After a PhII catastrophe wiped out a billion dollars in market cap, Seres is looking for a do-over

Seres CEO Roger Pomerantz

Last summer, shares of Seres Therapeutics $MCRB were shredded by a failed Phase II study for their lead microbiome drug program, wiping out a billion dollars of market cap.

The setback not only raised serious questions about Seres and its expertise in the field, as the most advanced microbiome study in the industry it also cast a pall over the whole field of microbiome R&D, the use of teeming multitudes of bacteria in the gut to fix what ails you.

Seres’ first target was a tough one. The biotech tackled recurrent Clostridium difficile infection, but fell far short of statistical significance when compared to a placebo. And the stock has yet to recover.

But now Seres wants a do-over, taking what it learned from what went wrong and applying it in a new study, once they have a chance to review their plans for this drug with the FDA.

“We don’t think we screwed up the trial design,” says CEO Roger Pomerantz, an experienced Merck vet who made the switch to biotech, in response to my first query. “We did learn things in a new field not intuitively obvious or the science had been there 2.5 years ago.” And the review involved looking through everything, from CMC to pharmacodynamics and pharmacokinetics, microbiome analysis and more.

One key mistake, says Pomerantz, was choosing the wrong diagnostic test. Most of the patients were chosen using a polymerase chain reaction test, he says, which doesn’t actually tell you if the C. difficile cytotoxin genes found by the test are producing disease-causing cytotoxins.

Switching to samples of patients who chose to join the open label extension study, fewer than half of the total of 72 who were enrolled, the cytotoxin test found that only 44% of the patients who tested positive with the PCR test also tested positive with the cytotoxin test.

Investigators concluded that the test results could have been simply screwed up through the use of the wrong test, also skewing the number of recurrences tracked in the two drug arms. That could be fixed by switching to the cytotoxin test, which they plan to do in the new trial.

They also found that the dose used was clearly “suboptimal,” suggesting a better dosing would have produced much better results.

But it’s not necessarily easy to make that argument at the FDA. Do-overs are not uncommon in biopharma, but they are extremely high-risk affairs that often do not work out the way they’re planned.

The PCR test that they decided to use on the first go is also endorsed by the Mayo Clinic — which has participated in the trial work for Seres — as “highly accurate.” The cytotoxin test is more cumbersome, according to the clinic, takes longer and is sometimes paired with an enzyme immunoassay test for accuracy. Pomerantz, though, says there have been several new papers just this year that highlight the issues they experienced with the PCR test.

In addition, Seres acknowledges that there was a significantly higher rate of serious adverse events in the drug group, 15% versus 10.3% in the placebo arm — though the investigators did not consider the SAEs drug related.

But Pomerantz is satisfied that when you break new ground in drug R&D, as Seres is trying to do, there will be a considerable amount of trial and error in the process.

“We really are opening a new field in medicine,” says the R&D vet. But Seres also has a breakthrough drug designation with the FDA, which gives the biotech ready access to regulators. At this point, he adds, it’s too early to tell exactly how the agency will respond to the pitch. And he isn’t saying now what the objective is going to be.

The big question for Seres is whether the FDA will look over its finding and ask for a new Phase II to clear the hurdle that now exists, or if it will allow the developer to shape this into a pivotal study that would position them to apply for marketing approval, if it proves successful. I asked. Pomerantz, though, just isn’t going there right now.

“I don’t like to get ahead with the FDA,” says the CEO.

But one way or the other the comeback campaign is about to take it’s next big step. There’s a lot riding on it.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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