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Barry Cohen
Barry Cohen
Articles (246) 

Seres Seeks Approval of First Microbiome Drug

Boston-area biotech's shares soar of news of imminent FDA filing

A small Boston-area biotech hopes to usher in a new era in disease treatment by getting regulatory approval for its microbiome drug. Seres Therapeutics Inc. (NASDAQ:MCRB) said it expects to meet shortly with the Food and Drug Administration to discuss next steps, and thinks the treatment will approved next year.

Based on the news, investors bid the stock up nearly 500% to more than $26 in less than two weeks. Seres traded near $36 shortly after going public in 2015. Just days ago, the 10-year-old company announced the pricing of an underwritten public offering of 10.5 million shares of its common stock, at $21.50 per share.

Seres achieved positive results in a pivotal study of its a microbiome capsule, known as SER-109, according an article in Biopharma Dive. Of the more than 180 patients with infections from a bacterium called C. diff, 90% of those who took the drug were without the infection after eight weeks, compared to almost 60% of the placebo group. According to research cited by Seres, there are over 450,000 primary C. diff infections in the U.S. each year and about 170,000 recurrent cases, representing an approximately $5 billion annual health care burden.

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The term microbiome refers to the wide assortment of bacteria, fungi and viruses that live inside humans. There's a growing chorus of scientists who believe microbiome's may have a huge effect on health, beginning with the well-being of the gut. When the bacteria in our gut are in balance, our digestive system has the best chance of being healthy, according to Takeda Pharmaceuticals Inc. (NYSE:TAK). Scientists believe microbiome's could eventually be used to treat diseases like inflammatory bowel disease and cancer - which impact millions of patients every year.

Other members of Big Pharma besides Takeda have stuck deals with small, specialized biotechs doing work in the field of microbiomes. They include Roche (RHHBY), AstraZeneca (NASDAQ:AZN) and Gilead Sciences Inc. (NASDAQ:GILD). The majority of small companies researching microbiomes are private; publicly-traded companies working in the field are Kaleido Biosciences Inc. (NASDAQ:KLDO), Evelo Biosciences Inc. (NASDAQ:EVLO) and ChunLab Inc. (XKRX:311690).

Despite Seres' huge move, analysts think there's still upside potential. As of Aug. 14, six of them have a median target of $31.25 for the stock, with a high estimate of $41 and a low of $24, reported CNN Business. The shares are rated a buy.

Disclosure: The author holds positions in Takeda and Gilead Sciences.

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About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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