Seres Therapeutics (MCRB -0.18%) saw its shares rise more than 22% Wednesday. The microbiome therapeutics company's stock closed at $6.87 on Tuesday, opened at $7.34 on Wednesday, and hit a high of $9.22 during afternoon trading. The stock has had a wide range over the past 52 weeks, with a high of $38.50 and a low of $5.41.
The company released its third-quarter earnings report on Wednesday, and it posted net income of $68.2 million, compared with $30.3 million in the same period in 2020. The company's revenue was $126.7 million, compared with only $1.4 million year over year, with most of the increase from collaboration revenue from Seres' co-commercialization license agreement with Nestlé Health Science.
The improved financial numbers were only part of the story.
Seres is focusing on bacterial consortia (a combination of bacteria) to treat diseases. On Wednesday, Seres said it had established a collaboration with Swiss pharmaceutical company Bacthera to manufacture SER-109, Seres' lead therapy to treat recurrent Clostridioides difficle infection (rCDI). It's the leading cause of hospital-acquired infections each year, responsible for 223,900 hospitalizations and more than 12,800 deaths each year in the United States, according to the Centers for Disease Control.
The deal paves the way for the mass production of SER-109, which would be the first investigational microbiome-based therapy, sometimes called bugs-as-drugs, to use bacterial spores from healthy human donors.
Seres said it expects its completed phase 3 trial on SER-109 to support finalization of a Biologics License Application for the therapy in mid-2022. It's a huge opportunity as one study in the International Journal of Environmental Research and Public Health this year said that hospital cases of rCDI increased expenses by more than half and extended patients' stays in the hospital by an average of 3.6 days.
The improved financial numbers and a clearer finish line for SER-109 were enough to excite investors in the biotech stock.
The therapy needs to be approved by the Food and Drug Administration, but now at least three companies have enough faith in SER-109 to put significant resources behind it. Besides Seres, contract development and manufacturing organization Bacthera is establishing a dedicated facility to manufacture the therapy and Nestlé Health Science agreed in July to jointly commercialize the product, when launched, in the U.S. and Canada.