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What changed in Seres Therapeutics, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Seres Therapeutics, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+667 added−582 removedSource: 10-K (2026-03-12) vs 10-K (2024-12-31)

Top changes in Seres Therapeutics, Inc.'s 2025 10-K

667 paragraphs added · 582 removed · 390 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

122 edited+121 added−71 removed258 unchanged
Biggest changeThe EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. Unlike directives, the CTR is directly applicable in all EU member states without the need for member states to further implement it into national law.
Biggest changeUnlike directives, the CTR is directly applicable in all EU member states without the need for member states to further implement it into national law. The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.
In January 2025, we reported exploratory translational biomarker data from the SER-155 Phase 1b study which provided evidence supporting the intended therapeutic mechanisms, including promotion of intestinal epithelial barrier integrity to reduce the potential of bacterial translocation into the bloodstream, and reduction of systemic inflammatory responses.
Exploratory biomarker data In January 2025, we reported exploratory translational biomarker data from the SER-155 Phase 1b study which provided evidence supporting the intended therapeutic mechanisms, including promotion of intestinal epithelial barrier integrity to reduce the potential of bacterial translocation into the bloodstream, and reduction of systemic inflammatory responses.
Results from this exploratory biomarker analysis showed that SER-155 was associated with lower levels of fecal albumin and lower concentrations of various plasma biomarkers associated with systemic inflammation (i.e., IFN-y, TNF-α, IL-17, and IL-8) in the HSCT peri-transplant period, the period from the end of the first SER-155 treatment course through to neutrophil engraftment.
Results from this exploratory biomarker analysis showed that SER-155 was associated with lower levels of fecal albumin and lower concentrations of various plasma biomarkers associated with systemic inflammation (i.e., IFN-y, TNF-α, IL-17, and IL-8) in the HSCT peri-transplant period, the period from the end of the first SER-155 treatment course through to neutrophil engraftment.
Owing to their hardiness and environmental persistence, production of aerobic and anaerobic vegetative bacteria, as well as spore-forming organisms, poses unique considerations for product, personnel, and facility design, operation, quality assurance and quality control. Manufacturing activities with spores are subject to specialized regulations.
Owing to their hardiness and environmental persistence, production of aerobic and anaerobic vegetative bacteria, as well as spore-forming organisms, poses unique considerations for product, personnel, facility design, operation, quality assurance and quality control. Manufacturing activities with spores are subject to specialized regulations.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, untitled lets, or holds on clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, untitled letters, or holds on clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2 — The investigational product is typically administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. • Phase 3 — The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.
These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2 — The investigational product is typically administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. 19 • Phase 3 — The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.
The bacteria consortia is designed to optimize: (i) the prevention of the growth of various Enterococcaceae and Enterobacteriaceae species known to potentially dominate the GI and lead to downstream negative clinical outcomes in medically compromised patients and that can harbor antibacterial resistance, (ii) the production of multiple bacterial metabolites that can promote mucosal and epithelial barrier integrity with the goal of reducing the likelihood of harmful bacteria translocating from the gut to the bloodstream through a compromised epithelium, and (iii) the production of multiple bacterial metabolites that can modulate immune pathways to induce immune tolerance with a potential impact on GvHD.
The bacteria consortia is designed to optimize: (i) the prevention of the growth of various Enterococcaceae and Enterobacteriaceae species known to potentially dominate the GI tract and lead to downstream negative clinical outcomes in medically compromised patients and that can harbor antibacterial resistance, (ii) the production of multiple bacterial metabolites that can promote mucosal and epithelial barrier integrity with the goal of reducing the likelihood of harmful bacteria translocating from the gut to the bloodstream through a compromised epithelium, and (iii) the production of multiple bacterial metabolites that can modulate immune pathways to induce immune tolerance with a potential impact on GvHD.
The process required by the FDA before our biologic product candidates may be marketed in the United States generally involves the following: • completion of certain preclinical laboratory tests and animal studies performed in accordance with the FDA’s good laboratory practice, or GLP, regulations; • submission to the FDA of an IND, which must become effective before clinical trials in the United States may begin; • approval by an institutional review board, or IRB, or ethics committee at each clinical site before a trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the product candidate for each proposed indication, conducted in accordance with the FDA’s good clinical practice, or GCP, regulations; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; 16 • determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP regulations, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency; • satisfactory completion of potential inspection of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA prior to any commercial marketing, sale or shipment of the product.
The process required by the FDA before our biologic product candidates may be marketed in the United States generally involves the following: • completion of certain preclinical laboratory tests and animal studies performed in accordance with the FDA’s good laboratory practice, or GLP, regulations; • submission to the FDA of an IND, which must become effective before clinical trials in the United States may begin; • approval by an institutional review board, or IRB, or ethics committee at each clinical site before a trial is commenced; 18 • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the product candidate for each proposed indication, conducted in accordance with the FDA’s good clinical practice, or GCP, regulations; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP regulations, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency; • satisfactory completion of potential inspection of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA prior to any commercial marketing, sale or shipment of the product.
In addition, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration, including waivers of co-payments and deductible amounts (or any part thereof), that the person knows or should know is likely to influence the beneficiary’s 26 selection of a particular provider, practitioner or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties for each wrongful act.
In addition, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration, including waivers of co-payments and deductible amounts (or any part thereof), that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties for each wrongful act.
Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of our product candidates or products to other available therapies. Conducting such a clinical trial could be expensive and result in delays in our commercialization efforts.
Pricing negotiations with governmental authorities 29 can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of our product candidates or products to other available therapies. Conducting such a clinical trial could be expensive and result in delays in our commercialization efforts.
This platform incorporates high-resolution analysis of human clinical data to identify microbiome biomarkers associated with disease and non-disease states; preclinical screening using human cell-based assays and in vitro/ex vivo 5 and in vivo disease models customized for live biotherapeutics; and microbiological capabilities and a strain library that spans broad biological and functional breadth.
This platform incorporates high-resolution analysis of human clinical data to identify microbiome biomarkers associated with disease and non-disease states; preclinical screening using human cell-based assays and in vitro/ex vivo and in vivo disease models customized for live biotherapeutics; and a strain library and associated microbiological capabilities that spans broad biological and functional breadth.
As a result, we believe the relatively high productivity of our 13 manufacturing processes relative to the dose level will enable production scales for both clinical and commercial supply to be modest by traditional industry standards for biologics and vaccine manufacturing. We have developed supply chains for producing and testing materials to ensure the availability of future clinical trial supplies.
As a result, we believe the relatively high productivity of our manufacturing processes relative to the dose level will enable production scales for both clinical and commercial supply to be modest by traditional industry standards for biologics and vaccine manufacturing. We have developed supply chains for producing and testing materials to ensure the availability of future clinical trial supplies.
Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. 27 Outside the United States, ensuring adequate coverage and payment for our products will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries.
Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Outside the United States, ensuring adequate coverage and payment for our products will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries.
Our clinical data from the VOWST (developed as SER-109), SER-301, SER-155, and other programs, and microbiome data generated with external collaborators, serve to instruct us on how the introduction of certain keystone microbes have the potential to restructure the microbiome and modulate the metabolic state of the gut to shift it to a non-disease state.
Our clinical data from VOWST (developed as SER-109), SER-287, SER-301, SER-155, and other programs, and microbiome data generated with external collaborators, serve to instruct us on how the introduction of certain keystone microbes have the potential to restructure the microbiome and modulate the metabolic state of the gut to shift it to a non-disease state.
We also utilize regulatory exclusivity as well as trade secrets to protect aspects of our business. 14 We plan to continue to expand our intellectual property estate by filing patent applications directed to compositions, methods of treatment, methods of manufacture and methods for patient selection created or identified from our ongoing development of our product candidates.
We also utilize regulatory exclusivity as well as trade secrets to protect aspects of our business. We plan to continue to expand our intellectual property estate by filing patent applications directed to compositions, methods of treatment, methods of manufacture and methods for patient selection created or identified from our ongoing development of our product candidates.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product labeling. 17 In some cases, the FDA may condition approval of a BLA on the sponsor’s agreement to conduct additional clinical trials to further assess the biologic’s safety and effectiveness after BLA approval.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product labeling. In some cases, the FDA may condition approval of a BLA on the sponsor’s agreement to conduct additional clinical trials to further assess the biologic’s safety and effectiveness after BLA approval.
Irritable Bowel Disease and Ulcerative Colitis UC, a form of IBD, is a relapsing-remitting chronic inflammatory disorder affecting the mucosal surface of the colon, leading to episodes of bloody diarrhea, urgency and mucosal inflammation (Danese and Fiocchi, 2011), which generally begins in young adulthood and endures for life.
Immunology and Inflammation Irritable Bowel Disease and Ulcerative Colitis UC, a form of IBD, is a relapsing-remitting chronic inflammatory disorder affecting the mucosal surface of the colon, leading to episodes of bloody diarrhea, urgency and mucosal inflammation (Danese and Fiocchi, 2011), which generally begins in young adulthood and endures for life.
In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary information by third parties. 15 Competition The development and commercialization of new drug and biologic products is highly competitive and is characterized by rapid and substantial technological development and product innovations.
In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary information by third parties. Competition The development and commercialization of new drug and biologic products is highly competitive and is characterized by rapid and substantial technological development and product innovations.
We support employee development in a variety of ways including leadership training to build people manager capabilities, ongoing performance and development conversations, and tuition reimbursement. Our management reports to our board of directors on human capital management topics, including as relevant: corporate culture, workforce inclusion and belonging, employee development and retention, and compensation and benefits.
We support employee development in a variety of ways including leadership training to build people manager capabilities, ongoing performance and development conversations, and tuition reimbursement. Our management reports to our Board on human capital management topics, including as relevant: corporate culture, workforce inclusion and belonging, employee development and retention, and compensation and benefits.
Our platform enables us to build upon our existing and growing clinical experience to rationally design treatments for acute and complex chronic diseases. We intend to leverage this advantage to develop additional innovative live biotherapeutics. • Developing manufacturing capabilities sufficient to support commercialization of any approved live biotherapeutic candidates.
Our platform enables us to build upon our existing and growing clinical experience to rationally design treatments for acute and complex chronic diseases. We intend to leverage this advantage to develop additional innovative live biotherapeutics. • Develop manufacturing capabilities sufficient to support commercialization of any approved live biotherapeutic candidates.
We face intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, universities, governmental entities and other research institutions, and we believe that our future success will depend in 29 large part on our continued ability to attract and retain highly skilled employees.
We face intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, universities, governmental entities and other research institutions, and we believe that our future success will depend in large part on our continued ability to attract and retain highly skilled employees.
If a CRL is issued, the sponsor must resubmit the BLA, addressing all of the deficiencies identified in the 18 letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.
If a CRL is issued, the sponsor must resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.
There also are continuing, annual user fee requirements for products marketed pursuant to approved applications. 19 Any biologics manufactured or distributed pursuant to FDA approvals remain subject to continuing regulation by the FDA, including recordkeeping requirements and reporting of adverse experiences associated with the product.
There also are continuing, annual user fee requirements for products marketed pursuant to approved applications. Any biologics manufactured or distributed pursuant to FDA approvals remain subject to continuing regulation by the FDA, including recordkeeping requirements and reporting of adverse experiences associated with the product.
Moreover, in certain cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the wrongful act.
Moreover, in certain cases, providers who routinely waive copayments and deductibles for 28 Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the wrongful act.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. 20 A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.
It is uncertain what legislative proposals will be adopted or what actions federal, state or private payors for medical goods and services may take in response to any healthcare reform proposals or legislation.
It is uncertain what legislative or regulatory proposals will be adopted or what actions federal, state or private payors for medical goods and services may take in response to any healthcare reform proposals or legislation.
Numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.
Numerous federal and state laws and regulations, including data breach notification laws, 31 health information privacy and security laws and consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.
The rationale for this program is based in part on published clinical evidence from our collaborators at Memorial Sloan Kettering Cancer Center showing that allo-HSCT patients with decreased diversity of commensal microbes and pathogen domination in the gastrointestinal tract were significantly more likely to die due to infection and/or lethal GvHD (Peled et al., 2020).
The rationale for this program is based in part on published clinical evidence from our collaborators at Memorial Sloan Kettering Cancer Center showing that allo-HSCT patients with decreased diversity of commensal microbes and pathogen domination in the GI tract were significantly more likely to die due to infection and/or lethal GvHD (Peled et al., 2020).
These agreements provide that all confidential information developed or made known during the course of an individual or entities’ relationship with us must be kept confidential during and after the relationship.
These agreements provide that all confidential information developed or made known during the course of an individual or entities’ 17 relationship with us must be kept confidential during and after the relationship.
In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed.
In addition, the approval of a biosimilar product may not be made effective 22 by the FDA until 12 years from the date on which the reference product was first licensed.
The overall ten-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing 23 therapies.
The overall ten-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing 25 therapies.
Adoption of other new legislation at the federal, state, or foreign level could further limit reimbursement for pharmaceuticals, including our product candidates if approved.
Adoption of other new legislation or regulation at the federal, state, or foreign level could further limit reimbursement for pharmaceuticals, including our product candidates if approved.
In October 2023, we were awarded a $500,000 grant from the CCF to leverage our clinical results and biological mechanism insights to functionally characterize subpopulations and to define associated biomarkers for IBD patient selection and stratification of patients where the gastrointestinal microbiome plays an active role in inflammation and could be modified to reduce colitis.
In October 2023, we were awarded a $500,000 grant from the CCF to leverage our clinical results and biological mechanism insights to functionally characterize subpopulations and to define associated biomarkers for IBD patient selection and stratification of patients where the GI microbiome plays an active role in inflammation and could be modified to reduce colitis.
We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 30
We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 32
In addition, while antibiotic starts were similar in each arm, patients administered SER-155 were treated with antibiotics for a significantly shorter duration compared to patients in the placebo arm (9.2 days vs. 21.1 days, respectively, with a mean difference of -11.9 days [95% CI: -23.85, -0.04; p=0.0494]).
In addition, while treatment antibiotic starts were similar in each arm, patients administered SER-155 were treated with antibiotics for a significantly shorter cumulative duration compared to patients in the placebo arm (9.2 days vs. 21.1 days, respectively, with a mean difference of -11.9 days [95% CI: -23.85, -0.04; p=0.0494]).
Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. 24 The advertising and promotion of medicinal products is also subject to laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices.
Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. 26 The advertising and promotion of medicinal products is also subject to laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices.
A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form.
A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its 20 present form.
Data from the SER-109 ECOSPOR III and ECOSPOR IV Phase 3 trial published in the New England Journal of Medicine (Feuerstadt et al., 2022) and Journal of the American Medical Association (Sims et al., 2023) suggest that live biotherapeutics have the potential to restructure the gut microbiome and shift the gut metabolic landscape.
Data from the ECOSPOR III and ECOSPOR IV Phase 3 trial published in the New England Journal of Medicine (Feuerstadt et al., 2022) and Journal of the American Medical Association (Sims et al., 2023) suggest that live biotherapeutics have the potential to restructure the gut microbiome and shift the gut metabolic landscape.
Specifically, to identify specific microbiome and host signatures that associate with disease or the onset of disease, we utilize data sets from healthy subjects and subjects with disease, or being treated for a disease, to delineate at high-resolution the microbial composition and functional profiles of the microbiome and the physiological state of subjects.
To identify specific microbiome and host signatures that associate with disease or the onset of disease, we utilize data sets from healthy subjects and subjects with disease, or being treated for a disease, to delineate at high-resolution the microbial composition and functional profiles of the microbiome associated with the physiological state of subjects.
Our bioprocess and manufacturing personnel are focused on creating a platform of manufacturing expertise that will set the stage for further advances in the emerging field of live biotherapeutics. • Leveraging our regulatory success in a novel drug modality. Live biotherapeutics are a novel drug modality.
Our bioprocess and manufacturing personnel are focused on creating a platform of manufacturing expertise that will set the stage for further advances in the emerging field of live biotherapeutics. • Leverage our regulatory success in a novel drug modality. Live biotherapeutics are a novel drug modality.
Additional data show that SER-109 rapidly reduced the abundance of bacteria associated with common antibiotic resistance genes, or ARGs, and reduced ARG abundance in the gut (Straub et al., 2023). Collectively, we believe these data suggest the potential for live biotherapeutics to prevent the colonization and overgrowth of pathogens that can establish in the gut and ultimately to reduce infections.
Additional data show that VOWST rapidly reduced the abundance of bacteria associated with common antibiotic resistance genes, or ARGs, and reduced ARG abundance in the gut (Straub et al., 2023). Collectively, we believe these data suggest the potential for live biotherapeutics to prevent the colonization and overgrowth of pathogens that can establish in the gut and ultimately to reduce infections.
The process for doing this depends, among other things, on the nature of the medicinal product. 22 Centralized procedure —Under the centralized procedure, following the opining of the EMA’s CHMP the European Commission issues a single MA valid throughout the EU.
The process for doing this depends, among other things, on the nature of the medicinal product. 24 Centralized procedure —Under the centralized procedure, following the opining of the EMA’s CHMP the European Commission issues a single MA valid throughout the EU.
Taken together, we believe our platform, spanning drug discovery, preclinical translation, and novel manufacturing and quality control approaches, has enabled a field leading pipeline across a range of therapeutics areas. Disease Overview and Our Product Pipeline We believe our live biotherapeutic product candidates represent a novel approach with potential application across a broad range of human diseases.
Taken together, we believe our platform, spanning drug discovery, preclinical translation, and novel manufacturing and quality control approaches, has enabled a field leading pipeline across a range of therapeutics areas. Disease Overview and Our Product Pipeline We believe our LBP candidates represent a novel approach with potential application across a broad range of human diseases.
A majority received post-transplant cyclophosphamide as part of their graft-versus-host disease (GvHD) prophylaxis. Results from Cohort 2, announced in September 2024, were consistent with the observations from Cohort 1. SER-155 was generally well tolerated, and no treatment-emergent serious adverse events related to drug were observed. SER-155 bacterial strains engrafted into the gastrointestinal tract of patients following the administration of SER-155.
A majority received post-transplant cyclophosphamide as part of their GvHD prophylaxis. Results from Cohort 2, announced in September 2024, were consistent with the observations from Cohort 1. SER-155 was generally well tolerated, and no treatment-emergent serious adverse events related to drug were observed. SER-155 bacterial strains engrafted into the gastrointestinal tract of patients following the administration of SER-155.
The EU laws that have been transposed into UK law through secondary legislation remain applicable in the UK. However, new legislation such as the CTR is not applicable in Great Britain.
The EU laws that have been transposed into UK law through secondary legislation remain applicable in the UK. However, new legislation such as the CTR is not applicable in the UK.
We believe this approach may also enable us to reduce antimicrobial resistant infections, or AMR, which the World Health Organization declared as a top ten global public health threat facing humanity, and with estimates that yearly deaths may reach 10 million by 2050, putting mortality due to AMR on par with deaths due to cancer.
We believe this approach may also enable us to reduce AMR, which the World Health Organization declared as a top ten global public health threat facing humanity, and with estimates that yearly deaths may reach 10 million by 2050, putting mortality due to AMR on par with deaths due to cancer.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (which began in 2024); and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
Our Live Biotherapeutics Platform We have developed the leading reverse translational biotherapeutics platform and knowledge base which we believe enables us to apply our capabilities to efficiently identify, manufacture and develop novel live biotherapeutics for serious human diseases.
Our Live Biotherapeutics Platform We have developed a field leading reverse translational biotherapeutics platform and knowledge base which we believe enables us to apply our capabilities to efficiently identify, manufacture and develop novel live biotherapeutics for serious human diseases.
The results support SER-155’s intended mechanisms of action and reinforce the previously reported promising clinical study efficacy and safety data. These systemic inflammatory response observations further support the potential to develop our live biotherapeutics to address inflammatory and immune diseases, including ulcerative colitis and Crohn’s disease.
The results support SER-155’s intended mechanisms of action and reinforce the previously reported promising clinical study efficacy and safety data. These 9 systemic inflammatory response observations further support the potential to develop our live biotherapeutics to address inflammatory and immune diseases, including UC and Crohn’s disease.
Our analytics can integrate gene profiling and metabolomics data (the small molecules made by the microbiome) with genomic data (the collection of microbes defined by sequencing) to delineate microbiome biomarkers (the specific species or strains and metabolites or functional pathways) that contribute to the state of disease or health.
Our analytics leverage machine learning to integrate gene profiling and metabolomics data (the small molecules made by the microbiome) with genomic data (the collection of microbes defined by sequencing) to delineate microbiome biomarkers (the specific species or strains and metabolites or functional pathways) that contribute to the state of disease or health.
However, on January 1, 2025, a new arrangement called the “Windsor Framework” came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products.
However, on January 1, 2025, an arrangement called the “Windsor Framework” came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products.
The Windsor Framework removes EU licensing processes, and EU labelling and serialization requirements in relation to Northern Ireland, and introduces a UK-wide licensing process for medicinal products. 25 MAs in the UK are governed by the Human Medicines Regulations (SI 2012/1916), as amended.
The Windsor Framework removes EU licensing processes, and EU labeling and serialization requirements in relation to Northern Ireland, and introduces a UK-wide licensing process for medicinal products. 27 MAs in the UK are governed by the Human Medicines Regulations (SI 2012/1916), as amended.
Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form. Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form. Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
In addition, we continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational development platform to prioritize future drug targets and to identify opportunities for combination therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
We continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational development platform to prioritize future drug targets and to identify opportunities for monotherapy treatment and in combination with existing therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
Healthcare Reform In the United States, there have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biological products, government control and other changes to the healthcare system.
Healthcare Reform In the United States, there have been a number of federal and state proposals regarding the pricing of pharmaceutical and biological products, government control and other changes to the healthcare system.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome therapeutic, which was sold to Société des Produits Nestlé S.A., or SPN, and with certain of its affiliates, collectively, Nestlé Health Science, in September 2024.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome biotherapeutic and a Breakthrough Therapy designated drug, which was sold to Société des Produits Nestlé S.A., or SPN, and with certain of its affiliates, collectively, Nestlé Health Science, in September 2024.
In addition, we continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational development platform to prioritize future drug targets and opportunities for combination therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
We continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational development platform to prioritize future drug targets and to identify opportunities for monotherapy treatment and in combination with existing therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
Additionally, leveraging all of these data we have curated and continue to build a database that links and associates: (i) functional properties of microbial species/strains, (ii) functional pathways in hosts that can be modulated by the microbiome, (iii) the association of functional pathways to disease, and (iv) the 7 association of existing non-microbiome drugs to the functional pathways.
Additionally, leveraging all of these data we have curated and continue to maintain and expand a graphical database, or graphDB, that links and associates: (i) functional properties of microbial species/strains, (ii) functional pathways in hosts that can be modulated by the microbiome, (iii) the association of functional pathways to disease, and (iv) the association of existing non-microbiome drugs to the functional pathways.
The strain library contains bacterial species isolated from individuals that are either healthy or that have a disease. We have developed extensive isolation and cultivation know-how. The strain library contains a majority of the Human Microbiome Project’s “most wanted” and many novel species we do not believe are described in other databases or the scientific literature.
The strain library contains bacterial species isolated from individuals that are either healthy or that have a disease. We have developed extensive isolation and cultivation know-how. The strain library contains a majority of the Human Microbiome Project’s “most wanted” species and many novel species we believe are not described in other databases nor found in other culture collections.
By way of example, in March 2010, the ACA was signed into law, which, among other things, includes changes to the coverage and payment for pharmaceutical and biological products under government health care programs.
By way of example, the ACA was enacted in 2010, which, among other things, includes changes to the coverage and payment for pharmaceutical and biological products under government health care programs.
These data suggest that the microbiome may play a role in a subset of subjects with IBD. Data from our SER-287 Phase 2b study and the first cohort of subjects from our SER-301 Phase 1b study in patients with mild-to-moderate UC suggest that the pharmacodynamic effects observed for SER-287 and SER-301 were greater in a subset of patients with IBD.
Data from our SER-287 Phase 2b study and the first cohort of subjects from our SER-301 Phase 1b study in patients with mild-to-moderate UC suggest that the pharmacodynamic effects observed for SER-287 and SER-301 were greater in a subset of patients.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome therapeutic, which was sold to Nestlé Health Science in September 2024.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome therapeutic and a Breakthrough Therapy designated drug, which was sold to Nestlé Health Science in September 2024.
These in-human insights on how different microbe species and strains and microbe-associated metabolites, genes, or peptides are associated with disease along with how these microbes and metabolites directly or indirectly modulate disease-relevant functional pathways in the host are leveraged in preclinical drug design, optimization and development.
These in-human insights on how different microbial strains, species, genes, metabolites or peptides directly or indirectly modulate disease-relevant functional pathways in the host are leveraged in preclinical drug design, optimization and development.
Infection Risk Reduction We believe that the scientific and clinical data from our SER-109 program validate our novel approach of using live biotherapeutics to decolonize pathogens and improve epithelial barrier integrity, resulting in reduced rate of infections in medically compromised patients.
We believe that the scientific and clinical data from our VOWST program (our then product candidate SER-109 program) validate our novel approach of using live biotherapeutics to decolonize pathogens and improve epithelial barrier integrity, resulting in reduced rate of infections in medically compromised patients.
SER-147 and other pipeline programs We continue to develop another proprietary live biotherapeutic composition, SER-147, designed to prevent bacterial bloodstream and spontaneous bacterial peritonitis, or SBP, infections in patients with metabolic disease, including chronic liver disease, or CLD. SER-147 was designed and optimized using our reverse translational therapeutics development platform.
SER-147 We are also developing another proprietary live biotherapeutic composition, SER-147, designed to prevent bacterial bloodstream and spontaneous bacterial peritonitis, or SBP, infections in patients with metabolic disease, including chronic liver disease, or CLD. SER-147 was designed and optimized using our reverse translational therapeutics development platform.
In December 2023, we received Fast Track Designation for SER-155 to reduce the risk of infection and GvHD in patients undergoing allo-HSCT.
In December 2023, we received Fast Track Designation for SER-155 to reduce the risk of infection and graft versus host disease, or GvHD, in patients undergoing allo-HSCT.
Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure, drug price reporting and other transparency measures.
We are progressing the development of SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve epithelial barrier integrity, and regulate immune response to prevent BSIs as well as other pathogen-associated negative clinical outcomes in patients undergoing allo-HSCT.
SER-155 in allo-HSCT We are developing SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve GI epithelial barrier integrity, and induce immune homeostasis to prevent bacterial BSIs as well as other pathogen associated negative clinical outcomes in patients undergoing allo-HSCT.
In For example, the Budget Control Act of 2011, enacted in August 2011, among other things, included reductions of Medicare payments to providers, which went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.
For example, the Budget Control Act of 2011, enacted in August 2011, among other things, included reductions of Medicare payments to providers, which went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2032, unless additional Congressional action is taken.
In our placebo-controlled Phase 1b study of SER-155 in allo-HSCT, Cohort 2 results demonstrated that SER-155 was associated with a significant reduction in both bloodstream infections and systemic antibiotic exposure as well as a lower incidence of febrile neutropenia, as compared to placebo through day 100 post-HSCT. SER-155 was generally well tolerated, with no observed treatment-related serious adverse events.
In our placebo-controlled Phase 1b study of SER-155 in allo-HSCT, SER-155 was associated with a 77% relative risk reduction in bacterial BSIs and a significant reduction in systemic antibiotic exposure as well as a lower incidence of febrile neutropenia, as compared to placebo through day 100 post HSCT. SER-155 was generally well tolerated, with no observed treatment-related serious adverse events.
We use a reverse translational discovery platform that incorporates analysis of microbiome biomarkers from human clinical data and preclinical assessments using human cell-based assays and in vitro/ex vivo and in vivo functional screening and disease models.
This platform incorporates analysis of microbiome biomarkers from human clinical data and preclinical assessments using human cell-based assays and in vitro/ex vivo and in vivo functional screening and disease models.
In the advanced stages of CLD, known as decompensated cirrhosis, patients exhibit significant immune dysfunction, microbiome disruption, and increased contact with the healthcare system, all of which drive increased susceptibility to bacterial infections (Bajaj et al., 2021, Albillos et al., 2022). We are conducting IND-enabling activities for SER-147.
In the advanced stages of CLD, known as decompensated cirrhosis, patients exhibit significant immune dysfunction, microbiome disruption, and increased contact with the healthcare system, all of which drive increased susceptibility to bacterial infections such as SBP and BSIs (Bajaj et al., 2021, Albillos et al., 2022).
The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented.
The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges.
We believe that the scientific and clinical data from the development of VOWST (our then product candidate SER-109 program) and the data from the SER-155 Phase 1b study validate this novel therapeutic approach in the context of infection.
We believe that the scientific and clinical data from the development of VOWST (our then product candidate SER-109 program) and the data from the SER-155 Phase 1b study (described below) validate our novel therapeutic approach in both infectious disease and I&I diseases.
Led by Eric Shaff, our President and Chief Executive Officer, our experienced management team possesses core capabilities and know-how in live biotherapeutics, drug development, commercialization, chemistry, manufacturing and controls, or CMC, public company management and finance. Our Strategy Our goal is to remain the leading biopharmaceutical company developing live biotherapeutics to address significant unmet medical needs.
We were founded by Flagship Pioneering, and our experienced management team possesses core capabilities and know-how in live biotherapeutics, drug development, regulatory approval, chemistry, manufacturing and controls, or CMC, commercialization, public company management and finance. Our Strategy Our goal is to remain the leading biopharmaceutical company developing live biotherapeutics to address significant unmet medical needs.
In December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
In December 2023, we received Fast Track Designation for SER-155 to reduce the risk of infection and GvHD in patients undergoing allo-HSCT, and in December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
In December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
In December 2023, we received Fast Track Designation for SER-155 to reduce the risk of infection and GvHD in patients undergoing allo-HSCT, and in December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
Material Agreements For a description of our material agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources" in Part II, Item 7 of this Annual Report on Form 10-K.
We also use contract manufacturing and testing organizations to supplement our internal capacity. 16 Material Agreements For a description of our material agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources" in Part II, Item 7 of this Annual Report on Form 10-K.
In addition to allo-HSCT, we intend to evaluate SER-155 and other cultivated live biotherapeutic candidates in other medically vulnerable patient populations including autologous-HSCT patients, cancer patients with neutropenia, chimeric antigen receptors therapy, or CAR-T, recipients, individuals with chronic liver disease, or CLD, solid organ transplant recipients, as well as patients in the intensive care unit and long-term acute care facilities.
We believe that SER-155 and other cultivated live biotherapeutic candidates could be developed in additional patient populations to address barrier compromise and bloodstream and AMR infections beyond allo-HSCT, including autologous-HSCT patients, cancer patients with neutropenia, chimeric antigen receptors therapy, or CAR-T, recipients, individuals with chronic liver disease, or CLD, solid organ transplant recipients, as well as patients in the intensive care unit, or ICU, and long-term acute care facilities.
As our first priority, we are progressing the development of SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve epithelial barrier integrity, and regulate immune response to prevent bacterial BSIs as well as other pathogen-associated negative clinical outcomes in patients undergoing allo-HSCT.
We intend to continue the development of SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens and improve GI epithelial barrier integrity to prevent bacterial BSIs, including those that can harbor AMR, as well as other pathogen-associated negative clinical outcomes in patients undergoing allo-HSCT.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • regulatory authorities or institutional review boards or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • failures or delays in reaching agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • clinical trials of our product candidates may demonstrate undesirable side effects or produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulatory authorities or institutional review boards or ethics committees may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; 36 • regulatory authorities may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and • regarding trials managed by any current or future collaborators, our collaborators may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but potentially suboptimal for us.
Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • regulatory authorities or institutional review boards or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • failures or delays in reaching agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • clinical trials of our product candidates may demonstrate undesirable side effects or produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulatory authorities or institutional review boards or ethics committees may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • regulatory authorities may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and • regarding trials managed by any current or future collaborators, our collaborators may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but potentially suboptimal for us. 38 If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may: • be delayed in obtaining marketing approval for our product candidates; • lose the support of current or any future collaborators, requiring us to bear more of the burden of development of certain compounds; • not obtain marketing approval at all; • obtain marketing approval in some countries and not in others; • obtain approval for indications or patient populations that are not as broad as we intend or desire; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; • be subject to increased pricing pressure; or • have the product removed from the market after obtaining marketing approval.
The specified worldwide net sales targets for the Product were based on certain assumptions about the future financial performance of the Product, and there can be no assurance that such projections will be achieved or that the Milestone Payments will become payable.
The specified worldwide net sales targets for the Product were based on certain assumptions about the future financial performance of the Product, and there can be no assurance that such projections will be achieved or that certain of the Milestone Payments will become payable.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for hiring of scientific and clinical personnel from universities and research institutions.
Among other things, these provisions include those establishing: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from filling vacancies on our board of directors; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the ability of our board of directors to alter our bylaws without obtaining stockholder approval; • the required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; 66 • the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer, the president or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, these provisions include those establishing: • a classified Board with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from filling vacancies on our Board; • the ability of our Board to authorize the issuance of shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the ability of our Board to alter our bylaws without obtaining stockholder approval; • the required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairman of the Board, the chief executive officer, the president or the Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
We rely on third-party manufacturers, which entails additional risks, including: • failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance; • failure of third-party manufacturers to perform the manufacturing process adequately; • breach of supply agreements by the third-party manufacturers; • failure to supply components, intermediates, services, or product according to our specifications; 43 • failure to supply components, intermediates, services, or product according to our schedule or at all; • misappropriation or disclosure of our proprietary information, including our trade secrets and know-how; and • termination or nonrenewal of agreements by third-party manufacturers at times that are costly or inconvenient for us.
We rely on third-party manufacturers, which entails additional risks, including: • failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance; • failure of third-party manufacturers to perform the manufacturing process adequately; • breach of supply agreements by the third-party manufacturers; • failure to supply components, intermediates, services, or product according to our specifications; • failure to supply components, intermediates, services, or product according to our schedule or at all; • misappropriation or disclosure of our proprietary information, including our trade secrets and know-how; and • termination or nonrenewal of agreements by third-party manufacturers at times that are costly or inconvenient for us.
Restrictions under applicable federal and state healthcare laws and regulations include the following: • the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment 49 may be made under a federal healthcare program, such as Medicare and Medicaid; a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the False Claims Act, imposes, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Restrictions under applicable federal and state healthcare laws and regulations include the following: • the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be 51 made under a federal healthcare program, such as Medicare and Medicaid; a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the False Claims Act, imposes, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
We will remain a smaller reporting company until the fiscal year following the determination that both (i) the value of our voting and non-voting common shares held by non-affiliates is more than $250.0 million measured on the last business day of our second fiscal quarter and (ii) our annual revenues are more than $100.0 million during the most recently completed fiscal year and the value of our voting and non voting common shares held by non-affiliates is $700.0 million or more as measured on the last business day of our second fiscal quarter.
We will remain a smaller reporting company until the fiscal year following the determination that both (i) the value of our voting and non-voting 68 common shares held by non-affiliates is more than $250.0 million measured on the last business day of our second fiscal quarter and (ii) our annual revenues are more than $100.0 million during the most recently completed fiscal year and the value of our voting and non voting common shares held by non-affiliates is $700.0 million or more as measured on the last business day of our second fiscal quarter.
In addition, these events may adversely affect our ability to defend any patents that may issue in procedures in the USPTO or in courts. 55 Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
In addition, these events may adversely affect our ability to defend any patents that may issue in procedures in the USPTO or in courts. Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
In the United States, the FDA may designate a drug or biologic as an orphan drug if it is intended to treat a rare disease or condition, which is defined as a disease or condition that affects fewer than 200,000 individuals in the United States, or a patient population 41 greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
In the United States, the FDA may designate a drug or biologic as an orphan drug if it is intended to treat a rare disease or condition, which is defined as a disease or condition that affects fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. 39 The process of obtaining marketing approvals, both in the United States and abroad, is expensive, risky and may take many years.
Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. The process of obtaining marketing approvals, both in the United States and abroad, is expensive, risky and may take many years.
Any failure by us or any collaborators to comply with applicable regulatory requirements may yield various results, including: • litigation involving patients taking our products, if and when they are approved; • restrictions on such products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters; • withdrawal of products from the market; • suspension or termination of ongoing clinical trials; 48 • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • damage to relationships with potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products, if and when they are approved; • product seizure or detention; • injunctions; or • imposition of civil or criminal penalties.
Any failure by us or any collaborators to comply with applicable regulatory requirements may yield various results, including: • litigation involving patients taking our products, if and when they are approved; • restrictions on such products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters; • withdrawal of products from the market; • suspension or termination of ongoing clinical trials; 50 • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • damage to relationships with potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products, if and when they are approved; • product seizure or detention; • injunctions; or • imposition of civil or criminal penalties.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. 56 Even if we are successful in these proceedings, we may incur substantial costs and divert management time and attention in pursuing these proceedings, which could have a material adverse effect on us.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. Even if we are successful in these proceedings, we may incur substantial costs and divert management time and attention in pursuing these proceedings, which could have a material adverse effect on us.
We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.
We may not be able to protect our rights to these trademarks and trade names, which we 60 need to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.
The federal research and development tax credit carryforwards include an orphan drug credit carryforward of $25.9 million. These NOLs and tax credit carryforwards could expire unused, to the extent subject to expiration, and be unavailable to offset future taxable income or income tax liabilities. In addition, in general, under Sections 382 and 383 of the U.S.
The federal research and development tax credit carryforwards include an orphan drug credit carryforward of $25.9 million. These NOLs and tax credit carryforwards could expire unused, to the extent subject to expiration, and be unavailable to offset future taxable income or income tax liabilities, respectively. In addition, in general, under Sections 382 and 383 of the U.S.
It is not possible to determine with precision as of the date of this Annual Report on Form 10-K the amount or timing of worldwide net sales the Product will generate in the future and, therefore, it is possible that the Milestone Payments will not be earned or will be limited by lower Product net sales than anticipated.
It is not possible to determine with precision as of the date of this Annual Report on Form 10-K the amount or timing of worldwide net sales the Product will generate in the future and, therefore, it is possible that certain of the Milestone Payments will not be earned or will be limited by lower Product net sales than anticipated.
For these purposes, an ownership change generally occurs where the aggregate change in stock ownership of one or more stockholders or groups of stockholders owning at least 5% of a corporation’s stock exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
For these purposes, an ownership change generally 67 occurs where the aggregate change in stock ownership of one or more stockholders or groups of stockholders owning at least 5% of a corporation’s stock exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
Even after an orphan drug or biologic is approved, the FDA or other regulatory authorities can subsequently approve the same drug or biologic for the same disease or condition if the FDA or other regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an orphan drug or biologic is approved, the FDA or other regulatory authorities can subsequently approve the same drug or biologic for the same disease or condition if the FDA or other regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes 43 a major contribution to patient care.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy and execution. Our consultants and advisors 59 may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy and execution. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
Furthermore, if, in the future, our common stock fails to meet the Bid Price Requirement and we have effected a reverse stock split within the prior one-year period, we will not be eligible for any compliance period to address the bid price deficiency and would be issued a delisting determination rather than be granted a compliance period.
If, in the future, our common stock fails to meet the Bid Price Requirement and we have effected a reverse stock split within the prior one-year period, we will not be eligible for any compliance period to address the bid price deficiency and would be issued a delisting determination rather than be granted a compliance period.
This risk extends to the third-party vendors and subcontractors we use to 60 manage this sensitive data or otherwise process it on our behalf. The secure processing, storage, maintenance and transmission of this critical information are vital to our operations and business strategy, and we devote significant resources to protecting such information.
This risk extends to the third-party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf. The secure processing, storage, maintenance and transmission of this critical information are vital to our operations and business strategy, and we devote significant resources to protecting such information.
We may from time to time acquire other businesses, products or technologies as well as pursue strategic alliances, joint ventures, technology licenses, investments in complementary businesses, or dispose of assets. We have not made any acquisitions to date, and our ability to do so successfully is unproven.
We may from time to time acquire other businesses, products or technologies as well as pursue strategic alliances, joint ventures, technology licenses, investments in complementary businesses, dispose of assets, or pursue other strategic alternatives. We have not made any acquisitions to date, and our ability to do so successfully is unproven.
If we are found to have violated laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and financial condition. 63 If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
If we are found to have violated laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and financial condition. If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. 54 Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
Moreover, even if not found invalid or unenforceable, the claims of our patents could be construed narrowly or in a manner that does not cover the allegedly infringing technology in question. Such a loss of patent protection would have a material adverse impact on our business.
Moreover, even if not found invalid or unenforceable, the claims of our patents could be 59 construed narrowly or in a manner that does not cover the allegedly infringing technology in question. Such a loss of patent protection would have a material adverse impact on our business.
Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
Patent protection must ultimately be sought on a country-by-country basis, which is an expensive 61 and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.
This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, 64 necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.
Our restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actions brought against us by stockholders.
Our restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actions brought 69 against us by stockholders.
In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. 57 We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
To our knowledge, VOWST is the first oral product based on this approach to receive FDA approval. We cannot be certain that our approach 35 will lead to the development of additional approvable or marketable products or that we will be able to manufacture at commercial scale.
To our knowledge, VOWST is the first oral product based on this approach to receive FDA approval. We cannot be certain that our approach will lead to the development of additional approvable or marketable products or that we will be able to manufacture at commercial scale.
Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates We are early in our development efforts of certain of our product candidates and may not be successful in our efforts to use our reverse translational platform to build a pipeline of product candidates and develop additional marketable drugs.
Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates We are early in our development efforts of our product candidates and may not be successful in our efforts to use our reverse translational platform to build a pipeline of product candidates and develop additional marketable drugs.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
In addition, because the Board is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board.
If potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited.
If potential collaborators or partners decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited.
We also make assumptions, 38 estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
Adverse differences between interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.
Adverse differences between interim data and final data could significantly harm 40 our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.
General Risk Factors 67 The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock. Our stock price is likely to be volatile.
General Risk Factors The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock. Our stock price is likely to be volatile.
Our expenses may increase in connection with our ongoing activities, particularly if and as we further SER-155 clinical studies, and research, develop and initiate clinical trials of our product candidates.
Our expenses may increase in connection with our ongoing activities, particularly if we further SER-155 clinical studies, and research, develop and initiate clinical trials of our product candidates.
Our ability to use our net operating loss carryforwards and research and development credits to offset future taxable income or income tax liabilities may be subject to certain limitations.
Our ability to use our net operating loss carryforwards and research and development credits to offset future taxable income or income tax liabilities, respectively, may be subject to certain limitations.
Under these circumstances, we could appeal the delisting determination to a Nasdaq hearing panel, during which time any suspension or delisting action will be stayed.
Under these circumstances, we could appeal the delisting determination to a Nasdaq hearing panel, during which time any suspension or delisting action will ordinarily be stayed.
For example, on April 25, 2017, we filed a notice of opposition in the European Patent Office challenging the validity of a patent issued to The University of Tokyo.
For example, on April 25, 2017, we filed a notice of opposition in the European Patent Office challenging the validity of a patent issued to 55 The University of Tokyo.
We expect for our compliance costs with these laws, regulations, and reporting requirements to increase in the future, and any failure, or perceived failure, by us to adhere to such laws, regulations, and reporting requirements, or meet evolving and varied stakeholder expectations and standards, could harm our business, reputation, financial condition, and operating results. 70 Item 1B.
We expect for our compliance costs with these laws, regulations, and reporting requirements to increase in the future, and any failure, or perceived failure, by us to adhere to such laws, regulations, and reporting requirements, or meet evolving and varied stakeholder expectations and standards, could harm our business, reputation, financial condition, and operating results. 72 Item 1B.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and an increase in the statute of limitations period for the government to recover overpayments to providers from three to five years.
In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and an increase in the statute of limitations period for the government to recover overpayments to providers from three to five years.
Any such real or perceived unauthorized access or use, breach, or other loss of confidential information could also result in regulatory scrutiny, reputational harm, legal claims or proceedings, and liability under federal or state laws that protect the privacy of personal information, and regulatory enforcement, including penalties or fines.
Any such real or perceived unauthorized access or use, breach, or other loss of confidential information could also result in regulatory scrutiny, reputational harm, legal claims or proceedings (including class actions), and liability under federal or state laws that protect the privacy of personal information, and regulatory enforcement, including penalties or fines.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant undertaking, whichever is greater.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million / £17.5 million or 4% of the annual global revenues of the noncompliant undertaking, whichever is greater.
Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. 69 Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. 71 Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
If competitors are able to obtain marketing approval for biosimilars referencing our 47 product candidates, our product candidates may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
If competitors are able to obtain marketing approval for biosimilars referencing our product candidates, our product candidates may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. 49 Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
We have experienced ownership changes in the past, per a Section 382 study performed through December 31, 2020. We believe that none of our existing tax assets will expire unused as a result of the calculated limitations resulting from such ownership changes.
We have experienced ownership changes in the past, per a Section 382 study performed through December 31, 2024. We believe that none of our existing tax assets will expire unused as a result of the calculated limitations resulting from such ownership changes.
However, we may have experienced additional ownership changes since December 31, 2020, and we may experience ownership changes in the future as a result of future transactions in our stock, some of which may be outside our control.
However, we may have experienced additional ownership changes since December 31, 2024, and we may experience ownership changes in the future as a result of future transactions in our stock, some of which may be outside our control.
Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change NOLs and tax credit carryforwards to offset future taxable income and income taxes.
Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change NOLs and tax credit carryforwards to offset future taxable income and income taxes, respectively.
To the extent we are subject to such litigation, activism or pressure, we may be require to incur costs or it may otherwise adversely impact our business or reputation.
To the extent we are subject to such litigation, activism or pressure, we may be required to incur costs or it may otherwise adversely impact our business or reputation.
The market price for our common stock may be influenced by many factors, including: • our ability to realize the benefits of the Transaction with SPN; • our ability to execute and realize the benefits of strategic plans; • our requirement for additional funding in the first quarter of 2026; • our continued compliance with stock exchange listing standards; • the success of competitive products or technologies; • actual or anticipated changes in our growth rate relative to our competitors; • results of clinical trials of our product candidates or those of our competitors; • the success of any potential future commercialization efforts; • developments related to any future collaborations; • regulatory or legal developments in the United States and other countries; • development of new product candidates that may address our markets and may make our product candidates less attractive; • changes in physician, hospital or healthcare provider practices that may make our product candidates less useful; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • the results of our efforts to discover, develop, acquire or in-license additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • our ability to develop, execute and realize the benefits of strategic plans including accessing capital through potential business development and/or achieving overall financing goals; • our requirement for additional capital to fund our operations following the third quarter of 2026; • our ability to realize the benefits of the Transaction with SPN; • our continued compliance with stock exchange listing standards; • the success of competitive products or technologies; • actual or anticipated changes in our growth rate relative to our competitors; • results of clinical trials of our product candidates or those of our competitors; • the success of any potential future commercialization efforts; • developments related to any future collaborations; • regulatory or legal developments in the United States and other countries; • development of new product candidates that may address our markets and may make our product candidates less attractive; • changes in physician, hospital or healthcare provider practices that may make our product candidates less useful; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; 70 • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • the results of our efforts to discover, develop, acquire or in-license additional product candidates or products; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries. Also, the anticipated benefit of any acquisition or disposition may not materialize.
Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries. Also, the anticipated benefit of any acquisition, disposition, or any other transaction or strategic alternative may not materialize.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (which began in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discounting program (which began in 2025).
Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing.
Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing or enter into a partnership.
Our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock and their respective affiliates, in the aggregate, hold shares representing approximately 38% of our outstanding voting stock as of December 31, 2024.
Our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock and their respective affiliates, in the aggregate, hold shares representing approximately 29% of our outstanding voting stock as of December 31, 2025.
We may seek PRIME designation by EMA or other designations, schemes or tools in the EU for one or more of our product candidates, which we may not receive. Such designations may not lead to a faster development or regulatory review or approval process and do not increase the likelihood that our product candidates will receive marketing authorization.
Such designations may not lead to a faster development or regulatory review or approval process and do not increase the likelihood that our product candidates will receive marketing authorization. We may seek EMA PRIME (PRIority MEdicines) designation or other designations, schemes or tools for one or more of our product candidates.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or policy changes could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Our future capital requirements will depend on many factors, including: • the cost of conducting clinical trials for our lead candidate, SER-155 in allo-HSCT and other targeted indications, and other product candidates in our pipeline; • the total amount of the Second Installment Payment and Milestone Payments we may receive from the Transaction, and the amounts payable or due under the Profit Sharing Payments; • the cost of manufacturing our product candidates; • the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates and research activities; • the costs, timing and revenue, if any, of potential future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; 31 • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.
Our future capital requirements will depend on many factors, including: • the cost of developing our pipeline product candidates, including SER-603 in IBD and SER-155 in irEC • the cost of conducting clinical trials for SER-155 in allo-HSCT and other targeted indications, and other product candidates in our pipeline; • the total amount of the Milestone Payments we may receive from the Transaction; • the cost of manufacturing our product candidates; • the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates and research activities; • the costs, timing and revenue, if any, of potential future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.
There can also be no assurance that we will regain compliance with the Bid Price Requirement during the 180-day compliance period, secure a second 180-day period to regain compliance, maintain compliance with the other Nasdaq listing requirements, or be successful in appealing any delisting determination.
If we were eligible for a compliance period, there can also be no assurance that we would regain compliance with the Bid Price Requirement during the 180-day compliance period, secure a second 180-day period to regain compliance, maintain compliance with the other Nasdaq listing requirements, or be successful in appealing any delisting determination.
We cannot predict the number, timing or size of future joint ventures or acquisitions or dispositions, or the effect that any such transactions might have on our operating results. We have in the past been subject to securities class action litigation and may be subject to similar or other litigation in the future, which may harm our business.
We cannot predict the number, timing or size of any transactions, or the effect that any such transactions might have on our operating results, our business, or our financial condition. 66 We have in the past been subject to securities class action litigation and may be subject to similar or other litigation in the future, which may harm our business.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
As of December 31, 2024, we also had federal and state research and development and other tax credit carryforwards of approximately $46.5 million and $8.1 million, respectively, net of uncertain tax position reserves, available to reduce future income tax liabilities, if any. Our federal and state tax credit carryforwards begin to expire in various amounts in 2031 and 2028, respectively.
As of December 31, 2025, we also had federal and state research and development and other tax credit carryforwards of approximately $46.2 million and $10.0 million, respectively, net of uncertain tax position reserves, available to reduce future income tax liabilities, if any. Our federal and state tax credit carryforwards begin to expire in various amounts in 2031 and 2028, respectively.
The Milestone Payments will be based on the achievement of specified worldwide net sales targets for the Product. Interest on the Prepaid Milestone will accrue and will reduce any corresponding Milestone Payments based on the length of time it takes to achieve the milestones.
The Milestone Payments are subject to various risks and uncertainties. The Milestone Payments are based on the achievement of specified worldwide net sales targets for the Product. Interest on the Prepaid Milestone will accrue and will reduce any corresponding Milestone Payments based on the length of time it takes to achieve the milestones.
There has been an increase in litigation claiming that corporate diversity, equity and inclusion programs may inappropriately discriminate against certain groups. Relatedly, both advocates and opponents to certain environmental and social matters are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigation, to advance their perspectives.
There has been an increase in litigation related to corporate diversity, equity and inclusion programs. Relatedly, both advocates and opponents to certain environmental and social matters are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigation, to advance their perspectives.
While we plan to focus our investment on continuing the development of SER-155 and advancing our other wholly-owned cultivated live biotherapeutic candidates, our expenses may increase substantially in connection with our ongoing and future activities, particularly if and as we: 32 • continue the clinical development of SER-155 in patients receiving allo-HSCT and for other medically vulnerable populations; • perform our obligations under the TSA; • advance research and development activities supported by partnerships; • make strategic investments in manufacturing capabilities; • maintain and augment our extensive proprietary live biotherapeutic drug development know-how that may be used to support future research and development efforts, including our intellectual property portfolio and intellectual property that we may opportunistically acquire; • establish a sales and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we have obtained and in the future may obtain regulatory approval; • perform our obligations under any agreements with collaborators; • seek to obtain regulatory approvals for our product candidates; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
Our expenses may increase substantially in connection with our ongoing and future activities, particularly if and as we: • invest in our early-stage pipeline product candidates, including SER-603 in IBD and SER-155 in irEC; • conduct clinical trials for SER-155 in patients receiving allo-HSCT and for other medically vulnerable populations; • advance research and development activities supported by partnerships; • make strategic investments in manufacturing capabilities; • maintain and augment our extensive proprietary live biotherapeutic drug development know-how that may be used to support future research and development efforts, including our intellectual property portfolio and intellectual property that we may opportunistically acquire; • establish a sales and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we have obtained and in the future may obtain regulatory approval; • perform our obligations under any agreements with collaborators; • seek to obtain regulatory approvals for our product candidates; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
On November 7, 2024, we received written notice from Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below the $1.00 Bid Price Requirement for continued inclusion on The Nasdaq Global Select Market.
In November 2024, we received written notice from Nasdaq notifying us that the bid price for our common stock had closed below the $1.00 Bid Price Requirement for continued inclusion on The Nasdaq Global Select Market.
Accordingly, our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property we develop or license. Risks Related to Our Operations Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
Accordingly, our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property we develop or license. Risks Related to Our Operations Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. On February 27, 2026, the board of directors appointed Richard N.
To date, we have financed our operations through the public offerings of our common stock, private placements of our common stock and preferred stock, payments under our prior collaboration agreements and loan facility.
To date, we have financed our operations through the public offerings of our common stock, private placements of our common stock and preferred stock, payments under our prior collaboration agreements and loan facility and payments from government entities for research grants.
The degree of market acceptance of any of our product candidates, if approved, will depend on a number of factors, including: • their efficacy, safety and other potential advantages compared to alternative treatments; • the clinical indications for which such products are approved; • our ability to offer them for sale at competitive prices; • their convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; 44 • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement for our product candidates; • the prevalence and severity of their side effects and their overall safety profiles; • any restrictions on the use of our products, if and when approved, together with other medications; • interactions of our products, if and when approved, with other medicines patients are taking; and • the ability of patients to take our products, if and when approved.
The degree of market acceptance of any of our product candidates, if approved, will depend on a number of factors, including: • their efficacy, safety and other potential advantages compared to alternative treatments; • the clinical indications for which such products are approved; • our ability to offer them for sale at competitive prices; • their convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement for our product candidates; • the prevalence and severity of their side effects and their overall safety profiles; • any restrictions on the use of our products, if and when approved, together with other medications; • interactions of our products, if and when approved, with other medicines patients are taking; and • the ability of patients to take our products, if and when approved. 46 If we are unable to establish effective sales, marketing and distribution capabilities or enter into agreements with third parties with such capabilities, we may not be successful in commercializing any of our product candidates if and when they are approved.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations. 62 Acquisitions, dispositions, or joint ventures could disrupt our business, cause dilution to our stockholders and otherwise harm our business.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
Additional compliance investment and potential business process changes may also be required. Similar laws have passed in other states, and continue to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
Additional compliance investment and potential business process changes may also be required. Similar laws have been enacted in other states reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
As of December 31, 2024, we had net operating loss carryforwards, or NOLs, of $580.1 million for federal income tax purposes and $543.6 million for state income tax purposes, which may be available to offset our future taxable income, if any. Our federal NOLs subject to expiration begin to expire in various amounts in 2035.
As of December 31, 2025, we had net operating loss carryforwards, or NOLs, of $616.4 million for federal income tax purposes and $597.8 million for state income tax purposes, which may be available to offset our future taxable income, if any. Our federal NOLs subject to expiration begin to expire in various amounts in 2035.
Finally, the FDA or other regulatory authorities may lack experience in evaluating the safety and efficacy of novel product candidates based on live biotherapeutics, which could result in a longer than expected regulatory review process, increase our expected development costs and delay or prevent any potential future commercialization of our product candidates.
Finally, the FDA or other regulatory authorities may lack experience in evaluating the safety and efficacy of novel product candidates based on live biotherapeutics, which could result in a longer than expected regulatory review process, increase our expected development costs and delay or prevent any potential future commercialization of our product candidates. 37 Clinical drug development involves a risky, lengthy and expensive process, with an uncertain outcome.
In connection with the Closing, SPN assumed certain liabilities with respect to the VOWST Business and agreed to pay to us: • a cash payment, which was paid at Closing, of $100 million, less approximately $17.9 million owed by us to SPN under the prior license agreement between us and the SPN affiliate, less approximately CHF 2.0 million in satisfaction of fees due under the Bacthera Agreement; • cash installment payments of $50 million, which was received on January 15, 2025, and $25 million due on July 1, 2025, or the Second Installment Payment (to be reduced by approximately $1.5 million related to certain employment obligations assumed by SPN, as described below), conditioned on our material compliance with obligations under the TSA entered into at Closing between us and NESA; 33 • prepayment of the $60 million Prepaid Milestone tied to the achievement of the First Sales Milestone of worldwide annual net sales of the Product of $150 million, which was paid in cash at Closing, which Prepaid Milestone will accrue interest at a fixed rate of 10% per annum until the First Sales Milestone is achieved and 5% per annum thereafter until the earlier of (x) the date on which the Prepaid Milestone, plus accrued interest thereon, has been repaid in full by set-off and (y) the last day of the Milestone Period; and • future Milestone Payments of (x) $125 million tied to the achievement of worldwide annual net sales of the Product of $400 million and (y) $150 million tied to the achievement of worldwide annual net sales of the Product of $750 million, during the Milestone Period from Closing until December 31 of the calendar year in which the tenth anniversary of Closing occurs.
In connection with the Closing, SPN assumed certain liabilities with respect to the VOWST Business and agreed to pay to us, among other payments: 35 • cash installment payments of $50 million, which was received on January 15, 2025, and $25 million, which was received July 1, 2025, (offset by $1.4 million paid by us to Nestl é on July 1, 2025 related to certain employment obligations assumed by SPN, as described below), conditioned on our material compliance with obligations under the TSA entered into at Closing between us and NESA; • prepayment of the $60 million Prepaid Milestone tied to the achievement of the First Sales Milestone of worldwide annual net sales of the Product of $150 million, which was paid in cash at Closing, which Prepaid Milestone will accrue interest at a fixed rate of 10% per annum until the First Sales Milestone is achieved and 5% per annum thereafter until the earlier of (x) the date on which the Prepaid Milestone, plus accrued interest thereon, has been repaid in full by set-off and (y) the last day of the Milestone Period; and • future Milestone Payments of (x) $125 million tied to the achievement of worldwide annual net sales of the Product of $400 million and (y) $150 million tied to the achievement of worldwide annual net sales of the Product of $750 million, during the Milestone Period from Closing until December 31 of the calendar year in which the tenth anniversary of Closing occurs.
We have broad discretion as to the use of the proceeds from the Transaction, and may not use the proceeds effectively. We were obligated to use the proceeds from the completion of the Transaction to fully repay our indebtedness under the Oaktree Credit Agreement.
We have broad discretion as to the use of the proceeds from the Transaction, and may not use the proceeds effectively. 36 We were obligated to use the proceeds from the completion of the Transaction to fully repay our indebtedness under our prior credit facility with Oaktree Capital Management ("Oaktree").
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.
Current and future legislation or regulation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may adversely affect the prices we may obtain.
If a prolonged government shutdown occurs, or if renewed global health concerns delay or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if funding shortages, staffing limitations, or changes in administrative policy delay or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We have conducted clinical studies in Australia and New Zealand in the past, and will likely in the future conduct clinical studies in other countries as well.
We have conducted clinical studies internationally in the past, and will 62 likely in the future conduct clinical studies in other countries as well.
Our audited consolidated financial statements included in this Annual Report on Form 10-K do not include any adjustments to reflect the possible inability of the Company to continue as a going concern within 12 months after the issuance of such financial statements. We are a clinical-stage company and have incurred significant losses since our inception.
Our audited consolidated financial statements included in this Annual Report on Form 10-K do not include any adjustments to reflect the possible inability of the Company to continue as a going concern within 12 months after the issuance of such financial statements.
In others, prosecution is at an early stage (e.g., provisional or PCT stage). For many patent applications in our portfolio, we have filed national stage applications based on our Patent Cooperation Treaty, or PCT, applications, thereby limiting the jurisdictions in which we can pursue patent protection for the various inventions claimed in those applications.
For many patent applications in our portfolio, we have filed national stage applications based on our Patent Cooperation Treaty, or PCT, applications, thereby limiting the jurisdictions in which we can pursue patent protection for the various inventions claimed in those applications.
The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights. Other parties may allege that our product candidates, or the use of our technologies infringes patent claims or other intellectual property rights held by them or that we are employing their proprietary technology without authorization.
Other parties may allege that our product candidates, or the use of our technologies infringes patent claims or other intellectual property rights held by them or that we are employing their proprietary technology without authorization.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CIO has over three decades of IT experience in life sciences organizations. Her cybersecurity work includes the development and implementation of cybersecurity policies, platforms, and robust end-user training curriculums. Our CIO and IT Information Security Group work together to monitor and r eport cybersecurity trends and threats to management .
Biggest changeThe team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our VP of IT has nearly three decades of IT and computational experience in life sciences organizations. His cybersecurity work includes the development and implementation of cybersecurity policies, platforms, and robust end-user training curriculums.
The IT Information Security Group undertakes table-top business disruption, disaster recovery and related response strategies, and plans on a periodic basis, and aims to review, and if appropriate update, applicable policies and procedures annually. 71 Our management team and IT Information Security Group takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
The IT Group undertakes table-top business disruption, disaster recovery and related response strategies, and plans on a periodic basis, and aims to review, and if appropriate update, applicable policies and procedures annually. 73 Our management team and IT Group takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
For more information, “Risk Factors— Risks Related to Our Operations—Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
For more information, “Risk Factors— Risks Related to Our Operations—Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of management’s implementation of our cybersecurity risk management program.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers , where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a security incident response plan that includes procedures for responding to cybersecurity incidents; • a third-party risk management process for service providers based on our assessment of their criticality to our operations and respective risk profile, suppliers, and vendors who have access to our critical systems and information; and • cybersecurity insurance to cover us for costs and expenses we may incur due to a cybersecurity incident.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers , where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • a security incident response plan that includes procedures for responding to cybersecurity incidents; • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile, suppliers, and vendors who have access to our critical systems and information; and • cybersecurity insurance to cover us for costs and expenses we may incur due to a cybersecurity incident.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Additionally, we work with an external IT partner and external cybersecurity counsel to assess, identify, and manage risks from cybersecurity threats.
Our VP of IT and IT Group work together to monitor and report cybersecurity trends and threats to management . Additionally, we work with an external IT partner and external cybersecurity counsel to assess, identify, and manage risks from cybersecurity threats.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity . Our management team, including our CIO, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
The Audit Committee regularly reports to the full Board regarding its activities, including those related to cybersecurity . Our management team, including our VP of IT, is responsible for assessing and managing our material risks from cybersecurity threats.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a security incident response plan.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from our Chief Information Officer, or CIO, on our cybersecurity risks. In addition, our CIO updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee receives quarterly reports from our Vice President, Bioinformatics & Information Technology, or VP of IT, on our cybersecurity risks. In addition, our VP of IT updates the Audit Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMine Saf ety Disclosures Not applicable. 72 PART II
Biggest changeMine Saf ety Disclosures Not applicable. 74 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” Recent Sales of Unregistered Securities Other than as previously reported in a Current Report on Form 8-K, we did not make any sales of unregistered securities during the quarter ended December 31, 2024.
Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” Recent Sales of Unregistered Securities We did not make any sales of unregistered securities during the quarter ended December 31, 2025.
Holders As of March 1, 2025, there were approximately eleven holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders As of March 1, 2026, there were approximately eleven holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers There were no repurchases of shares of common stock made during the quarter ended December 31, 2024. Item 6. [Reserved ] 73
Purchases of Equity Securities by the Issuer or Affiliated Purchasers There were no repurchases of shares of common stock made during the quarter ended December 31, 2025. Item 6. [Reserved ] 75

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease of $53.0 million was due primarily to the following: • a decrease in personnel-related costs of $36.6 million, primarily due to a decrease of $28.7 million in salaries, bonus, and employee benefits expenses as a result of the restructuring plan implemented in 2023, and a decrease of $8.3 million in stock-based compensation expense, which was primarily as a result of options and awards with performance conditions that were achieved during the three months ended June 30, 2023 (with no comparable performance options vesting in 2024), partially offset by an increase of $0.4 million in payroll taxes primarily related to tax credits we received during the three months ended March 31, 2023; • a decrease of $14.3 million in expenses related to our live biotherapeutics platforms and research and development operations which includes a decrease of $4.2 million primarily due to a $3.6 million reduction in the use of contractors and a decrease in employee travel and expense costs following the implementation of the restructuring plan, a decrease of $2.8 million in lab supplies and consumables, a decrease in consulting expenses of $2.6 million, a decrease of $2.4 million in facilities and depreciation primarily relating to the expense of not renewing the option to lease certain manufacturing 84 space with Flagship Pioneering during the three months ended June 30, 2023, and a decrease of $1.8 million in clinical trial, analytical and other manufacturing costs; • a decrease of $1.0 million in expenses related to our SER-155 program primarily due to a decrease of $0.5 million in analytical testing costs and a decrease of $0.5 million in lab supplies and consumables associated with the completion of the SER-155 Phase 1b study; and • a decrease of $1.1 million in expenses related to our early stage programs due to the decreased investment associated with the restructuring plan.
Biggest changeThe decrease of $15.5 million was due primarily to the following: • a decrease in personnel-related costs of $7.1 million, primarily due to a decrease in salaries, bonuses, employee benefits expenses, and stock-based compensation expense due to lower headcount, • a decrease of $5.4 million in expenses related to our live biotherapeutics platforms and research and development operations comprised of a decrease of $3.3 million of facilities and depreciation expense primarily due to the impairment charge that we recorded in the first quarter of 2024 related to our idled donor collection facility in Cambridge, Massachusetts, as well as decreases of $0.7 million of consulting and other costs, $0.6 million of clinical storage costs, and $0.8 million of lab assays; and • a decrease of $3.1 million in expenses related to our SER-155 program due to lower clinical trial costs of $3.7 million as the Phase 1b study has been completed, partially offset by an increase of $0.3 million in lab supplies and consumables due to the commencement of manufacturing of clinical trial material for the planned Phase 2 study and an increase of $0.3 million of regulatory consulting.
In January 2025, we reported exploratory translational biomarker data from the SER-155 Phase 1b study which provided evidence supporting the intended therapeutic mechanisms, including promotion of intestinal epithelial barrier integrity to reduce the potential of bacterial translocation into the bloodstream, and reduction of systemic inflammatory responses.
Exploratory biomarker data In January 2025, we reported exploratory translational biomarker data from the SER-155 Phase 1b study which provided evidence supporting the intended therapeutic mechanisms, including promotion of intestinal epithelial barrier integrity to reduce the potential of bacterial translocation into the bloodstream, and reduction of systemic inflammatory responses.
This platform incorporates high-resolution analysis of human clinical data to identify microbiome biomarkers associated with disease and non-disease states; preclinical screening using human cell-based assays and in vitro/ex vivo and in vivo disease models customized for live biotherapeutics; and microbiological capabilities and a strain library that spans broad biological and functional breadth.
This platform incorporates high-resolution analysis of human clinical data to identify microbiome biomarkers associated with disease and non-disease states; preclinical screening using human cell-based assays and in vitro/ex vivo and in vivo disease models customized for live biotherapeutics; and a strain library and associated microbiological capabilities that spans broad biological and functional breadth.
Investing Activities During the year ended December 31, 2024, net cash provided by investing activities was $142.3 million, primarily due to $141.3 million of proceeds from the sale of the VOWST Business and $1.4 million sale of a restricted investment relating to a security deposit on one of our leases that was reclassified as restricted cash, partially offset by $0.4 million of purchases of property and equipment.
During the year ended December 31, 2024, net cash provided by investing activities was $142.3 million, primarily due to $141.3 million of proceeds from the sale of the VOWST Business and $1.4 million sale of a restricted investment relating to a security deposit on one of our leases that was reclassified as restricted cash, partially offset by $0.4 million of purchases of property and equipment.
Nasdaq Notice and Compliance On November 7, 2024, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below the $1.00 79 per share minimum bid price requirement for continued inclusion on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1), or the Bid Price Requirement.
Nasdaq Notice and Compliance On November 7, 2024, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1), or the Bid Price Requirement.
From and after Closing, certain license agreements between us, SPN, and/or their respective affiliates terminated and are of no further force or effect, except as contemplated by the Purchase Agreement. 80 Regulatory Exclusivity If we obtain marketing approval for any of our product candidates, we expect to receive reference product exclusivity against biosimilar products.
From and after Closing, certain license agreements between us, SPN, and/or their respective affiliates terminated and are of no further force or effect, except as contemplated by the Purchase Agreement. Regulatory Exclusivity If we obtain marketing approval for any of our product candidates, we expect to receive reference product exclusivity against biosimilar products.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates and other obligations, which include: • expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research, preclinical activities and clinical trials on our behalf as well as contract manufacturing organizations that manufacture drug products for use in our preclinical and clinical trials; • salaries, benefits and other related costs, including stock-based compensation expense, for personnel in our research and development functions; • costs of outside consultants, including their fees, stock-based compensation and related travel expenses; • the cost of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials; • costs related to compliance with regulatory requirements; • facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs; and • labor and passthrough costs, reimbursable by Nestlé, incurred in performing duties under the TSA.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates and other obligations, which include: • expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research, preclinical activities and clinical trials on our behalf as well as contract manufacturing organizations and other third parties that manufacture or test drug products for use in our preclinical and clinical trials; • salaries, benefits and other related costs, including stock-based compensation expense, for personnel in our research and development functions; • costs of outside consultants, including their fees, stock-based compensation and related travel expenses; • the cost of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials; • costs related to compliance with regulatory requirements; 84 • facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs; and • labor and passthrough costs, reimbursable by Nestlé, incurred in performing duties under the TSA.
In May 2021, we entered into a Sales Agreement, or the Sales Agreement, with Cowen and Company, LLC, or Cowen, to sell shares of our common stock with aggregate gross sales proceeds of up to $150.0 million, from time to time, through an 86 "at-the-market" equity offering program under which Cowen acts as sales agent.
In May 2021, we entered into a Sales Agreement, or the Sales Agreement, with Cowen and Company, LLC, or Cowen, to sell shares of our common stock with aggregate gross sales proceeds of up to $150.0 million, from time to time, through an "at-the-market" equity offering program under which Cowen acts as sales agent.
Because of the numerous risks and uncertainties associated with the development of our current and any future product candidates, the development of our platform and technology and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses required for completing the research and development of our product candidates.
Because of the numerous risks and uncertainties associated with the development of our current and any future product candidates, the development of our platform and technology and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are 89 unable to estimate the amounts of increased capital outlays and operating expenses required for completing the research and development of our product candidates.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing 89 approval for our current or future product candidates and achieve product sales.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for our current or future product candidates and achieve product sales.
If potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. We will need to generate significant revenues to achieve profitability, and we may never do so.
If potential collaborators or partners decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. We will need to generate significant revenues to achieve profitability, and we may never do so.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights as common stockholders.
To the 91 extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights as common stockholders.
General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and consulting 81 services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
The bacteria consortia is designed to optimize: (i) the prevention of the growth of various Enterococcaceae and Enterobacteriaceae species known to potentially dominate the GI and lead to downstream negative clinical outcomes in medically compromised patients and that can harbor antibacterial resistance, (ii) the production of multiple bacterial metabolites that can promote mucosal and epithelial barrier integrity with the goal of reducing the likelihood of harmful bacteria translocating from the gut to the bloodstream through a compromised epithelium, and (iii) the production of multiple bacterial metabolites that can modulate immune pathways to induce immune tolerance with a potential impact on GvHD.
The bacteria consortia is designed to optimize: (i) the prevention of the growth of various Enterococcaceae and Enterobacteriaceae species known to potentially dominate the GI tract and lead to downstream negative clinical outcomes in medically compromised patients and that can harbor antibacterial resistance, (ii) the production of multiple bacterial metabolites that can promote mucosal and epithelial barrier integrity with the goal of reducing the likelihood of harmful bacteria translocating from the gut to the bloodstream through a compromised epithelium, and (iii) the 80 production of multiple bacterial metabolites that can modulate immune pathways to induce immune tolerance with a potential impact on GvHD.
Liquidity and Capital Resources Since our inception, we have generated revenue only from collaborations and have incurred recurring net losses. We anticipate that we will continue to incur losses for at least the next several years.
Liquidity and Capital Resources Since our inception, we have generated revenue only from collaborations and have incurred recurring net losses from operations. We anticipate that we will continue to incur losses for at least the next several years.
The rationale for this program is based in part on published clinical evidence from our collaborators at Memorial Sloan Kettering Cancer Center showing that allo-HSCT patients with decreased diversity of commensal microbes and pathogen domination in the gastrointestinal tract were significantly more likely to die due to infection and/or lethal GvHD (Peled et al., 2020).
The rationale for this program is based in part on published clinical evidence from our collaborators at Memorial Sloan Kettering Cancer Center showing that allo-HSCT patients with decreased diversity of commensal microbes and pathogen domination in the GI tract were significantly more likely to die due to infection and/or lethal GvHD (Peled et al., 2020).
The incidence of febrile neutropenia was lower in patients administered SER-155 compared to placebo (65% vs. 78.6%, respectively; [Odds Ratio: 0.51; 95% CI: 0.07, 2.99; p=0.4674]). Six cases of gastrointestinal infections (C. difficile infections) were observed in the study, with four cases (20%) in the SER-155 arm and two cases (14.3%) in the placebo arm.
The incidence of febrile neutropenia was lower in patients administered SER-155 compared to placebo (65% vs. 78.6%, respectively; [Odds Ratio: 0.51; 95% CI: 0.07, 2.99; p=0.4674]). Six cases of GI infections (C. difficile infections) were observed in the study, with four cases (20%) in the SER-155 arm and two cases (14.3%) in the placebo arm.
These contracts generally provide for termination upon notice, and therefore we believe that our non-cancelable obligations under these agreements are not material. Recently Issued and Adopted Accounting Pronouncements 90 For a discussion of recent accounting standards see Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included in this report.
These contracts generally provide for termination upon notice, and therefore we believe that our non-cancelable obligations under these agreements are not material. Recently Issued and Adopted Accounting Pronouncements For a discussion of recent accounting standards see Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included in this report. 92
In addition, while antibiotic starts were similar in each arm, patients administered SER-155 were treated with antibiotics for a significantly shorter duration compared to patients in the placebo arm (9.2 days vs. 21.1 days, respectively, with a mean difference of -11.9 days [95% CI: -23.85, -0.04; p=0.0494]).
In addition, while treatment antibiotic starts were similar in each arm, patients administered SER-155 were treated with antibiotics for a significantly shorter cumulative duration compared to patients in the placebo arm (9.2 days vs. 21.1 days, respectively, with a mean difference of -11.9 days [95% CI: -23.85, -0.04; p=0.0494]).
Data from the SER-109 ECOSPOR III and ECOSPOR IV Phase 3 trial published in the New England Journal of Medicine (Feuerstadt et al., 2022) and Journal of the American Medical Association (Sims et al., 2023) suggest that live biotherapeutics have the potential to restructure the gut microbiome and shift the gut metabolic landscape.
Data from the ECOSPOR III and ECOSPOR IV Phase 3 trial published in the New England Journal of Medicine (Feuerstadt et al., 2022) and Journal of the American Medical Association (Sims et al., 2023) suggest that live biotherapeutics have the potential to restructure the gut microbiome and shift the gut metabolic landscape.
As consideration for the Transaction, SPN agreed to pay us: (i) a cash payment, which was paid at Closing, of $100 million, less approximately $17.9 million owed by us to an affiliate of SPN as of March 31, 2024 under the prior license agreement between us and the SPN affiliate, less approximately CHF 2.0 million in satisfaction of fees due under an existing manufacturing agreement between us and Bacthera; (ii) cash installment payments of $50 million, which was received on January 15, 2025 and $25 million due on July 1, 2025, or the Second Installment Payment (to be reduced by approximately $1.5 million related to certain employment obligations assumed by SPN, as described below), conditioned on our material compliance with obligations under the TSA entered into at Closing between us and NESA; (iii) prepayment of the $60 million Prepaid Milestone tied to the achievement of the First Sales Milestone of worldwide annual net sales of the Product of $150 million, which was paid in cash at Closing, which Prepaid Milestone will accrue interest at a fixed rate of 10% per annum until the First Sales Milestone is achieved and 5% per annum thereafter until the earlier of (x) the date on which the Prepaid Milestone, plus accrued interest thereon, has been repaid in full by set-off and (y) the last day of the Milestone Period; and (iv) future Milestone Payments of (x) $125 million tied to the achievement of worldwide annual net sales of the Product of $400 million and (y) $150 million tied to the achievement of worldwide annual net sales of the Product of $750 million, during the Milestone Period from Closing until December 31 of the calendar year in which the tenth anniversary of Closing occurs.
As consideration for the Transaction, SPN agreed to pay us: (i) a cash payment, which was paid at Closing, of $100 million, less approximately $17.9 million owed by us to an affiliate of SPN as of March 31, 2024 under the prior license agreement between us and the SPN affiliate, less approximately CHF 2.0 million in satisfaction of fees due under an existing manufacturing agreement between us and Bacthera; (ii) cash installment payments of $50 million, which was received on January 15, 2025 and $25 million, which was received on July 1, 2025, (offset by $1.4 million paid by us to Nestl é on July 1, 2025 related to certain employment obligations assumed by SPN, as described below), conditioned on our material compliance with obligations under the TSA entered into at Closing between us and NESA; (iii) prepayment of the $60 million Prepaid Milestone tied to the achievement of the First Sales Milestone of worldwide annual net sales of the Product of $150 million, which was paid in cash at Closing, which Prepaid Milestone will accrue interest at a fixed rate of 10% per annum until the First Sales Milestone is achieved and 5% per annum thereafter until the earlier of (x) the date on which the Prepaid Milestone, plus accrued interest thereon, has been repaid in full by set-off and (y) the last day of the Milestone Period; and (iv) future Milestone Payments of (x) $125 million tied to the achievement of worldwide annual net sales of the Product of $400 million and (y) $150 million tied to the achievement of worldwide annual net sales of the Product of $750 million, during the Milestone Period from Closing until December 31 of the calendar year in which the tenth anniversary of Closing occurs.
In connection with the TSA the Company entered into with NESA following the sale of the VOWST Business during the third quarter of 2024, our operating expenses also consisted of certain passthrough costs incurred in performing duties under the TSA and manufacturing services related to the VOWST Business and operations.
In connection with the TSA we entered into with NESA following the sale of the VOWST Business during the third quarter of 2024, our operating expenses also consisted of certain passthrough costs incurred in performing duties under the TSA and manufacturing services related to the VOWST Business and operations.
During the Profit Sharing Period, we will reimburse SPN for (i) certain payments under the exclusive license agreement between us and Memorial Sloan Kettering Cancer Center, (ii) certain costs incurred in connection with an ongoing post-marketing safety study of VOWST and (iii) 80.1% of all rent and other costs due to the landlord under the lease for our Waltham facility.
During the Profit Sharing Period, we reimbursed SPN for (i) certain payments under the exclusive license agreement between us and Memorial Sloan Kettering Cancer Center, (ii) certain costs incurred in connection with an ongoing post-marketing safety study of VOWST and (iii) 80.1% of all rent and other costs due to the landlord under the lease for our Waltham facility.
Additional data show that SER-109 rapidly reduced the abundance of bacteria associated with common antibiotic resistance genes, or ARGs, and reduced ARG abundance in the gut (Straub et al., 2023). Collectively, we believe these data suggest the potential for live biotherapeutics to prevent the colonization and overgrowth of pathogens that can establish in the gut and ultimately to reduce infections.
Additional data show that VOWST rapidly reduced the abundance of bacteria associated with common antibiotic resistance genes, or ARGs, and reduced ARG abundance in the gut (Straub et al., 2023). Collectively, we believe these data suggest the potential for live biotherapeutics to prevent the colonization and overgrowth of pathogens that can establish in the gut and ultimately to reduce infections.
The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments.
The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments.
In Cohort 2, the ability to detect pathogen domination (i.e., relative abundance in the GI ≥30%) in the placebo arm, and differences between the study arms, was constrained due to the limited number of placebo stool samples (placebo patients submitted fewer stool samples) and an imbalance in the number of available stool samples between the arms.
In Cohort 2, the ability to detect pathogen domination (i.e., relative abundance in the GI ≥30%) in the placebo arm, and differences between the study arms, was constrained due to the limited number of placebo stool samples and an imbalance in the number of available stool samples between the arms.
We believe this approach may also enable us to reduce antimicrobial resistant infections, or AMR, which the World Health Organization declared as a top ten global public health threat facing humanity, and with estimates that yearly deaths may reach 10 million by 2050, putting mortality due to AMR on par with deaths due to cancer.
We believe this approach may also enable us to reduce AMR, which the World Health Organization declared as a top ten global public health threat facing humanity, and with estimates that yearly deaths may reach 10 million by 2050, putting mortality due to AMR on par with deaths due to cancer.
For additional information on our leases and timing of future payments, please read Note 8, Leases , to the consolidated financial statements included in this Form 10-K. Profit Sharing Payments We and SPN share 50/50 in the net profit or net loss achieved during the period from the Closing Date until December 31, 2025, or the Profit Sharing Period.
For additional information on our leases and timing of future payments, please read Note 6, Leases , to the consolidated financial statements included in this Form 10-K. Profit Sharing Payments We and SPN shared 50/50 in the net profit or net loss achieved during the period from the Closing Date until December 31, 2025, or the Profit Sharing Period.
To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses. 83 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023.
To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses. Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024.
Accordingly, management has concluded that these circumstances raise substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing.
Accordingly, management has concluded that these circumstances raise substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing or enter into a partnership.
We believe the available study data from Cohort 1 suggest that SER-155 administration results in significantly lower incidence rates of gastrointestinal dominations with pathogens of clinical concern, such as Enterococcaceae , Enterobacteriaceae , Streptococcaceae , and Staphylococcaceae .
We believe the available study data from Cohort 1 suggest that SER-155 administration results has the potential to significantly lower incidence rates of gastrointestinal dominations with pathogens of clinical concern, such as Enterococcaceae , Enterobacteriaceae , Streptococcaceae , and Staphylococcaceae .
Non-cash income consisted of the $146.7 million gain on sale of VOWST Business and $0.5 million decrease in the fair value of the Additional Warrants, partially offset by stock-based compensation expense of $21.0 million, $9.2 million related to the amortization of right-of-use assets, $5.5 million of depreciation and amortization, $1.4 million of amortization of debt issuance costs, $23.4 million of loss associated with the extinguishment of the Oaktree Term Loan, $0.3 million loss on disposal of fixed assets, and $3.3 million of impairment charges related to our long-lived assets.
Non-cash charges consisted of the $146.7 million gain on sale of VOWST Business and $0.5 million decrease in the fair value of warrants, partially offset by stock-based compensation expense of $21.0 million, $9.2 million related to the amortization of right-of-use assets, $5.5 million of depreciation and amortization, $1.4 million of amortization of debt issuance costs, $23.4 million of loss associated with the extinguishment of the prior credit facility with Oaktree, $0.3 million loss on disposal of fixed assets, and $3.3 million of impairment charges related to our long-lived assets.
We anticipate that our future expenses will increase if and as we: • continue the clinical development of SER-155 in patients undergoing allo-HSCT and for other medically vulnerable populations; • perform our obligations under the TSA; • make strategic investments in manufacturing capabilities; • maintain and augment our extensive proprietary live biotherapeutic drug development know-how that may be used to support future research and development efforts, including our intellectual property portfolio and intellectual property that we may opportunistically acquire; • establish a sales and distribution infrastructure and scale-up manufacturing capabilities to commercialize any other products for which we may obtain regulatory approval; • perform our obligations under any agreements with collaborators; • seek to obtain regulatory approvals for our product candidates; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
We anticipate that our future expenses will increase if and as we: • invest in our early-stage pipeline product candidates, including SER-603 in IBD and SER-155 in irEC; • conduct clinical trials for SER-155 in allo-HSCT and other medically vulnerable populations; • make strategic investments in manufacturing capabilities; • maintain and augment our extensive proprietary live biotherapeutic drug development know-how that may be used to support future research and development efforts, including our intellectual property portfolio and intellectual property that we may opportunistically acquire; • establish a sales and distribution infrastructure and scale-up manufacturing capabilities to commercialize any other products for which we may obtain regulatory approval; • perform our obligations under any agreements with collaborators; • seek to obtain regulatory approvals for our product candidates; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome therapeutic, which was sold to Société des Produits Nestlé S.A., or SPN, and with certain of its affiliates, collectively, Nestlé Health Science, in September 2024.
We led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome biotherapeutic and a Breakthrough Therapy designated drug, which was sold to Société des Produits Nestlé S.A., or SPN, and with certain of its affiliates, collectively, Nestlé Health Science, in September 2024.
In addition, we continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational 74 development platform to prioritize future drug targets and to identify opportunities for combination therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
We continue to leverage microbiome pharmacokinetic and pharmacodynamic data from across our clinical and preclinical portfolios, using our reverse translational development platform to prioritize future drug targets and to identify opportunities for monotherapy treatment and in combination with existing therapies across various indications, including inflammatory and immune diseases, cancer, and metabolic diseases.
Research and development expenses may increase in the future if and as we resume development of any clinical or preclinical programs. In 2025, research and development expenses will continue to include labor and passthrough costs, reimbursable by Nestlé, incurred in performing obligations under the TSA.
Research and development expenses may increase in the future if and as we resume development of any clinical or preclinical programs. In 2025, research and development expenses included labor and passthrough costs, reimbursable by Nestlé, incurred in performing obligations under the TSA.
SER-155 We are developing SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve epithelial barrier integrity, and regulate immune response to prevent bacterial bloodstream infections, or BSIs, as well as other pathogen associated negative clinical outcomes in patients undergoing allo-HSCT.
SER-155 in allo-HSCT We are developing SER-155, an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve GI epithelial barrier integrity, and induce immune homeostasis to prevent bacterial BSIs as well as other pathogen associated negative clinical outcomes in patients undergoing allo-HSCT.
Financing Activities 88 During the year ended December 31, 2024, net cash used in financing activities was $90.4 million, consisting of $127.9 million repayment of the Oaktree Term Loan, partially offset by $23.5 million from the issuance of common stock under our at the market equity program, net of issuance costs, $13.5 million from the issuance of common stock in connection with the sale of the VOWST Business to SPN, and $0.5 million from the issuance of common stock under our 2015 Employee Stock Purchase Plan, or ESPP.
Financing Activities During the year ended December 31, 2025, net cash provided by financing activities was $13.9 million, consisting of $13.2 million from the issuance of common stock under our at the market equity program, net of issuance costs, $0.5 million from the exercise of stock options, and $0.2 million from the issuance of common stock under our 2015 Employee Stock Purchase Plan, or ESPP. 90 During the year ended December 31, 2024, net cash used in financing activities was $90.4 million, consisting of $127.9 million repayment of the prior credit facility with Oaktree, partially offset by $23.5 million from the issuance of common stock under our at the market equity program, net of issuance costs, $13.5 million from the issuance of common stock in connection with the sale of the VOWST Business to SPN, and $0.5 million from the issuance of common stock under our 2015 ESPP.
As of December 31, 2024, our contractual commitments for our leases were $137.9 million, of which $19.4 million is expected to be paid within one year, and $118.4 million will be paid over the remaining term of such leases. We do not have any commitment for leases that had not yet commenced as of December 31, 2024.
As of December 31, 2025, our contractual commitments for our leases were $118.4 million, of which $20.0 million is expected to be paid within one year, and $98.4 million will be paid over the remaining term of such leases. We do not have any commitment for leases that had not yet commenced as of December 31, 2025.
SER-147 and other pipeline programs We continue to develop another proprietary live biotherapeutic composition, SER-147, designed to prevent bacterial bloodstream and spontaneous bacterial peritonitis, or SBP, infections in patients with metabolic disease, including chronic liver disease, or CLD. SER-147 was designed and optimized using our reverse translational therapeutics development platform.
SER-147 We are also developing another proprietary live biotherapeutic composition, SER-147, designed to prevent bacterial bloodstream and spontaneous bacterial peritonitis, or SBP, infections in patients with metabolic disease, including chronic liver disease, or CLD. SER-147 was designed and optimized using our reverse translational therapeutics development platform.
SER-155 bacterial strains engrafted into the gastrointestinal tract of patients following the administration of SER-155. 78 The incidence of BSIs was significantly lower in the SER-155 arm compared with the placebo arm (2/20 (10%) vs. 6/14 (42.9%), respectively; [Odds Ratio: 0.15; 95% CI: 0.01, 1.13, p=0.0423]), which represents a relative risk reduction of approximately 77% and an absolute risk reduction of approximately 33%.
The incidence of BSIs was significantly lower in the SER-155 arm compared with the placebo arm (2/20 (10%) vs. 6/14 (42.9%), respectively; [Odds Ratio: 0.15; 95% CI: 0.01, 1.13, p=0.0423]), which represents a relative risk reduction of approximately 77% and an absolute risk reduction of approximately 33%.
As a condition to Closing, we and SPN entered into the Securities Purchase Agreement, pursuant to which SPN purchased 14,285,715 shares of Common Stock at Closing, at a purchase price per share of $1.05, for an aggregate purchase price of $15.0 million.
As a condition to Closing, we and SPN entered into the Securities Purchase Agreement, pursuant to which SPN purchased 714,285 shares of Common Stock at Closing, at a purchase price per share of $21.00, for an aggregate purchase price of $15.0 million.
As of December 31, 2024, we also had federal and state research and development 82 tax credit carryforwards of $46.5 million and $8.1 million, respectively, net of uncertain tax position reserves, which begin to expire in 2031 and 2028, respectively. The federal research and development tax credits include an orphan drug credit carryforward of $25.9 million.
As of December 31, 2025, we also had federal and state research and development tax credit carryforwards of $46.2 million and $10.0 million, respectively, net of uncertain tax position reserves, which begin to expire in 2031 and 2028, respectively. The federal research and development tax credits include an orphan drug credit carryforward of $25.9 million.
Other (Expense) Income, Net Other (expense) income, net primarily consists of: • sublease income; • amortization of premiums or accretion of discounts on investments; • gains and losses on foreign currency transactions; • changes in the fair values of our warrant liabilities associated with our Oaktree Term Loan; • loss associated with the extinguishment of the Oaktree Term Loan; • the amount Nestlé agrees to pay for costs associated with preserved raw material suspension ("PRMS") manufacturing; and reimbursement for certain labor and other passthrough costs of the transition services performed by the Company under the TSA; and • gain associated with the change in the Company's accrued liabilities due to SPN - related party.
Other (Expense) Income, Net Other (expense) income, net primarily consists of: 85 • sublease income; • amortization of premiums or accretion of discounts on investments; • gains and losses on foreign currency transactions; • changes in the fair values of our warrant liabilities associated with our prior credit facility with Oaktree; • loss associated with the extinguishment of our prior credit facility with Oaktree; • the amount Nestlé paid for costs associated with PRMS manufacturing; and reimbursement for certain labor and other passthrough costs of the transition services performed by the Company under the TSA; and • gains or losses associated with the change in the Company's accrued liabilities due to SPN - related party.
In performing this analysis, we excluded certain elements of our operating plan that cannot be considered probable of occurring. Under the applicable accounting standards, the receipt of contingent payments from the Transaction and any future equity issuances cannot be considered probable, as these events are outside our control.
In performing this analysis, we excluded certain elements of our operating plan that cannot be considered probable of occurring. Under the applicable accounting standards, any future transactions or equity issuances cannot be considered probable, as these events are outside our control.
Our future capital requirements will depend on many factors, including: • the total amount of the Second Installment Payment and Milestone Payments we may receive from the Transaction, and the amounts payable or due under the Profit Sharing Payments; • the cost of manufacturing our product candidates; • the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates and research activities; • the costs, timing and revenue, if any, of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.
Our future capital requirements will depend on many factors, including: • the cost of conducting clinical trials for our lead candidate, SER-155 in allo-HSCT and other targeted indications, and other product candidates in our pipeline; • the total amount of the Milestone Payments we may receive from the Transaction, • the cost of manufacturing our product candidates; • the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates and research activities; • the costs, timing and revenue, if any, of potential future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.
Other (Expense) Income, Net Other (expense) income, net was $4.5 million of expense for the year ended December 31, 2024 compared to $5.0 million of income for the year ended December 31, 2023.
Other Income (Expense), Net Other income (expense), net was $99.7 million of income for the year ended December 31, 2025 compared to $4.5 million of expense for the year ended December 31, 2024.
Our ability to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Since our inception, we have incurred significant operating losses. Our net loss from continuing operations was $125.8 million, $190.1 million, and $183.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Our ability to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Since our inception, we have incurred significant operating losses. Our net loss from operations was $94.0 million, $121.3 million, and $195.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.
In our placebo-controlled Phase 1b study of SER-155 in allo-HSCT, Cohort 2 results demonstrated that SER-155 was associated with a significant reduction in both bloodstream infections and systemic antibiotic exposure as well as a lower incidence of febrile neutropenia, as compared to placebo through day 100 post HSCT. SER-155 was generally well tolerated, with no observed treatment-related serious adverse events.
In our placebo-controlled Phase 1b study of SER-155 in allo-HSCT, SER-155 was associated with a 77% relative risk reduction in bacterial BSIs and a significant reduction in systemic antibiotic exposure as well as a lower incidence of febrile neutropenia, as compared to placebo through day 100 post HSCT. SER-155 was generally well tolerated, with no observed treatment-related serious adverse events.
A majority received post-transplant cyclophosphamide as part of their graft-versus-host disease (GvHD) prophylaxis. Results from Cohort 2, announced in September 2024, were consistent with the observations from Cohort 1. SER-155 was generally well tolerated, and no treatment-emergent serious adverse events related to drug were observed.
A majority received post-transplant cyclophosphamide as part of their GvHD prophylaxis. Results from Cohort 2, announced in September 2024, were consistent with the observations from Cohort 1. SER-155 was generally well tolerated, and no treatment-emergent serious adverse events related to drug were observed. SER-155 bacterial strains engrafted into the gastrointestinal tract of patients following the administration of SER-155.
During the year ended December 31, 2024, we sold 20,617,028 shares of common stock under the Sales Agreement, at an average price of approximately $1.18 per share, raising aggregate net proceeds of approximately $23.5 million after deducting an aggregate commission of approximately 3%.
During the year ended December 31, 2024, we sold 1,030,846 shares of common stock under the Sales Agreement, at an average price of approximately $23.67 per share, raising aggregate net proceeds of approximately $23.5 million after deducting an aggregate commission of approximately 3% and other issuance costs.
In the advanced stages of CLD, known as decompensated cirrhosis, patients exhibit significant immune dysfunction, microbiome disruption, and increased contact with the healthcare system, all of which drive increased susceptibility to bacterial infections (Bajaj et al., 2021, Albillos et al., 2022). The Company is conducting IND-enabling activities for SER-147.
In the advanced stages of CLD, known as decompensated cirrhosis, patients exhibit significant immune dysfunction, microbiome disruption, and increased contact with the healthcare system, all of which drive increased susceptibility to bacterial infections such as SBP and BSIs (Bajaj et al., 2021, Albillos et al., 2022).
We believe that the scientific and clinical data from the development of VOWST (our then product candidate SER-109 program) and the data from the SER-155 Phase 1b study validate this novel therapeutic approach in the context of infection.
We believe that the scientific and clinical data from the development of VOWST (our then product candidate SER-109 program) and the data from the SER-155 Phase 1b study (described below) validate our novel therapeutic approach in both infectious disease and I&I diseases.
As of December 31, 2024, our estimated costs associated with these future payments were $17.8 million, all of which is expected to be within one year. Other Obligations We enter into contracts in the normal course of business with CROs for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes.
As of December 31, 2025, the remaining liability associated with all of these obligations was $3.3 million, all of which is expected to be paid within one year. Other Obligations We enter into contracts in the normal course of business with CROs for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes.
In December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
In December 2023, we received Fast Track Designation for SER-155 to reduce the risk of infection and GvHD in patients undergoing allo-HSCT, and in December 2024, the FDA granted Breakthrough Therapy designation to SER-155 for the reduction of BSIs in patients 18 years and older undergoing allo-HSCT.
Lease Commitments Our lease commitments reflect payments due under our operating lease agreements for our corporate headquarters, office and laboratory space, and donor collection facilities, that expire between November 2028 and April 2033.
Such arrangements include those related to our lease commitments. Lease Commitments Our lease commitments reflect payments due under our operating lease agreements for our corporate headquarters, office and laboratory space, that expire between November 2028 and April 2033.
We further believe the resulting Cohort 2 data, together with the Cohort 1 SER-155 Phase 1b study results provide encouraging evidence to support further development of SER-155 to potentially reduce GI associated bloodstream and AMR infections as well as increase immune tolerance in individuals undergoing allo-HSCT for cancers and other serious conditions.
We further believe the resulting Cohort 2 data, together with the Cohort 1 SER-155 Phase 1b study results provide encouraging evidence to support further development of SER-155 to potentially reduce GI associated bloodstream and AMR infections as well as increase immune tolerance in individuals undergoing allo-HSCT for cancers and other serious conditions. 81 Proposed SER-155 Phase 2 Study The SER-155 Phase 2 study will incorporate a well-powered, placebo-controlled design, which provides for a planned interim analysis to enable an expedited initial data readout.
During the year ended December 31, 2023, we sold 7,711,199 shares of common stock under the Sales Agreement, at an average price of approximately $2.46 per share, raising aggregate net proceeds of approximately $18.2 million after deducting an aggregate commission of approximately 3% and other issuance costs.
During the year ended December 31, 2025, we sold 739,545 shares of common stock under the Sales Agreement, at an average price of approximately $18.48 per share, raising aggregate net proceeds of approximately $13.2 million after deducting an aggregate commission of approximately 3%.
SER-155 contains 16 bacterial strains selected using our reverse translation discovery and development platform technologies to optimize SER-155’s functional profile. The design incorporates biomarker data from human clinical data and screening data from nonclinical human cell-based assays and in vivo disease models.
SER-155 is a live biotherapeutic candidate designed to prevent frequent, expensive, and fatal infections in blood cancer patients. SER-155 contains 16 bacterial strains selected using our reverse translation discovery and development platform technologies to optimize SER-155’s targeted profile. The design incorporates biomarker data from human clinical data and screening data from nonclinical human cell-based assays and in vivo disease models.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with performing research services on our behalf and clinical trials; • investigative sites or other providers in connection with clinical trials; • vendors in connection with preclinical and clinical development activities; and • vendors related to product manufacturing, development and distribution of preclinical and clinical supplies.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with performing research services on our behalf and clinical trials; • investigative sites or other providers in connection with clinical trials; • vendors in connection with preclinical and clinical development activities; and • vendors related to product manufacturing, development and distribution of preclinical and clinical supplies. 86 We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage clinical trials on our behalf.
In addition to allo-HSCT, we intend to evaluate SER-155 and other cultivated live biotherapeutic candidates in other medically vulnerable patient populations including autologous-HSCT patients, cancer patients with neutropenia, chimeric antigen receptors therapy recipients, individuals with chronic liver disease, or CLD, solid organ transplant recipients, as well as patients in the intensive care unit and long-term acute care facilities.
We believe that SER-155 and other cultivated live biotherapeutic candidates could be developed in additional patient populations to address barrier compromise and bloodstream and AMR infections beyond allo-HSCT, including autologous-HSCT patients, cancer patients with neutropenia, chimeric antigen receptors therapy, or CAR-T, recipients, individuals with chronic liver disease, or CLD, solid organ transplant recipients, as well as patients in the intensive care unit, or ICU, and long-term acute care facilities.
The financial results of the VOWST Business have been classified as discontinued operations in the consolidated statements of operations and the related assets and liabilities of the VOWST Business have been are classified as assets and liabilities of discontinued operations in the consolidated balance sheets.
Discontinued Operations We completed the sale of the VOWST Business to SPN on September 30, 2024. The financial results of the VOWST Business have been classified as discontinued operations in the consolidated statements of operations and the related assets and liabilities of the VOWST Business have been classified as assets and liabilities of discontinued operations in the consolidated balance sheets.
Beginning in the fourth quarter of 2024, general and administrative expenses also include labor and passthrough costs, reimbursable by Nestlé, incurred in performing duties under the TSA. We expect that our general and administrative expenses will decrease in 2025 as compared to 2024, following the sale of VOWST Business, reduction of our workforce and overall cost containment efforts.
In 2025, general and administrative expenses included labor and passthrough costs, reimbursed by Nestlé, incurred in performing obligations under the TSA. We expect that our general and administrative expenses will decrease in 2026 as compared to 2025, following the conclusion of the TSA, reduction of our workforce and overall cost containment efforts.
All such employees have transferred to SPN as of December 31, 2024. 77 Infection Risk Reduction We believe that the scientific and clinical data from our SER-109 program validate our novel approach of using live biotherapeutics to decolonize pathogens and improve epithelial barrier integrity, resulting in reduced rate of infections in medically compromised patients.
We believe that the scientific and clinical data from our VOWST program (our then product candidate SER-109 program) validate our novel approach of using live biotherapeutics to decolonize pathogens and improve epithelial barrier integrity, resulting in reduced rate of infections in medically compromised patients.
Results from this cohort, announced in May 2023, showed SER-155 was generally well tolerated and resulted in successful drug strain engraftment and a reduction in pathogen domination in the GI microbiome relative to a historical control cohort.
Cohort 1 included 13 subjects who received any dosing of the SER-155 regimen, with 11 subjects subsequently receiving an allo-HSCT. Results from this cohort, announced in May 2023, showed SER-155 was generally well tolerated and resulted in successful drug strain engraftment and a reduction in pathogen domination in the GI microbiome relative to a historical control cohort.
The receipt of contingent payments from the Transaction, collaborations or future equity issuances cannot be considered probable, as these events are outside of our control. Accordingly, management has concluded that these circumstances raise substantial doubt about our ability to continue as a going concern.
The ability to obtain sufficient proceeds from additional equity offerings, collaborations or other financing with terms favorable or acceptable to us cannot be considered probable, as these events are outside of our control. Accordingly, management has concluded that these circumstances raise substantial doubt about our ability to continue as a going concern.
In accruing service fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites activated and the level of effort to be expended in each period.
Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites activated and the level of effort to be expended in each period.
As of December 31, 2024, we had an accumulated deficit of $978.1 million. While we plan to focus our investment on progressing the development of SER-155 and advancing our other wholly-owned live biotherapeutic candidates in the near-term, our expenses may increase in connection with these future activities.
As of December 31, 2025, we had an accumulated deficit of $972.4 million. 77 While we plan to focus our investment on advancing our early-stage live biotherapeutic candidates, starting with SER-603, in the near-term and, subject to receiving additional funding, progressing the development of SER-155 into a Phase 2 study, our expenses may increase in connection with these future activities.
Year Ended December 31, 2024 2023 (in thousands) Cash used in operating activities $ (148,609 ) $ (117,354 ) Cash provided by investing activities $ 142,293 $ 10,582 Cash (used in) provided by financing activities $ (90,372 ) $ 71,705 Net decrease in cash, cash equivalents and restricted cash $ (96,688 ) $ (35,067 ) Operating Activities During the year ended December 31, 2024, net cash used in operating activities was $148.6 million, primarily due to a net income of $0.1 million and non-cash income of $83.2 million, reduced by changes in our operating assets and liabilities of $65.5 million.
Year Ended December 31, 2025 2024 (in thousands) Cash provided by (used in) operating activities $ 1,117 $ (148,609 ) Cash (used in) provided by investing activities $ (42 ) $ 142,293 Cash provided by (used in) financing activities $ 13,898 $ (90,372 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 14,973 $ (96,688 ) Operating Activities During the year ended December 31, 2025, net cash provided by operating activities was $1.1 million, primarily due to net income of $5.7 million and non-cash charges of $23.2 million, partially offset by changes in our operating assets and liabilities of $27.8 million.
Our Hercules Loan and Security Agreement and Oaktree Term Loan included and any additional debt financing and preferred equity financing, if available, may involve agreements that include, covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Any debt financing and preferred equity financing, if available, may involve agreements that include, covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Additional debt or preferred equity financing may also require the issuance of warrants, which could potentially dilute our stockholders’ ownership interest.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, commercial, business development and administrative functions.
Given the conclusion of the TSA as of December 31, 2025, these costs and related reimbursements are not expected to reoccur in 2026. General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, commercial, business development and administrative functions.
For example, the trading prices for our and other biopharmaceutical companies’ stock have been highly volatile as a result of factors such as the impacts of pandemics, such as COVID-19, and increases in inflation rates or interest rates.
For example, the trading prices for our and other biopharmaceutical companies’ stock have been highly volatile as a result of factors such as the impacts of pandemics, increases in inflation rates, interest rates and tariffs. As a result, we may face difficulties raising capital through sales of our common stock and any such sales may be on unfavorable terms.
We are progressing the development of SER-155, an investigational, oral, live biotherapeutic designed to decolonize gastrointestinal, or GI, pathogens, improve epithelial barrier integrity, and regulate immune response to prevent bacterial bloodstream infections, or BSIs, as well as other pathogen-associated negative clinical outcomes in patients undergoing allogeneic hematopoietic stem cell transplantation, or allo-HSCT.
SER-155, our most advanced LBP candidate, is an investigational, oral, live biotherapeutic designed to decolonize GI pathogens, improve GI epithelial barrier integrity, and induce immune homeostasis to prevent bacterial BSIs, including those that can harbor antimicrobial resistance, as well as other pathogen-associated negative clinical outcomes in patients undergoing allogeneic hematopoietic stem cell transplantation, or allo-HSCT.
Intellectual Property Patent Portfolio We have an extensive patent portfolio directed to rationally designed ecologies of spores and microbes. The portfolio includes both company-owned patents and applications, and those that we have rights to as licensee. The patents and applications included in our portfolio cover both composition of matter and methods (e.g., method of treating).
The portfolio includes both company-owned patents and applications, and those that we have rights to as licensee. The patents and applications included in our portfolio cover both composition of matter and methods (e.g., method of treating). Our intellectual property rights related to SER-155 and SER-147 extend through 2043 (not including any potential term extension).
The Second Installment Payment due on July 1, 2025 will be reduced by approximately $1.5 million related to certain employment obligations assumed by SPN through the period prior to the Closing Date.
The installment payment received on July 1, 2025 was offset by the $1.4 million we paid to Nestl é on the same date related to certain employment obligations assumed by SPN through the period prior to the Closing Date.
We believe clinical and nonclinical data across our programs support the development of live biotherapeutics to target the prevention and treatment of a broad swath of infections, and in inflammatory and immune diseases.
We believe clinical and nonclinical data across our programs support the development of LBPs to target the prevention and treatment of a broad swath of infections, and to treat inflammatory and immune, or I&I, diseases. Our pipeline consists of SER-155, SER-603, and SER-147, as well as other potential candidates in earlier development.
As of December 31, 2024, we had federal and state net operating loss carryforwards of $580.1 million and $543.6 million, respectively, both of which begin to expire in 2035.
As of December 31, 2025, we had federal and state NOL carryforwards of $616.4 million and $597.8 million, respectively, both of which begin to expire in 2035.
General and Administrative Expenses Year Ended December 31, 2024 2023 Change (in thousands) Personnel-related (including stock-based compensation) $ 22,679 $ 36,069 $ (13,390 ) Professional fees 9,805 18,784 (8,979 ) Facility-related and other 20,699 22,647 (1,948 ) Total general and administrative expenses $ 53,183 $ 77,500 $ (24,317 ) General and administrative expenses were $53.2 million for the year ended December 31, 2024, compared to $77.5 million for the year ended December 31, 2023.
General and Administrative Expenses Year Ended December 31, 2025 2024 Change (in thousands) Personnel-related (including stock-based compensation) $ 14,413 $ 22,679 $ (8,266 ) Professional fees 8,991 9,805 (814 ) Facility-related and other 15,752 20,699 (4,947 ) Total general and administrative expenses $ 39,156 $ 53,183 $ (14,027 ) General and administrative expenses were $39.2 million for the year ended December 31, 2025, compared to $53.2 million for the year ended December 31, 2024.
This platform and knowledge base enables identification of specific microbes, microbial genes, and microbial metabolites/peptides associated with disease and the design of therapeutic consortia of bacteria for specific pharmacological properties to restructure the gut microbiome and modulate functional pathways associated with disease. In addition, we own a valuable intellectual property estate related to the development and manufacture of live biotherapeutics.
This platform and knowledge base are integrated through a proprietary knowledge graph and agentic artificial intelligence, enabling rapid identification of specific microbes, microbial genes, and microbial metabolites/peptides associated with disease and the design of therapeutic consortia of bacteria for specific pharmacological properties to restructure the gut microbiome and modulate functional pathways associated with disease.
As of December 31, 2024, we had cash and cash equivalents totaling $30.8 million and an accumulated deficit of $978.1 million. For the year ended December 31, 2024, we incurred a net loss from continuing operations of $125.8 million, and used cash in operations of $148.6 million.
As of December 31, 2025, we had cash and cash equivalents totaling $45.8 million and an accumulated deficit of $972.4 million. For the year ended December 31, 2025, we incurred a net loss from operations of $94.0 million, and used cash in operations of $73.9 million, net of $75.0 million in milestone payments received from Nestl é .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHowever, because of the short-term nature of the instruments in our portfolio, an immediate 10% change in market interest rates would not have a material impact on the fair market value of our investment portfolio or on our financial position or results of operations.
Biggest changeHowever, because of the short-term nature of the instruments in our portfolio, an immediate 10% change in market interest rates would not have a material impact on our financial position or results of operations.
Item 7A. Quantitative and Qu alitative Disclosures about Market Risk Interest Rate Fluctuation Risk We are exposed to market risk related to changes in interest rates. As of December 31, 2024, our cash and cash equivalents consisted of cash and money market accounts. Our interest income is sensitive to changes in the general level of U.S. interest rates.
Item 7A. Quantitative and Qu alitative Disclosures about Market Risk Interest Rate Fluctuation Risk We are exposed to market risk related to changes in interest rates. As of December 31, 2025, our cash and cash equivalents consisted of cash in operating bank accounts. Our interest income is sensitive to changes in the general level of U.S. interest rates.

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