Microbiome therapeutics company Seres Therapeutics has entered into a development and commercialization agreement with Nestlé Health Science for its Clostridium difficile infection (CDI) and inflammatory bowel disease (IBD)—including ulcerative colitis and Crohn’s disease—product candidates.

Nestlé benefits from the agreement by capturing commercial rights in global markets to Seres-developed SER-109, a formulation granted orphan drug and breakthrough status, and SER-262 for CDI, and SER-287 and SER-301 for IBD. In exchange, it will make an upfront payment to Seres of $120 million, as well as contingent payments for sales milestones and tiered royalties in percentages up to the high-teens for all products.

This agreement comes as a follow-up to investments made by Nestlé to Seres in January and July of 2015. Seres Therapeutics, which was founded in 2010 and specializes in treatments designed to combat disease by restoring the function of dysbiotic microbiomes—characterized by an increased presence of pathogenic bacterial species—went public in June of 2015.

The upfront payments is expected to help fund late-stage product development and drive continued growth in Seres’ pipeline of products addressing a variety of conditions wherein altering the microbiome would work as an effective clinical strategy. Seres also has several formulations in development, including indications for infectious, inflammatory and metabolic diseases, including rare genetic diseases and immuno-oncology indications.

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