What happened

Shares of Seres Therapeutics (MCRB 3.25%), a biopharmaceutical company focused on the microbiome, jumped 64% after partnering with AstraZeneca (AZN 0.41%) to test a unique cancer therapy candidate in combination with Imfinzi. Excited investors pushed the stock 64.2% higher in early morning trading, but the stock's gain settled to 28.8% as of 1:04 p.m. EDT on Monday.

So what

Seres is developing oral microbiome therapeutics, which are essentially bacterial spores that should come to life in your gut and thrive there. The company's lead candidate, SER-109, is in a phase 3 trial for the treatment of Clostridium difficile infection, but it was a phase 1 asset that drove the stock higher today.

Guy in a suit with a cartoon jetpack flying parallel to an upward sloping arrow.

Image source: Getty Images.

In January, the Parker Institute for Cancer Immunotherapy sponsored a 30-patient randomized study with SER-401 in partnership with the University of Texas MD Anderson Cancer Center. Melanoma patients were split into groups receiving Opdivo from Bristol-Myers Squibb (BMY 2.17%) plus SER-401 or a placebo.

AstraZeneca didn't want to wait around for Bristol-Myers Squibb or any of its peers to jump on what might be an opportunity to expand sales of Imfinzi, a drug similar to Opdivo. The big British pharma will give Seres $20 million up front for a three-year collaboration to better understand how the microbiome might work with its cancer therapies.

Check out the latest earnings call transcript for Seres Therapeutics.

Now what

The partners aren't beginning any studies right away. That's because AstraZeneca's probably waiting to see if patients given Opdivo plus SER-401 outperform those given Opdivo on its own.

To a company as large as AstraZeneca, $20 million is pretty small potatoes. That said, I wouldn't be surprised if a sneak peek at results from a highly anticipated presentation coming up at the end of the month played a role.

On March 31, at the annual meeting of the American Association for Cancer Research (AACR), we'll find out if fecal transplants from patients who respond well to anti-PD-1 therapy help patients who didn't respond the first time around. Seres is developing feces-free treatments that patients swallow, but the goal is the same as a fecal transplant. If results suggest the right microbiome really makes a difference, this stock could jump again.