Seres Therapeutics, Inc.

Clinical Manufacturing

We currently conduct our manufacturing operations in our leased facilities in Cambridge, Massachusetts, where we conduct process development, scale-up activities, the manufacture of active components for our biotherapeutic candidates, and quality control testing. We believe our current laboratory facilities and contract relationships are sufficient to meet our current bioprocess development and manufacturing needs. Product candidates may be brought into the facilities for economies of operation, or may remain external with contract manufacturing organizations, depending on business dynamics and development needs.

We plan to control the production of all products under current good manufacturing practices by making strategic investments in manufacturing, which may include collaborations with third parties, the design and renovation of existing facilities and the construction of additional new facilities for commercial supply.

• Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
• If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we or any collaborators will not be able to commercialize our product candidates or will not be able to do so as soon as anticipated, and our ability to generate revenue will be materially impaired.
• A Fast Track designation by the FDA may not actually lead to a faster development or regulatory review or approval process.
• A Breakthrough Therapy, or other similar designations by the FDA for our product candidates may not lead to a faster development, regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
• We may seek PRIME designation by EMA or other designations, schemes or tools in the EU for one or more of our product candidates, which we may not receive. Such designations may not lead to a faster development or regulatory review or approval process and do not increase the likelihood that our product candidates will receive marketing authorization.
• We may seek orphan drug designation for some of our product candidates but may not be able to obtain it.
• Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or policy changes could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
• Risks Related to our Dependence on Third Parties and Manufacturing
• We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.
• We rely on third parties for certain aspects of the manufacture of our product candidates, and we expect to continue to do so for the foreseeable future. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or that such quantities may not be available at an acceptable cost, which could delay, prevent or impair our development or potential future commercialization efforts.
• Evaluation of our product candidates in investigator-sponsored clinical trials (ISTs) may expose us to additional risks that could impair the development of our product candidates.
• We have limited experience manufacturing our product candidates commercially, and we cannot assure you that we can manufacture our product candidates in compliance with regulations at a cost or in quantities necessary to make them commercially viable.
• Risks Related to Our Product Candidates and Other Legal Matters
• Our product candidates may fail to achieve the degree of market acceptance by physicians, patients, hospitals, third-party payors and others in the medical community necessary for commercial success.
• If we are unable to establish effective sales, marketing and distribution capabilities or enter into agreements with third parties with such capabilities, we may not be successful in commercializing any of our product candidates if and when they are approved.
• We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.
• Even if we are able to commercialize any of our product candidates, if approved, the products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, any of which would harm our business.
• Product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we may develop.
• We may face competition from biosimilars, which may have a material adverse impact on the future commercial prospects of our product candidates.
• Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
• Any product candidate for which we obtain marketing approval will remain subject to significant post-marketing regulatory requirements and oversight.
• The FDA and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses.
• Our relationships and any collaborators' relationships with customers, physicians and third-party payors are and will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us or any collaborators to criminal sanctions, civil penalties, exclusion from governmental healthcare programs, contractual damages, reputational harm and diminished profits and future earnings.
• Current and future legislation or regulation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may adversely affect the prices we may obtain.
• Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.
• Risks Related to Our Intellectual Property
• If we are unable to adequately protect our proprietary technology or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects.
• If we are unable to protect the confidentiality of our trade secrets and know-how, our business and competitive position may be harmed.
• Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
• Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
• Issued patents covering our product candidates could be found invalid or unenforceable or could be interpreted narrowly if challenged in court.
• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.
• We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
• We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
• If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
• We will not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.
• Risks Related to Our Operations
• Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
• A variety of risks associated with operating internationally could materially adversely affect our business.
• We have significant excess leased space that may adversely affect our financial condition and results of operations.
• Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.
• Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
• Our business may be affected by the evolving regulatory framework for AI Technologies.
• Acquisitions, dispositions, joint ventures, or other strategic alternatives could disrupt our business, cause dilution to our stockholders and otherwise harm our business.
• We have in the past been subject to securities class action litigation and may be subject to similar or other litigation in the future, which may harm our business.
• We are subject to complex and changing laws and regulations, which exposes us to potential liabilities, increased costs and other adverse effects on our business.
• If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
• Our ability to use our net operating loss carryforwards and research and development credits to offset future taxable income or income tax liabilities, respectively, may be subject to certain limitations.
• Risks Related to Our Common Stock
• We have in the past and may again in the future receive a notice of the failure to satisfy a continued listing rule from Nasdaq.
• Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to significantly influence all matters submitted to stockholders for approval.
• A significant portion of our total outstanding shares are eligible to be sold into the market, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
• We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
• Provisions in our restated certificate of incorporation and amended and restated bylaws and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
• Our certificate of incorporation designates the Court of Chancery of the State of Delaware, subject to certain exceptions, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and our bylaws designate the federal district courts of the United States as the exclusive forum for actions arising under the Securities Act of 1933, as amended, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
• Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be the sole source of gain for our stockholders.
• General Risk Factors
• The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.
• If securities or industry analysts issue an adverse or misleading opinion regarding our business, our common stock price and trading volume could decline.
• We will continue to incur costs as a result of being a public company, and our management will continue to devote substantial time to compliance initiatives and corporate governance practices.
• If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
• Failure to keep up with evolving and conflicting laws, regulations, trends and stakeholder expectations relating to environmental, social and governance, or ESG, practices or reporting could adversely impact our reputation, share price and access to and cost of capital or otherwise adversely impact our business.