Welcome, everyone. I'm Josh Schimmer from the Cantor Biotech Equity Research team, and very pleased to introduce from Septerna, we have Jeff Finer, Co-Founder and Chief Executive Officer, and Liz Bhatt, President and Chief Operating Officer. Welcome. Jeff, maybe set the stage for us. Give us a quick overview of where Septerna is today and where we're headed.
All right. Well, real quick, I do have a few slides to just share. Septerna's a company focused entirely on G protein-coupled receptors. We found a new way to do drug discovery for GPCRs that has allowed us to find novel binding pockets and novel compounds for traditionally difficult to drug GPCR problems, like finding small molecule agonists for peptide GPCRs or finding allosteric modulators. That has quickly evolved into this pipeline that I'm sure we're going to spend most of the time talking about today. Our lead program is called SEP-479. It's in a phase I study for hypoparathyroidism. We'll have a lot of discussion there. SEP-631 targets MRGPRX2 for mast cell-driven diseases. It's a negative allosteric modulator. That one is through phase I. We showed that we had a profile that we think is a best-in-class profile there. It's between phase I and phase II.
Behind that, we've got our thyroid-stimulating hormone receptor program. This is one that's been on our pipeline for a long time, but one where we now believe we've got line of sight to a development candidate and hope to have a lot more to say about that in the coming months. The newest addition to our pipeline is the fourth line there. We announced that we've got a very early stage, it's discovery stage as an osteoporosis program.
That whole area is getting quite hot. Here, we want a short-acting PTH agonist compared to the long-acting PTH agonist for hypoparathyroidism. We've also got a really quite a substantial deal with Novo Nordisk focused on metabolic targets. There we discovered novel binding pockets for a whole variety of different incretin receptors. Got Novo excited. We're sitting in an excellent cash position. At the end of the second quarter, we had about $516 million, which gives us runway at least into 2029. We're in heavy execution mode at this point.
All right. A lot to talk about then. Why don't we start with 479? One of the most common questions I get, which is actually a really telling question, which is, by the time that 479 gets to the market, will the injectable PTH replacement therapies for hypoparathyroidism be so entrenched and so sticky that there isn't necessarily a role for an oral drug? What's so interesting about that is we're already jumping to the assumption that the development is going to go very smoothly, and you'll hit all the clinical hurdles and regulatory hurdles. What gives you the confidence that this is the molecule that really can go that distance?
Yeah. First off, maybe I'll say a little bit about the molecule, and then Liz can frame how it fits within the space. We've got a molecule that from the very beginning was designed to basically phenocopy a PTH peptide. It's proven to do so in all of our assay systems. Cell-based assays, animal models, it's doing everything indistinguishable from what a peptide does. PTH receptor's been a traditionally very difficult one to hit from a small molecule standpoint, but we think we've cracked it. The effects that we've seen in animal models for all other PTH agonists have translated to healthy volunteers, and those have translated to patients. Back to your point. I think we've got a lot of confidence going from animals to now healthy volunteers.
Hopefully we'll see in the coming months that data to show that we can hopefully go the distance. In this particular program, the healthy volunteer data should be actually quite predictive of working in patients. Healthy volunteers are just a little bit different than hypoparathyroidism patients in that healthy volunteers have intact parathyroid glands. The endocrine system is so efficient that the first thing we expect to see is decreases in PTH secretion to counteract anything that would push calcium up, and then calcium consequences after that. Back to your main question. Liz, do you want to comment on?
Actually, maybe before we get there.
Sure
If you can finish out the development milestones and walk us through the key steps ultimately to being in a position to file for approval.
Yeah. So maybe I'll just quickly go here, flip ahead to this slide, which is an outline of our phase I study. It's a single ascending dose, multiple ascending dose design. It's a very standard study. We are looking obviously at safety, tolerability, PK. We gave a preview of the PK. We've got a very long half-life. So the half-life is about three o four days, which is, we think, in an absolute sweet spot. If you look at Yorvipath, their effective half-life's about 2.5 days, and so this is quite nice. So from this phase I study, we want to see, as I mentioned, PTH going down, calcium going up. We want to be in a zone that we think would be an appropriate starting dose for a hypoparathyroidism patient.
We will try to pivot from this study as quickly as we can to a patient study. This study is being done in Australia. We are thinking currently about a global phase II study, and in order to do that, we'd go into different regions. We will need phase II ready IND to be in the U.S. That will have to include all the phase I data. We've also decided to go forward with trying to get chronic toxicology studies out of the way. The reason for that is that once we are in patients, we would like those patients to be able to continue on the drug. So we are going to be planning for an open label extension on that phase II study. The goal of the phase II study, they're fairly focused goals.
One is to show that it works in hypoparathyroidism patients, but also we want to know what the starting dose would be for a pivotal study. So we'll probably test a couple of different starting doses. Most agents have tested two or three starting doses in that first patient study. We want to know, importantly, what the titration protocol is. Fortunately, since our half-life's on about the same scale as Yorvipath, we can kind of leverage their learnings there.
Okay.
Then we would go into a pivotal study. These studies aren't that large in the grand scheme of things, on the scale of about 100 patients or so.
Okay. You don't feel like you could size up phase II to turn it into a pivotal, or?
Those two combined, they're going to be functionally the same design, at the end of the day. If we happen to nail the starting dose, the combination of that phase II plus that additional patients in phase III, that whole combined set will probably look like a bigger study. Hopefully they should be somewhat combinable.
How big and how long would a phase II be?
Phase II, we're talking kind of dozens of patients and probably about a 12-week dosing period.
These would be untreated patients?
Most likely patients that are on standard of care calcium and vitamin D supplements.
How might you think about establishing a database to facilitate a conversion from a patient who is on some form of PTH replacement to 479?
Yeah, it's a great question. We are trying to think about, somewhere along the way in the development of 479, we'll probably want to do a switch study. Exactly when we do that remains to be determined. The phase II study, we think there's going to be enough people out there, we should be able to do that with just people that aren't on injectable therapies. We are currently thinking that most of the phase III is also those untreated patients.
However, we may consider a parallel study, either at the same time as that phase III or even a post-marketing study to basically teach physicians how to switch from injectable peptides to an oral therapy. If we think about the titration protocol just to get somebody onto one of these drugs, it's kind of complicated. You got to take the drug up. You got to take the supplements down. There will be a different type of titration protocol to go from an injectable to an oral.
In terms of a development program, and particularly maybe thinking about more severe patients who should not be on a placebo, given the availability of Yorvipath, as you kind of indicate, how do you think about designing a trial to account for that dynamic? Would there be a Yorvipath control? If not, how do you think about addressing severe patients who, as I said, shouldn't necessarily be on a placebo control arm of a trial?
Yeah. That's a very fair question. I think you have to have a reasonable crossover period. This would play into our phase II study as well. Anybody who's on placebo that doesn't seem to be working as that placebo is being-
It's like rescue.
dose escalated, should have an opportunity to switch over to the active arm.
Get. Oh, active. Okay, so not necessarily a rescue, but a switched. It's kind of a rescue in some sense.
Yeah, it's switching from a placebo that isn't working to-
Okay. Yeah.
the drug.
I guess encaleret is now moving forward into a phase III trial for the broader hypo PTH population. How do you think about the relative positioning, I should say, between 479 and what ultimately encaleret might look like, recognizing we don't have all that data?
Yeah. I'll go ahead and jump in on this one.
Yeah, sure.
Encaleret, one thing to remember is a different mechanism of action. Calcium sensing receptor inhibitor, really initially designed for the ADH1 patients. One of the key things for that mechanism to work is that you have to have parathyroid tissue to actually be able to produce PTH. One of the key questions for post-surgical patients, which is where they're going, is there enough residual tissue to certainly be able to produce PTH to be able to work in that particular patient population? So far, there's only been a little bit of data to suggest that. Really what's going to be important is the phase III study to kind of see how it really behaves in a broader post-surgical patient population. The other key thing to remember here is that the endpoint is also different. The endpoint for this particular study is more around serum calcium as well as urinary calcium.
Doesn't really look at the withdrawal of standard of care as well, which again is an important component for post-surgical patients as well. Again, options are good for patients, but I think we're really going to have to see what the phase III data shows. At the end of the day, we believe a true PTH replacement for post-surgical is really what patients really are going to desire to really get the entire complement of what they're really missing as a result of the surgery.
One of them, we come to the issue of your launch is still a few years away.
Right
At which point PTH injectable replacement therapy will be, to some extent, entrenched. How do you think about commercializing in that dynamic and where the easy inroads may be versus the harder ones?
Yeah. I think the first generation of peptides are a good thing for patients. Obviously, it's been certainly a huge innovation beyond the original peptides that have been approved for the disease. I think what's key to remember, though, is this initial bolus of patients are really the most severe patients. The patients who, even under current standard of care, calcium and vitamin D, can't get in control. They may be ending up in the emergency room, either due to hypercalcemia or hypocalcemia, and so they're certainly seeing the benefit of it, but there's a whole host of patients as well that are maybe generally under control most of the time, but may be having breakthroughs. They still may have urinary calcium issues. They may still have a very high pill burden as it relates to their standard of care.
But the key thing is, they're just not ready to go on a daily injectable. I think that's really kind of where the barrier is. You have to remember, these patients, very young when they have the surgery, they're going to be on therapy for decades, 30, 40 years. Many of them at that point in time really want the most convenient option to be able to manage their disease. As we've talked to both patients and physicians, some patients, as they hear that an oral is coming, they want to wait to see what's available. It is something that we're going to be thinking about is what is our enrollment criteria relative to our studies. Maybe going back to something that Jeff said earlier as well, but even the severe patients.
The severe patients who are on the once-daily injectable may, at the end of the day, say, "I'd much rather be on an oral to control my disease." That's really the genesis for thinking about a switch study, is to really safely educate about how you can move between the injectables to the orals as well. Yes, I think they're entrenched. The good news is they're helping to develop the market and raise the awareness. I think we have the opportunity to provide another option for patients and actually expand the treatable patient population as well.
Yeah. 479 really should work across the board. It should work for the severe patients as well as the mild patients.
A little bit early to be contemplating price dynamics, but would there be much reason to drift much away from where Yorvipath is?
Obviously really early to discuss that. We have a lot of work to do between now and then, and then looking at the clinical profile. Yeah.
How are you thinking about ex-U.S. commercialization?
Yeah. This is a disease that's seen globally as well. Certainly a lot of other patients. I think Yorvipath is approved now in about 35 different countries. They're getting pricing approval across those as well. The needs of those patients are the same, obviously. I think what's going to be really critical as we think about the dossiers that need to go in for pricing, is to make sure they're comprehensive, to really talk about the benefits, certainly for patients, the improvement in productivity, the lost work, less hospitalizations, really kind of making the real case as it relates to the benefit associated with it. So again, as we continue to develop the drug, this is not just focused on the U.S., we're thinking globally as well.
For the osteoporosis program now, I guess the landscape has shifted a bit with Entera having a path forward.
Yeah
For osteoporosis approval using DEXA endpoints, which is a very important update for the field. As you're kind of moving forward with this program, I'm guessing you're envisioning similar development path. How though do you differentiate versus Entera and their first-mover advantage?
Yeah. Again, I think it's been a great shift for the field. Certainly with the change in the legislation at the FDA being able to accept BMD as an endpoint now, as a surrogate, and move away from fractures of, well, probably soft tissue fractures long term. Being able to see what a study design looks like as a first mover, I think is really critical for the field now being able to do more of a 12-month study, much smaller in number as well. Entera's program is an oral peptide. Again, it's a PTH program, and again, it's an opportunity to be able to see improvement in osteoporosis. Oral peptides have historically had more challenges in terms of getting good bioavailability, in terms of drug in, as well as consistency as well.
Again, I think this is going to be another one where the results, I think, will be very informative for us. Jeff can describe a little bit about kind of the characteristics of what we want to think about relative to an osteoporosis program. But we're confident, given what we know about the biology around PTH, if we can get the right profile, that that's really going to be a huge opportunity for patients.
I think what's also become clear in the field beyond just the change in the regulatory environment is that being able to treat patients with anabolic agents sooner is something that's actually something that the physician community is really beginning to push for. A challenge right now is most of the anabolic agents are all injectable, so they're daily injectable or monthly injectable with potentially some challenges. If you have an oral once-daily anabolic agent that builds bone from the outset, it coincides well with the changing in the landscape from a development perspective as well.
Yeah. One additional comment related to Entera. My guess is that they are going to have a food effect that may be significant. Again, if this is a therapy that somebody is going to have to take for a long time, having a daily pill, something as simple as that actually could make a big difference for patients if you have to really change your habits. This is a very early-stage program for us.
Yep.
We have got a lot of experience in the PTH space, as you guys know. For hypoparathyroidism, we made a long-acting compound that we just mentioned. For osteoporosis, we want a short-acting compound. There is something about bone biology that is not totally well understood, but what is understood is that pulsatile PTH activation can be anabolic for bone. We are excited enough about this space that we decided to add it to our pipeline.
One question I get a lot in conversations with investors, and now actually, it will be relevant to the PTH program, but it pertains to the Graves' and thyroid eye program. It is such an obvious, promising approach. It is part of why I love endocrine, because there is almost no target risk, and paths to forward are very clear. The question I do get asked often is, why is it taking so long to come up with a lead? Maybe as you kind of address that, maybe talk a little bit about how you leverage the GPCR targeting platform to come up with candidates and kind of the steps that you need to work through that may take perhaps a little bit longer than traditional development programs.
Yeah. I think this one has taken time for a reason that is not really generalizable.
Okay.
So maybe just to set the stage here. This is a challenging small molecule drug discovery challenge. We've got an autoimmune disease where patients are making autoantibodies to the TSH receptor, and usually they're not making just one. They're often polyclonal. Every patient makes their own antibody. You don't want a different drug for each patient. So what we decided to do is come up with an approach where we're targeting the transmembrane domain of the receptor, which is shown here. All the antibodies are binding to the extracellular domain. And we wanted a compound that would basically prevent those autoantibodies from over-activating the receptor. Along the way, one of the reasons that it has taken a long time is that we've had a number of compound series that had the right effects. They had the right effects in animals, as I'm going to show you here.
This is a Graves' model that we developed in-house where we treat a mouse with an autoantibody. The animals' thyroid hormone levels get up, the thyroid size gets enlarged, the eyes became proptosis. We were able to reverse this. But this compound here, which works really well, didn't have adequate pharmaceutical properties. The human dose projection would've been over 1 gram a day, and that just wasn't viable.
For this particular program, the reason it has taken some time is that we had to optimize both the potency and the pharmaceutical properties, and for multiple different compound series, those moved in opposite directions. And it has been tricky, but we now think we've cracked it. We think we've got something very close to a development candidate that we're putting through its paces. We hope to have more to say about that again in the coming months, but we anticipate this really should be an important part of our portfolio next year.
I guess the implication then is that the PTH osteoporosis program, coming back to that, may move faster than the TSH.
No, I think at this point, given where they are.
I do not mean move past, but just move along at a faster pace since you kind of got a little slowed down with.
Oh, yeah. No, I would expect the osteoporosis, just because of our experience in the PTH receptor, we should be able to leverage that. That one should go more quickly to get to a candidate quality molecule.
As you advance the TSH program into the clinic, again, one of the things I love about the endocrine space is how quickly you learn if you are on the right path or not. How do you think about designing a trial, either in healthy volunteers or adults, to really show the efficacy of the product, also while safeguarding against a hypothyroid state?
Yeah. Great questions. This program should look a lot like the PTH program, the hypoparathyroidism program. As we mentioned in that program, endogenous PTH goes down because the endocrine systems are efficient. There is another efficient loop here, which is TSH secretion. In a healthy volunteer, we would expect TSH to go up. We think that readout is going to be very equivalent to our PTH going down in the hypoparathyroidism patients or the healthy volunteers in the case of that molecule.
As we are designing our first trial, we are thinking about healthy volunteers first, and then obviously trying to get into Graves' patients after that. To your question about overshooting, in the endocrine space, there is a lot of discussion about TSH receptor antibodies and such. Those are going after a strategy that is pretty much block and replace. Block the receptor. Thyroid hormone replacement is actually dirt cheap. It is easy to do. With that said, those will all be injectable antibodies, or they are going to have injections, plus they are going to have a daily pill on top of that, which is thyroid hormone replacement pills. We may do that as well, but we do think there may be room to play to potentially titrate it into the right range.
Okay. My understanding is that for thyroid hormone replacement, there can be variability in absorption from patient to patient and at least one company is taking an injectable path to addressing that. I do not know if it makes any sense for you to contemplate a thyroid hormone analog, kind of like PTH, or is that not a path you would consider?
We have not thought about that.
Could consider that.
Yeah.
Yeah. No, that-
All right. Excellent.
That's interesting. Why don't we come to MRGPRX2? I guess, a bunch of lessons from the Evommune program and biology not necessarily playing out in the way that we had hoped. What are the lessons as you carry forward and try to figure out what the right application for MRGPRX2 inhibition may be, and how do you get to a signal sooner rather than later so you don't wind up spending a lot of resource in any dead end?
Yeah. First off, I think we've got a best-in-class compound profile. I think our molecule, we think is the best one at turning off the receptor, turning it off completely. We've got a unique mechanism that does turn the receptor completely off. The compound's on there for hours. We've got a 24-hour half-life clean safety profile from our phase I, and we did have a pharmacodynamic marker in that phase I that also was very robust. One thing that that phase I trial did indicate, however, we used a thing called an icatibant skin challenge. Icatibant is a drug for hereditary angioedema that has an off-target effect on this receptor. We've started to understand that receptor occupancy is actually a very important thing here.
Looking at these two figures here, one is with a low dose of icatibant, one's with a higher dose of icatibant, and what we're looking at is taking the baseline all the way down to saline as close as you possibly can. At the high dose of icatibant, you can see that there's a dose response, but there's also a dose response in terms of receptor occupancy. So that 10 mg dose there, it's got a 95% receptor occupancy. Mast cells are primed to degranulate. They have a lot of receptors on them. All you need is a little bit of sneak through to get a mast cell to degranulate. So that 95% receptor occupancy only got us halfway to saline. Down at the other end, we're at 99.9%.
And it's very possible that the drugs that have been in this space previously didn't have the ability to turn off the receptor completely enough or enough receptor occupancy to be effective. Now, with that said, with two existing failed CSU trials, back to your earlier point, we made a decision not to pour a lot of money into a third large CSU trial. Doesn't mean we won't consider a small one at some point in time, but we decided to instead focus more broadly on seeing if we could affect some other indications. Do you want to go?
Yeah. Our strategy now, since we took the decision to not do the large phase II study in CSU, is to think about how can we do smaller signal finding studies that are a little bit more capital efficient. Really try to interrogate the biology, maybe with just one or two doses in a short period of time, and really focusing on indications where we believe that mast cells are critical to a pathobiology, ones where we know that X2 is present there.
The challenge is really what is the design of that study? And what is the right endpoint to give you the confidence that by making that investment and getting to that endpoint, it's really going to be informative relative to the particular indication. As we know, activation of mast cells play a role across a variety of different diseases. The key questions is what's the role of MRGPRX2 within those? We're continuing to work through and trying to think about the biology piece, the clinical development piece, the opportunity at the end of the day as we map this out.
What might the role of biomarkers be in picking and choosing where to navigate through the array of indications you could pursue?
Yeah, I think each indication's going to have its own biomarkers in a sense. The idea is to learn from them as much as we possibly can. Maybe I'll just give you one example where we would have to probably do a little bit of trailblazing in terms of biomarkers is interstitial cystitis. Interstitial cystitis is a bladder inflammation condition. Very significant unmet need. With that said, very severe patients have been shown to have lesions on the inner wall of their bladder that are chock-full of mast cells.
Nobody's ever really studied mast cell markers in urine before, but you could imagine that if you had one, you could then start to use that as a biomarker for that indication. That's an example of one where we'll have to do a little more trailblazing. There are other types of indications where challenge studies have been used, like asthma or migraine. Those are some other things that we have in mind. Those are ones where, with a small study, we may be able to at least gain confidence.
Is tryptase a relevant CSU biomarker? What do we know from other MRGPRX2 inhibitors' effect on tryptase?
Tryptase is an important biomarker, but I think it is more of a marker of sort of total body mast cell mass, in a sense, activation, because mast cells are sort of releasing tryptase at a regular rate.
Yeah.
I think it was important for the mast cell depleters as a marker of just total amount of mast cells that you have. But whether or not it's important for a given condition is kind of an open question.
And then last, for the programs we have not spoken about, whether it is the Novo partnership or the earlier stage indications that you may be pursuing, what are we likely to hear about next?
Yeah, good question. We have a lot of things cooking behind these four programs. Maybe it is a good opportunity to comment a little bit on the Novo collaboration. Unfortunately, we do not have control over communication there, but that is a very robust collaboration. We are working on five targets, three of which are disclosed. We have identified a novel marker there, though there is a little bit of a trickle-through on our financials in terms of just some indicators there on milestones being met and things like that.
So that one, I am not sure when we are going to hear about it. With regard to programs below the line that we have not disclosed, we are excited about a lot of things. We are intentionally picking programs like these, where there is a good biology story and a phase I biomarker that could be meaningful. And so, hopefully, we will have more to talk about in the future.
Great.
Stay tuned.
Stay tuned. Excellent. All right, Jeff, Liz, thank you so much for joining. Thanks, everyone, for tuning in.
Yeah, thanks for the invitation.
Thank you