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10-K
SERES THERAPEUTICS, INC. filed this Form 10-K on 03/06/2019
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a decrease of $0.3 million in expenses of our SER-262 program primarily driven by a decrease in contract manufacturing costs of $1.0 million, a decrease in animal studies costs of $0.2 million, and a decrease in other consulting costs of $0.2 million, partially offset by an increase in clinical trial costs of $0.9 million and an increase in sequencing costs of $0.3 million; and

 

a decrease of $0.2 million in expenses of our SER-287 program primarily driven by a decrease in contract manufacturing costs of $0.3 million a decrease in other consulting costs of $0.2 million, and a decrease in lab consumables and supplies of $0.6 million, partially offset by an increase in clinical trial costs of $0.3 million and an increase in sequencing costs of $0.6 million.

General and Administrative Expenses

 

 

 

Year Ended

December 31,

 

 

 

 

 

 

 

2017

 

 

2016

 

 

Change

 

 

 

(in thousands)

 

Personnel related (including stock-based compensation)

 

$

17,233

 

 

$

16,623

 

 

$

610

 

Professional fees

 

 

8,265

 

 

 

9,090

 

 

 

(825

)

Facility-related and other

 

 

8,542

 

 

 

6,903

 

 

 

1,639

 

Total general and administrative expenses

 

$

34,040

 

 

$

32,616

 

 

$

1,424

 

General and administrative expenses were $34.0 million for the year ended December 31, 2017, compared to $32.6 million for the year ended December 31, 2016. The increase of $1.4 million was primarily due to the following:

 

an increase in personnel related costs of $0.6 million primarily due to the increase in stock-based compensation expense;

 

a decrease in professional fees of $0.8 million due to a decrease in consulting costs of $0.9 million, partially offset by an increase in legal, accounting, and audit fees of $0.1 million; and

 

an increase in facility-related and other costs of $1.6 million primarily due to an increase in information technology expenses of $2.5 million, partially offset by a decrease in office-related expenses of $1.0 million.

Other Income (Expense), Net

Other income (expense), net for the year ended December 31, 2017 was $2.0 million, compared to $1.3 million for the year ended December 31, 2016. The $0.8 million increase in other income (expense), net was primarily due to an increase of $0.3 million in interest income and the recognition of $0.3 million of non-operating income related to the Massachusetts Life Sciences Center tax incentive received in 2016.

Liquidity and Capital Resources

Since our inception, we have generated revenue primarily from collaborations and have incurred recurring net losses. We anticipate that we will continue to incur losses for at least the next several years. Our research and development and general and administrative expenses may continue to increase and, as a result, we will need additional capital to fund our operations, which we may obtain from additional financings, public offerings, research funding, additional collaborations, contract and grant revenue or other sources.

In January 2016, we entered into the License Agreement with NHS, for the development and commercialization of certain of our product candidates in development for the treatment and management of CDI and IBD, including UC and Crohn’s disease. In exchange for the license, NHS agreed to pay us an upfront cash payment of $120 million, which we received in February 2016. NHS has also agreed to pay us tiered royalties, at percentages ranging from the high single digits to high teens, of net sales of NHS Collaboration Products in the Licensed Territory. We are eligible to receive up to $285.0 million in development milestone payments, $375.0 million in regulatory payments and up to an aggregate of $1.125 billion for the achievement of certain commercial milestones related to the sales of NHS Collaboration Products. The full potential value of the up-front payment and milestone payments payable by NHS is over $1.9 billion, assuming all products receive regulatory approval and are successfully commercialized. In September 2016, we received a $10.0 million milestone payment associated with the initiation of the Phase 1b clinical study for SER-262 in CDI. In June 2017, we initiated a Phase 3 clinical study of SER-109 (ECOSPOR III) in patients with multiply recurrent CDI. In July 2017, we recorded revenue of $20.0 million based on the achievement of this milestone under the License Agreement. In November 2018, we executed the Letter Agreement modifying certain terms of the License Agreement. Under the Letter Agreement, NHS agreed to pay us the $20.0 million Phase 3 milestone payment upon commencement of the Phase 2b study for SER-287. In December 2018, we received $40.0 million in milestone payments in connection with the commencement of the Phase 2b study for SER-287.

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