In the first big test of public investor appetite for the human microbiome, Seres Therapeutics (NASDAQ: MCRB) has priced shares tonight for its initial public offering at $18 each. The Cambridge, MA-based developer of bacteria-based treatments for serious gastrointestinal ailments sold 7.43 million shares to gross nearly $134 million.
That sum is one-third more than the company anticipated last week, when it set its sights on a $100 million debut. As I wrote earlier today, Seres is developing a treatment for the antibiotic-resistant bacterial infection Clostridium difficile.
With its program—a mix of bacterial spores that when swallowed bloom into a healthy bacterial community in the gut and crowd out the invasive C. difficile—Seres, under the leadership of former Merck business development chief Roger Pomerantz (pictured), could be about two years away from FDA approval.
Until then, sufferers of C. difficile infection who cannot rely on antibiotics can turn to a nonprofit, OpenBiome of Medford, MA, which takes healthy donors’ feces, freezes it, and ships it out to hospitals and clinics around the country that practice fecal microbial transplantation, or FMT. FMT is the transfer of healthy poop into a sick person’s stomach, where the good bugs crowd out the bad bugs. It’s the same concept as Seres’ product, but OpenBiome charges $635, at the most.
How Seres positions its product against what could be a lower-cost competitor produced by a nonprofit remains to be seen. Seres is also developing a C. difficile treatment meant to be given with antibiotics, and it is exploring bacterially derived products to treat ulcerative colitis and other diseases.
Flagship Ventures of Cambridge, MA, seeded and developed Seres in its VentureLabs program and provided its Series A funding three years ago. Flagship remains its largest shareholder, with roughly 55 percent ownership before the IPO. Nestle is next, with 18 percent, followed by Fidelity (8 percent) and Enso Ventures (6 percent).