| Item 1.01 | Entry into a Material Definitive Agreement |
Securities Purchase Agreements
On June 29, 2022, Seres Therapeutics, Inc. (the “Company”) entered into a Securities Purchase Agreement with certain institutional accredited investors (the “IAIs”) named therein (the “Non-Affiliate Purchase Agreement”) and a Securities Purchase Agreement with certain directors and officers of the Company (the “Affiliates”, and collectively with the IAIs, the “Purchasers”) named therein (the “Affiliate Purchase Agreement” and, together with the Non-Affiliate Purchase Agreement, the “Purchase Agreements”). Pursuant to the Purchase Agreements, the Company agreed to issue and sell in a registered direct offering (the “Offering”) (i) an aggregate of 31,238,094 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $3.15 per share (the “Purchase Price”) to the IAIs, for aggregate gross proceeds to the Company of $98.4 million, and (ii) an aggregate of 507,936 shares of Common Stock at the Purchase Price to the Affiliates, for aggregate gross proceeds to the Company of $1.6 million, in each case pursuant to an effective shelf registration statement on Form S-3, as amended (File No. 333-244401) and a related prospectus supplement filed with the Securities and Exchange Commission. The closing of the Offering is expected to occur on or about July 5, 2022, subject to the satisfaction of customary closing conditions.
The Company expects to receive net proceeds from the Offering of approximately $96.8 million, after deducting the placement agent’s fees and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for commercial readiness and manufacture of SER-109 for the U.S. market, including expanding longer-term commercial manufacturing capacity, advancing the clinical development of SER-109 for the EU market, and other general corporate and working capital purposes. The Company believes that its existing cash, cash equivalents and investments, together with the net proceeds from the Offering, will fund its operations for at least 12 months from the date of the prospectus related to the Offering filed with the Securities and Exchange Commission (the “SEC”) on June 30, 2022. This evaluation does not take into consideration contingent payments associated with SER-109 FDA approval, which the Company anticipates in the first half of 2023, as these are uncertain and there is no assurance the Company will receive them. These contingent payments include the potential to receive a $125 million milestone payment pursuant to the Company’s collaboration and license agreement with NHSc Pharma Partners upon SER-109 FDA approval and a $25 million tranche under its existing term loan with Hercules Capital, Inc., which becomes available upon the satisfaction of certain conditions, including FDA approval of SER-109.
The Purchase Agreements contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Purchasers, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), other obligations of the parties and termination provisions.
The foregoing description of the Purchase Agreements is not complete and is qualified in its entirety by reference to the full text of the Non-Affiliate Purchase Agreement and Affiliate Purchase Agreement, forms of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Placement Agency Agreement
On June 29, 2022, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with J.P. Morgan Securities LLC (“J.P. Morgan”) for J.P. Morgan to act as placement agent for the IAIs. The Placement Agency Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the placement agent, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.
The foregoing description of the Placement Agency Agreement is not complete and is qualified in its entirety by reference to the full text of the Placement Agency Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated by reference herein.
Latham & Watkins LLP, counsel to the Company, has issued an opinion to the Company, dated June 30, 2022, regarding the validity of the shares of Common Stock to be issued and sold in the Offering. A copy of the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K.
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the securities discussed herein, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Forward-Looking Statements Disclaimer
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the completion of the Offering,
