To say Seres Therapeutics (MCRB) began the week with a bang would be a severe understatement. More like an earth-shattering explosion. Shares surged by 390% in Monday’s trading after the microbiome drug maker announced positive results from a clinical trial.
In a Phase 3 study of SER-109 for the treatment of recurrent C. difficile infection (CDI), the oral microbiome medicine exhibited a 30.2% drop in the proportion of patients who experienced a recurrence in CDI within an eight week period compared to placebo. Overall, only 11.1% of patients given the treatment experienced a CDI recurrence as opposed to 41.3% in the control arm.
Oppenheimer analyst Mark Breidenbach is in no doubt as to the importance of the results and the impact they could have on the colon infection therapy’s success.
“These results are the most compelling we have seen for any microbiome restoration therapy to date, and represent a major vindication for Seres’ platform technology and rational approach to study design,” Breidenbach said, further adding, “In our view, the 30.2% absolute lower recurrence rate with SER-109 is clearly an unprecedented win from an efficacy standpoint, and we increase our POS to 90% (vs. prior 50%).”
Next up, Seres will schedule a meeting with the FDA to finalize registrational requirements, including safety database size. Breidenbach believes the results could “put the company on track for a 2021 filing.”
Along with increasing the therapy’s chances of success, the analyst increased his US and EU peak sales estimates from $100 million to $600 million. Moreover, since the trial de-risked Seres’ core platform technology, the 5-star analyst increased the possibility of success for Seres’ ulcerative colitis candidate SER-287 (currently in a Phase 2b study) from 30% to 50%.
To this end, Breidenbach reiterates an Outperform (i.e. Buy) rating on MCRB shares, while giving his price target a massive boost – up from $7 to $30. Even after Monday's surge, the figure represents possible upside of an additional 50%. (To watch Breidenbach’s track record, click here)
All in all, Breidenbach’s colleagues concur. Based on 6 Buy ratings with no Holds or Sells, Seres has a Strong Buy consensus rating. Meanwhile, the $34.10 average price target represents possible of 70%. (See Seres stock analysis on TipRanks)
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