Septerna Inc. (SEPN), a thyroid-focused Phase I biotech, upsized its IPO at pricing to 16.0 million shares – up from 15.28 million shares in the recently upsized prospectus – and priced the IPO at $18.00 – as planned – to raise $288.0 million on Thursday night, Oct. 24, 2024. Septerna’s stock opened at $23.50 – up $4.50 or up 30.56 percent – in its NASDAQ debut at 12:09 p.m. EDT today – Friday, Oct. 25, 2024 – on volume of 530,547 shares.
J.P. Morgan, TD Cowen, Cantor and Wells Fargo Securities were the joint book-runners.
The market cap – at pricing – was $756.05 million.
Septerna’s IPO was increased in size twice in the same day – first, in an S-1/A filing early Thursday morning – and again at pricing. The IPO’s original terms, disclosed in an S-1/A filing on Monday, Oct. 21, 2024, called for 10.94 million shares (10,937,500 shares) to be sold at a price range of $15.00 to $17.00 to raise $175.0 million. Septerna upsized the IPO to 15.28 million shares (15,277,778 shares) – at an assumed IPO price of $18.00 – $1.00 above the top of its original price range – in an S-1/A filing dated Oct. 24, 2024 – filed early on the morning of its IPO pricing day. The IPO was priced on Thursday night.
“What you’re seeing is the demand. Get what you can,” a veteran IPO pro said Thursday, after Septerna’s upsized terms were disclosed.
Gold-Plated Backers
Septerna, a Phase I biotech with only one drug candidate – a thyroid-disease drug – in a clinical trial, has no licensing or collaboration deals, according to the prospectus.
But it does have top-tier backers – through their various entities – the prospectus said:
*Third Rock Ventures, a major healthcare VC firm, had a pre-IPO stake of 33.5 percent that would go to a post-IPO stake of 21.1 percent;
*RA Capital, a prominent biotech investment firm, had a pre-IPO stake of 10.9 percent that would go to a post-IPO stake of 6.8 percent, and
*Goldman Sachs had a pre-IPO stake of 5.4 percent that would go to a post-IPO stake of 3.4 percent.
Testing a Drug Candidate for Low PTH
Septerna, based in San Francisco, is evaluating a new drug candidate, SEP-876, in a Phase I clinical trial to treat hypoparathyroidism, a rare endocrine disease caused by low levels of the parathyroid hormone (PTH), according to the prospectus. SEP-876 is an oral small molecule agonist targeting PTH1R – parathyroid hormone 1 receptor (PTH1R). Septerna plans to report data from this clinical trial in mid-2025.
Septerna has another drug candidate in IND-enabling studies: SEP-631, an oral small molecule MRGPRX2 negative allosteric modulator (NAM) to treat a painful inflammatory skin disease called chronic spontaneous urticaria (CSU).
Septerna is developing a preclinical TSHR (thyroid stimulating hormone receptor) program to treat Graves’ disease and thyroid eye disease (TED), the prospectus said. Graves’ disease, the leading cause of hyperthyroidism, affects over 2 million patients in the U.S. In about 50 percent of Graves’ disease patients, the illness progresses to thyroid eye disease (TED), a vision-threatening autoimmune condition that can lead to eye bulging, swelling, pain and blurred or double vision.
Like most biotechs when they go public, Septerna has red ink on its bottom line and minimal revenue. For the 12 months that ended June 30, 2024, Septerna reported a net loss of $46.2 million on revenue of about $0.84 million ($840,000).
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