Good day, ladies and gentlemen, and welcome to the First Quarter 2018 Seres Therapeutics Earnings Conference Call. [Operator Instructions]. As a reminder this call is being recorded. I would now like to introduce your host for today's conference Carlo Tanzi, Vice President, Investor Relations and Corporate Communications. Sir, you may begin.

Thank you, and good morning. A press release with the company's first quarter 2018 financial results and a business update became available at 7 A.M. Eastern Time this morning and can be found on the Investors & Media section of the company's website. I'd like to remind you that we'll be making forward-looking statements relating to our development plans, the ability of ECOSPOR III to support SER-109 approval, the promise and potential impact of any of our microbiome therapeutics or clinical trial data, our plans to initiate clinical studies of SER-287 and SER-401, the timing and results of any clinical studies and the sufficiency of cash to fund operations. Actual results may differ materially. Additionally, these statements are subject to certain risks and uncertainties, which are discussed under the Risk Factors section of our recent SEC filings. Any forward-looking statements made on today's call, represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. On today's call, I'm joined by Dr. Roger Pomerantz, Seres' President, CEO and Chairman; and Eric Shaff, Chief Operating and Financial Officer. Roger?

Thanks, Carlo, and thank you all for joining us. Seres is focused on developing new therapeutics for serious human diseases, where dysbiosis of the gastrointestinal microbiome is thought to play a central role. We are using live bacterial consortia, an entirely new treatment modality as the therapeutic development candidates. We believe that microbiome therapeutics have the potential to address multiple disease states and our R&D efforts target therapeutic areas where compelling preclinical and clinical data indicate that the microbiome is important, such as, infectious diseases, metabolic diseases and inflammatory and immune diseases, including immuno-oncology. Seres has made continued strong progress on a number of our clinical and preclinical stage programs. 1; we continue to enroll patients with objectively defined multiply recurrent C. diff infection into our Phase III trial across North America. 2; we have made progress in advancing our SER-287 program for ulcerative colitis into further late-stage clinical development. 3; we obtained important learnings from our SER-262 Phase 1b study results, the first ever rationally designed, synthetically fermented microbiome therapeutic to reach clinical development. The mechanistic insights obtained from this program will inform how we advance SER-262 as well as future synthetic microbiome therapeutic candidates. And number 4; we also continue to make significant progress in our preclinical stage programs, including our SER-401 program designed to increase the efficacy of immune oncology checkpoint inhibitors. So let's begin with SER-109. To remind you, SER-109 has received both Breakthrough and Orphan Drug designations from the FDA for the treatment of multiply recurrent C. diff infection. Last year, we began ECOSPOR III, our SER-109 Phase III study based on the extensive learnings we obtained from our prior SER-109 trials. ECOSPOR III is randomized placebo-controlled study in 320 patients with multiply recurrent C. diff infection. The design of ECOSPOR III incorporates our key…

Thanks, Roger, and good morning everyone. Seres reported a net loss of $27.9 million for the first quarter of 2018 as compared to a net loss of $25.5 million for the first quarter of the prior year. The first quarter net loss was driven primarily by clinical and development expenses, personnel expenses and ongoing development of the company's microbiome therapeutics platform. The first quarter net loss figure was inclusive of $4 million in recognized revenue, associated primarily with a company's collaboration with Nestlé Health Science. Research and development expenses for the first quarter were $23.5 million, as compared to $20.1 million for the same period in 2017. The R&D expense was primarily related to Seres microbiome therapeutics platform, the clinical development of SER-109, SER-262 and SER-287 as well as the company's immuno-oncology preclinical programs. General and administrative expenses for the first quarter were $8.8 million unchanged compared to the same period in the prior year. G&A expenses were primarily due to headcount, professional fees and facility costs. The decrease in our cash, cash equivalents and investments balance during the quarter was $27.8 million. Seres ended the first quarter with approximately $122.2 million in cash, cash equivalents and investments. Cash resources are expected to fund operating expenses and capital expenditure requirements, excluding cash inflows or outflows from future business development activities or potential incoming milestone payments through at least the next 12 months. Seres is also eligible to receive a substantial milestone payment that is not considered in the financial guidance update associated with the planned initiation of the next SER-287 clinical study. Previous milestones have represented a meaningful offset to Seres expenses and we expect that potential future milestones may also partially offset Seres operational investment. I'll now pass the call back over to Roger.

Thanks, Eric. I want to thank you for continued interest in Seres and we look forward to keeping you updated in our progress. As I mentioned, we will be hosting an upcoming webcast R&D Day -- our first R&D Day where we plan to discuss our microbiome approach and our pipeline programs in more depth. Given the exciting recent activity mentioned related to IVD and immuno-oncology, we will focus this event on the role of the microbiome in immune biology. This first R&D Day for Seres will be held on May 24th and will feature both our own clinicians and scientists as well as prominent external academic experts. Thank you all for your attention and for your continued interest in Seres and our pioneering microbiome therapeutics. Operator let's open the line for questions.

[Operator Instructions]. Your first question comes from Terence Flynn with Goldman Sachs.

Hey, this is Jason Jakoby on for Terence. Can you share any of the feedback that you received from the FDA on 287, specifically, just what should we expect for the trial design and will it be registration enabling?

Yes. No, thanks for the good questions. Yes, we were very happy with the responses that we've received from the FDA. As usual, as I've said before on these calls, the group has been very collaborative with us. I would like to wait until we finalize the trial and the end of our discussions with them. And I would just point out that much of what you asked we will discuss in more detail at the R&D Day. Right now, we've just heard back from the FDA. As I said in the script, we feel strongly that we will go into the next trial. And as soon as we've finished the dialogue, at R&D Day we'll talk more about it. Thank you.

Your next question comes from Chris Shibutani with Cowen and Company.

This is Pam Barendt on for Chris Shibutani. Just wanted to ask a little bit about SER-109. Do you have any framework for how we should think about when we might receive updates on enrollment for that?

Yes, we will, as I said, be providing updates on enrollment for this drug. It is an Orphan Drug I'm very happy to say that we have well over 100 sites now in the U.S. and throughout Canada. Certainly the biggest site trial for multiply recurrent C. diff ever done. And I'll remind you it is an orphan disease. We're looking for every orphan patient throughout the continent. And we'll give feedback when we know exactly when we can meaningfully predict Last Patient In, LPI.

And if I can just ask one more.

Sure.

Looking forward to R&D Day, can we look forward to thinking about at that R&D Day any discussion of strategic partnership outside of academia in the realm of immuno-oncology as well as different indications?

Yes, so we're -- as I've always said, we're always open to strategic partnerships that the -- two things, create value for our company, but most importantly, value for our patients in moving drugs as rapidly, but as safely to them as possible. We are in constant dialogue. Obviously, we have lots of drugs both in clinical and preclinical development with what's becoming large armamentarium. So I can't make any promises. But I can tell you we always talk about what's the best way to get each of these drugs to patients. Sometimes it includes a partnership. As you know, we did what I think is a great one for both companies with Nestlé Health Science, so stay tuned.

Your next question comes from Mark Breidenbach with Oppenheimer.

First, a quick one on ECOSPOR III SER-109. I know you can't comment on enrolment timelines. But I was wondering if they are plans to open any EU sites. You mentioned there are over 100 sites opened all in the U.S. and Canada, what about Europe?

Yes, that's a great question. So we are keeping this in North America. We think that that would be best way of getting the most objective best qualified patients into this trial without getting too diverse. But we are very interested in Europe. Obviously, working with Nestlé Health Science, we've been in front of those regulators a number of times. We've had very positive responses and they're assuming that we have continued good data. We look forward to doing a trial in Europe. But at this time, we're concentrating in putting all our effort into North America and finishing this 109 pivotal trial as rapidly as possible. But most importantly, making sure as I sort of outlined, that we get only the best patients, the ones that definitely have recurrent C. diff and within our trial, we objectively now measure who fails and who doesn't. So it's rapid, but the best patients.

And just couple on SER-287.

Sure.

First of all, I'm wondering if there are any plans in addition to an induction studies to also at SER-287 in a maintenance setting? And also second part of the question is, are there any expected changes in formulation between what you use in Phase 1b and the next trial? I recall in SER-109, there were some changes. Anything similar...

Those are both great questions. So starting with the first. We are considering maintenance. I want to just remind you, it's a very small trial, but it was a very interesting data where with all the patients that were in clinical remission with SER-287 we followed them for 6 months off of drug and none of them flared. Small dataset, but interesting. So when we think about maintenance, we have to take that into consideration. Certainly, we will talk with our colleagues at the FDA and think about if and when maintenance therapy should be sought out. Again, I really am intrigued by the fact that even in a small trial we did not see flares with -- off of drug. We, as a commented before, think about the microbiome as a living drug, so that unlike TNF inhibitor or small molecule, were you turn it off, it goes to zero with T1/2. Here it continues, so maintenance is an interesting area that maybe something that we can help patients with. Your second question with on CMC, there is no plan to make changes in formulation for the next trial with CMC. I can even tell you that we have most of that already made and banked as we do most of our trials, so -- but no changes in formulation.

We're looking forward to see you guys on May 24th.

Looking forward to you being there.

Your next question comes from John Newman with Canaccord Genuity.

Hey, John.

This is David Jones [ph] associate on for John. So could you talk to us about how you use vancomycin ahead of therapy in the planned induction study in patients with active mild to moderate UC?

Yes, as I said, we think this is a huge learning in humans that only we have, which is that there does seem in multiple disease states for the best engraftment of microbiome. And when I say best, it's not only the degree of engraftment, it's the kinetics of engraftment, how fast it engrafts. And what we've shown is that when you create an ecological niche in both inflamed and non-inflamed colons, you get better engraftment. Vancomycin is an interesting drug when given orally, because there are almost no AEs associated with it unlike IV vancomycin. And it has a major effect on the areas in the microbiome that we want to create enough ecological niche for our drug to then repopulate as a foundation for the new ecosystem that we're creating. We, right now, think that in many of these cases whether it's 287, 109, 262, and we can even say potentially in 401, that a short course of vancomycin may allow and data suggests does allow faster and higher engraftment, which is something that we want. Thank you.

And I'm sure no further questions at this time. I'd like to turn the call back over to the company for closing remarks.

Sure. Thank you very much. This is Roger. Thank you. I want to just say to everyone on the call thank you for your continued interest in the microbiome and in Seres Therapeutics. I will look forward to seeing many of you at our R&D Day in a few weeks in New York City. It is going to be a very interesting day. And I will now end today's call and see you all there. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you all may disconnect. Everyone have a wonderful day.