Seres Health of Cambridge, MA, announced two big steps Tuesday. First, it says it has raised $48 million in a Series C round from public investors, which is often a sign among biotech companies that a push toward an IPO is on the horizon.
If indeed that is the company’s intent—as CEO Roger Pomerantz (pictured) signaled when he spoke with Xconomy this summer—the move to go public would roughly coincide with a second significant step: A Phase 3 trial for its lead product, which, if successful, would likely become the first approved treatment to emerge from the recent wave of human microbiome research.
Seres is working on SER-109, a mixture of microbes to help cure infection of the potentially deadly bacterium Clostridium difficile, or C. diff, which often strikes people whose immune systems are compromised and whose antibiotic use has wiped out the “good bugs” of the gut, allowing resistant C. diff strains to flourish. The infection causes severe diarrhea that kills 14,000 people in the U.S. alone each year, according to the Centers for Disease Control and Prevention.
In a Phase 1/2 trial SER-109 cured 29 of 30 patients who suffered from recurring infection. Those results have led to a Phase 3 trial, which Seres said it plans to start in early 2015.
SER-109 isn’t exactly a mix of microbes. It’s made instead of bacterial spores, like the seeds of a plant, which can survive inhospitable conditions both inside and outside the body. Seres has identified 50 bacteria that help re-balance the microbial mix in a C. difficile-infected gut, and the spores of those bacteria, isolated from healthy human feces, are put into a pill. When they enter the gut, they grow into bacteria.
Outside the FDA’s purview, doctors for decades have been using a treatment called fecal microbial transplantation that inspired Seres Health’s efforts. It’s pretty much what it sounds like: Feces from a healthy person is transferred to a sick one. The field received more clinical validation from a study published in early 2013 that showed fecal transplants worked much better than the standard antibiotic, vancomycin. And the FDA said last summer it would be flexible in allowing fecal transplant testing for the treatment of C. diff. (SER-109 is aimed at patients whose infections are resistant to vancomycin treatment.)
SER-109′s potential fast track to the market could provide commercial validation for other microbiome startups, and for those looking to start new ones. But success in C. diff, a relatively simple problem, won’t easily translate to more complicated diseases.
The Series C round brings Seres’s total fundraising to approximately $68 million. The firm was conceived and incubated within the VentureLabs program of Flagship Ventures, which supplied the first $10 million. Flagship then led a $10 million Series B round that included the Mayo Clinic, Enso Ventures, Alexandria Real Estate, and undisclosed private backers.
This new round is even more anonymous. Seres did not disclose any investors except to say that they are “leading public healthcare investors.” In biotech, bringing on board public or “crossover” investors for a big private round is often, though not always, a sign that an IPO is next.