therapeutics, having secured the first FDA-approved oral microbiome treatment a little over a year ago, is now in discussions to sell its principal asset to partner Nestlé Health Science. The announcement came on Thursday, stating a memorandum of understanding between Seres and Nestlé. While specific financial details were not disclosed, Seres indicated that the deal would enable the company to "fully retire its debt" and extend its financial stability through the fourth quarter of 2025.

Vowst, previously known as SER-109, is an orally administered therapy that received FDA approval in April 2023 for preventing recurrent Clostridioides difficile infections (CDI) in adults after they have undergone antibacterial treatment for the same condition.

Nestlé Health Science's president of medical nutrition and pharma, Moreno Perugini, highlighted Vowst's success since its market introduction in June of the previous year. Perugini emphasized the commitment to continuing the provision of this vital medication to patients. According to Seres, Vowst achieved sales of $19.6 million in 2023, based on the sale of 1284 units, despite the company incurring a net loss of $18.9 million from the product last year. In the first quarter of 2024, Vowst generated $10.1 million in revenue from the sale of 642 units.

Seres and Nestlé Health Science initially entered into a co-exclusive license agreement for the development and commercialization of Vowst in 2021. This deal was valued at over $520 million. Under the new terms, Nestlé Health Science will gain full ownership of Vowst, along with the associated intellectual property rights.

Seres CEO Eric Shaff remarked on the strategic importance of this transaction, noting that the capital obtained from this deal would be used to retire existing debt and bolster the company's financial health. This move is intended to position Seres advantageously as it progresses with SER-155 and other microbiome therapeutic candidates toward key developmental milestones.

Although Seres did not reveal specific financial figures, the company anticipates substantial capital influxes from the divestiture, including an upfront payment. In late 2022, Seres announced a restructuring plan aimed at reducing its workforce by 41%, which is expected to save the company between $75 million and $85 million in 2024.

SER-155 is currently undergoing a Phase Ib clinical trial in patients receiving allogeneic hematopoietic stem cell transplants. The candidate holds promise for reducing the incidence and severity of gastrointestinal and related bloodstream infections, as well as mitigating the risk of acute graft-versus-host disease.

The proposed transaction with Nestlé Health Science marks a significant step for Seres Therapeutics, enabling it to focus more on advancing its pipeline of microbiome-based therapeutics while enhancing its financial stability and operational efficiency. This strategic move aims to create a sustainable path forward as the company navigates the complexities of biotech innovation and market dynamics.