Executive Summary / Key Takeaways

• Septerna is pioneering oral small molecule drug discovery for GPCR targets using its proprietary Native Complex Platform, designed to address historically challenging targets and expand therapeutic possibilities across endocrinology, immunology/inflammation, and metabolic diseases.
• The company recently entered a significant global collaboration with Novo Nordisk for metabolic diseases, including GLP-1, GIP, and glucagon receptors, providing a substantial $195 million upfront payment and potential milestones exceeding $2.2 billion, alongside R&D cost reimbursement for partnered programs.
• While the company discontinued its SEP-786 Phase 1 trial due to elevated bilirubin, it is advancing next-generation PTH1R agonists and expects to initiate a Phase 1 trial for SEP-631 (MRGPRX2 NAM) in mast cell diseases in 2025, demonstrating pipeline progression despite setbacks.
• Septerna holds a strong liquidity position with $398.2 million in cash, cash equivalents, and marketable securities as of March 31, 2025, significantly bolstered by its October 2024 IPO and further extended by the anticipated Novo upfront payment, providing runway well beyond the prior early 2028 guidance.
• Despite being an early-stage biotech with increasing operating losses and execution risks inherent in drug development, the differentiated platform, deep pipeline, and validation from the Novo partnership position Septerna as a compelling, albeit high-risk, investment opportunity in the GPCR space.

Pioneering the GPCR Frontier with a Native Complex Platform

Septerna, Inc. is carving out a distinct niche in the biotechnology landscape, focused on unlocking the full therapeutic potential of G protein-coupled receptors (GPCRs) through oral small molecules. GPCRs represent the largest and most diverse family of cell membrane receptors, regulating physiological processes across nearly every organ system. Despite their biological importance, many GPCRs have remained challenging targets for drug discovery, particularly with oral small molecules.

The company's core strategic response to this challenge is its proprietary Native Complex Platform. This industrial-scale platform is designed to replicate the natural structure, function, and dynamics of GPCRs outside of cells. By isolating, purifying, and reconstituting full-length, properly folded GPCR proteins within ternary complexes in a lipid bilayer, Septerna aims to mimic the cellular environment critical for GPCR function. This foundational technology allows Septerna to apply state-of-the-art discovery tools, including structure-based drug design and high-throughput screening, to target GPCRs that were previously considered "undruggable." The platform is intended to uncover novel binding pockets and enable the pursuit of a wide spectrum of pharmacologies, including agonists, antagonists, and allosteric modulators, to precisely modulate GPCR signaling for therapeutic effect. While specific quantitative metrics on the platform's efficiency or success rates compared to traditional methods are not detailed, the strategic intent is clear: to expand the landscape of druggable GPCR targets and accelerate the discovery of novel oral small molecule medicines. For investors, this platform represents Septerna's primary technological moat, offering the potential for differentiated pipeline assets and a competitive edge in a crowded field.

Strategic Positioning and Navigating the Competitive Currents

Septerna's pipeline is initially focused on three therapeutic areas: endocrinology, immunology and inflammation, and metabolic diseases. These are areas with significant unmet needs but also intense competition from established pharmaceutical giants and other innovative biotechs. Key competitors include companies like Novo Nordisk (NVO), Eli Lilly (LLY), Ascendis Pharma (ASND), and Amgen (AMGN), all of whom have significant market presence and pipelines in related therapeutic areas.

Novo Nordisk and Eli Lilly, in particular, dominate the metabolic disease space with blockbuster injectable incretin therapies like semaglutide and tirzepatide, respectively. These companies boast robust financial profiles with strong revenue growth (NVO: 22%, LLY: 27% in 2024 Q3) and healthy profitability margins (NVO net margin ~35%, LLY net margin ~24%). Septerna, as an early-stage company, currently has negligible revenue and operates at a significant net loss ($-21.5 million in Q1 2025). While Septerna's oral small molecule approach offers potential advantages in patient convenience and potentially lower manufacturing costs compared to injectables, it faces the challenge of demonstrating comparable or superior efficacy and safety profiles against these entrenched market leaders.

In endocrinology, specifically hypoparathyroidism, Septerna's PTH1R program competes with companies like Ascendis Pharma, which is developing a sustained-release injectable PTH therapy. Ascendis, while smaller than NVO or LLY, also faces profitability challenges (negative net margin ~-104% in 2024) but has demonstrated significant revenue growth from partnerships. Septerna's oral PTH1R agonist aims to offer a differentiated profile, potentially providing full-day calcium control and disease modification, which could be a key differentiator against existing or emerging therapies. The immunology and inflammation space, where Septerna's SEP-631 targets MRGPRX2 for mast cell diseases like chronic spontaneous urticaria (CSU), is also competitive, with established therapies like Novartis (NVS)/Roche's (RHHBY) Xolair (omalizumab) generating billions in sales ($3.9 billion in 2023). An analyst noted that if SEP-631 can replicate Xolair's efficacy with the added convenience of oral administration, it could achieve blockbuster status.

Septerna's competitive strategy hinges on its Native Complex Platform enabling the discovery of novel, highly targeted oral small molecules that can address limitations of existing therapies or target previously inaccessible GPCRs. While its financial metrics currently lag far behind large pharma competitors, its innovation speed and ability to target specific GPCRs or binding pockets represent its primary competitive advantage. The recent collaboration with Novo Nordisk, a leader in the metabolic space, serves as a significant validation of Septerna's platform and strategic approach, providing non-dilutive funding and leveraging Novo's development and commercialization expertise to potentially accelerate programs in a highly competitive market.

Pipeline Evolution and Recent Milestones

Septerna's pipeline includes several promising programs derived from its platform. The PTH1R program, aimed at hypoparathyroidism, is a key focus. However, the company recently faced a setback in February 2025 with the discontinuation of its Phase 1 clinical trial for SEP-786, an oral small molecule PTH1R agonist, due to unanticipated events of elevated unconjugated bilirubin levels. In response, Septerna is actively advancing multiple next-generation oral small molecule PTH1R agonists with distinct chemical structures, aiming to move a new candidate toward clinical development.

Beyond the PTH1R program, Septerna is advancing SEP-631, an oral small molecule MRGPRX2 negative allosteric modulator (NAM) for mast cell diseases, with a Phase 1 trial expected to initiate in 2025. The pipeline also includes a TSHR Program for Graves' disease and thyroid eye disease, as well as other oral small molecule single- and multi-incretin receptor agonists for metabolic disorders.

A transformative recent development is the exclusive global collaboration and license agreement with Novo Nordisk, announced on May 13, 2025. This partnership focuses on discovering, developing, and commercializing oral small molecule therapies for metabolic-related diseases, targeting key GPCRs including GLP-1, GIP, and glucagon receptors. The collaboration includes Septerna's most advanced preclinical metabolic program, an oral small molecule agonist to the GIP receptor. The agreement outlines initial work on four simultaneous R&D programs, with Novo Nordisk taking responsibility for global development and commercialization from IND-enabling activities onward, bearing all associated costs (subject to Septerna's profit share option on one program). This partnership provides significant external validation for Septerna's platform and pipeline potential in a high-value market.

Financial Performance and Capital Runway

As an early-stage biotechnology company focused on R&D, Septerna has incurred significant operating losses since its inception. For the three months ended March 31, 2025, the company reported a net loss of $21.5 million, an increase from the $14.2 million net loss in the same period of 2024. This widening loss is primarily attributable to increased operating expenses, driven by higher research and development costs ($19.3 million in Q1 2025 vs. $13.2 million in Q1 2024) and general and administrative expenses ($6.9 million in Q1 2025 vs. $2.7 million in Q1 2024). The increase in R&D reflects higher direct program costs, increased headcount, and expanded facility costs, while G&A growth is linked to increased headcount and costs associated with operating as a public company. Revenue remains minimal, generated solely from a research service agreement with Vertex (VRTX) ($0.2 million in Q1 2025 vs. $0.3 million in Q1 2024).

Septerna's financial position was substantially strengthened by its initial public offering in October 2024, which generated $302.8 million in net proceeds. As of March 31, 2025, the company held $398.2 million in cash, cash equivalents, and marketable securities. This cash position was previously guided to fund operations into early 2028. The subsequent Novo Nordisk collaboration further enhances this liquidity, with an anticipated $195 million upfront payment upon closing. Management expects this payment to significantly extend the cash runway beyond the prior guidance, with updated guidance to be provided later. While the Novo deal provides a substantial financial cushion and non-dilutive funding for partnered programs, Septerna anticipates needing additional financing in the future to support its wholly-owned pipeline and growth strategy, which may involve further equity offerings or debt financing.

Risks and Future Outlook

Investing in Septerna carries inherent risks typical of early-stage biotechnology companies. These include the high uncertainty of clinical trial success, potential delays in development or regulatory approval, reliance on third-party manufacturers and CROs, and the challenges of competing against larger, more established pharmaceutical companies. The discontinuation of the SEP-786 trial highlights the clinical risks involved. Furthermore, macroeconomic and geopolitical factors, including inflation, potential disruptions to capital markets, and regulatory changes (such as potential FDA staffing reductions or tariffs), could impact operations and financial performance.

Despite these risks, the outlook is significantly shaped by the validation and financial strength provided by the Novo Nordisk collaboration. This partnership not only extends the cash runway but also leverages the expertise of a global leader in metabolic diseases, potentially accelerating the development and commercialization of key pipeline assets. The advancement of next-generation PTH1R agonists and the expected initiation of the SEP-631 Phase 1 trial represent important near-term milestones for the wholly-owned pipeline. The company expects R&D and G&A expenses to continue increasing as programs progress. The core investment thesis centers on the potential of Septerna's Native Complex Platform to deliver differentiated oral small molecule therapies for challenging GPCR targets, validated by the Novo partnership and supported by a solid cash position to fund upcoming clinical milestones.

Conclusion

Septerna stands at a pivotal juncture, armed with a differentiated technology platform aimed at unlocking the vast potential of GPCR-targeted therapies. While the recent discontinuation of the SEP-786 trial serves as a reminder of the inherent risks in drug development, the company's strategic response to advance next-generation candidates demonstrates resilience. The transformative collaboration with Novo Nordisk provides significant financial backing and external validation, particularly for its metabolic disease programs, and substantially extends its operational runway.

As Septerna advances its wholly-owned pipeline, including the anticipated SEP-631 Phase 1 trial, and leverages the Novo partnership, investors will be closely watching for clinical data readouts and progress across its programs. The company's ability to translate the promise of its Native Complex Platform into successful clinical outcomes and navigate the competitive landscape will be critical determinants of its long-term value creation.