Seres Therapeutics Inc (MCRB) 2021 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Seres Therapeutics Q2 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Dr. Carlo Tanzi of Investor Relations.

Thank you, and good morning. Our press release with the company's second quarter 2021 financial results and a business update became available at 7:00 a.m. Eastern Time this morning and can be found on the Investors and News section of the company's website. I'd like to remind you that we'll be making forward-looking statements relating to the timing, enrollment and results of our clinical studies, the anticipated safety profile of our products, regulatory approval, the success of our agreement with Nestlé, the sufficiency and availability of cash to fund operations and the promise and potential impact of any of our microbiome therapeutics. Actual results may differ materially.

Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of our recent SEC filings. Any forward-looking statements made on today's call represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so.

On today's call with prepared remarks, I'm joined by President and Chief Executive Officer, Eric Shaff; Chief Financial Officer, David Arkowitz; and Chief Scientific Officer, Matthew Henn. During the Q&A portion of the call, we will also be joined by our Chief Medical Officer, Lisa von Moltke; and Dr. Terry Young, our Chief Commercial and Strategy Officer.

And with that, I'll pass the call to Eric.

Thank you, Carlo, and good morning, everyone. The last several months have been an eventful period for Seres. We have made substantial progress advancing our lead SER-109 program towards the BLA filing for recurrent C. difficile infection. We signed an important SER-109 co-commercialization agreement with Nestlé Health Science covering the North American region. We obtained top line clinical results for our SER-287 program. And we have also continued to make clinical development progress with SER-155 and SER-301, our next-generation rationally designed pipeline candidates. Last month, we held 2 conference calls focused on our CDI and ulcerative colitis programs, and today, we intend to keep our remarks relatively brief.

I will begin today with SER-109. Our top corporate priorities are to complete the required SER-109 safety database through our ongoing open-label study and to prepare for a high-quality BLA filing. We are very pleased with our progress with the enrollment of the open-label study, and we are on track to achieve the full 300-patient target later this quarter.

Our organization is also preparing for a successful commercial launch. To support this effort, in early July, we entered into an agreement with Nestlé Health Science to jointly commercialize SER-109 in the United States and Canada. We believe that through this agreement, Seres is well positioned to effectively bring SER-109 to patients suffering from recurrent CDI. The transaction also provides Seres with substantial capital to drive the continued development of our earlier-stage pipeline of microbiome therapeutic, including SER-301 and SER-155, our preclinical stage programs, as well as our platform capabilities.

Under the terms of the Nestlé agreement, Seres received an upfront license payment of $175 million and is eligible for an additional $125 million upon FDA approval of SER-109 and $10 million upon approval in Canada. The agreement includes sales target milestones, which if achieved, could total up to $225 million. Upon commercialization, Seres will be entitled to an amount equal to 50% of the commercial profits. We are very pleased with this transaction from both a strategic and financial perspective.

As you may remember, Nestlé previously owned ex-North American rights to SER-109 based on our 2016 deal. There are considerable efficiencies and benefits to a global approach to commercializing SER-109 in terms of marketing, pricing and reimbursement, executing an effective global regulatory strategy and other aspects of launch that will maximize value. Seres has -- Nestlé has been a great collaborator to Seres, and we look forward to continuing to work closely with them moving forward.

We expect SER-109 to become the first ever FDA-approved microbiome therapeutic. SER-109 approval and launch would represent a landmark event for the field. And in addition, we believe that SER-109 represents a substantial commercial opportunity for Seres. Each recurrence of CDI has been estimated to result in approximately $34,000 in direct health care expenses.

The recurrent CDI population includes approximately 170,000 cases in the U.S., and we believe we have the opportunity to address this entire patient group. Since announcing our positive SER-109 Phase III data last summer, we've observed a steady increase in the awareness and excitement of the medical community for this product.

The substantial interest in SER-109 has also been seen in the enrollment of our ongoing open-label study. And in fact, July was our highest month of enrollment to date. The SER-109 open-label study is now approaching full enrollment, and we believe to achieve target enrollment late in the third quarter. The FDA has requested that 6 months of safety follow-up from the study to be included in the safety database. Completion of this database will support a SER-109 BLA filing, and this would represent completing a major requirement to potentially enable SER-109 to become the first ever FDA-approved microbiome therapeutic.

In addition to SER-109, we are advancing the pipeline of additional investigational microbiome therapeutics. Last month, we reported top line clinical results from our SER-287 Phase IIb study. The SER-287 Phase IIb study did not demonstrate a clinical benefit in patients with mild-to-moderate UC. The results of the study were unexpected, and we are now focused on obtaining microbiome results from that study. We expect these data to provide us with a much deeper understanding of the study outcome and why the results were so different from the prior Phase Ib study data.

In addition, these results will provide us with valuable information that will provide insights to inform continued development of our pipeline, including SER-301, our next-generation investigational candidate for ulcerative colitis. As we have successfully done with our SER-109 program in the coming months, we intend to perform an in-depth scientific analysis of all Phase IIb study results, learn from the data and determine what modifications to implement in our future microbiome therapeutic development efforts.

I'll now pass the call to Matt to discuss our earlier-stage pipeline programs.

Thanks, Eric. Starting with our ongoing SER-301 Phase Ib study. SER-301 is a next-generation, orally dosed, rationally designed, cultivated microbiome therapeutic candidate for the treatment of ulcerative colitis. The unique composition of SER-301 is designed to optimize drug species engraftment and the pharmacological properties that our clinical and nonclinical research have identified as potentially important drivers of a treatment effect.

Research over the past decade continues to support that individuals with IBD can have a gastrointestinal microbiome that differs from those of healthy individuals in terms of the specific bacteria that are found in and that dominate the GI. Further, we know from the research literature and our internal clinical and nonclinical data sets that bacteria found in the gastrointestinal microbiome and the metabolites they produce are associated with modulation of many of the immune pathways that have been associated with IBD and UC.

Unlike SER-287, a donor-derived product candidate, SER-301 is targeted at and contains bacteria specifically selected to optimize the reduction of pro-inflammatory activity, improve epithelial barrier integrity and TNF-alpha driven inflammation in intestinal epithelial cells and modulate UC-relevant, anti-inflammatory innate and adaptive immune pathways to suppress inflammation. We are enrolling a SER-301 Phase Ib study in adults with mild-to-moderate ulcerative colitis. The study is being conducted in Australia and New Zealand with a target enrollment of 65 patients.

The objectives for this study are to evaluate drug safety and pharmacokinetics and to evaluate clinical remission and other measures of efficacy as secondary endpoints. We anticipate obtaining additional clinical and biological information from this study to support robust, data-driven decisions regarding the future development of the program.

Moving now to SER-155. SER-155 is an orally dosed, rationally designed, cultivated microbiome therapeutic candidate designed to decrease the incidence of gastrointestinal bacterial infections, bacteremia, and graft-versus-host disease in immunocompromised patients receiving allogeneic hematic (sic) [hematopoietic] stem cell transplantation.

SER-155 built on the SER-109 data, we have obtained an infectious disease and has leveraged the company's reverse translational platforms and capabilities that can evaluate at high resolution how microbes in the gastrointestinal tract are interacting with one and other in human cells and tissues to impact pathogen colonization and modulate host pathways associated with various inflammatory and immune-related diseases.

SER-155 is designed to prevent both bacterial bloodstream infections, particularly those that harbor antibiotic resistance genes as well as to modulate host immunity to reduce the onset of graft versus host disease. We have obtained IND clearance for SER-155 to initiate clinical development, and we expect to begin screening patients in a Phase Ib study later this quarter. This study will be conducted in collaboration with Memorial Sloan Kettering Cancer Center and the University of Chicago field leading academic centers.

Turning now to our earlier-stage pipeline. We continue to advance our core platforms and technologies and to evaluate several potential new indications for our microbiome therapeutics. Since Seres inception, we have been building a research engine that can integrate insights in microbiome biomarker data from human data with screening data from human cell-based assays and disease model results from customized in vivo models defined at high-resolution microbiome signatures of disease and health.

Importantly, our platforms can interrogate the mechanisms of action of microbes both directly and humans to help derisk discovery and in combination with nonclinical assays and models to maximize the translatability of our lead candidates. The company has established extensive insights and a database of microbiome druggable targets with a mapping of these target modalities to disease correlates and existing therapeutics to inform the advancement of our future pipeline and to delineate the mechanisms of action of our investigational drugs.

Our research platforms, capabilities and knowledge base, combined with a broad scope and the breadth of complexity of microbes we can manufacture under GMP conditions, positions us well as we advance and broaden our pipeline. This know-how and these technologies enable us to consider multiple diseases with high unmet medical needs, with near-term opportunities in biologically adjacent areas, such as fighting antibiotic-resistant infections and additional opportunities that span oncology, inflammatory, autoimmune, metabolic and neurological diseases.

With that, I'll now turn the call to David to provide a few overview of our financials.

Thank you, Matt. The details of our quarterly financials are included in this morning's press release, so I won't reiterate them here. Seres ended the second quarter of 2021 with approximately $229 million in cash, cash equivalents and marketable securities. The June 30, 2021, cash balance does not include the upfront fee of $175 million that has been received by Seres following the SER-109 co-commercialization license agreement announced on July 1, 2021, with Nestlé Health Science.

Including this upfront fee from Nestlé, our quarter end pro forma cash balance was approximately $404 million, so we believe the company has a strong balance sheet and is well resourced to optimally prepare for SER-109 commercialization in the U.S., drive our ongoing development and discovery programs while deploying resources to continue to advance our research platforms where we believe we have differentiated, proprietary and sustainable advantages.

With respect to our operating expenses and efforts over the near term, we are focused on a number of critical SER-109-related activities, which include completing the open-label study, filing the BLA submission, ramping up manufacturing operations for commercial supply and in conjunction with Nestlé accelerating our prelaunch commercialization efforts. We believe that there is a significant commercial opportunity for SER-109 in the U.S. given the number of annual cases of recurrent C. diff, the lack of current effective treatments and the stellar efficacy and safety profile of SER-109.

Moreover, as a result of our agreement with Nestlé, we are able to leverage their commercial capabilities to maximize the commercial success of SER-109 while minimizing the cash burn to Seres. As we have discussed previously, Nestlé has a sizable and highly capable GI sales force and well-established marketing function as well as strong supporting functions such as sales operations and market access. And our commercial team is already actively engaged with their counterparts from Nestlé.

As Matt discussed, our pipeline is very promising, and our research platforms and core capabilities are unique and differentiated. We are committed to developing and advancing microbiome therapeutics to transform patient outcomes for serious diseases, and we will continue to invest to advance and expand our pipeline and further build and enhance our platforms and capabilities. While we capitalize on these opportunities, we will be prudent and disciplined in managing this growth.

I'll now pass the call back to Eric.

As we conclude our remarks, I'd like to recap several of the important milestones that we are looking forward to during the remainder of this year. These include achieving full enrollment in our SER-109 open-label study later during the third quarter of the year in preparations for a BLA filing. Continued progress executing on SER-109 pre-commercial readiness, working closely with Nestlé, including on expanded market education efforts; microbiome data analysis from the SER-287 Phase IIb study; and continued enrollment of our SER-301 and the start of enrollment of our SER-155 Phase Ib study.

Our organization also continues to strengthen our microbiome therapeutic platform capabilities. So supported by an expansive literature and over a decade of Seres research, our belief in the promise of our therapeutic approach is deep-rooted, and we are optimistic for the future of this technology. With SER-109, we expect to lead the field with the achievement of the first ever approved microbiome therapy. We are also continuing to make progress advancing our pipeline, and we expect we will transition new microbiome therapeutics into clinical development to treat serious diseases.

Seres is supported by a strong scientific foundation and a solid balance sheet. We believe that Seres is well positioned to continue to lead and drive the microbiome therapeutic field forward. We are looking forward to continuing to execute on our mission to lead the microbiome field forward and improve the lives of patients.

With that, operator, we'll now open the call up to questions.

(Operator Instructions) Your first question comes from the line of Mark Breidenbach with Oppenheimer.

Just a couple of quick ones for me. I was hoping you could give us some clarity on the expected time line for filing the BLA. If you wrap up enrollment of the open label in third quarter and you have 6 months of follow-up, can we realistically expect the BLA to be filed in the first half of 2022?

And the second question is just really housekeeping. We saw a pretty sharp uptick in OpEx in the second quarter. Should we -- I guess I'm wondering how we should be thinking about cash burn for the remainder of 2021?

Yes, Mark, thank you for the question. So maybe I'll start on the first, and I'll invite David to ask -- to answer the second one. But just in terms of timing for the BLA, we haven't provided guidance, but obviously, we're moving with urgency. And for us, the single largest or gating critical path item is finishing the open-label study and enrolling the at least 300 subjects in to support the safety database that the FDA had asked for.

As we said in our prepared remarks, we've really made great progress in the open label. And in fact, July was our highest enrollment month yet. So we think that the message is really getting out in part based on the work that we're doing to interact with key stakeholders across the field. But at the same time, we're continuing to work on other aspects of the BLA, and we will be looking to move as quickly as possible. So whereas we haven't provided guidance, we're looking to finish the open label. We've got the 6-month follow-up, as indicated previously, in the prepared remarks.

And then we will move as quickly as possible for patients that we know and providers that we know are waiting for the therapy to be available. Second question was on OpEx. And obviously, as you know, we entered into an agreement with Nestlé, where we are responsible for leading the pre-commercial efforts, and maybe I can ask David to comment further on that.

Yes. Thank you. So we have not provided guidance. We did talk about in our prepared remarks our strong balance sheet, pro forma quarter-ending cash balance of approximately $404 million. And our activities over the near term are really focused on high value-add efforts in terms of filing the -- in preparing to file the BLA as well as preparing for the commercialization of SER-109 in the U.S. Important also to note that under our agreement with Nestlé, there are future opportunities for additional milestones, $125 million upon the approval of SER-109 and up to $225 million in sales milestones, as well as we will be splitting profits once SER-109 is commercial. So there's a lot of opportunities from an economic standpoint, and we are focused on ensuring that we are well prepared once SER-109 is approved to have a very successful launch.

And maybe I'll just finish, Mark, by adding to David's comments. We think that, that investment that is earmarked for pre-commercial work has a very compelling return to it based on the opportunity in the C. diff field, the unmet need and the remarkable safety and efficacy profile that we showed in the Phase III study.

Your next question comes from the line of John Newman with Canaccord.

The question is, just curious -- I know that you're still performing the microbiome analysis for 287. But just curious based on the work that you did in C. diff, if you think there's a specific pattern or type of dysbiosis at baseline and you see where 287 might be more effective. I'm not sure if you saw anything like that in C. diff given that it's caused by a very specific type of bacteria, but just curious, it's kind of a speculative question at this point, but just curious if that's a line of thought that you'll pursue during the analysis.

Yes, John, thanks for the question. Let me open, and I'll ask Matt to comment more specifically. And I'll just open with a more general comment, which is you referenced the 109 analysis. And as we think about types of dysbiosis or perhaps subgroup analysis or other different ways in which you can cut the data. I think it's worth just reminding everybody that, when we set out to do the 109 post-Phase II analysis, obviously, we ended up in a spot where we changed the dose, we changed the diagnosis, and we ended up with an incredible result for patients on the heels of the Phase III. That didn't happen overnight, right? And we purposefully didn't go into that analysis saying, "Hey, maybe if we increase the dose or change the diagnostic protocol, then we'll end up in a great spot."

It was only after the thorough objective scientific analysis that we came up with those 2 key hypotheses. And by the way, we rejected many, many others. And all of it was based on the data. It was those 2 key hypotheses that were most compelling to us based on the microbiome analysis that led us to those hypotheses. But maybe I can ask Matt to comment more specifically on how we'll approach it with this analysis.

Sure. John, thanks for the question. So we will certainly look at the baseline microbiome of patients prior to initiation of any treatment to understand if there is any association that we may observe in terms of those who had a response versus those that did not have a response. We did that -- we've done that kind of work and continue to look at that across many different patient populations and different healthy individuals to understand those differences and how they may vary.

And an important area of research as a company has been to understand, for example, how our drugs interact in different patient background and settings. And we have observed some trends in that in the past, and that -- those kinds of insights are actually, for example, incorporated into our SER-301 drug design to ensure that we have a strong engraftment signature across a broad patient population. So that's certainly an active area of research. We will certainly be looking at that, and we'll see what the data tell us.

Your next question comes from the line of Chris Howerton with Jefferies.

Congratulations on all the progress recently and very excited for the 109 coming up very soon. So for -- I guess, for me, maybe just 1 question as it relates to the CMC ramp-up, I guess. I was just curious if you could give us some more color on what specifically that would mean? Is it recruiting more donors? Is it building up supply? Just a little more information on what exactly that ramp-up would be.

And then the second question is -- or I guess 2 questions, is focused on 155. First, I don't think that we really know a whole lot about the trial design. So if you could provide some insight on that, that would be really helpful. And then to the extent that you can, Matt, it would be really interesting to hear your thoughts on the putative mechanism for 155 in graft versus host disease?

Chris, thank you for the questions. On CMC, I guess what I would say is that following our Phase III results last summer, we really accelerated the work in preparing for commercialization. And there's multiple categories that includes. First and foremost, it was recruiting Dave Ege as our new CTO. And I know, as you know, Dave joined us from Merck and has deep experience in moving to commercialize key products like KEYTRUDA. So making sure that our CMC processes were in Dave's hands was the first step.

But we -- yes, to your question, yes, we have continued to invest in expanding our donor supply operations, our manufacturing capabilities and capacity and that work continues. So we were at our commercial process because of the fact that it was a Phase III study. But since the Phase III results, we've continued to invest to ensure that we're able to supply patients reliably and that work continues.

Maybe I can ask Matt to comment and then if Lisa has a comment as well on 155 and why we're excited about 155 as continuation of our work in infectious disease and with our partnership.

Yes. Thanks for the question, Chris. We're really excited about our SER-155 program. We've been learning and continuously learn with our clinical experience and something that we have observed in different settings is the ability of our therapeutics to have an impact on reducing the character of important antibiotic-resistant bacterial infections. Many of which could actually be a problem, particularly in immunocompromised patients, such as those that are undergoing hematic (sic) [hematopoietic] stem cell transplantation. These are highly immunocompromised patients.

So the ideas of 155 were born many years ago where we decided -- based on the insights and knowledge we had, based on all of our nonclinical research as well as clinical research that we could design a drug that could reduce the carriage of important bacteria that harbor antibiotic resistance and often are the bacteria that cause bloodstream infections and that we could also design a drug that could repair the epithelial barrier to help prevent translocation events of these bacteria into the bloodstream.

And then lastly, the drug is designed to actually modulate a few immune pathways that we believe are important in increasing the receptivity of grafts. And so there are 3 core mechanisms to the drug. This has been a collaboration. This program has come out of a long-standing collaboration that we have with Memorial Sloan Kettering who's been working in this disease area for quite some time and as well deploying FMT to look at improved responses in these patients with very promising results. Much of that has been published in Nature and Science over the past couple of years.

So we really built upon that -- those learnings and combining that with our internal knowledge to design this -- to design this drug. And I think it's an important program for a couple of reasons. One, obviously, it's an expansion of our infectious disease efforts, but we're also going into these immunocompromised patients. So this is a high-risk population. And as we demonstrate -- anticipate to demonstrate safety in that population that's important. And of course, secondly, antibiotic-resistant bacterial infections are probably one of the second biggest challenges facing human kind right now, I'd argue outside of COVID. And so this is an initial project program in that space with expectations to expand further.

And then, Lisa, do you want to just kind of add to long answer of the question? Do you want to just answer quickly on the trial design?

Sure. So as you heard, this is for patients who are undergoing an allo stem cell transplant usually for a heme malignancy, and we'll be looking at 10 in an open-label portion and then 60 of them randomized to placebo or 155. And we'll be looking for -- excuse me, lousy my voice, infection or graft-versus-host disease as well as safety outcomes.

Got it. Okay. And then with respect to the graft-versus-host disease, is it fair to say that you're expecting the greatest impact on GI symptoms?

Yes. We will be looking at GI symptoms, but we'll also be following hepatic symptoms as well as skin symptoms.

Your next question comes from the line of Ted Tenthoff with Piper Sandler.

I kind of want to ask you again about 287 just a little bit. Appreciating that there's probably not a lot more you can say right now. But more with respect to the process, do you see similarities with sort of a root cause analysis that was done around 109 after the Phase 2? Is that sort of some of the places that you start as you digest the data? And are there possibilities to adjust the 301 study? Or is that one pretty much set to go as forward? And any learnings from 287 would be applied to future studies?

Yes, Ted, thank you for the question. Let me start, and I'll ask Matt to comment a little bit more comprehensively on the data itself. I think there's ways in which there are similarities and differences between where we are with 287 and 109. Different programs, different disease areas, different patient populations, different study designs, there are differences, right? At the same time, I think that we've got the benefit of having gone through it.

And the framework or the structure of the process, I think, is if not comparable, certainly, we could learn from what we did last time. And the bottom line is we're going to follow the science, right? And that's what we did last time, and we ended up with a great result. We're not going to predict where this will go, but we do have a lot of confidence that we're set up to interrogate this outcome as thoroughly comprehensively as possible. And I would also note that -- and maybe Matt can comment more fully on this, I think our tools and our insights are actually far sharper and better developed now than they were 4-odd years ago.

I'll answer the second question, then I'll hand it over to Matt. We've made great progress in 301, Ted, but it is not too late for us to make adjustments to 301, if, in fact, there's ways in which we take learnings from 287 that we think could accrue benefits to 301. And that's, of course, one of the reasons that we'll be working with a lot of urgency in this analysis.

But maybe I could ask Matt to comment more fully.

Yes. Thanks, Eric. Yes, Ted, thanks for the question. And I think the 287 Phase II trial was really designed to capture a rich data set to inform drug activity in pharmacology. And so given that we sit in a strong position to really generate the types of data that we use to understand drug activity in pharmacology. So including the metagenomic data and look at changes in microbiome metabolic data, transcriptional data sets. And then we'll be looking at these changes and evaluating them in the context of the clinical parameters, very similar to what we did in the context of SER-109. So a very similar process. And of course, it was well looking at any potential forwards and backwards with respect to sort of any manufacturing as well as clinical. So each of those 3 buckets will certainly be pursued.

And in terms of what we're looking for, we'll be looking at drug activity, things like engraftment, changes in microbiome-associated metabolites that we know modulate disease pathways and various measures of host response. So I think I'll kind of close by leaving 2 thoughts with you, which is, one, this was a rigorously collected sizable interventional data set. Those are very rare. And so I think that provides us an important opportunity, particularly with the advancement of our tools, as Eric pointed out, and our ability to really mine that information to inform both our UC program, but also our portfolio more broadly. And look, we have a rock-solid R&D team, and I'm confident that the team will drive forward data-driven insights to inform this program and the rest of our programs.

Your next question comes from the line of Peyton Bohnsack with Cowen.

This is Peyton on for Joe. We were wondering really quickly, if you could share what you expect the patient breakdown will be in terms of number of patients with first recurrence, second recurrence, et cetera, and the safety database will be? And then also, any insight you can share about how you expect the FDA will look at efficacy signal in the safety database? Or if the FDA has made any indication about what they're looking for or if that's changed at all?

And then secondly, we were also wondering if there were any plans to expand the SER-301 trial outside New Zealand and Australia to potentially accelerate signal from that study.

Yes. Peyton, thanks for the questions. Maybe I'll take the first one, which is, from our perspective, what we're really looking for, first and foremost, from the study is to satisfy the safety database that the FDA has asked for as part of supporting the BLA. And as we've said, they've asked for at least 300 subjects on what was the winning dose in the Phase III. We're getting very close to fulfilling that requirement. I think we will resist the urge to talk about the breakdown or maybe even projected breakdown of what first recurrence, multiple recurrence or other data that may come from it until we actually have it.

But our -- again, just as a reminder, our first goal and objective with this study is really safety. And there is -- Also as a reminder, there will not be -- there is not a comparator arm. So the insights into efficacy, I think, will be certainly constrained relative to the placebo-controlled Phase III study.

As far as 301, Peyton, it's a good question. I would just say we need to do the 287 analysis and see where it leads us. And if there is an impact on 301, then we'll consider those potential adjustments. As I think said in my last answer, it's not too late for us to think about different adjustments, and -- but we'll follow the data. So I think it's probably premature for us to speculate as to whether we could open up additional sites or new geographies. Let's see what the analysis says, and if it is relevant for 301, and we'll go from there.

Your next question comes from the line of Chris Shibutani with Goldman Sachs.

Once you've completed enrollment of the safety database, obviously, you're going to go through the process of the follow-up, the BLA filing and anticipating a potential approval in 2022, which would give us 9 to 12 months. Can you talk about what your ability is to continue to provide 109 prior to approval to clinicians, physicians? You talked about the pre-commercialization work, but this is obviously going to be an educational effort. Can you talk specifically about what you're going to be able to do and if you're going to be gathering any data during that process?

Yes. Chris, thank you for the question. It's a good question. It's something that we're talking about actively as a team. But I don't have an answer for you as we stand here this morning. I think we're keenly focused on finishing the open label. And as we said, we're pretty close to that. But we are actively discussing what happens after the open label has been completed, and I would say, let us come back to you on that very good question.

Fair enough. To follow up from Mark's question on the operating expenses, the second quarter was an incremental sequential step up. Should we think about that 2Q level of R&D and SG&A spend as a reasonable guide towards quarterly spend on a go-forward basis? Or was it perhaps a little bit more of an anomaly reflecting the initiation of the Nestlé North American agreement?

Well, let me ask David to comment more fully on that.

Chris, thank you. Look, as we said, we're not providing guidance. We're going to ensure that we're appropriately and sufficiently resourcing SER-109 pre-commercialization activities in conjunction with Nestlé. So -- and we're going to do it thoughtfully, we're going to do it prudently because we only have 1 opportunity to launch the product, and we're going to ensure that we're doing this as thoughtfully as we can. So I don't think it's helpful to provide additional information as how we're thinking about it, but really just leave it at that.

Yes. And maybe I'll just add, Chris. Keep in mind, there are additional pieces that are -- we need additional clarity on in the system to be able to have a better sense going forward, including next steps with 287 as an example.

Got it. And then 1 final, a year ago in September, you provided a news release where you talked about correspondence with the FDA, and that was after the positive efficacy results from SER-109, which we're obviously very positive and striking. When you complete the safety database, I imagine you will have another interaction with the FDA. Do you anticipate this to be an actual meeting? And if that occurs, will you provide us with an update on what occurs there?

Yes, Chris, I don't think we've guided -- remember, we have breakthrough designation with this program, and we have been connecting with the FDA. We will continue to connect with the FDA. I'm not sure that we can guide to the exact form of it, but all I could say is that we are moving with urgency on behalf of patients. And we look forward to working with the FDA to try to move this forward as quickly as possible. Obviously, the open label, as we said, is really the critical path item. And once we clear that, we're going to focus on getting the other aspects of the BLA to them as quickly as possible.

Great. Glad to hear that July was strong, wishing you well for August as well.

Your next question comes from the line of [Jay Niek] with Chardan.

It's Keay Nakae from Chardan. Question for you about the 301 study, and specifically, the mild-to-moderate patient population you're enrolling. Can you describe any differences in that patient population from the Ib or IIb patient populations for 287?

Lisa, do you want to take that one?

Sure. So we have said that the 301 study does include naive patients, which were not allowed in the 287 study. And we do not allow biologics failures. So there are some differences in the populations.

Okay. And then just back to the manufacturing questions. Have you talked about how much capital is involved in that ramp-up? And then also what aspects of that ramp-up will benefit the company with some of your future rationally designed products?

Yes, it's a good question. We haven't provided guidance in terms of what a number of -- how we're allocating capital from a CapEx perspective. I do think it's worth reminding folks that for 109, which I think was the beginning of the question, I think oftentimes people are surprised that our manufacturing network is not typically 20,000 liters stainless steel bioreactors, right? It tends to be efficient, nimble, small. And as a result, the capital required to support it, even though the capabilities we think are differentiated, is relatively modest versus other therapeutic modalities.

As it relates to the synthetic side of things, it too is a relatively efficient setup, even relative to the biologically sourced side of the house because we don't have the complexity around the supply chain. So we feel good about where we are, our capabilities to continue to support our pipeline going forward, and it will continue to be an area of investment.

Jay (sic) [Keay], Matt here. And just in addition, there are important synergies between the different programs and manufacturing methodologies, particularly in terms of the release assays and identity purity potency assays that we develop and have been helping pioneer the field in terms of developing what those are and how they're provided to the FDA, et cetera.

And another thing I'll point out is, of course, we're in late stage and moving to commercial. And the level of qualification and validation that's required for those assays and releases is substantially higher than anything that's needed for a Phase I or even a Phase II. And of course, we do that work internally here. And so we feel well positioned. So those advances will help in a meaningful way across the portfolio.

I am showing no further questions at this time. I would now like to turn the conference back over to management.

So thank you, operator, and I want to thank everyone for joining our call today and for your continued interest in Seres. We look forward to continuing to keep you updated on our progress. And with that, we'll conclude. Have a great day. Thank you very much.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.