Seres, indebted and in need of cash, agrees to sell microbiome pill to Nestle
2 min read
Dive Brief:
- Seres Therapeutics plans to sell all the rights to its microbiome pill to Nestlé Health Science as it struggles to fund operations.
- Under a nonbinding memorandum of understanding announced Thursday, the Swiss company will acquire all the product and intellectual property rights to Vowst, which was approved in the U.S. in 2023 to prevent the recurrence of difficult-to-treat C. diff infections. Seres expects the transaction to close within 90 days.
- The company didn’t disclose exact financial terms for the deal, saying only that it would receive capital infusions including an upfront payment. Seres said it will use the money to retire an existing debt facility with Oaktree Capital Management and extend its cash runway into the fourth quarter of 2025.
Dive Insight:
The sale will allow Seres to focus on advancing SER-155 and other experimental microbiome therapies designed to fight infections. In April, the company announced it had completed patient enrollment for a Phase 1b trial of SER-155 in patients who received allogeneic hematopoietic stem cell transplants.
Seres has been working with Nestlé since 2016 when the companies signed a development and commercialization deal involving four medicines. In 2021, Nestlé agreed to pay Seres to expand the collaboration and acquire more commercialization rights to one of those drugs, SER-109, now sold under the brand name Vowst.
The pill is made from human fecal matter that’s been screened and purified. It’s designed to repopulate the gut with helpful bacteria to ward off infections. It was the second microbiota therapy to win Food and Drug Administration approval and the first one cleared for oral administration. But a year after the launch of Vowst, Seres is struggling. The company posted a net loss of $40.1 million in the first quarter and told investors in May that its cash was sufficient to carry operations only into the fourth quarter of this year. That was even after eliminating 41% of its workforce in a restructuring announced in November.
Seres said it will enter into a service agreement with Nestlé to support the transition of the product. Its new cash runway guidance is subject to performance under the service agreement.
