Hello and welcome to the Jefferies 2025 Global Healthcare Conference. My name is Chase Booken with the Jefferies Healthcare Banking Team, and it is my great pleasure to introduce Jeff Feiner, CEO of Septerna. Jeff?
Okay, thanks, Chase, and thanks to Jefferies for the invitation to introduce some of you to Septerna for the first time and for others to give you an update. I need to say that my presentation will include some forward-looking statements, so please take that into consideration. For Septerna, for those of you who are learning about us for the very first time, we're a company that's focused entirely on G-protein coupled receptors, or GPCRs, and we've developed a new way to do drug discovery for GPCRs that we call our Native Complex Platform. I'll introduce you guys to that platform very briefly today, but then spend the majority of the time on our portfolio. Our portfolio strategy from the outset has been to pick targets that have good degrees of biological validation, either good biological or clinical validation, or ideally both.
Each of the programs that I'll introduce you to today has an early clinical readout, one where we'll know in Phase one whether or not our compound is doing what we want it to do. Each represents a significant unmet need as well as a significant market opportunity. We're well capitalized. We did our IPO last October, and then recently, only about three weeks ago, we announced a new collaboration with Novo Nordisk, so we'll tell you about that collaboration as well, but we're sitting in a very well-capitalized position. With regard to our programs, we'll talk about four programs today. The first is a parathyroid hormone receptor agonist program. We were previously in the clinic there. We unfortunately had to discontinue our first lead there, but we're in a good position to accelerate a next-generation compound into the clinic in the very near term.
Our second program goes after a target called MRGPRX2, which is a target in the mast cell space. That one is moving along quite nicely, and we will be hopefully in phase I in the near term in Q3. Then two earlier stage programs. One is a thyroid-stimulating hormone receptor, negative allosteric modulator. You'll hear me use the term NAM a couple of times. That's what that means. I'll explain that a little bit more later. That is focused on both Graves' disease and thyroid eye disease, where we believe we have an approach that could be disease-modifying for both of those conditions. Finally, we've got an incretin receptor agonist program. What we've done there is actually quite different than what other companies have done.
We found a way, we found a novel binding pocket, a novel way to hit not only single incretins one at a time, but also multiples, and that's partially the focus of our Novo Nordisk collaboration. Kind of set the context here. GPCRs have been by far the most productive drug target class in drug discovery history, leading to hundreds of approved products. There are actually hundreds of GPCRs, and those are represented by the branches on this tree. Everywhere we see a dot on this tree is where there's an approved drug, at least one, and the bigger the dots, the more approved drugs there are.
You can see that the top branch of the tree is one where there's been a lot of success in drug discovery history, so much so that about 70% of all GPCR drugs target just six small subfamilies of GPCRs, and that has included about, like I said, hundreds of them. We believe there's a tremendous amount of untapped opportunity space for additional GPCRs, and that's the focus of the company has been to unlock the difficult-to-drug GPCRs. When we first started to think about the company, there were some drug discovery challenges for GPCRs. Even though there was the productivity I showed you before, a number of inaccessible GPCRs were difficult to use in the context of some of the new drug discovery technologies that had been emerging, things like structure-based design and such. That's where our Native Complex Platform comes in.
What is a Native Complex? A Native Complex is a receptor that's been taken out of a cell and reconstituted in a fully functional system in concert with a transducer such as a G-protein, as well as a ligand and a lipid bilayer. The receptor is entirely surrounded by all of its natural binding partners, and in that context, it retains all of its natural structure, function, and dynamics. Once we have the receptor, we can do several things with that, one of which is to get high-resolution structures. I'll have more to say about that on the next slide. That allows us to see with molecular detail where our compounds are binding, as well as providing us with new insights on how to modulate these receptors. With the same Native Complexes, we can also discover new chemical matter.
We found multiple ways to identify new chemical matter out of libraries of billions of compounds. In our structures, when we have a binding pocket, we can virtually screen literally billions of compounds into those binding pockets. We have a complementary biophysical approach using DNA-encoded libraries, where we've been able to find new chemical matter with pretty much any mechanism of action that we want for any one of our targets. These two things come together: the ability to find new chemical matter, the ability to get structures in what's proving to be a very fruitful structure-based design and optimization process, where for each of our programs I'll tell you about today, we've been able to go from starting medicinal chemistry to active compounds in animals in less than a year.
Double-clicking a little bit on the structure-based side, we use a technology called cryo-electron microscopy that allows us to not only get a structure of the receptor, but also the receptor in concert with anything else it's binding, the transducer as well as the ligand. This is a technology that has applied broadly. We've solved to date more than 100 high-resolution structures, and as part of that, we've got a high rate of being able to get these structures. Once we get a first structure for a receptor, we're able to get a second, third, fourth structure very, very quickly, usually within a week or two, every time our chemists have a compound that they'd want to answer some questions about, and that's allowed us to move quite quickly. In this figure that you're seeing here over on the right, each of the columns represents a different GPCR target.
Each of the horizontal bars within a column represents a new high-resolution structure, mostly with ligands, and you can see it spans a whole variety of different ligand types. You can also see that for a given drug discovery program represented by each of the columns, we'll get between 10 and say 25-plus structures. That's allowed us to move quickly. All right, now turning to our portfolio, I'm going to go into detail most heavily on the first two programs, our parathyroid hormone receptor program and our MRGPRX2 program. One thing to draw your attention to are our therapeutic areas. We've been focused on endocrinology, immunology, and inflammation, as well as metabolic disease. That represents most of our targets there, but you can see on the fourth line there that we've got research areas.
This is a generalizable technology that applies to a whole slew of different GPCR targets spanning virtually every therapeutic area, and we've got some early stage efforts across numerous areas. The other thing to point out are the modes of action in the first column. The PTH receptor program, as well as the incretin receptor programs, represent small molecule agonists for peptide GPCRs. That's been a traditional drug discovery challenge for the GPCR field, and we found a way to crack it with our platform. The middle two represent allosteric modulators. What is an allosteric modulator? It's something that binds outside of the binding site of the endogenous ligand, and what a negative allosteric modulator will do is it'll dial down the activity of the endogenous ligand. A positive allosteric modulator will dial it up, and we've found ways to find both of those.
All right, so jumping into our first program, the parathyroid hormone receptor agonists, where we're targeting oral small molecules for a disease called hypoparathyroidism. To level set and give you guys a quick background on hypoparathyroidism, it's important to know a little bit about physiology. The parathyroid glands are located within the thyroid gland in the neck. They release a hormone called PTH, or parathyroid hormone, that has its effects downstream in the bone and kidney primarily, where it binds to the PTH1 receptor, and in the bone, it causes increases in release of calcium from the bone. In the kidney, it causes an increase in calcium resorption, so less calcium goes out in the urine. It has other effects on the intestine through vitamin D, but all roads lead to increases in serum calcium. PTH is effectively a master regulator of blood calcium.
For a patient with hypoparathyroidism, they've lost their parathyroid glands, usually. That leads to a decrease in PTH and hypocalcemia, and that has a whole variety of different side effects listed down there in the lower right-hand corner, including muscle cramps, tingling. Some of them can actually be quite severe and debilitating. A number of these patients complain about brain fog. They can't think straight. It can also lead to life-threatening complications because of the role of calcium in the brain and in the heart. It can lead to cardiac arrhythmias as well as seizures. Standard of care for many years has been calcium supplements and vitamin D. Sounds simple on the surface, but in reality, it's actually quite burdensome. These patients have to take supplements every few hours during the course of the day, and the calcium dosing itself can have significant consequences.
Because of the physiology I just mentioned, it can lead to excessive wasting of calcium through the kidneys, which leads to kidney calcifications, and that can lead to severe complications, including renal failure. In more recent years, there's been approvals of injectable PTH hormone replacement therapies. Those have been working nicely. However, they will require lifelong injections and likely lifelong daily injections. Our strategy here has been to see if we could come up with a way to functionally replace PTH instead of with a peptide, with an oral small molecule. The way we discovered our PTH agonist was with the Native Complex Platform I described to you. To set the context here, the PTH receptor has been a target of drug discovery for decades by a number of pharmaceutical companies, really without any traction from a small molecule standpoint.
The receptor is shown here in blue, the G-protein in yellow. The PTH peptide, you can barely make it out. It's a long helical peptide in green, and we found ways to activate this receptor with small molecules, and not only one way, but two ways. We found two unique independent binding pockets that allow us to activate the receptor. We put these two compounds from both of these pockets through our rapid and iterative structure-based design process. In less than a year, we got to very potent compounds from both of these mechanisms, and we continued to use our optimization process to increase potency and improve the drug-like properties. At the end of the day, we ended up with potent selective oral small molecules that normalize calcium, as I'll show you in animal models.
We're aiming for full-day calcium control with either once a day or twice a day dosing, and obviously, we need a safe and well-tolerated compound. Our first compound in this space was SEP-786. Unfortunately, in February, we had to discontinue the trial. I'll say more about that in a moment, but we've got several additional new compounds on the horizon that are structurally unrelated to 786. A little bit on 786. As I mentioned, we had to discontinue the trial. This was moving along quite well in phase one, and we ended up with two unanticipated consequences, events of unconjugated bilirubin in these patients. When people hear bilirubin, they often think, "Okay, that's drug-induced liver injury," but in this case, it wasn't. We had no evidence of liver injury, normal liver enzymes.
It is pure bilirubin, and there are a couple other negative pieces of information that are helpful for us in trying to decipher exactly what was going on. Bilirubin comes from the red blood cells. It goes into the liver, gets conjugated, and then excreted in the bile, and we did not see anything in either hemolysis or the cholestasis at either end of that process that would indicate any of those. We are looking and actively investigating the mechanism, and we are honing in on either bilirubin transporters or bilirubin conjugation enzymes. Investigations ongoing. We hope to share the results of that in the future. What we did learn in a positive way from the phase I trial is that a small molecule, in this case 786, was doing exactly what we wanted it to do. It was affecting the physiology in a way that we anticipated.
In a healthy volunteer, these patients or these healthy subjects have intact PTH axis, very different than hypoparathyroid patients, where the first thing we would expect to see is decreases in endogenous PTH to compensate for the PTH replacement that we have, and then subsequently increases in serum calcium levels, and that's exactly what we were seeing. It was still early signals. It wasn't quite at the level that we thought we needed in hypoparathyroidism patients, and given this side effect that we saw, we decided to discontinue the trial. On the more positive side as well, we ended up with a pharmacokinetics profile that we thought was compatible with either once or twice daily dosing. Pivoting to next-generation compounds, we're well-positioned to do that.
We've got multiple candidate quality molecules that are structurally distinct from 786, have great activity in animal models, as well as excellent pharmaceutical properties, and both of those are ones that are even potentially superior to 786. I'm going to introduce you now to a couple of our next-generation compounds, and I'm going to do it in the setting of our rat surgical model of hypoparathyroidism. What we do here is we take a rat, surgically remove the parathyroid glands. These animals end up with functional hypoparathyroidism that causes hypocalcemia, and then the idea is once we dose our compound, could we reverse those effects and normalize calcium? What I'm showing you here now is a 28-day study with one of our next-generation compounds looking at calcium levels.
Calcium levels on the y-axis, I do not know if you can see it very clearly in this image, but the gray band represents the normal calcium range. The hypocalcemic animals represented by the gray circles are low, and then over the course of looking in detail at four different days on the 28-day study, you can see that we are able to get into the normal range by dosing this compound. That is very promising. The other thing that we saw was normalization of phosphate levels. Phosphate actually starts high, comes down into the normal range, which is again exactly what we would like to see. We had similar data to this for SEP-786, but one thing I would like to point out is the dosing.
SEP-786, to have very comparable data, required 3 mg per kg twice a day in a rat, whereas this compound was at a much lower dose, about 20-fold lower dose once a day instead of twice a day, so about 40-fold less drug. We are optimistic that if this next-generation compound ends up moving forward, we will be at a significantly lower dose. In terms of pharmacokinetic properties, prior to our phase one trial, we introduced the PK properties in terms of oral bioavailability and half-life for 786 shown over on the right. You can see across species, the oral bioavailability is in about the 50% range. The half-life starts in the range of about four hours in a rodent and goes up to about eight hours in a monkey. This led to predicted human PK half-life of about 9-27 hours.
That was our prediction before the phase one. With the phase one data in hand now, we can say that the prediction was a good one. We were right in the middle of that range at a half-life of about 18 hours. Using the same methodology to predict human PK for these other two potential candidates, these are among the finalists that we're deciding between for our next-generation compound, you can see that both of them have significantly longer projected human half-lives than 786. Put all this together, we've got compounds that are structurally unrelated to 786. We've got compounds that have potentially much lower doses and potentially much better pharmaceutical properties as well. We are currently in candidate selection with these molecules.
We hope to be able to select a candidate later this year, and then depending on which compound we pick, we could be back in the clinic as early as towards the end of the year or the first half of next year. All right, moving on to our second program. This is our program targeting MRGPRX2, which is a mast cell target, and the compound's called SEP-631. MRGPRX2 is an emerging new target for mast cell diseases. Mast cells have a canonical pathway of activation, including that implicates IgE and allergens coming together and binding to a high-affinity IgE receptor. That leads to degranulation, the release of a whole bunch of inflammatory mediators, including histamine. There is a separate pathway that has been only appreciated for about a decade or so, MRGPRX2, leads to release of different granules, and those have a different composition of inflammatory mediators.
MRGPRX2 importantly responds to a whole variety of endogenous peptides and protein mediators listed up there on the upper right. Mast cell diseases are becoming much better known and with increasing focus in industry these days. There are several mast cell-driven diseases. I've only listed a few here. Skin conditions, including chronic spontaneous urticaria, atopic dermatitis, prurigo. There are other conditions, including allergic asthma, as well as some pain conditions, including migraine, that might implicate mast cells. CSU represents a significant unmet need and is getting more attention these days. Millions of patients in the US, it results in itchy, painful hives, and there are a number of patients that are refractory to antihistamines. There is unmet need in this space, and our strategy is to develop a negative allosteric modulator for MRGPRX2 for this target. SEP-631 has a number of properties that we're excited about.
One property is that we fully inhibit the activation of the receptor by a whole range of endogenous agonists. In fact, every endogenous agonist we've gotten our hands on. I'm only showing you four here, but it's very potent inhibition in the single-digit nanomolar or high-picomolar range. We also have what we call an insurmountable negative allosteric modulator profile. That means that when the compound binds to the receptor, it functionally turns off the receptor to the point where it can't be activated anymore. In this case, I'm showing some data with Cortistatin 14 to illustrate that, but this insurmountable profile and the very long half-life that we have with the compound on the receptor are important pharmacologic features. Pre-clinically, this target presents a challenge in that MRGPRX2 is not well-controlled or well-conserved across species. We had to make a knock-in mouse.
We had to replace the mouse's gene with the human gene, and the animal model we've used with this mouse, this knock-in mouse, is one that we think is quite relevant to urticaria. The way this works is we dose the compound orally. You administer a blue dye to the animal. It tints the blood a little bit blue, and then we do an intradermal skin challenge with an X2 agonist, in this case, Cortistatin 14. At the site of that skin challenge, you get extravasation of the blue dye, so the animal gets effectively like a little blue hive, shown in the diagram there. The idea is if we inhibit this target, we should completely inhibit the extravasation. That's exactly what we see.
In that plot, we're looking at skin extravasation with the y-axis is fold-over vehicle, so the dotted line that I'm showing you there is basically the zero extravasation line. We get significant extravasation without 631, but when we put 631 on board at 3 milligrams per kilogram, we completely shut it down. Very promising there. We've also done the best translational model we can on the human side, which is to get primary human skin mast cells from skin donors. Here, I'm showing you that if we take those primary skin mast cells, we stimulate them with an X2 agonist, substance P in this case, we're able to completely shut down the tryptase release from those cells. We're excited about the profile of 631. It's got all the features that I've mentioned so far. It's now completed 28-day GLP-tox studies in both rat and dog.
The IND-enabling studies are completely completed now, and we are tracking towards being in the clinic starting phase I in Q3. All right, the next program I'd like to introduce to you very briefly is the thyroid-stimulating hormone receptor. This is also a negative allosteric modulator, again, targeting Graves' disease and thyroid eye disease. Both of these diseases are caused by the same pathophysiology, which are autoantibodies that bind to this TSH receptor in either the thyroid gland, leading to hyperthyroidism, or the orbital fibroblasts behind the eyes, leading to expansion of the orbital fat and the characteristic proptosis of thyroid eye disease. Graves' disease and thyroid eye disease both represent significant unmet needs. If you treat one with one of these diseases with their conventional or current therapies, you do not treat the other condition.
What we're hoping for is an approach to treating both conditions simultaneously with a TSH receptor negative allosteric modulator. What makes this particularly challenging is that every patient develops their own autoantibodies. They're often very high affinity, high titer, and even polyclonal. Within a given patient, there are multiple antibodies. We wanted a universal approach. To gain some confidence in that, we got some primary orbital fibroblasts from thyroid eye disease patients as well as patient serum samples, and we found some selective TSH receptor NAMs. What we're looking at here on the plot now is increases in hyaluronic acid caused by the patient serum samples. Each of the magenta bars shows a significant increase in hyaluronic acid production compared to the gray bar.
Each of the purple bars for each, they're matched pairs with each patient serum sample, has that patient serum sample spiked in with a TSH or a NAM, and you can see that we're able to dampen the effects of those autoantibodies. This gives us confidence that we really can have a universal mechanism. We also developed a novel animal model for Graves' disease. There really wasn't a great animal model. This involves taking a mouse. We found a patient-derived autoantibody to the receptor that cross-reacts with the mouse's receptor, and when we dose that antibody over and over again, we give the animal a functional Graves' disease. Thyroid hormone levels go up, the thyroid gets enlarged, and the eyes actually begin to bulge.
The idea is that in the setting of continuing with that antibody, could we reverse the symptoms with our TSHR NAM? That is exactly what we see here. On the thyroid side, the gray bar represents the baseline. The magenta bars represent what the animals see. You can see increases in thyroid T4 levels. You can also see increases in thyroid size represented by the weight, and both of those start to reverse with only one week of dosing of this particular TSHR NAM. This is thyroid eye disease in a mouse. Mice typically have kind of bulgy eyes. They become particularly bulgy by the middle two photos. You can see very prominent proptosis in the mouse. If you look at the lower two photos, we are starting to see some reversal of that.
We're excited about this profile as well. All right, last but not least, our incretin receptor agonist program. As I mentioned in the outset, we found a novel binding pocket, and this is a novel binding pocket that we think positions us to not only find single-acting incretin receptor agonists, but potentially multiple multi-incretin receptor agonists where we can activate multiple receptors simultaneously. There's been a lot of work on GLP, small molecule agonists. Two prominent scaffolds are orforglipron and danuglipron shown in the figure on the right. You can see that there's only about 40-60% sequence similarity across the three different receptors: GLP-1 receptor, GIP receptor, and glucagon receptor. That's what GCGR is. In our binding pocket, which is a unique one, we're able to see significant increased homology and sequence similarity across them.
We think we've got a good shot at being able to find multi-incretin receptor agonists, and we've demonstrated that with some early-stage molecules as well. Just one example I wanted to share is that we found selective mono GIP receptor small molecule agonists with favorable properties so far. You can see in this weight loss model, very standard weight loss model in a diet-induced obese mouse. In the magenta curve, you can see that we've got a little bit of weight loss with our compound. The light blue curve is semaglutide, the GLP-1 peptide. It's kind of the gold standard in this space for these models and human trials as well. You can see more weight loss there. The green curve is tirzepatide. That's a dual GLP-1 GIP peptide. In purple, that curve represents our compound dosed orally in combination with semaglutide.
You can see that the combination is mimicking the tirzepatide profile. We're excited about where this is going. As I mentioned at the outset, we announced a collaboration with Novo about three weeks ago. This collaboration involves not only those three targets, but two additional undisclosed targets, and we've got a nice financial package associated with that, including bringing in an additional $195 million upfront. Caveat there is that the deal hasn't closed yet. We still have to go through an HSR review process, but we're hoping that that will close for real over the course of the next month or so. We've got a significant milestone package, royalties, as well as an opt-in right for a profit share on one program. Importantly, Novo is going to be responsible for all R&D costs, including all of our research costs going forward.
All right, so just to wrap up in the last two minutes, just in terms of the company profile, we've got a very experienced senior leadership team across the board. Everybody has a couple of decades' experience. I'm joined today by Liz Bhatt, our Chief Operating Officer, Gail Labrucherie is our Chief Financial Officer, but across the board, everybody's really quite experienced. We've got an experienced board of directors, world-class academic co-founders that are GPCR experts, and we've got a drug discovery advisory board that includes some prominent names from the pharma industry. Just to wrap very quickly on the last slide, just to come back to what I've mentioned before, we've got a nice portfolio of oral small molecule GPCR targeted programs that we're excited about. Our Native Complex Platform has really been the secret to creating this portfolio.
Each product represents a potential large market opportunity, and we're sitting in a very well-capitalized position. We're between the IPO and the Novo collaboration. We previously gave guidance just based on where we were pre-Novo deal with runway into early 2028, and obviously the Novo deal will extend that significantly. We'll probably be providing guidance on that sometime in the next couple of months. We have a minute or two left for any questions. Thank you to Jefferies for the invitation.