Seres Therapeutics’ Pipeline Setback Triggers Price Target Cut From Goldman

Courtesy of Benzinga.

On Friday morning, Seres Therapeutics Inc (NASDAQ: MCRB) announced an update on its interim results from SER-109 Phase 2 ECOSPOR study, stating the primary endpoint was not achieved.

Seres Therapeutics’ conference call stated the company was in the process of conducting future additionally analysis to discover the reason behind the failed trial.

Goldman’s Take

Goldman Sachs’ Terence Flynn cut Seres Therapeutics price target substantially from $30.00 to $9.00 as a result of Friday’s disappointment.

In Flynn’s view, there was not yet a clear explanation on the failure of the trial.

“MCRB did not provide definitive timing for disclosure of analyses or next steps. Management stated that they expect to leverage these findings and are committed to moving SER- 109 as well as their microbiome platform forward,” stated the analyst.

Lower Success Rate of SER-262

Given the setback, Flynn removed the SER-109 drug from his model and lowered the probability of a SER-262 success from 20 percent to 10 percent. This was partly due to the similarity between the two drugs; “SER-262 is a subset of 15 bacterial strains found in SERR-19,” according to the analyst.

Related Link: Benzinga’s Top Downgrades

Future drivers of value for the company now remain in SER-262 and SER-287, stated Flynn.

According to TipRanks, Terrence Flynn is among the best analyst’s covering Seres, with a 76 percent success rate and an average return of +21.1 percent per recommendation. The analyst is ranked 213 out of 4,085 analysts.

At time of writing, Seres Therapeutics traded at $10.61, down 3.02 percent Monday.

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