SERES THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Effective January 1, 2016, the Company elected to match 50% of the first 6% of an employee’s deferral. Company contributions are expensed in the year for which they are declared. During the year ended December 31, 2018, 2017, and 2016 the Company recorded expense of $604, $484, and $457, respectively for 401(k) match contributions.
On January 14, 2019, Roger J. Pomerantz, M.D. notified the Company of his resignation from his position as President and Chief Executive Officer of the Company effective immediately. In connection with his resignation, Dr. Pomerantz entered into a separation agreement and release (the “Separation Agreement”) with the Company pursuant to which Dr. Pomerantz will receive the severance payments and benefits described in his existing employment agreement with the Company upon his involuntary or constructive termination, subject to and in accordance with the previously disclosed terms of his employment agreement. Dr. Pomerantz will continue to serve as a director and as Chairman of the Board of Directors (the “Board”) of the Company. The Company expects to record a liability in the first quarter of 2019 to reflect its obligations to Dr. Pomerantz under the Separation Agreement.
On January 15, 2019, the Company announced that the Board had appointed Eric D. Shaff, as the Company’s President and Chief Executive Officer and as a member of the Board.
On February 7, 2019, the Company announced corporate changes to focus its resources on advancing its clinical-stage therapeutics candidates. As a result, the Company will now concentrate on completing the recently-initiated SER-287 Phase 2b study in mild-to-moderate UC, obtaining results from the ongoing SER-109 Phase 3 study for recurrent CDI and advancing the SER-401 Phase 1b study, in collaboration with the Parker Institute for Cancer Immunotherapy and MD Anderson Cancer Center, to evaluate augmenting checkpoint inhibitor response in patients with metastatic melanoma. In connection with the prioritization of these therapeutics candidates, the Company made changes to its management team and committed to a workforce reduction plan to reduce headcount by approximately 30 employees. Accordingly, the Company expects to incur one-time costs related primarily to employee termination benefits between $1,500 and $2,000.