Good morning, and welcome to the Seres Therapeutics Conference Call. As a reminder, this conference is being recorded and will be available on Seres website for replay. And I would now like to introduce your host for today's call, Dr. Carlo Tanzi, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Josh, and good morning. A press release with the company's fourth quarter and full year 2018 financial results and a business update became available at 7:00 AM Eastern Time this morning, and can be found on the Investors and 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 impact of our recent corporate changes, the timing of the ECOSPOR III study and it's ability to support approval, the promise and potential impact of any of our microbiome therapeutics or clinical trial data, the expected regulatory requirements for the SER-287 Phase 2b study and the sufficiency of cash to support 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 Eric Shaff, Seres President and CEO; Dr. Kevin Horgan, our Chief Medical Officer; and Dr. Matt Henn, our Chief Scientific Officer. Eric, Kevin and Matt have prepared remarks and will be available for the Q&A portion of this morning's call. With that, I'll pass the call to Eric.

Thanks, Carlo, and good morning, everyone. The last several months have been a period of corporate change for Seres, including focusing our efforts within the company's pipeline, reducing our cash burn by streamlining our workforce and refining our strategy. This also includes my own appointment to the President and CEO role. I've been with Seres for over four years initially as Chief Financial Officer, and more recently as Chief Operating Officer. I am excited and honored with the opportunity to lead the Company forward. I deeply believe in the potential of microbiome therapeutics to transform key areas of medicine and given Seres' substantial scientific, clinical and manufacturing expertise, the Company is well positioned to pioneer this effort. I'll begin by reviewing our recent progress as well as our refocused corporate strategy. I will ask Kevin to discuss our late-stage clinical programs SER-109 for recurrent C. diff infection and SER-287 for ulcerative colitis. And I will ask Matt to review our immuno-oncology efforts including the recently initiated SER-401 Phase 1b study and give a brief update on our SER-301 program. Given my history with Seres, I took the CEO role with substantial knowledge of the Company. I also entered into the role with the specific intention to conduct a fresh and objective assessment of the company's programs, strategy and operations. My intention was and remains to take whatever actions are required to best position the Company to advance our development programs, serve patients and create value for shareholders. Following the initial completion of this assessment, and in close consultation with our Board, last month, we implemented a number of important corporate changes. These include actions to reduce the company's cost structure and extend our operating runway. We also refocused the company's R&D pipeline and strategy. After a comprehensive evaluation of each…

Thank you, Eric. I'm delighted to have the opportunity to review the late stage clinical pipeline from my perspective as Chief Medical Officer, having joined the Company in October 2018. Seres is developing new, microbiome-based therapeutics, for serious human diseases, where dysbiosis of the gastrointestinal microbiome has a central role. Our drug candidates are comprised of consortia of live bacteria, that are designed to modulate the human gastrointestinal microbiome. And as a result, impacts downstream biological processes and address various disease states. Through this approach, we are working to develop an entirely novel treatment modality that holds great promise for inflammatory and immunological conditions, infectious diseases as well as other diseases such as cancer. I'll begin with SER-287 for ulcerative colitis by summarizing the evidence that led to the exploration of microbiome therapeutics in this indication. First, patients with ulcerative colitis have been identified as having dysbiotic microbiome. And a body of preclinical research suggest that these bacterial imbalances and specifically metabolites produced by certain bacteria may trigger and amplify inflammation. In addition, several published placebo-controlled proof-of-concept studies in ulcerative colitis have reported that fecal microbiota transfer can result in clinical remission. SER-287 is an orally administered, biologically sourced drug candidate comprised of commensal bacterial spores derived from the healthy human gastrointestinal tract. Our therapeutic objective with SER-287 is to induce remission of ulcerative colitis subjects by engrafting commensal bacterial species that promote anti-inflammatory functional responses, enhanced integrity of the gut barrier, and further displace the pro-inflammatory bacterial species. Our SER-287 Phase 1b study demonstrated a statistically significant difference in clinical remission with 40% of patients treated with vancomycin, followed by daily SER-287 for eight weeks remitted, compared to none in the placebo group. This clinical outcome was accompanied by microbiome, metabolite and transcriptomic data, consistent with a significant therapeutic…

Thank you, Kevin. Over my six-plus year tenure at the Company, there have been significant advances in the scientific community's understanding of how the microbiome can impact human health and disease through modulation of the inflammatory and immunological state of individuals. Our reverse translation microbiome therapeutics platform and insights from pharmacokinetic and pharmacodynamic assessments of our placebo-controlled clinical trials, have yielded insights into the specific mechanisms by which microbes can impact human subjects. We are leveraging these insights in our preclinical discovery and development efforts. Based on several lines of pre-clinical and early clinical evidence, we believe that microbiome therapeutics could have an important role in influencing response to checkpoint inhibitor therapy for cancer. Let me summarize some of the key data sets from our labs, as well as published data from other groups. Several groups have demonstrated in various cancer animal models how differences in the overall diversity, of gut microbes, and further how specific gut bacteria in these models can improve response to PD-1 blockade, and anti-CTL-4 treatment. In animal models, the ability to modulate response to checkpoint inhibitor treatments has been demonstrated using fecal microbiota transplants. Fecal microbiota prepared from checkpoint inhibitor responsive mice or humans can convert efficacy to non-responsive mice. Lastly, these general findings have been extended to human subjects. In the settings of metastatic melanoma, lung and kidney cancer, differences in the diversity of gastrointestinal microbes have been associated with differences in subjects response to checkpoint inhibitors. Turning to our lead immuno-oncology SER-401, a donor-derived, microbiome therapy, designed to mimic the bacterial signature found in those cancer patients who have a robust response to anti-PD-1 therapy. SER-401, is designed to modify the cancer immune set point and meaningfully improve patient's response to checkpoint inhibitor therapy. The scientific basis for SER-401 is supported by published…

Thanks Matt. Seres reported a net loss of $98.9 million for the full year 2018, as compared to a net loss of $89.4 million for the prior year. Seres reported a net loss of $21.3 million for the fourth quarter of 2018, as compared to a net loss of $29 million for the same period in 2017. The fourth quarter net loss was driven primarily by clinical and development expenses, personnel expenses and ongoing development of the company's microbiome therapeutics platform. The fourth quarter net loss figure was inclusive of $10.6 million in recognized revenue associated primarily with the company's collaboration with Nestlé Health Science. R&D expenses for the fourth quarter 2018 were $24.8 million, as compared to $24 million for the same period in 2017. G&A expenses for the fourth quarter were $7.5 million, as compared to $8.8 million for the same period in the prior year. The increase in the company's cash, cash equivalents and investments balance during the quarter was $12.9 million. Seres ended the fourth quarter with approximately $85.8 million in cash, cash equivalents and investments. The increase in cash in Q4 was inclusive of $40 million in milestones received under the company's collaboration with Nestlé Health Science. Revenue related to the Q4 milestones will be recognized over time, based on progress achieved against the collaboration with Nestlé Health Science. Based on the company’s current operating plan, cash resources are expected to fund operating expenses and CapEx requirements, excluding net cash flows from future BD activities or potential incoming milestone payments, into the fourth quarter of this year. Now before I move to – before we move to Q&A, I just want to spend a moment recapping this past period, as well as looking ahead. As you have heard, we have refocused the company on a select number, of what we believe are highly exciting programs with opportunity to provide meaningful patient benefit, and create substantial value. As a company operating principal, we are focused on execution and driving these programs forward, as quickly as possible. Our eyes on clinical readouts for each program, and ensuring that we have the team, the capabilities in place to expeditiously drive toward each of these events. We are also fortunate to have the support of a strong corporate partner in Nestlé. We would also like to be as clear as possible, based on what we know today, regarding the operational status of our pipeline. Based on current projections, we expect to complete the enrollment of the SER-287 Phase 2b study, by mid 2020, and we expect to obtain SER-401 Phase 1b study results in 2020. We continue to recruit the SER-109 Phase 3 study, and as Kevin mentioned, we are working diligently to complete our assessment of any changes to that study and we will provide you with an update as soon as possible. Operator, let’s open the line now for questions.

Thank you. [Operator Instructions] Our first question comes from Mark Breidenbach of Oppenheimer & Company. You may proceed with your question.

Hey, good morning guys, and thanks for taking the questions. Maybe the first one for Kevin. I think I heard you mentioned that one-third of subjects in ECOSPOR III who are failing their screening for entry into the study are due to touching negative for cytotoxins. First of all, can you give us a sense for what the other two-thirds are largely failing screening for? And second of all, I’m wondering, if the high rate of negative tests for cytotoxins are implying that the incidence of recurrent CDI infection are actually – maybe artificially higher than what we commonly see in the literature? Thanks.

So with respect to the reasons for screening, it’s really pretty – it’s pretty remarkable, how the only explanation that we see frequently is toxin negativity. If you look at the entire spectrum of the other reasons, it’s individual like one or two subjects failing for a complete variety of reasons. There is no other dominant kind of factor that stands out. And with regard to your second question, I think, it – our sense is based on the science and the sensitivity and specificity of toxin to define real disease versus PCR approaches, I think, the key thing is that we’re confident we’re accurately diagnosing recurrent disease. And inevitably, I think, that there is – that there has to be a significant amount of over diagnosis of recurrent disease when toxin – when patients are assessed using other tests, PCR tests.

Yes, Mark, this is Eric. Maybe I’ll just add to Kevin’s answer, which I agree with. We believe that C. diff is obviously an incredibly important and difficult issue, healthcare issue, and in particular when you’re looking at the recurrent patient population as we are with SER-109 high unmet medical needs, orphan disease and we really believe that solutions in the space today are wholly inadequate. And the one thing, I would add to Kevin’s comment is, we believe that we’re really leading the field by using the cytotoxin approach as opposed to PCR. And as people throw around – numbers around potential efficacy for other approaches, you really have to question whether those assessments are accurate, unless they’re using cytotoxin which in many cases, they are not. So I just wanted to add that.

Okay. All right, that’s helpful. One last one from me, I can’t help, but notice that the design of the SER-401 trial has been scaled back a little bit from what was originally proposed last year. I seem to remember, it used to be a 3-arm trial that was targeting to enroll 60 patients and it included an arm that was comparing against a fecal transplant of some sort. Can you just comment on the changes why are we going down to a 2-arm design with 30 patients?

Yes, Mark, this is Eric, I’ll ask Kevin to answer that.

Yes, I think it just reflects – I mean, the fundamental design of the program is unchanged. It’s that the – the component of the program that is actually active at the moment is the component evaluating SER-401.

Okay. But in terms of – does that imply we might see another arm added in the future that would include it?

Yes, yes, absolutely. We’re committed to conducting the FMT arm. It just happens to be that enrollment right at the moment is in the 401 component of the study.

Okay, got it. Thank you for taking the questions.

Thank you. And our next question comes from Chris Shibutani of Cowen. You may proceed with your question.

Yes, hi. Thanks for the update. This is Pam on for Chris. I had a couple of questions. First, on 109, you mentioned potential structural study changes. Could you elaborate on this a little bit, more sites, more investigators? Thank you.

Yes. Thanks for the question. So there’s really two major approaches, how we’re thinking about 109. The first is, it’s from an operational perspective. As we’ve commented before, we’re looking at every lever possible to increase patient enrollment. And we’ve mentioned one of those in our prepared remarks. Kevin mentioned one of those regarding the amendment that the FDA agreed to in patients enrolling directly into the open-label study. But that’s one, but certainly not all of the levers that we’re looking at. We continue to make sure that no stone is unturned in the clinical operations relating to the study and how quickly we can enroll those patients. The other component of it is, trial design alternatives and we’ve mentioned before, and certainly we continue to look at ways in which we can alter the design of the study and expedite trial results. Certainly, I think you’ve seen that given the corporate changes that we made, shortly after the leadership changes here, we are not afraid to make decisive decisions relating to reaching late-stage clinical endpoints, and that’s really what will be the case here. So if there are additional updates, then we will get back to you with those updates.

Thank you, very helpful. And if I can ask just one more. On 287, is there any possibility of just one pivotal trial, or if discussions with the FDA have really moved towards two pivotal trials, what would the second trial look like? Thank you very much.

Yes, this is Eric. I’ll start by saying, we don’t disclose the kind of the day-to-day interactions that we have with the FDA. But our expectation is, as we stand here today, this would be one of – with compelling results, this would be one of two pivotal trials. And I’ll ask Kevin to add commentary.

Yes. So I agree, I mean, the standard for registration of a novel therapeutic in inflammatory bowel disease in general and ulcerative colitis in particular, will be two pivotal trials. As I mentioned, the focus of the current study is an induction study, that we are exploring maintenance regimens. And one of the dividends of the second pivotal trial would be that we would study a specific maintenance regimen in order to obtain a maintenance indication. And it’s the development paradigm for drugs for inflammatory bowel disease in general and ulcerative colitis in particular, the two pivotal trials are required to achieve an indication for induction, whereas only one pivotal trial is required to obtain a maintenance indication. And so our program as currently configured will directly fulfill those requirements.

Got it. Thank you very much.

Thank you. And our next question comes from Taylor Feehley of Chardan. You may proceed with your question.

Good morning, everyone. Thanks for taking my call. Kevin, I was hoping for a little bit of clarification on the protocol changes you discussed have been implemented. So, if I understood correctly, patients who recur ahead of eight weeks can now roll over to the open-label use of 109. Eight weeks seems to be pretty standard in the field for testing recurrence, but I was wondering about how common is it for patients to recur ahead of that time point, trying to get a sense of how many patients would fall into this new group?

The timing of recurrence is heavily skewed towards the first few weeks within the first 14 days to 21 days. So no, we haven’t modeled this out precisely, but there, our sense is that there’s a substantial number of patients to whom this change would be relevant. And it’s notable that our original proposal was that patients would, after they recurred, would be able to go into the open label extension, and the FDA were quite resistant to that, to that approach and the reasoning that they had is that they wanted to see patients for the full eight-week period, primarily to assess safety. But I think it’s probably a reflection of the confidence in the safety of our approach that the FDA with – following our dialogue has allowed us to make this change and to enable patients to, once they recur to go directly into the open label extension. And this was something that has resonated with investigators as a potential factor that will help enrollment. And obviously a backdrop to this whole dialog that we suspect has informed the FDA’s flexibility is the whole fecal microbiota transplant issue.

Yes, thank you so much for that added color. And I wanted to follow up a little bit on the FMT question. So I was wondering if anyone had comments on the ongoing debate that was highlighted in The New York Times over the weekend. Certain physicians are concerned on cost of an approved medicine relative to FMT. And whether or not regulators are skewed one way or the other toward favoring the two tracks, certainly you’ve indicated some of your perception of the regulators, but any comments on pricing or other considerations in the debate?

Yes, Taylor. Thanks for the question. I would start by saying, I think, it’s a great thing that people are talking about C. diff. I think, it’s a great thing. This is a serious disease, and especially as I mentioned, if you’re looking at the recurrent patient segment as we are with SER-109, it’s extremely costly to the system and there are just are inadequate solutions today for patients in the space. So the question is what’s the best way to serve patients, right? And we feel strongly that the best way to serve patients is through well-controlled FDA regulated GMP manufactured clinical studies, right. And the idea of speculating on safety or speculating on efficacy, we think, in the long term, doesn’t make sense, certainly in the short term for anything that helps patients. But our belief is that with an approved therapy and approved FDA therapy, unregulated and uncontrolled procedures will go away. So maybe I’ll ask Kevin to comment further.

Yes, I think, that the key thing here is the medical need, and providing patients and physicians with data that they can make a really informed decision. And over the last 50 or 60 years, they’ve been paradigms for the evaluation of therapies to enable patients and physicians to make informed decisions under the auspices of the FDA and other regulatory agencies outside the United States. And that system has worked remarkably well. And it’s when there are deviations from those paradigms that, I think, that patients are put at unnecessary risk and we’re very happy with our approach. We’re having – we’re taking things very carefully and rigorously in accordance with the dialog with the FDA. And we’re – we really think we’re pushing the frontiers of science, and I think that is reflected in the topic about the – using toxin for diagnosis. This is something that’s not only helping the design of clinical trials in this space, but this is informing – should inform clinical practice to optimize outcomes for patients in a very transparent and rigorous way.

Great, thank you so much for those comments.

Thanks for the question Taylor and we look forward to participating in the microbiome conference tomorrow.

Thank you. And our next question comes from John Newman of Canaccord. You may proceed with your question.

All my questions have been answered. Thank you.

Thank you, John.

Thank you. And our next question comes from Vernon Bernardino of H.C. Wainwright. You may proceed with your question.

Hi, thanks for taking my questions, and congrats on the initiation of SER-401. Just a couple of questions. Regarding structural changes for the ECOSPOR III study, have you seen any positive changes as far as the pace of patient enrollment? And then with SER – but, I guess also with 109. What have you seen as perhaps in your studies coming to perhaps a – just definition of our mechanism of action for the microbiome approach to these type of diseases? And then lastly, with the SER-401, what time frame do you expect to take the measures that you will be looking for in the SER-401 study? Thank you.

Yes, Vernon. So three questions. Maybe I’ll take the first one, which is on progress in 109. We have not provided the detail or guidance on enrollment to date, what I can say is that, again, we’ve looked at every lever possible operationally to try to speed up enrollment, and frankly that also includes Kevin’s arrival as our new CMO and taking a fresh look at our clinical operations and ensuring that we’re exhaustive in thinking about alternatives. So we do think, as Kevin mentioned in his opening remarks, that the protocol amendment is one example of a way in which, we think that there is the possibility of increasing that enrollment, speeding up enrollment, making it more attractive for patients to enter the trial. Your second question related to mechanism, and maybe I’ll ask Matt to comment on that one.

Yes, no problem. So – and I think the question was mechanism around both 109 and 287. It was unclear from the question. So I’ll address both briefly. So with respect to SER-109, and the mechanisms of action that are important to there, we really believe there are two primary mechanisms in play. One is the ability of the bacteria in our therapeutics to out compete C. diff in the gut, and that’s done through various different mechanisms including carbohydrate composition, et cetera. And secondly, as well as the ability of SER-109 to change the metabolic profile in these subjects, and we’ve been able to identify changes in bile acid metabolism that are favorable to competition against C. diff. With respect to 287, we’ve been obtaining a lot of very interesting data with respect to metabolites, genetic pathways as we said that are associated with remission, and further that we can connect with specific different bacteria. And the key mechanisms of action that we believe are important and are ones in which we are designing SER-301 towards, as example, is the ability to repair epithelial barrier integrity and basically the use of microbes and the metabolites that they produce to generate such changes. And then as well as the ability to tap down inflammation, and in this particular case, we see the ability of changes in various different inflammatory and immunological pathways that are known for UC as well as others that are not.

And Vernon, I think your last question related to timing for 401, and perhaps, additional data that we might get from 401. I’d just reiterate that we expect to receive readout in 2020. And we may guide additional detail on the way as we get further in the trial. But, of course, as you know, we just started it. So for now, we’ll provide that initial guidance and we may refine that overtime as we’ve done with other programs in the past.

Terrific, that’s helpful. Thank you.

Thank you. And that does conclude our Q&A. I would now like to turn the call back over to Seres Therapeutics, for any closing remarks.

So thank you, operator, and thanks for everyone for giving us your time this morning, and for your continued interest in Seres Therapeutics. I just want to let you know that we will be attending several upcoming conferences, including the Chardan Microbiome Sciences Medicine Summit tomorrow in New York, Cowen’s Health Care Conference in Boston on March 11, and Oppenheimer’s Health Care Conference in New York on March 19. So we look forward to connecting with many of you soon. So we’ll end today’s call and have a great day. Thank you.

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