That’s a bit disingenuous, but Seres Health’s (MCRB) SER-109 isn’t far from it. The company made a splash on Friday when it IPO’d at $18, and its stock ripped to $50 before the close
SER-109 is designed to treat recurrent Clostridium difficile infections by fixing the bacterial makeup in a patient’s gut. SER-109 is a capsule containing spores, isolated from healthy human feces, that grow into bacteria once in the gut, essentially replacing the detrimental flora. Fecal transplants are already being used in the setting, thus putting the same treatment into a simple pill form has always been the logical next step.
Investors who were able to get in on the microbiome company’s IPO this week are already up 175% – and Seres Health is already a $2 billion company. Considering that the stock opened at $28.00, even open-market buyers did incredibly well in the stock’s first day of trading. MCRB is white-hot, and for good reason. ER-109 cured 97% of patients with recurrent C. Dif. in a small pilot study, and the drug just received the FDA’s breakthrough therapy designation. A phase II trial will wrap up in the middle of next year, with a phase III beginning immediately after. MCRB is certainly a story to follow in the next two years.
Remember Celladon Corp (CLDN)? The company’s MYDICAR, a gene therapy being developed for heart failure patients, failed a phase II trial in April. This week Celladon said it could shut down entirely, outlining what a liquidation might look like for shareholders if the company doesn’t find a strategic acquirer. Failure is common, but liquidation is an ultra-rate event in this sector.
On that note, two CNS drugs failed mid-stage studies on the same morning this week. Transition’s (TTHI) ELND005 and Alcobra’s (ADHD) MDX flopped in Alzheimer’s agitation/aggression and Fragile X Syndrome, respectively. Contrasting the companies’ related press releases is an interesting exercise considering the rarity of putting a failed asset down entirely.
It was a choppy week for the markets, including the healthcare sector, and potential headlines out of Greece this weekend and Russell rebalancing kept a lid on trading Friday. A few weeks ago we pointed out the sector’s breakout (as demonstrated by the Nasdaq Biotech ETF (IBB)), which turned into weakness over the last few sessions. Critical now is that prior resistance at ~368, which traders will look to now to act as support on this pullback.
