Seres Therapeutics (MCRB) tumbled by 75% this morning after the company announced that it had failed to achieve the primary endpoint of a phase 2 clinical trial. The phase 2 trial was testing its microbiome-rebalancing product, known as SER-109, to treat patients with bacterial infections caused by Clostridium Difficile, or C. diff.

The final conclusion of the phase 2 trial was that the drug was not able to reduce the recurrence of the bacteria in patients compared to a placebo compound. This trial evaluated patients over an 8-week period, to determine if SER-109 could perform better than placebo. The company will shuffle through the data and determine the next steps for the program. 

About 44% of patients had their C. diff recur after 8 weeks compared to 53% of those on the placebo. Still, the main goal of the study was hitting the primary endpoint, and unfortunately that was not achieved. This is particularly disappointing since the good results of its phase 1b trial gained it a 'breakthrough therapy' designation from the FDA. The company has other products in the pipeline but most are in pre-clinical stages, and one is in a phase 1 study. 

It will take a while for this stock to recover, if it recovers at all. Seres will have to go back to the drawing board and see if it can change anything in the next microbiome trials to see if it can achieve success. Considering that one product has already failed in one indication, I would urge investors to only risk what they can afford to lose. This is because it could be that the company's entire platform is flawed and that would bring about more trouble for shareholders.