Septerna stood out from the crowd of biotech IPOs last year due to the lack of clinical data to hand. Now, the data are coming in—and it’s led the biotech to abandon its lead asset.
The G protein-coupled receptor (GPCR)-focused company had been testing SEP-786, an oral small molecule agonist of the parathyroid hormone 1 receptor (PTH1R), in a phase 1 trial of healthy volunteers. But the biotech announced this morning that two unanticipated grade 3 events of elevated unconjugated bilirubin—a biomarker of liver injury—had been reported in the multiple ascending dose portion of the study.
Septerna pointed out that neither of the “severe” adverse events was linked to increased levels of the liver enzymes ALT, AST, and GGT. Raised levels of those enzymes have sunk clinical trials from the likes of Third Harmonic, Centessa Pharmaceuticals and Surrozen in the recent past.
“Dosing was discontinued for both study participants, and the bilirubin elevations were reversible,” Septerna pointed out in the Feb. 18 pre-market release. “Importantly, there were no events of liver injury, cholestasis, or hemolysis across all participants, and there were no serious adverse events in the phase 1 trial.”
Septerna’s stock shed two-thirds of its value on the news, dropping 65% to land at $4.48 when markets opened Tuesday from a Friday closing price of $12.96. Having launched onto the Nasdaq in October at $18 per share, the biotech’s stock had sat comfortably in the mid-twenties for the rest of 2024 before gradually falling over the opening weeks of 2025.
The biotech had been developing SEP-786 as a potential hypoparathyroidism treatment. But after “careful evaluation,” Septerna said this morning that it is discontinuing SEP-786’s phase 1 trial and turning its attention to its “portfolio of follow-on compounds that are chemically distinct.”
“We observed early signals of on-target pharmacological activity with SEP-786, with increases in serum calcium and corresponding decreases in endogenous PTH, reinforcing our commitment to developing an oral small molecule PTH1R agonist for hypoparathyroidism,” Septerna CEO Jeffrey Finer, M.D., Ph.D., said in a statement.
“We have multiple attractive PTH1R agonists from which we plan to select a next-generation candidate to accelerate toward the clinic later this year to quickly regain momentum with our PTH1R program,” Finer added.
Chief Medical Officer Jae Kim, M.D., said the company’s “extensive” preclinical research, which included 28-day toxicology studies, had not predicted a risk of elevated bilirubin. The company will now conduct some non-clinical studies to identify the underlying mechanism for these adverse events, while “expeditiously progress[ing] our PTH1R program with a next-generation candidate.”
The company will also look to take SEP-631, an MRGPRX2 negative allosteric modulator for mast cell diseases, into the clinic “later this year,” Kim added.
Combining the $302.6 million in IPO proceeds with the $137.5 million in cash and equivalents that the company had to hand as of September means Septerna expects its cash to last into “at least” the second half of 2027.
The biotech exited stealth with $100 million in funding and then added $150 million in a series B round in 2023—the same year that Vertex paid Septerna $47.5 million for a licensing deal for an undisclosed discovery-stage GPCR program.