January 6, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Cambridge, Mass.-based startup Seres Health announced Tuesday that it has received $65 million from a Nestlé subsidiary specializing in nutritional therapy, a sign that investor interest in the “microbiome,” or how bacteria can create effective health treatments, is heating up.
As part of the funding, Nestlé Health Science said the $65 million Series D preferred stock investment will allow it to broaden its portfolio into products that use nutrition as a component of health care. Seres focuses on using the body’s own bacterial footprint to create treatments for infectious, metabolic and inflammatory illnesses.
For its part, Seres is in an enviable position for a start up--together with its recently announced $48 million Series C preferred stock financing, Seres Health had over $110 million of cash and investments at the end of 2014.
Greg Behar, Nestlé Health Science’s chief executive, told the New York Times Tuesday that the company is doubling down on companies and therapies that allow it to find ways to combine nutrition and health care, including its recent acquisition of Prometheus Laboratories, which pipeline includes similar therapies used to irritable bowel syndrome.
“There are some specific diseases Nestlé had been particularly interested in Seres because of its currently ongoing Phase III trial of microbiome infection treatment. “This therapeutic approach to nutrition offers great growth opportunities in the next three to five years.”
The move is a bold one for the four-year-old company, and combined with its Tuesday announcement that it will partner with Boston venture capital shop Flagship Ventures on a start-up incubator for the nutritional therapy field, shows Nestlé Health Science is pushing boldly into the biotech sector. As part of that deal, Behar will join Flagship’s board of directors, an unusual inversion of the typical VC/company investment partnership terms.
“We welcome Nestlé Health Science as a co-investor and Greg Behar as a board member of Seres Health,” Noubar Afeyan, the chief executive of Flagship Ventures and a co-founder of Seres Health, said in a statement. “In addition, Flagship is excited to enter into a strategic innovation partnership aimed at providing Nestlé Health Science with early exposure to breakthrough innovations, and potentially contributing to Nestlé Health Science’s innovation pipeline.”
Indeed, all of its new partners lauded Tuesday news--Seres said it, too, was delighted to begin working with the Nestlé team, particularly in such a narrow field of study.
“We are excited about Nestlé Health Science‘s commitment to providing patients with novel therapeutics,” said Roger Pomerantz, president, CEO and chairman of Seres Health, in a statement. “Nestle Health Science has made the microbiome a priority and we are pleased they view Seres as the leader in microbiome therapeutic development. We expect this investment will accelerate the discovery and development of our pioneering drugs in this new field.”
