Bullish indicating open at $55-$60, IPO prices at $37
Tuesday, JPMorgan reaffirmed its Overweight rating and $38.00 price target for Septerna Inc (NASDAQ:SEPN), currently trading at $4.59, following the company’s decision to voluntarily pause a phase 1 study. According to InvestingPro data, analyst targets range from $38 to $50, suggesting significant upside potential from current levels. Septerna’s study of their hypoparathyroidism (HP (NYSE:HPQ)) candidate, SEP-786, experienced a setback when two participants in the highest dose cohort of the multiple ascending dose (MAD) study portion showed isolated Grade 3 elevated unconjugated bilirubin levels. This prompted the company to halt further testing of the compound.
The analyst at JPMorgan noted that while this development led to the discontinuation of SEP-786’s development, the adverse events did not indicate potential liver injury, cholestasis, or hemolysis and were resolved off therapy. The company plans to resume its clinical HP program with a new compound as early as late-2025, drawing from a range of oral PTH1R agonists currently in later-stage non-clinical development.
Despite the interruption, JPMorgan views the impact of the SEP-786 update as limited to the operational timelines for the HP program, without fundamentally altering the program’s likelihood of success. The analyst pointed out that early PTH biomarkers observed in the study could reduce the risk associated with Septerna’s overall oral-agonist strategy. InvestingPro analysis shows the company maintains a strong financial position with a current ratio of 10.08, indicating robust liquidity to support its development programs.
JPMorgan’s stance remains positive on Septerna’s prospects, with other pipeline programs and operational timelines reportedly unchanged. The research firm sees the current weakness in Septerna’s stock as an attractive long-term entry point for investors. Septerna’s immunology and inflammation (I&I) candidate, SEP-631, is expected to enter the clinic in 2025, which supports the firm’s recommendation to remain buyers of SEPN stock.
In other recent news, Septerna Inc. has discontinued its Phase 1 clinical trial of SEP-786 due to unexpected elevated bilirubin levels in participants. Despite this setback, the company is initiating non-clinical studies to investigate the underlying mechanism behind this occurrence. Septerna’s CEO, Jeffrey Finer, has indicated that the company plans to select a next-generation candidate from its portfolio of PTH1R agonists for future clinical trials.
On the financial front, as of September 30, 2024, Septerna reported having $137.5 million in cash, cash equivalents, and marketable securities. Post their IPO in October 2024, which raised $302.6 million, the company anticipates its current cash position will fund operations into the second half of 2027.
In addition to these developments, Cantor Fitzgerald has reaffirmed its Overweight rating on Septerna with a price target of $50.00. This rating reflects confidence in the company’s development pipeline, including their lead product, SEP-786, which is projected to reach $820 million in peak global sales.
Septerna has also announced the appointment of Gil Labrucherie as its new Chief Financial Officer, bringing over two decades of experience in senior finance and legal roles within the biopharmaceutical sector. Labrucherie’s appointment is expected to enhance Septerna’s financial and capital strategy.
These recent developments highlight Septerna’s commitment to overcoming challenges and maintaining its growth trajectory in the biotechnology sector.
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