I've written recently about my enthusiasm for Seres Therapeutics (NASDAQ:MCRB) and its dominance of the emerging field of microbiomics. In that article, I reviewed the various products that Seres has under development. Near-term proof of concept for a valuable microbiomic product is found in the use of SER-109 to treat Clostridium difficile infection (CDI). CDI has a long name but it involves nasty diarrheal infections in hospitals and long-term care facilities. Results of an 87-patient Phase 2 trial are expected imminently.
Will Driscoll has given a conservative view of the market size for SER-109 and other Seres products (noting that he makes no estimates of the value to Seres of the development of the products outside of the US, where Nestle Health Science has commercialisation responsibility).
MCRB's strategy is bigger than these early products. Its goal is to own the space for identification and culture of key organisms from the microbiome and package them in microbiomic products.
A new technology partnership with Emulate Inc.
A couple of weeks back, Seres announced a technology partnership with privately held Emulate Inc., which is pioneering Organs-on-Chips technology that involves having human cells in environments where they can be studied. The Seres-Emulate partnership involves Emulate's Intestine-Chip platform, which will presumably allow Seres researchers to explore their gut microbes interacting with both normal and diseased (inflammatory bowel disease) human intestinal cells.
This is a powerful extension of Seres' already impressive technology in microbiomics.
A healthy microbiome might protect from Alzheimer's disease
This week, there was a new report where the microbiome is implicated. Researchers at the University of Chicago, reported that changing the gut microbiome in mice through antibiotic treatment led to decreased amyloid plaques (a key Alzheimer's marker) and positive changes in the immune system that have consequences on the development of Alzheimer's disease.
This research further emphasizes the critical importance of a healthy gut microbiome for good health and as protection from chronic disease that has an inflammatory component. Seres already has research partnerships on other chronic diseases.
Whether or not the new Alzheimer's study will result in a product for preventing Alzheimer's disease, it shows the kind of thinking that will lead to products in the next phase in the microbiome story. This is for researchers to figure out.
MCRB is preparing the ground for turning these discoveries into products. This requires a deep understanding of the microbiome and also the best culture and formulation techniques for a range of gut bacteria, which Seres has a commanding lead on.
Insiders still selling
On the downside, the relentless programmed selling of shares received after execution of options by insiders continues, and this no doubt has some investors nervous.
It is easy to underestimate how profound the study of the microbiome is already and how it will change medicine.
In the specific case of the Alzheimer's study mentioned here, I don't believe that anyone would take seriously using high doses of antibiotics as a preventative for Alzheimer's disease. Antibiotics are used too promiscuously already. What seems feasible is that when there is a better understanding of a gut microbiome that is protective for Alzheimer's disease, microbiomic products (comprising appropriate bacteria) will be developed.
These could be used proactively as health sustaining drugs, rather than to treat Alzheimer's when it is diagnosed. The market for such preventative products would be very interesting.
The prize for this kind of product, and microbiomic preventative products for other complex chronic diseases like diabetes and obesity, will go to companies who have the capacity to make such microbiomic products. At the moment, MCRB is an obvious company of choice.
The share price has struggled in the range from $22 to $34 in 2016, possibly held back by insider selling. However, I suspect that should the soon to be announced results of SER-109 treatment of CDI (Clostridium difficile infection) be positive, the share price may once again get above $40. This is just my opinion, so do your own research.
Think about this company as a long-term play in a new field of medicine, with near-term products.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.