This biotech is seeing great results from its studies of SER-287 for ulcerative colitis, a condition that affects more than 750,000 North Americans.
Seres Therapeutics, Inc. (MCRB)
From Canaccord Genuity Research
We see interesting evidence for Seres Therapeutics’ SER-287 success in ulcerative colitis, based on four prior randomized studies for fecal microbiota transplant. Similar to recurrent C Difficile, we believe this lowers clinical risk for SER-287.
Four randomized studies show higher clinical remission for FMT vs control. Fecal microbiota transplant (FMT) has shown better clinical remission vs control in n=4 randomized studies, suggesting SER-287 should also increase remission. Three of four studies showed an average difference of about 20% favoring FMT at 8 weeks, and one study showed about 10% difference at 12 weeks. The four randomized studies included a total of n=293 patients, with all studies involving 1: 1 randomization. Three studies involved active US patients with average Mayo score of 7.2-8.0. Endoscopic Mayo score was> = 1 in one study, and >= 2 in three other studies.
Two studies showed better endoscopic remission for FMT vs control, also supporting success for SER-287 for this tougher endpoint. One study involving n=73 patients showed 11% endoscopic remission for active FMT vs. 0% for control at week 8 and 12 months. A second study involving n=85 patients showed 12% endoscopic remission for active FMT vs. 8% for control at week 8, where endoscopic remission was defined as Mayo endoscopy subscore of zero.
We are raising our peak sales estimate for SER-287 in ulcerative colitis to $620M from $486M in the US based on higher confidence in success. We assume only about 10-11% share for the severe UC population, and about 3-4% share for the mild/moderate population. However, given the favorable safety profile, share could be higher, especially since SER-287 would likely be used ahead of infused therapies such as TNF-a inhibitors.
We are raising our price target to $42 from $38 on higher peak sales for SER-287 in Ulcerative Colitis. We believe success here is likely because FMT has shown success in both recurrent C. Difficile, and also ulcerative colitis. SER-287 is currently in Phase 2b, and we await updates from management on enrollment and data timing. We continue to expect FDA approval for SER-109 in recurrent C. Difficile in 2021.
John Newman, Ph.D., CFA, Canaccord Genuity Research, canaccordgenuity.com, September 21, 2020