Septerna's Expanded IPO Raises $288M for GPCR Drug Pipeline

Septerna, a biotech company based in South San Francisco, has recently entered the clinical stage, marking its presence in the competitive biotech IPO market. Despite its lack of human data, the company has successfully raised $288 million through its initial public offering (IPO). This significant achievement is underpinned by technology derived from the research of a Nobel laureate and a promising lead drug candidate aimed at treating a rare inherited disease.

On Thursday, Septerna announced the pricing of its IPO, offering 16 million shares at $18 each, exceeding the preliminary financial terms initially set. The shares will be traded on the Nasdaq under the ticker symbol "SEPN." The majority of the funds raised from the IPO will be allocated to the clinical development of SEP-786, a treatment for hypoparathyroidism. This inherited condition results from a deficiency of parathyroid hormone (PTH), leading to symptoms such as fatigue, brain fog, muscle weakness, and in severe cases, cardiovascular issues and renal failure.

Traditional treatments for hypoparathyroidism involve calcium and vitamin D supplements, which do not fully alleviate the disease's symptoms. Takeda Pharmaceutical's Natpara, an engineered PTH, is set to cease production by year-end due to manufacturing problems. Recently, the FDA approved Ascendis Pharma’s Yorvipath, an injectable peptide, as a new treatment option. Septerna's SEP-786, however, distinguishes itself as a small molecule oral drug that targets and activates the parathyroid hormone 1 receptor (PTH1R), stimulating the body to produce more PTH. This oral formulation could offer a more convenient and less burdensome treatment option for patients.

Septerna's technology, known as Native Complex, allows for the detailed study of G protein-coupled receptors (GPCRs) outside of cells while maintaining cellular conditions. This technology, developed from the research of Robert Lefkowitz, a Duke University biochemist and Nobel laureate, enhances the understanding of GPCRs, which play crucial roles in various physiological processes. By leveraging this knowledge, Septerna aims to design and optimize small molecules that can effectively target these receptors.

In preclinical animal studies, SEP-786 demonstrated its ability to activate PTH1R and regulate genes important for calcium homeostasis, similar to natural parathyroid hormone. The company has initiated a placebo-controlled Phase 1 study to evaluate the safety and tolerability of SEP-786 in healthy volunteers, with preliminary data expected by mid-2025.

Septerna's pipeline extends beyond SEP-786. It includes two preclinical negative allosteric modulators, SEP-631 and TSHR, which are in development for indications such as chronic spontaneous urticaria and potential endocrinology applications, respectively. Additionally, Septerna is working on small molecule agonists targeting GLP-1, GIP, and glucagon receptors for treating metabolic disorders. These developments could position Septerna as a competitor to commercialized injectable peptide drugs, offering oral alternatives.

Since its founding in 2019, Septerna has raised $224.2 million before its IPO. The company's largest shareholder post-IPO is Third Rock Ventures, holding a 23.6% stake. CEO Jeff Finer, who also serves as a venture partner at Third Rock, leads Septerna.

The company's IPO garnered significant investor interest, allowing Septerna to increase the deal size twice before finalizing it at $288 million. With a robust cash position of $155.7 million at the end of the second quarter, Septerna plans to allocate $54 million for the Phase 2 development of SEP-786, $24 million for the Phase 1 completion of SEP-631, and $41 million for other R&D initiatives, including its TSHR and incretin receptor programs.