What happened
Shares of Seres Therapeutics (MCRB -4.04%) climbed more than 21% on Tuesday. The biotech stock, which closed at $8.82 on Monday, opened at $8.63 on Tuesday, then took off, climbing to a daily high of $10.78 in the afternoon.
The move was in direct contrast to the general market trend with both the Dow Jones Industrial Average and S&P 500 index down for the day. The stock's 52-week low is $5.41 and its high is $29.90. Year to date, the stock is still down 56%, but over the past six months, it is up more than 67%.
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So what
Seres' therapies focus on bacterial consortia (a combination of bacteria) to better enable patients to improve intestinal microbiome, healthy gut bacteria, which can be adversely affected by antibiotics, various diseases, and chemotherapy.
The company announced Tuesday it had enrolled its first patient in its SER-155 Phase 1B study. The microbiome therapeutics company said the trial will evaluate the efficacy, safety and microbiome alterations associated with SER-155 in hematopoietic stem cell transplantation (HSCT) for adults. The hope is that SER-155 will help fight infections in adult patients undergoing HSCT, which is the use of healthy stem cells to assist patients with dysfunctional or depleted bone marrow. With enhanced bone marrow function, the body's own immune system may be able to better fight tumor cells.
The news comes on the heels of the company's announcement earlier this month that it would collaborate with Swiss pharmaceutical company Bacthera to make SER-109, Seres' therapy to treat recurrent Clostridioides difficile infection (rCDI), a leading cause of hospital-acquired infections each year.
Now what
The company is a small-cap biotech, with most of its revenue being collaboration revenue. Still, it appears the company's successful SER-109 trials opened the door for it to use its therapies to prevent other infections associated with cancer drugs. Seres said it plans to submit its Biologics License Application for SER-109 in mid-2022.
On top of that, its recent third-quarter report showed that the company is in an improved position. The company had revenue of $126.7 million, up from $1.4 million year over year, and net income of $68.2 million, up from $30.3 million year over year.
Investors in early-stage biotech stocks know it is generally a long game. Seres' annual revenue had been relatively stagnant over the past five years, but now it appears to have a path to more consistent revenue growth. Caution is needed because its therapies have not yet been approved by the Food and Drug Administration, though SER-109's positive trials show it might be sometime next year.
