Celebrating his company’s upsized initial public offering (IPO), Septerna CEO Jeffrey Finer rang the opening bell on the Nasdaq stock exchange on Friday morning in New York, in the latest sign of investor support for biotech companies that are taking promising drugs into the clinic.
South San Francisco-based Septerna is offering 16 million shares of stock at an initial price of $18, with an additional 2.4 million shares available over the next 30 days at the public offering price. The company expects to generate $288 million from the IPO and close the deal on Monday. Trading for “SEPN” began on Friday.
Interest in Septerna, which came out of stealth in January 2022, has been sparked by its development of G protein-coupled receptors (GPCRs). Using a platform for isolating functional native GPCR proteins outside of cells, Septerna has created a small molecule, SEP-786, that could offer hypoparathyroidism patients an oral alternative to lifelong injections.
Earlier this week in an SEC filing, when Septerna laid out its plan to go public, the company said it expected to sell 10.9 million shares at between $15 and $17 each, working out to $157.9 in net proceeds, with the potential to grow to $182.3 million if underwriters took up a 30-day option to buy up another 1.6 million shares.
The bumped-up IPO is further evidence that investors are warming back up to drug development companies. On the same day last month, Bicara Therapeutics, MBX Bioscences and Zenas BioPharma went public, with each of the deals also significantly upsized. This has come after a dearth of IPOs in the first half of the year, and a general drop off in IPO fervor in the post-COVID era.
The difference with Septerna is that it has yet to deliver clinical trial data. SEP-786 is in an early-stage phase 1 study that the company expects to read out next year. The candidate could be a new answer for hypoparathyroidism, which affects between 70,000 and 90,000 people in the U.S. With the endocrine system disorder, parathyroid glands don’t produce enough calcium, causing muscle aches and spasms.
Interest in Septerna is not limited to its lead asset. With its small molecule drug discovery platform, the company is developing a pipeline of GPCR product candidates in a broad range of endocrinology, metabolic and immunology and inflammation disorders.
The biotech exited stealth with $100 million in funding and then added $150 million in a series B round last year. Last year, Vertex paid Septerna $47.5 million for a licensing deal for an undisclosed discovery-stage GPCR program.