Is Sunshine Returning to Seres Therapeutics Inc. (NASDAQ:MCRB)?

Seres Therapeutics Inc. (NASDAQ:MCRB)

Seres Therapeutics Inc. (NASDAQ:MCRB) shares closed Wednesday at $9.27, then, on Thursday, MCRB gapped up to open at $10.00 before reaching a high of $13.32 and closing at $12.71. MCRB has a history of gapping and not always up. In the last week of July, MCRB was trading above $35 and gapped down to open below $10. Since that down move, the stock has gapped up three times but none with the force of Thursday’s move which saw a price gain of over 37%.

Seres Therapeutics Inc. (NASDAQ:MCRB) reported in July that its Phase 2 trial (Ser-109) did not meet its primary endpoint. Ser-109 was studying the effectiveness of its lead drug candidate, Ecospor, on patients with gastrointestinal diseases – specifically patients with recurrent Clostridium Difficile infection (CDI). That news wiped out over 70% of shareholder equity.

Fast forward to Thursday when Seres Therapeutics Inc. (NASDAQ:MCRB) released financial results and a programmatical update.

Financials

Seres Therapeutics Inc. (NASDAQ:MCRB) reported a net loss of $91.6 million for the full year, as compared to a net loss of $54.8 million for the prior year. Seres reported a net loss of $25.3 million for the fourth quarter of 2016, as compared to a net loss of $19.6 million for the same period in 2015. The increase in fourth quarter net loss was driven primarily by continued growth in clinical and development expenses as well as increased headcount, and ongoing development of the company’s therapeutic platform.

Programmatical Update
  • Seres Therapeutics Inc. (NASDAQ:MCRB) has consulted with the FDA and has received approval to perform an additional Phase 2 clinical trial for SER-109 (Ecospor III) in approximately 320 patients with multiply recurrent Clostridium difficile infection (CDI).
  • Seres continued to advance the SER-287 Phase 1b clinical study in subjects with mild-to-moderate ulcerative colitis who have failed first line therapy.
  • Seres continued to advance the SER-262 Phase 1b clinical study in patients with primary C. difficile infection. SER-262, an Ecobiotic®, rationally-designed, fermented microbiome therapeutic candidate, is the first synthetically-derived and designed microbiome therapeutic candidate to reach clinical-stage development.
  • Seres continued to strengthen its intellectual property estate related to microbiome therapeutics. The United States Patent and Trademark Office issued a new patent (#9,585,921), assigned to Seres, covering compositions for treating multiple gastrointestinal diseases associated with dysbiosis of the microbiome.

Interested parties should be aware that Seres Therapeutics Inc. (NASDAQ:MCRB) has never reported any sales. Seres’ EPS has been negative each year since 2012 and had its worst year in 2015 when it reported an EPS loss of -$2.33. However of the six firms that cover MCRB, five rate the shares as a “Strong Buy” while one rates the shares as a “Hold”.

3/17/2017
Ticker Symbol MCRB
Last Price a/o 8:07 AM EST  $                    12.98
Average Volume                    223,400
Market Cap (mlns)  $                  515.64
Sales (mlns) $18.70
Shares Outstanding (mlns) 40.57
Share Float (mlns) 32.93
Shortable Yes
Optionable Yes
Inside Ownership 18.72%
Short Float 7.97%
Short Interest Ratio 11.74
Quarterly Return 37.85%
YTD Return 28.38%
Year Return -48.52%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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