All right, everyone, I think we'll get started. Good morning, and welcome to the Wells Fargo Healthcare Conference. My name's Derek Archila, I'm one of the senior biotech analysts. Starting us off for the day, we have Septerna. From the company, we have Jeff Finer, Co-Founder and CEO. Jeff, thanks so much for joining us.
Yeah, thanks, Derek, and appreciation to the Wells Fargo team for inviting us.
Excellent. Well, maybe to start off, you can just provide a little bit of background on Septerna, what you guys are working on, and we can get into the more detailed questions.
Yeah, great. I've got a pipeline slide that I can just share briefly here. Septerna is a company working on G protein-coupled receptors, and we've discovered a new way of doing drug discovery for GPCRs, which based on the few years that we've been doing this, has proven that we can actually unlock a number of difficult to drug GPCRs. This includes GPCRs that have peptides as their endogenous ligands, as well as we've got a new way of finding allosteric modulators. This has led to the portfolio that you see here on this slide, which includes our lead program in hypoparathyroidism. This is a PTH receptor agonist, which I'm sure we'll spend some time talking about. We've got a second program targeting MRGPRX2, which is a targeted mast cell diseases. Both of those are clinical stage programs. We've got behind that quite a robust discovery portfolio.
The next program that we hope to be able to share information on is our thyroid-stimulating hormone receptor negative allosteric modulator, which is targeting Graves' disease and thyroid eye disease. Just recently we announced a fourth program added to our portfolio focused on osteoporosis. This is another PTH receptor program. There are actually several more programs under the surface here that we haven't talked about. In addition to that, we have a deal with Novo Nordisk, targeting a whole variety of cardiometabolic targets.
Excellent. Maybe starting with 479 as the lead, it'd be really good to understand what you'll actually disclose with the phase I readout early next year, and what we actually learned from the original molecule 786, some of the key learnings there that you've applied to 479.
Yeah. We're tracking towards being able to share the entire phase I data set, that's the SAD and the MAD, in Q1 of next year. That trial is moving along nicely. We did disclose recently an extended half-life for that molecule. We were pleasantly surprised to see that the half-life of the drug is approximately three-four days, which we think will actually do a really good job of controlling day-to-day fluctuations on serum calcium levels. But in terms of the full readout, obviously like all phase I trials, we're looking for safety and tolerability, that's number one. PK, we've already disclosed a little bit about the PK profile, but we'll disclose the full PK profile as well. For the SAD and the MAD, the two biomarkers that we're looking most closely at are endogenous PTH suppression and calcium increases.
Maybe it's worth a moment to just share that, for those of you who don't think about this every day, normal patients, normal healthy individuals are different than hypoparathyroidism patients in a very fundamental way, in that healthy volunteers like all of us would be, we have intact parathyroid glands, and that allows us to control the parathyroid hormone levels. The parathyroid hormone's the master regulator of calcium in the body. The endocrine loop is so efficient, it allows calcium to be controlled very steadily by dialing up or down PTH. So in a healthy volunteer, we're looking for PTH suppression, and in fact, we anticipate PTH suppression well before we start to see increases in calcium. So those will be the main biomarkers that we're looking for, and we hope that in our full SAD and MAD data set, we're able to share that.
Can you talk about some of the precedents from prior molecules targeting PTH, and I guess some reference points, some benchmarks that you guys would be looking for to help de-risk future trials?
Yeah, fortunately, we've had the PTH peptides pave the trail for us here. If you look back at the effective doses in hypoparathyroidism patients for a drug like YORVIPATH as an example, and look back at what that drug did in its phase I healthy volunteer study, there are some clear learnings in terms of the magnitude of effects that we hope to see with both PTH and calcium increases to identify a dose that may translate into hypoparathyroidism patients. Just to give you some numbers here, what we're looking for in PTH suppression is a decrease of about 50% or so. At that point, that's when calcium increases generally start to kick in, and we'd be looking for increases in serum calcium in the range of about 0.3-0.5 mg per deciliter.
That dose should, based on precedent with PTH peptides, translate actually very well to a starting dose for hypoparathyroidism patients. Another thing to remind everybody of here is that hypoparathyroidism patients on an individual-by-individual basis need to be titrated into the right drug levels. That starting dose is an important point because it does, in the case of YORVIPATH, it does control a decent percentage of the population, and others need to probably only go up a little bit from that baseline.
Got it. I guess that raises the question, how do you think about titration given the half-life that you've already kind of communicated, three or four days, seemingly is very good. I guess how do you think about titration and also phase II, do you have to look at multiple titration schedules or really kind of hone in on one? How many arms do you think that future phase II could look like?
Yeah. The goals of that first phase II study in patients are pretty simple. Obviously, to show that we have pharmacology, but also to figure out what the starting dose is and that titration protocol. Fortunately, again, with our half-life being actually not that far off from YORVIPATH's apparent half-life. YORVIPATH is a sustained release form of PTH. While the PTH peptide itself is short-lived, their sustained release system mimics a half-life of about 2.5 days. We think with a half-life of three-four days, even if it is a bit longer than that, we should be able to leverage their learnings on how to titrate patients. We will be thinking about ways to streamline that potentially a bit further to see if we can improve titration there.
Got it. In terms of 479, oral convenience, a big differentiator in and of itself relative to the injectable peptides, our injectable PTHs. I guess, how do you think that there is potential other opportunities or other areas of differentiation, and how would you incorporate that into the phase II?
Yeah. In terms of differentiation, obviously oral is a big thing. We think it will allow for potentially better patient adherence, potentially better ease of use. We think importantly it may allow effectively PTH replacement therapies to move earlier in the disease course in terms of potentially going after more mild to moderate patients as well, just to sort of lower the barrier there. There are a number of patients who really do not want to take injectables. It is important to realize that hypoparathyroidism is also a lifelong condition, and a number of patients that may already be well controlled on injectables, over the long haul may want to switch to an oral anyway.
We think oral is not something that necessarily should be discounted. Once we show that we are able to have effects on the PTH receptor biology, we hope we are able to show additional effects beyond just calcium control. There are some learnings from the earlier trials that may lead us to looking more closely at some other endpoints, like urinary calcium and other patient symptom-based markers.
Got it. Given the fact that it is an oral, how important is it to essentially recapitulate a YORVIPATH efficacy profile? Is there margin to be even slightly less effective and still be very successful commercially?
Yeah. We are going to be aiming for that profile or better. Whether or not there's room to be not quite as good, I think we'll worry about that if we get there.
Fair. Then maybe just talk about CNS penetration and how important that is, or not important you think that is, and what's the level of evidence in terms of PTH therapies?
Yeah. This is a question that does come up quite frequently. We don't think there's any evidence that CNS levels are important. We think that the main receptor for PTH's activity is the parathyroid hormone 1 receptor, PTH1R, which is present in the bone and the kidney. That's where it has most of its effects on controlling calcium. It also controls phosphate as well. That's an important thing that isn't talked about a lot. One of the reasons people have started to focus a little bit on the CNS is that brain fog is an associated symptom for a number of patients, and there is a second receptor called PTH2 receptor that's in the brain.
Although PTH2 receptor's in the brain, its main ligand is actually a different peptide. It's not PTH. It's a peptide called TIP39. TIP39 is also in the brain. Both that receptor and that ligand are in the brain, and there's no evidence to date at all of the role of PTH going into the brain and hitting that receptor and having some effect. On the other hand, if you look at brain fog as a symptom, a lot of it really could be explained by calcium control as well as phosphate control. Both of those things have been shown to affect cognition and memory and things like that as well.
Got it. Maybe just to revisit the 786 experience. Ran into some trouble on the safety side, but you were already dosing patients, right? I guess, what did we learn from that? In terms of the trends that you were already seeing on endogenous PTH suppression and calcium increases, were you seeing things like, was it kind of acting as you would expect from a PD perspective and outside the safety?
Yeah. 786 was tracking actually quite nicely. Although we never disclosed the actual data, we were seeing early signs of on-target pharmacology. We saw endogenous PTH going down, just as I had mentioned earlier, and calcium levels beginning to go up. We didn't think we were quite at the level that would be a starting dose when this unfortunate off-target effect kicked in. But potentially the most important thing we learned is that a small molecule can mimic the effect of a peptide.
Yeah.
That gave us confidence going in with 479, even though 479 is a completely different molecule, completely different structural series, so a completely different binding pocket. In our preclinical models, it does everything like a PTH peptide.
Got it. Then again, just kind of revisiting our prior comments, but just spell it out. I mean, if the data looked good in the first quarter, that's probably very predictive of being successful in phase II, phase III. Is that a fair statement?
I think that is a fair statement. This is a target where there's actually been excellent correlation from animal models into healthy volunteers into patients. Every molecule that has gone along that pathway continues to work. We do think that our phase I healthy volunteer data, if it shows the magnitude of effects that we just talked about a minute ago, we think that should bode quite well for working in hypoparathyroidism patients. The physiology is exactly the same in the bone and the kidney in a hypoparathyroidism patient as a healthy volunteer.
Excellent. So you brought up osteoporosis. I remember during the IPO, you guys were talking about that, and if there's some regulatory changes and things like that might be an opportunity. So maybe talk about that. Your program is very early, but maybe just talk about in your experience with PTH and how that's all relevant to osteoporosis.
Yeah. Our learnings from having worked on PTH for a number of years we think are going to bode quite well in this osteoporosis program. With regard to PTH, it's well established as an anabolic therapy for bone formation in osteoporosis patients. There's injectable peptides. One of the things that we know we need to do is make a shorter acting drug. We now have a three-four day half-life drug for hypoparathyroidism. But for osteoporosis, we need basically a short pulsatile delivery that could be anabolic to bone formation. Our team's been actively working on making shorter acting molecules, so it will have to be a completely different molecule than 479, just for clarity.
In terms of what we had talked about a couple years ago in terms of regulatory changes, things have played out almost perfectly as to what we were hoping for there. The FDA, a little over a year ago, or a little less than a year ago now, changed their regulatory guidance in terms of allowing bone mineral density as a surrogate biomarker in registration trials. Terns Bio has been paving the way there in terms of getting the FDA to agree to such an approach. What that does is it allows a much smaller clinical trial. We don't need thousands of patients. We also don't need to wait to have an event driven trial looking at fractures.
We think that's a major breakthrough in the osteoporosis field, and we're excited to see a lot of interest from others in the field and excited to participate ourselves.
I guess you have to choose a development candidate. You got to kind of move forward with the early stage program. But is this something that you would do yourself now because it's a bone mineral density endpoint versus having a huge spend to run an event driven trial? How far can you take it? I presume that there's going to be a lot more interest now in this space where it's been kind of left, not for dead, but just little innovation because it was a huge indication undertaking for small companies.
How do you think that will evolve and how do you guys think you guys will approach it?
Yeah. At this point, we believe we can take it well into development and possibly further than that. We will have to think about what Septerna as a company looks like a few years from now, but I think this could fit really well into our future portfolio. At some point down the line, we may want to have commercial partners to share in the commercial load because osteoporosis is so prevalent. But I think in terms of getting it all the way through clinical development now with the size of trials that may be feasible, we could take it all the way.
Got it. Maybe shift gears off PTH to MRGPRX2. We saw the readout for Evommune's X2 program and prior the Escient data. I guess where do you think the field is now on this target? You guys have thought about essentially de-emphasizing or deprioritizing at least CSU, but how should we think about this asset as part of your pipeline portfolio?
Yeah. We are actually still very excited about this asset. We believe we have got a compound that we think has the best in class profile. It has got great pharmaceutical properties, once a day drug, 24-hour half-life, very safe in phase I, and importantly, we were able to show a very strong pharmacodynamic effect in our phase I trial. The trick with this target, though, is figuring out what the right indications are. There are a ton of mast cell driven diseases, and they may differ from each other in terms of what the appropriate ligands are, what the appropriate amount of receptor inhibition it needs to be. One reason we are excited about our compound and why we think we potentially have the best in class profile is our ability to completely turn off the receptor. This drug is a negative allosteric modulator.
What we've been able to show is that the compound, when it binds to the receptor, causes a structural rearrangement that completely blocks the receptor's ability to bind to any endogenous ligand. This is a receptor that also has literally dozens of endogenous ligands, all kinds of neuropeptides, inflammatory mediators, and such. We think it could actually be really important if we can just find the right indication. So where's the field? I think the field is looking for the right set of indications here.
Although we've decided to not do a full-blown phase II-B CSU trial after Evommune's and Escient's results, we do think that there is still a possibility that a better compound could work in those indications as well as other skin indications. Our strategy, obviously that's higher risk now, but our strategy is now to try to survey the landscape of indications as cost-effectively as we possibly can. We're looking at fairly capital efficient signal finding trials across a variety of different indications. We're looking at indications where there's good evidence of mast cell involvement in the disease, good evidence of the target being present in those tissues, and ideally, as we select indications to survey different tissue types.
At this point, we're still doing our work, trying to figure out which indications to go after. But hope to have more to say about that in the coming months.
What do those trials look like? Are they individual small phase II-As, or are you talking more like a basket trial? How do you approach that to generate at least POC and get people more excited about the X2 and the biology?
Yeah. Although it may functionally be like a basket trial, it would probably be more like individual phase II As in reality, because the indications, the investigators, the sites could be different from indication to indication. But we're looking on the scale of dozens of patients as opposed to hundreds. As we're designing these trials, we're hoping to find a pretty clear signal in each of those indications to justify the larger investment in the multi-hundred patient phase II trials.
Got it. Okay. I guess do you think some of the, we'll be getting data for atopic derm, I think, from Evommune fairly soon. Do you think that has solid rationale for AD, or do you think that's less priority for you guys in terms of the mast cell biology in AD?
Yeah, we've decided to not prioritize that one initially. Obviously, if they show great data, we'll.
Revisit?
Yeah, we'll absolutely revisit that. We thought within the skin conditions, the urticarias had a little more rationale. However, one of the main features of atopic dermatitis is itch. This receptor actually could play a major role in itch. The jury's out, we'll see what their data shows and then decide where to go from there.
Got it. I know you highlighted a little bit earlier the TSHR NAM that you guys are working on. Maybe provide a little bit more detail there and the opportunities that you see within potentially Graves' and even beyond in TED and things like that. I guess what has been the trick of really trying to drug this with an oral?
Yeah, the TSH receptor, which is the main receptor responsible for all the symptoms associated with both Graves' disease and thyroid eye disease. Both those conditions are autoimmune conditions where patients develop autoantibodies that bind to the TSH receptor, cause hyperthyroidism in the thyroid gland, proptosis behind the eyes. This receptor's turned out to be a tricky one for us. It's one that we've been working on for multiple years. We've developed, in the past, a number of compounds that do exactly what we would hope to do, which is to prevent the receptor from being activated by a whole variety of different patient antibodies. One thing that everybody should remember here is that every patient develops their own autoantibodies. They're often polyclonal as well.
They're high titer, high affinity, so you need a drug that can really turn off several things at once if you're going to do that. Although we've found those previously, we've had trouble optimizing the pharmaceutical properties and potency at the same time. We've had compounds earlier where we shared some data that worked quite well, however, the doses would've been probably too high. What we've worked on over the last year or two is trying to figure out how to thread that needle. How can we get the optimal potency and the optimal pharmaceutical properties to have a reasonable human dose? We now think we've got line of sight to that sort of development candidate and hope to have more to say about that in the coming months.
Understood. As you envision the development path there, is that similar to what you need to do with the 479 and multiple, trying to figure out titration and dose? Or do you think you'll have a better sense of how to dose this route because we also have precedents with TSHR antibodies that are currently in development?
That's a good question. One interesting parallel to draw with the 479 program is that we think there's going to be phase I biomarkers that are actually quite relevant. In the PTH program, which we just talked about, we're expecting to see endogenous PTH levels to go down. The TSH receptor has almost the same thing, but just the opposite. In the case of the TSH receptor, TSH levels should go up with our drug.
That's something that should allow us to have a really solid signal in phase I that, again, should be predictive of future effects once we get into Graves' disease patients and thyroid eye disease patients. The thyroid space in terms of development is actually one that hasn't had a new drug approved in 30- 50 years. I can't remember when it was. It's been a long time. There are a number of companies now trying to establish what that development path is going to look like, whether it's Graves' disease, thyroid eye disease is a little more established now, but on the Graves' side, this is something that needs to absolutely be figured out as we go. But we've got some ideas there that we'll share as we get further on.
Excellent. Then maybe just talking about the Novo collaboration and some of the programs that you've generated there, I guess how should we think about next external visible milestone that we can kind of understand where that program is kind of trending and ultimately the value that can come to Septerna?
Yeah. So just maybe a little bit of reminder on what that collaboration involves. It involves five targets, three of which are disclosed. That's GLP-1 receptor, GIP receptor, and glucagon receptor. There's two other named but undisclosed targets. It involves four programs running at any point in time. We think that this collaboration does have a lot of potential high future value for the company. We received a nice upfront payment. Unfortunately, in terms of sharing data and where we are on that's really in Novo's hands. They control all external communications, which they bought the right to do. But one thing that if investors want to sort of track how things may be going in the absence of that is to track our financials.
In addition to the $195 million upfront, over the course of just the first year of the collaboration, we've had over $40 million in reimbursed expenses, R&D expenses, as well as a few smaller research stage milestones that have come through. So that's one way to sort of track things. We're excited about the progress so far and we believe that the Novo leadership team is as well.
Got it. So you think at least it seems like things are progressing and that remains a fairly decent priority for you.
Yeah. Progressing very well.
Got it. Okay. Then just kind of from the broader platform perspective, you talk about new programs that you'll disclose. I guess talk about the utility of kind of your Native Complex Platform, how versatile is it and other types of value creating things. So whether it be developing new candidates that you guys will take forward yourself or developing partnerships around the platform.
Yeah. We've been really pleased with the Native Complex Platform. It's a platform that we developed completely from scratch at the beginning of the company, first starting in 2020, and we continue to invest in the platform even to today. What it has shown us over and over again is that we're able to drug previously difficult to drug GPCRs. In fact, for every program that we've started to date, we've been able to find a molecule with the exact profile that we want, and often more than one molecule. One testament to that is the PTH receptor program, where we found not only one way to activate a very difficult to drug receptor, but two completely different ways to activate it. All of our other programs, I could say the same thing.
What we've found more often than not are basically cryptic inducible pockets within these receptors that the world didn't have a way of finding previously. We've got a lot of structural biology technology within the platform. In fact, we've probably solved close to 200 high-resolution 3D structures of proteins at this point in time. This drives structure based drug discovery in an unprecedented way. Again, we think a couple of the killer applications are small molecules for peptide GPCRs, allosteric modulators, both negative allosteric modulators as we've talked about in the case of X2 and TSH receptor, but also positive allosteric modulators. We've been able to find those. We've been able to find antagonists. Again, we think that there's a huge number of indications.
From a target strategy, our approach has been largely focused on well-validated targets, ones where there's a good biological story to it. All the programs we've talked about today at least have some solid biology behind them. We do think there's also opportunities for orphan receptors. We've got some techniques there. But for the most part, we're focused on well-validated targets. Beyond the ones that we've disclosed today, we have a handful of other programs that are at earlier stages in the works, and as they start to hit certain points of maturation, then we'll add them to the pipeline.
Excellent. We get this question often, but with the Native Complex Platform, how much is IP protection around the platform versus kind of technical knowhow?
Yeah. It's both. One of the major forms of IP is trade secrets. We continue to build technologies even to this day. We've got new parts of the platform that we've introduced just this year. We're not talking about those, but they've enabled us to move a lot of things forward as well.
Got you. Just kind of the question, like for 786, how did that experience, that reset around that molecule kind of change the way you select these future candidates and how you're kind of evaluating them. You did a really kind of good, I don't know if I want to say like postmortem on 786 in terms of going back, really understanding how that safety signal emerged and even developing maybe more robust animal testing to kind of make sure that it's not going forward. So how have you kind of taken that experience and are you applying it to new molecules?
Yeah. We think that 786 experience is really quite molecule specific. At the end of the day, we just happened to run into an unexpected finding. We'll never run into that particular unexpected finding again. We've introduced that into our system. But just as we've been going, one of the things that it does emphasize is always having sort of backup and follow on compounds. What the Native Complex Platform has allowed us to do is to have structurally distinct backup compounds. Just in case we happen to run into an unexpected finding. We happen to be in a great position when the 786 event was observed, and we want to be in equally good positions for other compounds. But another set of development philosophies that as our company has matured, we're starting to integrate into all of our programs.
We're starting to move forward chronic toxicology studies just generally early in our development path. I didn't mention this for 479, but we have already started chronic safety studies there. It's one, to de-risk the compound, but also importantly, we think that as we get quickly from phase I, sort of biomarker driven proof of principle, we want to be able to go into phase II studies with patients that we can do open label extensions. Having that chronic toxicology study early will allow us to be more efficient in development there.
Another thing that we've started to do really for all of our programs is to enter phase I. Often we'll enter that with a capsule formulation, but we try to get to tablet formulations as fast as we possibly can. For 631, as an example, we had a tablet formulation even before starting phase I, which we think will allow us to speed things along in development.
Got it. Is 479 a capsule currently, and you are shifting to tablet or?
We have got both.
You have got both. All right.
Yeah.
Okay. Are those both being tested in the phase I?
Yeah, they're both being tested in phase I.
Got it. Will you split out the data to see both, and do you expect any major changes between the two?
No, we don't expect major changes. We'll share all that data.
Excellent. Cool. Anything else that we should be looking forward to in 2027 beyond 479? That seems like it is the key update, but maybe just sketch out for us how the next 12- 18 months look.
Yeah. So, obviously, lots of focus on 479. As I mentioned, we are hoping that the TSH receptor program starts to become an important one for us in 2027. Hopefully somewhere along the way, we will share some preclinical data on the osteoporosis program, as well as updates on the MRGPRX2 program. Who knows? Maybe there is another program that emerges as well.
Great. Well, Jeff, we will leave it there. Thank you so much.
Yeah. Thanks again.
Great. Good to see you. Thanks, man.