On Wednesday, Oppenheimer adjusted its stock price target for Seres Therapeutics (NASDAQ:MCRB), a microbiome therapeutics platform company, reducing it to $5.00 from the previous $9.00, while keeping an Outperform rating on the stock. This change follows the company's recent announcement of its fourth-quarter and full-year results.
Seres Therapeutics reported net sales of $10.4 million for its product VOWST in the fourth quarter, marking a quarter-over-quarter growth of 27%. These figures were in line with the numbers pre-released in January. Despite this growth, the financial impact of VOWST on the company's earnings was negative, with a fourth-quarter loss of $10.3 million.
The company's management has indicated that the strategic restructuring initiated in November 2023 is expected to save between $75 million and $85 million in 2024. Seres ended 2023 with $128 million in cash, which is projected to fund operations until the fourth quarter of 2024. This forecast includes an anticipated additional $45 million from Oaktree.
Clinical data for SER155, another product in Seres Therapeutics' pipeline, is anticipated to be released in the third quarter of 2024. The future of this product is said to hinge on the company's financing strategy. Despite the financial challenges faced by Seres Therapeutics, the firm's analyst maintains a positive outlook on the potential of VOWST.
The adjusted price target reflects a balance of actual financial results, reduced spending for 2024, and the dilution effect from the use of an At-the-Market (ATM) offering in the first quarter of 2024. The analyst reiterates the Outperform rating, indicating confidence in the company's long-term prospects despite the current financial concerns.
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