Shares of Seres Therapeutics Inc. (NASDAQ: MCRB) took an absolute dive early in Friday’s session. The company had a market cap of nearly $1.5 billion on Thursday, but this was reduced to just under $350 million in one fell swoop. The problem is that this company is staring down the barrel of a seemingly failed mid-stage clinical trial. What is for sure right now, though, is that shareholders are getting crushed.

The company announced interim eight-week results from the ongoing SER-109 Phase 2 Ecosportm clinical study for the prevention of multiply recurrent Clostridium difficile infection (CDI). The study’s primary endpoint of reducing the relative risk of CDI recurrence at up to eight weeks was not achieved. Seres continues to gather and analyze study data, and in consultation with the FDA, plans to make appropriate adjustments to its SER-109 development plans.

Keep in mind that these are not the final results from the trial, but they are strongly suggesting a successful trial may not be the outcome.

The predefined study primary efficacy endpoint is the relative risk of CDI recurrence up to eight weeks after treatment comparing subjects in the placebo arm with the SER-109 arm. CDI recurrence is defined as diarrhea for two or more consecutive days, a positive CDI test and the requirement for antibiotic treatment.

Based on the eight-week data, Seres did not observe any difference in the adverse event frequency or type in the subjects receiving SER-109 compared to those receiving placebo. The most commonly reported adverse events in both the SER-109 and placebo arms were in the gastrointestinal category. The most common adverse events reported in the SER-109 arm were diarrhea, abdominal pain and flatulence. No drug-related serious adverse events were observed.

Roger Pomerantz, M.D., president, chief executive and board chair of Seres, commented:

These are unexpected clinical results in view of the positive data in our prior investigator-sponsored Phase 1b trial, as well as in a wide range of supporting clinical and preclinical data. Specifically, the recurrence rates observed in the overall SER-109 treatment group, in the age stratified subgroups, and in the placebo groups are inconsistent with our expectations. Our priority is to complete a full review of the clinical results and microbiome data of the Phase 2 study and to compare it to data from the prior investigator sponsored Phase 1b. Based on this information and pending discussions with the FDA, we plan to make any necessary changes to our development plans for SER-109.

Shares of Seres were last seen down about 75% at $8.70, with a consensus analyst price target of $42.67 and a 52-week trading range of $8.05 to $52.00.

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