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Seres Therapeutics Inc (NASDAQ:MCRB)
Q3 2019 Earnings Call
Nov 5, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2019 Seres Therapeutics Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to your speaker today, Mr. Carlo Tanzi with the Investor Relations. Thank you. Please sir, go ahead.

Carlo Tanzi -- Investor Relations

Thank you and good morning. A press release with the Company's third quarter 2019 financial results and a business update became available at 7:00 AM Eastern Time this morning and can be found in the Investors and Media section of the Company's website. I'd like to remind you that we'll be making forward-looking statements relating to the timing, enrollment and results of our clinical studies, regulatory approval, the promise and potential impact of any of our microbiome therapeutics, the sufficiency of our cash and cash equivalents to fund operations and the availability of additional cash resources.

Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of our recent SEC filings. Any forward-looking statements made on today's call represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. On today's call I'm joined by Eric Shaff, Seres' President and CEO; and Dr. Matt Henn, Seres' Chief Scientific Officer, and also Dr. Kevin Horgan, our Chief Medical Officer will be available during the Q&A portion of the call.

And with that, I'll pass the call to Eric.

Eric Shaff -- President and Chief Executive Officer

Thanks Carlo and good morning everyone. 2019 has been an important year of focus on advancement for Seres and as we move into the final months of the year, we are pleased to note that we are in a stronger position to deliver on our mission to advance our microbiome therapeutics platform and to execute on the development of our promising pipeline of drug candidates.

To summarize some of our accomplishments, we have focused our pipeline on our highest priority programs, modified the SER-109 Phase 3 study to expedite top-line results, initiated our SER-287 and SER-401 clinical studies, entered into a collaboration with AstraZeneca in immuno-oncology, nominated our SER-301 lead candidate and strengthened our balance sheet with a $61 million equity raise.

More recently, we further strengthened our balance sheet with access to, up to an additional $50 million in debt financing. All of these efforts lay the foundation for Seres to execute on a data rich 2020 that we believe could be transformative for the company. Seres differentiated core competencies include our field leading R&D capabilities and deep domain expertise in microbiome therapeutic drug discovery, manufacturing and clinical development. We are able to identify key signatures in the microbiome associated with disease and design tailored oral therapeutic microbial candidates aimed at improving patient outcomes by establishing a healthy and more diverse microbiome.

Turning now to an update on our development programs. Let me begin with SER-287, which is in a potentially pivotal Phase IIb study in patients with mild-to- moderate active ulcerative colitis. SER-287 is an orally administered biologically derived live drug candidate comprised of commensal bacterial spores derived from the healthy human gastrointestinal tract. Our objective with SER-287 is to develop a first-in-class microbiome therapeutic that modulates the microbiome and microbe associated metabolites in UC patients. This approach is intended to reduce the impact of a dysfunctional microbiome as a trigger and amplifier of inflammation. We believe this drug candidate has the potential to result in significant improvements in patient outcomes by providing a novel, non-immunosuppressive treatment option for this serious disease. A prior completed SER-287 Phase Ib proof-of-concept study demonstrated a statistically significant difference in the clinical remission rate between patients treated with vancomycin followed by daily SER-287 for eight weeks compared to the placebo group.

In that study, we observed a 40% remission rate with SER-287 versus 0% of placebo. Following those encouraging initial clinical results, we obtained additional microbiome, metabolite and transcriptomic data sets that provide mechanistic insights associated with the observed clinical therapeutic activity. Changes in both species and metabolites were identified as associated with treatment and clinical remission consistent with published data from the Human Microbiome Project.

Importantly, the safety profile for SER-287 was highly favorable with no imbalance in adverse events seen in patients administered SER-287 compared to placebo. Supported by these compelling data, we subsequently initiated this ongoing SER-287 Phase IIB ECO-RESET study. Based on written FDA feedback, we believe that this study could serve as one of two pivotal studies to support product registration.

In addition, our feedback from the European Medicines Agency Committee on Human Medicinal Products also indicated that ECO-RESET could serve as one of the two registrational studies to support a European regulatory marketing application.

The SER-287 ECO-RESET study is a randomized placebo controlled 3-arm induction trial designed to enroll 201 patients with active mild-to-moderate ulcerative colitis who have failed prior therapy. In the first of three arms, patients receive vancomycin pretreatment followed by 10 weeks of the same daily regimen used in the arm of the Phase 1b trial that showed the highest clinical remission rate.

In the second arm, patients also receive vancomycin pretreatment followed by two weeks of the same SER-287 daily regimen as in the first arm, followed by eight weeks of a lower dose. In the prior Phase Ib trial engraftment, the germination and vegetative growth of SER-287 bacteria in the gastrointestinal tract was seem to plateau after 2 weeks of SER-287 administration So this arm evaluates a regimen based on our mechanistic learnings from this study. In the 3rd arm, patients receive only placebo. ECO-RESET is primarily an induction study; however, the effects of SER-287 as a maintenance therapy will also be evaluated. We continue to recruit patients for this study and we now have over 100 sites open across the US and Canada and 70% of these sites have screened patients to date. We expect to have top-line data in the second half of 2020 well within the Companys' cash operating runway.

I'll now turn to the SER-109 ECOSPOR III Phase III study. SER-109 is an orally administered biologically derived drug candidate designed to restructure the microbiome to increase the diversity of commensal microbes in patients with recurrent C. difficile or C. diff infection. SER-109 was designed using bioinformatic insights suggesting that a complex spore ecology includes keystone organisms that could address the underlying depletion in commensal microbes.

SER-109 is an ecology of bacterial spores enriched and purified from healthy screens human donors. We employ a robust manufacturing process that includes steps that inactivate vegetative bacteria, including species such as E-coli, which has been linked with FMT. Indeed, last week in the New England Journal of Medicine, published a report describing cases of drug resistant E-coli bacteremia that were transmitted by FMC, an unapproved and unregulated procedure included one that led to an unfortunate patient death.

Also, just yesterday, Seres attended an FDA meeting focused on the use of FMT C. diff infection and other diseases. The meeting presentations and discussions have reaffirmed our conviction in the dire need for an FDA approved microbiome therapeutic. The meeting highlighted the risks associated with unregulated FMT. We came away further encouraged in the advantages of our purified spore-based approach that uses both extensive donor screening and rigorous product purification.

We believe that both these steps are essential to ensure product safety. We continue to enroll the ECOSPOR III trial, which is evaluating efficacy and safety in 188 patients with recurrent C. diff infection. Importantly, all patients enrolled the ECOSPOR III are required to test positive for C. diff cytotoxin to ensure high quality data by enrolling only patients with an active C. diff infection. ECOSPOR III is a randomized, placebo-controlled study where all patients are treated with standard-of-care antibiotics to address the qualifying acute C. diff infection and subjects then receive either SER-109 or placebo.

The primary endpoint compares the C. diff recurrence rate in subjects who receive SER-109 versus placebo up to 8 weeks after dosing. We continue to make steady progress with the study in the face of widespread continued use of unapproved and unregulated FMT to treat C. diff infection. As of October 31st, this study was more than 85% enrolled and we expect to report top-line study results in mid 2020. We are nearing full enrollment for ECOSPOR III and we are very excited by the potential for this program.

I will remind you that SER-109 has both Breakthrough Therapy and Orphan Drug designations from the FDA. We are very much looking forward to seeing the top-line study results. Based on prior discussions with the FDA, we believe this study is successful, has the potential to be a single pivotal study supporting product registration; however, this would depend on the strength of the data and additional safety data may be required. If successful, SER-109 could represent a major breakthrough for patients suffering from recurrent C. diff infection, considered one of the top three most urgent antibiotic-resistant bacterial threats in the US, according to the Centers for Disease Control.

It is also the leading cause of hospital-acquired infection in the US and is responsible for the deaths of approximately 29,000 Americans each year. Furthermore, we believe that a positive result from ECOSPOR III would provide definitive clinical validation more broadly for the promise of microbiome therapeutics.

I'd like to now pass the call to Matt to discuss our immuno-oncology programs and our next generation development candidate, SEF-301.

Matthew Henn -- Chief Scientific Officer

Thanks, Eric. I'll begin with SER-301. We have made excellent recent progress with SER-301. This is a next-generation rationally designed live microbiome therapeutic candidate for the treatment of ulcerative colitis. SER-301 was designed using our in-human reverse translational drug discovery and development platform that leverages insights from our clinical studies. We believe that our next generation drugs like SER-301 may provide important benefits that include optimization of microbiome therapeutic candidates, pharmacological properties for target diseases and streamlined drug product manufacturing. We are pleased to report today that we have finalized the design of SER-301 and nominated a candidate that incorporates specific defined commensal bacterial species. The consortia of bacteria in SER-301 are designed to modify the microbiome and microbiome associated metabolites in the gastrointestinal tract to favorably impact UC relevant anti-inflammatory and immune pathways and to improve epithelial barrier integrity.

The design of SER-301 incorporates insights on microbiome biomarkers and microbial mediated functional pathways associated with clinical remission and endoscopic improvement from our SER-287 Phase 1b study. Further, bacterial species selected for inclusion in SER-301 have been confirmed to engraft across human subjects. The SER-301 consortia has demonstrated the capacity to modulate disease relevant cellular mechanisms in human cell-based screening assays and in-vivo models. SER-301 is manufactured in series in-house GMP facility and we are moving quickly to transition SER-301 to clinical development to evaluate safety and efficacy in patients with ulcerative colitis. We expect to initiate clinical development in early 2020.

Moving now to SER-401. SER-401 is an orally administered biologically derived live microbiome therapeutic candidate comprising bacteria that reflect the bacterial signature in the gastrointestinal microbiome associated with response to checkpoint inhibitor immunotherapy. In collaboration with the Parker Institute for Cancer Immunotherapy and the MD Anderson Cancer Center, we continue to enroll our SER-401 randomized, placebo-controlled Phase 1b study.

This study will enroll 30 patients with metastatic melanoma. All patients receive Nivolumab, an FDA approved anti-PD-1 therapy and are randomized at a 2 to 1 ratio to either SER-401 or placebo. This study will evaluate safety clinical response and various potential biomarkers of response that include microbiome signatures of response. We will specifically examine tumor biopsies to evaluate immunological activity and other potential pharmacodynamic biomarkers. We expect to report SER-401 Phase 1b study results in the second half of 2020. In addition, under our collaboration with AstraZeneca, SER-401 may be studied in combination with AstraZeneca compounds targeting various cancers. The collaboration is combining Seres microbiome drug discovery and manufacturing expertise with AstraZeneca's extensive oncology experience to evaluate the potential of microbiome therapeutics to improve clinical response when used in conjunction with checkpoint inhibitor therapies.

In addition, this collaboration seeks to further delineate the microbiome biomarkers of immunotherapy response in the patients most amenable to such treatment as well as elucidate additional mechanistic targets for microbiome combination therapies. In addition to the $20 million we receive over two years, AstraZeneca will also reimburse all research activities related to the collaboration.

Under the agreement, we maintain rights to oncology targeted microbiome therapeutic candidates and AstraZeneca will have the option to negotiate for rights to those programs and other inventions arising out of the collaboration. We believe this collaboration will contribute to providing validation of microbiome therapy in oncology.

I'll now pass the call back to Eric.

Eric Shaff -- President and Chief Executive Officer

Thanks, Matt. Turning now to an overview of the financials and I'll note that additional detail is included in the press release issued earlier this morning. Seres reported a net loss of $16.4 million for the third quarter of 2019 as compared to a net loss of $21.9 million for the same period in 2018.

The third quarter net loss was driven primarily by clinical and development expenses, personnel expenses and ongoing development of the Company's microbiome therapeutics platform. The lower level of cash used in the third quarter, relative to prior quarters, is the result of the streamlining of our investments and focusing of our pipeline implemented earlier this year.

Seres ended the third quarter with approximately $83.8 million in cash and cash equivalents. This figure does not include capital that we obtained with our recent debt financing. We obtained $25 million upon the closing of the agreement late last month and we could also have access to up to an additional approximately $25 million with the achievement of certain milestones.

The Company's cash resources are expected to fund operating expenses and capital expenditure requirements, excluding net cash flows from future business development activities or potential incoming milestone payments into the second quarter of 2021. This cash cash run rate does not include a $10 million SER-301 Phase 1 milestone payment that Seres would be entitled to next year as part of our Nestle Health Science Collaboration. Importantly, we believe our resources are sufficient to enable the company to reach the multiple significant R&D milestones we're looking forward to in 2020. We have made considerable progress this year across all areas important to building a sustainable company. We have refocused our clinical strategy and made important advances to these programs. In addition, we have partnered with AstraZeneca to further elucidate the potential of microbiome therapeutics to augment immuno-oncology treatment for cancer.

We have streamlined our operations, implemented disciplined financial management, and added key skills and experience to our Board of Directors. Importantly, we have strengthened our balance sheet with a $61 million equity financing and secured up to $50 million in debt funding to support our R&D efforts.

We are closing out 2019 on strong footing and looking ahead we anticipate a data-rich 2020 with important milestones and data readouts . Before opening up the call to your questions, I want to take this opportunity to thank the patients and clinicians involved in our studies, our supportive investor base and our dedicated and passionate team here at Seres.

Operator, let's open the line for questions.

Questions and Answers:

Operator

[Operator Instructions]. Your first question comes from Chris Shibutani.

Chris Shibutani -- Cowen -- Analyst

Thanks for taking our question. Hey, my first question is, can you help us understand the trend for enrollment in the pivotal SER-109 trial, just looking at what you disclosed previously at the end of April, 135 patients or so out of 188 were enrolled and now you've reported that at the end of October, there were 160. So just extending this without knowing any trend, one would think another 6 to 7 months might be needed for enrollment. Can you provide any color on that?

Eric Shaff -- President and Chief Executive Officer

Sure. So, there certainly is variability in month to month enrollment and we provided our current estimate which is based on the latest transfer top-line study results. So we've had some months that are softer, we've had some months which are more firm. In the last couple of months, we've been pleased that the trend is really positive. But we're pleased that the study is really now close to fully enrolled. We disclosed this morning that we're over 85% enrolled. So that really allows us to narrow the focus of our projections. And look, I'd say that we are very happy to be in the last lap of this clinical study and we're really looking forward to next year's clinical results. This, as the FDA meeting yesterday, I think, further evidenced there continues to be an unmet medical need for patients in this space and it's a need that we think that's SER-109 could really fill. So we're pleased to be toward the end of the study and we're very pleased to be preparing for top-line results next year.

Chris Shibutani -- Cowen -- Analyst

Got it, thanks. And we have a second question on SER-287, can you talk about the pros and cons of potentially starting a second potentially pivotal trial for SER-287 before this current potentially pivotal trial is complete.

Matthew Henn -- Chief Scientific Officer

Yes, I would say we are focused on the IIb study which as we've said it could be one of two pivotal studies based on feedback from the FDA. I would point out that we're really looking to replicate the data that we saw in the 1b study, both in terms of the top line clinical results as well as some of the really interesting microbiome analysis which correlated with those top line clinical results. So, there is more to learn and I would say that we, as you remember, we've designed a study with both, a dose which replicates the dose that was most efficacious in the 1b study, as well as a step down dose. So it's unlikely that we would move forward with a second pivotal study before seeing the results of this IIb study, which we're really focused on.

Chris Shibutani -- Cowen -- Analyst

Got it. Very helpful, thank you.

Eric Shaff -- President and Chief Executive Officer

Thanks for the questions.

Operator

Your next question comes from Terence Flynn with Goldman Sachs.

Unidentified Participant

Hey, this is Holly on for Terence. Thanks so much for taking my question. For the SER-401 Phase Ib data expected next year, what are you hoping to see in order to advance that program. And can you remind us why you chose melanoma as the first implication and have you considered exploring other tumor types? Thank you.

Eric Shaff -- President and Chief Executive Officer

Sure. Holly, thanks for the question. I'm going to ask Matt to comment and Kevin, if he can get on the line to maybe provide his views as well.

Matthew Henn -- Chief Scientific Officer

Sure. So basically, first with respect to why metastatic melanoma. There's been various different publications over the past couple of years that have explored how the microbiome is associated with improved response to checkpoint inhibitor therapies and several of those studies point to a potential response in the context of metastatic melanoma We have developed preclinical data sets in-house that have looked at several different cancer types and metastatic melanoma and the [Indecipherable] we are using as an area where we have been able to recapitulate important preclinical results which give us confidence in that particular cancer type. As part of our collaboration with AstraZeneca, where the fundamental components of that collaboration is to generate data and acquire data for other potential cancer types and other therapies and so that's an ongoing area of investigation to identify where the next best opportunities are with respect to microbiome therapeutic in combination with an immune checkpoint inhibitor.

In terms of the Phase Ib study, in that particular study we are first and foremost evaluating safety of SER-401 and then we are looking at efficacy in the context of the ability to improve response and that we are measuring using various resist measurements for measurements of response and then in addition, we will be basically looking at what the microbiome dynamics are post-treatment with SER-401 and understanding how those changes modulate host immunological properties, and in particular we are acquiring tumor biopsies, which will allow us to look at specific immunological response at the tumors themselves.

Unidentified Participant

Great, thanks. That's very helpful.

Matthew Henn -- Chief Scientific Officer

Thanks for the question.

Operator

Your next question comes from Mark Breidenbach with Oppenheimer.

Unidentified Participant

This is Matt on for Mark, thanks for taking our questions. So, Eric, with the spotlight now on donor-derived therapies from that New England Journal paper you mentioned, have you had any additional interactions with the FDA? I mean have they voiced any concerns around your process?

Eric Shaff -- President and Chief Executive Officer

Yeah, Matt, let me answer. I'm glad you brought up the question, because there -- as I think most people are aware, but if you're not, there was a forum at the FDA yesterday that talked about FMT and overall I thought it was a good discussion. You heard a number of different points of view. I think it's helpful for the FDA to hold these types of forums, particularly following some of the safety issues that we've seen with FMT and there were a number of different issues or questions that were addressed including headwinds to enrollment created by FMT which is something that we talked about. But look, Seres position is that in light of the recent reports of Seres adverse events with FMT, the policy of enforcement discretion really could be revisited. It may not be in the best interest of patient safety, but in any case, you heard multiple points of view that strongly agree that when an approved therapy is available, that enforcement discretion may not be appropriate, so I think the idea of safety is one that's on everyone's minds and it's one in which we think that we are well situated to provide a solution for patients. I do want to -- I'll ask Matt to comment on some of our processes from a manufacturing perspective and why we think we're differentiated from some of the concern that you heard yesterday.

Matthew Henn -- Chief Scientific Officer

Sure. Thanks, Eric. So SER-109 is a highly purified composition of spores from commensal bacterial from acutes [Phonetic] and as such it's a fundamentally different product than FMT. The donor screening protocol that we use in combination with our GMP manufacturing process to fractionate and purify the spores of SER-109 yield the drug product that does not contain any vegetative bacteria including E-coli and procarcinogenic bacteria that have been associated with FMT safety risks in the past.

In addition, our manufacturing process in a very meaningful way removes other impurities that are inherent in FMT and may have unknown safety risks and importantly we've conducted validation studies to demonstrate reduction of viruses, parasites, other stool components and we've actually have posters on our website that even speak to that.

And lastly, SER-109 drug product is released under rigorous GMP identity purity and potency assays that include bioburden testing. In that bioburden testing, we would pick up any potential problems that were with a particular product.

Unidentified Participant

Got it. Thanks for that insight. And then maybe just a quick housekeeping question. So the updated cash runway that you've guided, does that include the new debt facility?

Eric Shaff -- President and Chief Executive Officer

It does Matt. So into the second quarter of 2021 includes the $25 million which is the first tranche of debt that we received in closing the transaction last month.

Unidentified Participant

Got it. Thanks for taking our questions.

Eric Shaff -- President and Chief Executive Officer

Sure.

Operator

Your next question comes from Chris Howerton with Jefferies.

Chris Howerton -- Jefferies -- Analyst

Thanks for taking the questions. I guess the first question that I want to start with is related to 301 and getting to the IND stage. What are the gating factors to getting to that IND? What are the boxes that you have to check from now until the filing of that? And then a follow-up to that is, should we expect a similar early clinical program similar to SER-287 for 301 or should we expect a more traditional type of drug development pathway? And then I have a couple more as well.

Eric Shaff -- President and Chief Executive Officer

All right, let's start with the first couple Chris and on 301, I'd say that a number of the gating items toward moving to clinical initiation Matt talked about and certainly the most significant were nominating the consortia itself as well as some of the CMC activities that are in the clinical path. I'll ask Matt to comment on that. We have not talked about the design of the study yet, but I can tell you that we're in the final stages of designing and finalizing that clinical study.

So let me ask Matt to comment, then we can take from there.

Matthew Henn -- Chief Scientific Officer

Yes, so we've moved -- as I noted earlier, we've moved SER-301 to our lead nomination stage, so we have finished our design of the composition and that particular consortia is in manufacturing as we speak and is nearing completion. And as soon as we have all the requisite appropriate stability data etc, as you know are required for regulatory filings, we will initiate our filings.

In terms of the Phase Ib trial itself, we expect to initiate, as we said, the Phase Ib in early 2020. This trial is intended to assess SER-301 safety. But in addition, we will be evaluating efficacy and drug activity using various microbiome metabolomic and disease relevant host readout.

Eric Shaff -- President and Chief Executive Officer

And Chris, I just add, we are incredibly excited about moving forward with SER-301. We've talked, I think, in depth in the past about the benefits of our biologically sourced platform providing insights into our synthetic platform including some of the learnings that we have from our 287 Ib study, which have been incorporated into the design of SER-301.

So we're excited. Our partners at Nestle are excited and we're looking forward to moving this as quickly as possible.

Chris Howerton -- Jefferies -- Analyst

Great, thank you for that. So in terms of 109, it's just kind of related to the enrollment question asked earlier, what gives you confidence in the timing of the 109 read coming in the middle of next year?

Eric Shaff -- President and Chief Executive Officer

Yes, Chris, I think I'll provided some comments beforehand, but we're more than 85% enrolled in this study and we think that that allows us to really narrowed the bands of our projections and gives us confidence in that projection. So we're excited to be, as I said, at the final stages of clinical enrollment and we're even more excited about the opportunity for top-line results, not only for this program, but really we think that this will be a significant moment, not just for Seres, but for the microbiome space. So we're excited to be moving forward.

Chris Howerton -- Jefferies -- Analyst

Great, thank you. And the last one is related to your debt financing that you did. What would trigger those additional $12.5 million tranches?

Eric Shaff -- President and Chief Executive Officer

Yes, Chris, we provided, I think, a fair amount of detail in the 8-K that we filed last night but basically, we haven't disclosed exactly what they are, but you can envision that with positive clinical progress, the opportunity to access additional funds would be unlocked. And we think that it's really -- we're pleased to have done this transaction. We think it's a great way to opportunistically support the financial health of the company, provides additional runway. Given where our stock price is, we think that this cost of capital is highly attractive. So we think based on the terms of the transaction, we're pleased about moving forward with that as well.

Chris Howerton -- Jefferies -- Analyst

Great, thank you guys. Thanks for taking the questions.

Eric Shaff -- President and Chief Executive Officer

Thanks for the questions Chris.

Operator

Your next question comes from John Newman from Canaccord.

Justin Zelin -- Canaccord -- Analyst

Hi, good morning guys. This is Justin Velan [Phonetic] on for John.

Analyst

Congrats on the progress for the quarter and I just had a question on 109. Have you had any additional interactions with the FDA on whether data from the Ecospor trial would be sufficient for filing of the LA. Can you give some color there?

Eric Shaff -- President and Chief Executive Officer

Yeah, thanks for the question. We have not -- I'll reiterate what we've said in the past, which is we are extremely pleased with the opportunity to provide top-line results next year in the study. And based on the fact that it's a breakthrough therapy, it's an orphan therapy, based on some of the unmet medical needs that I thought was highlighted yesterday at the FDA meeting with positive top-line clinical results, we will be very pleased to engage with the FDA in the dialog about next steps next year after we get those top-line results.

Analyst

Great. Got it. Well, thanks for answering my question.

Eric Shaff -- President and Chief Executive Officer

Thanks for the question.

Operator

Your next question comes from Vernon Bernardino from HC Wainwright.

Vernon Bernardino -- HC Wainwright -- Analyst

Hi, good morning, everyone, and congrats on the progress. Most of my questions have been asked and answered, but just one question I have is, you have additional cash and you're focusing on the current programs including initiation of 301, any activities that could be to the advancement of other product candidates, now that you have a little bit of cash?

Matthew Henn -- Chief Scientific Officer

Yeah, Vernon. good morning and thanks for the question.

Vernon Bernardino -- HC Wainwright -- Analyst

Good morning.

Matthew Henn -- Chief Scientific Officer

The answer is we are highly focused right now and we think that next year's milestones, including the 2 late-stage milestones, will be, we believe, potentially transformative not only for the company, but also for the industry and I think that's a tremendous responsibility. So we are continually evaluating how we're deploying capital in the most effective way to treat patients and to reward shareholders and I'd say that's not a static exercise, it's continually ongoing. If there are ways in which we can move the science for the medicine forward, we will explore those ways, but I can tell you that as of now we're highly focused on executing on these 2 late-stage clinical results that we think will be significant for the field.

We've -- as I've said, we've found a way to work with AstraZeneca in a resource efficient way. There are other opportunities that we have available to us. But again, we're focused on our late-stage clinical results, which we think will be potentially transformative for the field.

Vernon Bernardino -- HC Wainwright -- Analyst

Do you anticipate, with the expenses you have ramp down so far, with the programs you've identified and the cuts earlier and last year that you anticipate any further operating expense efficiencies or that's all built in and just allows you to look forward to second quarter 2021?

Eric Shaff -- President and Chief Executive Officer

I think Vernon, you saw a fairly significant reduction from the burn that we had in Q1 and earlier versus where we've been in the last couple of quarters. Our expectation is that that's the model for going forward and I think that's how we get into the second quarter of 2021. So we continue to invest in the best, the best methods, the best investments to help patients and provide a return to shareholders. So that's where we're focused.

Vernon Bernardino -- HC Wainwright -- Analyst

Perfect. Congrats again on the progress and looking forward to more.

Eric Shaff -- President and Chief Executive Officer

Thanks for the question Vernon, appreciate it.

Operator

I am showing no further questions at this time, I would like to now turn the conference back to the Company.

Carlo Tanzi -- Investor Relations

Thank you, operator and thank you for your continued interest in Seres Therapeutics and we look forward to keeping you apprised of our progress. Have a great morning and a good week. Thanks.

Operator

[Operator Closing Remarks].

Duration: 40 minutes

Call participants:

Carlo Tanzi -- Investor Relations

Eric Shaff -- President and Chief Executive Officer

Matthew Henn -- Chief Scientific Officer

Chris Shibutani -- Cowen -- Analyst

Unidentified Participant

Chris Howerton -- Jefferies -- Analyst

Justin Zelin -- Canaccord -- Analyst

Analyst

Vernon Bernardino -- HC Wainwright -- Analyst

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