Septerna Swings to Profit on Revenue Surge, Asset Sale

TL;DR

**SEPN's surprise profit is a game-changer, but don't forget the asset sale — watch R&D spend closely for sustained growth.**

AI Summary

Septerna, Inc. reported a significant financial turnaround for the three months ended September 30, 2025, achieving a net income of $8.173 million, a substantial improvement from a net loss of $20.523 million in the same period of 2024. This positive shift was primarily driven by a dramatic increase in revenue to $21.495 million, up from $176 thousand year-over-year, and a $12.500 million gain on the sale of a non-financial asset. Despite this, the company still recorded a net loss of $38.141 million for the nine months ended September 30, 2025, though this was an improvement from the $51.130 million loss in the prior year. Research and development expenses increased to $24.264 million for the quarter, up from $17.832 million, reflecting continued investment in its pipeline, including PTH1R agonist and SEP-631 programs. General and administrative expenses also rose to $7.117 million from $4.894 million. The company's cash and cash equivalents increased to $319.989 million as of September 30, 2025, from $238.196 million at December 31, 2024, bolstering its liquidity.

Why It Matters

Septerna's unexpected quarterly profit, fueled by a substantial asset sale and revenue growth, signals a potential turning point for investors in this clinical-stage biotech. While the nine-month loss persists, the significant increase in cash and marketable securities provides a stronger runway for its R&D programs, particularly the PTH1R agonist and SEP-631. This improved financial health could enhance its competitive position against larger pharmaceutical companies by allowing more sustained investment in drug development and potentially attracting further partnerships, ultimately benefiting employees through job security and customers through accelerated drug development.

Risk Assessment

Risk Level: medium — While Septerna reported a quarterly net income of $8.173 million, this was significantly bolstered by a one-time $12.500 million gain on the sale of a non-financial asset. The company still reported a net loss of $38.141 million for the nine months ended September 30, 2025, and its research and development expenses increased to $65.723 million for the nine-month period, indicating ongoing significant operational costs typical of a clinical-stage biotech with no commercial products.

Analyst Insight

Investors should closely monitor Septerna's future revenue streams and R&D progress, particularly for its PTH1R agonist and SEP-631 programs, to determine if the recent quarterly profit is sustainable without one-time gains. Consider this a speculative buy for those comfortable with biotech risk, focusing on pipeline milestones rather than short-term profitability.

Financial Highlights

debt To Equity

N/A

revenue

$21.495M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$8.173M

eps

$0.18

gross Margin

N/A

cash Position

$319.989M

revenue Growth

N/A

Key Numbers

• $8.173M — Net Income (Q3 2025, a swing from -$20.523M in Q3 2024)
• $21.495M — Revenue (Q3 2025, a significant increase from $176K in Q3 2024)
• $12.500M — Gain on Sale of Non-Financial Asset (Q3 2025, a one-time boost to income)
• $24.264M — Research and Development Expenses (Q3 2025, an increase from $17.832M in Q3 2024)
• $319.989M — Cash and Cash Equivalents (As of Sep 30, 2025, up from $238.196M at Dec 31, 2024)
• $38.141M — Net Loss (Nine Months) (Nine months ended Sep 30, 2025, an improvement from -$51.130M in prior year)
• 44,774,192 — Shares Outstanding (As of November 4, 2025)
• $0.18 — Basic EPS (Q3 2025, a positive shift from -$8.40 in Q3 2024)

Key Players & Entities

• Septerna, Inc. (company) — Registrant
• Novo Nordisk A/S (company) — Strategic partner
• SEC (regulator) — Securities and Exchange Commission
• FDA (regulator) — U.S. Food and Drug Administration
• $8.173 million (dollar_amount) — Net income for Q3 2025
• $20.523 million (dollar_amount) — Net loss for Q3 2024
• $21.495 million (dollar_amount) — Revenue for Q3 2025
• $12.500 million (dollar_amount) — Gain on sale of non-financial asset for Q3 2025
• $319.989 million (dollar_amount) — Cash and cash equivalents as of Sep 30, 2025
• PTH1R agonist (person) — Product candidate program

FAQ

Risk Factors

• Dependence on Future Financing [high — financial]: The company has a history of net losses and may require additional capital to fund its operations and development activities. As of September 30, 2025, Septerna had $319.989 million in cash and cash equivalents, but ongoing research and development expenses of $24.264 million in Q3 2025 and general and administrative expenses of $7.117 million could deplete these reserves without successful product commercialization or further funding.
• Drug Development and Regulatory Approval [high — regulatory]: Septerna's success is contingent on the successful development and regulatory approval of its drug candidates, including the PTH1R agonist and SEP-631 programs. The lengthy and complex regulatory process, including clinical trials and FDA review, presents significant risks of delays or failure, which could materially impact the company's financial condition.
• Research and Development Execution [medium — operational]: The company's R&D expenses increased to $24.264 million in Q3 2025 from $17.832 million in Q3 2024, indicating significant investment. Failure to effectively manage and execute these R&D programs, or unexpected scientific challenges, could lead to substantial financial losses and hinder pipeline progression.
• Competition in Pharmaceutical Market [medium — market]: The pharmaceutical industry is highly competitive. Septerna faces competition from established companies and emerging biotechs with similar therapeutic targets. The success of its drug candidates will depend on their ability to demonstrate superior efficacy, safety, or convenience compared to existing or developing treatments.
• Burn Rate and Cash Runway [medium — financial]: While cash and cash equivalents increased to $319.989 million as of September 30, 2025, the increased operating expenses, particularly R&D, contribute to a significant burn rate. Management must carefully monitor cash runway to ensure sufficient funds are available until profitability or further financing is secured.
• Intellectual Property Protection [medium — legal]: Protecting intellectual property is crucial for a biotechnology company. Any challenges to Septerna's patents or proprietary technology could jeopardize its competitive advantage and future revenue streams.

Industry Context

Septerna operates in the highly competitive biotechnology and pharmaceutical sector, characterized by long development cycles, significant R&D investment, and stringent regulatory oversight. The industry is driven by innovation in drug discovery and development, with companies focusing on unmet medical needs. Key trends include advancements in targeted therapies and the increasing complexity of clinical trials and regulatory pathways.

Regulatory Implications

The company faces significant regulatory hurdles inherent in drug development. Successful navigation of the FDA approval process for its pipeline candidates, such as the PTH1R agonist and SEP-631, is critical. Any delays or failures in obtaining regulatory approval could severely impact Septerna's financial viability and market position.

What Investors Should Do

1. Monitor R&D Pipeline Progress
2. Analyze Revenue Sustainability
3. Assess Cash Burn Rate and Runway
4. Evaluate Profitability Drivers

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net income of $8.173 million on revenue of $21.495 million, a significant turnaround from Q3 2024. Cash reserves increased to $319.989 million.
• 2024-09-30: End of Q3 2024 — Reported a net loss of $20.523 million on revenue of $176 thousand, highlighting the substantial improvement in the current year's performance.
• 2025-12-31: End of Fiscal Year 2024 — Company had $238.196 million in cash and cash equivalents, providing a baseline for the increase observed by Q3 2025.

Glossary

PTH1R agonist

A molecule that activates the parathyroid hormone receptor 1 (PTH1R). This receptor plays a role in bone metabolism and other physiological processes. (Septerna is investing in the development of a PTH1R agonist, indicating a focus on therapeutic areas related to bone health or other conditions regulated by this receptor.)

SEP-631

A specific drug candidate developed by Septerna, Inc. The exact therapeutic area is not specified in the provided text, but it is part of the company's pipeline. (This is one of the key programs Septerna is investing in, with R&D expenses increasing, suggesting it is a significant focus for future growth.)

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue. (A key indicator of profitability. Septerna's swing from a net loss of $20.523 million in Q3 2024 to a net income of $8.173 million in Q3 2025 demonstrates a significant financial improvement.)

Cash and Cash Equivalents

Includes cash on hand, bank deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (Indicates the company's immediate liquidity. The increase to $319.989 million provides Septerna with financial flexibility for operations and development.)

Basic EPS

Earnings per share calculated by dividing net income by the weighted-average number of outstanding common shares. (Measures the profitability on a per-share basis. The positive $0.18 EPS in Q3 2025 is a strong indicator of the company's improved financial performance compared to the negative EPS in Q3 2024.)

Year-Over-Year Comparison

Septerna, Inc. has demonstrated a significant financial turnaround in the three months ended September 30, 2025, compared to the same period in 2024. Revenue surged from $176 thousand to $21.495 million, primarily driven by a $12.500 million gain on the sale of a non-financial asset, leading to a net income of $8.173 million versus a net loss of $20.523 million. While operating expenses, particularly R&D, have increased, the company's cash position has strengthened considerably, rising to $319.989 million from $238.196 million at the end of 2024, indicating improved liquidity.

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share SEPN The Nasdaq Global Ma

Filing Documents

• sepn-20250930.htm (10-Q) — 2799KB
• sepn-ex10_1.htm (EX-10.1) — 25KB
• sepn-ex31_1.htm (EX-31.1) — 18KB
• sepn-ex31_2.htm (EX-31.2) — 18KB
• sepn-ex32_1.htm (EX-32.1) — 17KB
• img118503428_0.jpg (GRAPHIC) — 285KB
• 0001193125-25-273375.txt ( ) — 11077KB
• sepn-20250930.xsd (EX-101.SCH) — 1068KB
• sepn-20250930_htm.xml (XML) — 2175KB

Financial Statements (unaudited)

Financial Statements (unaudited) 1 Condensed Balance Sheets 1 Condensed Statements of Operations and Comprehensive Income (Loss) 2 Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) 3 Condensed Statements of Cash Flows 5 Notes to Unaudited Condensed Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 35 Item 4.

Controls and Procedures

Controls and Procedures 35 PART II. OTHER INFORMATION 37 Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 3. Defaults Upon Senior Securities 42 Item 4. Mine Safety Disclosures 42 Item 5. Other Information 42 Item 6. Exhibits 42

Signatures

Signatures 44 We own various U.S. federal trademark applications and unregistered trademarks, including our company name and logo, that we use in connection with the operation of our business. This Quarterly Report on Form 10-Q (this "Quarterly Report") includes our trademarks and trade names which are protected under applicable intellectual property laws and are our property. This Quarterly Report also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this Quarterly Report may appear without the , or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. From time to time, we may use our website as well as social media, including our X (formerly known as Twitter) account at Septerna_Inc and our LinkedIn account at https://www.linkedin.com/company/septernainc/ to distribute material information about us and for complying with our disclosure obligations under Regulation FD. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.Septerna.com . Investors are encouraged to review the Investors section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website or our social media are not incorporated into, and does not form a part of, this Quarterly Report. i SPECIAL

—FIN ANCIAL INFORMATION

PART I—FIN ANCIAL INFORMATION Ite m 1. Condensed Financial Statements. SEPTERNA, INC. Condensed B alance Sheets (In thousands, except for share and per share data) (Unaudited) September 30, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 319,989 $ 238,196 Marketable securities 154,357 112,727 Accounts receivable 8,645 171 Prepaid expenses and other current assets 8,690 5,730 Total current assets 491,681 356,824 Marketable securities, non-current 87,212 69,866 Property and equipment, net 4,316 5,090 Operating lease right-of-use assets 22,038 23,602 Restricted cash 905 905 Other non-current assets 501 267 Total assets $ 606,653 $ 456,554 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,729 $ 3,200 Accrued expenses and other current liabilities 7,833 7,798 Operating lease liabilities, current 2,117 1,851 Deferred revenue, current 61,603 — Total current liabilities 75,282 12,849 Operating lease liabilities, non-current 21,993 23,625 Deferred revenue, non-current 120,647 — Other non-current liabilities — 33 Total liabilities 217,922 36,507 Commitments and contingencies (Note 5) Stockholders' equity: Preferred stock, $ 0.001 par value per share; 10,000,000 shares authorized as of September 30, 2025 and December 31, 2024; no shares issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value per share, 500,000,000 shares authorized at September 30, 2025 and December 31, 2024; 44,638,703 and 44,422,505 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively; 228,020 and 576,829 shares subject to repurchase as of September 30, 2025 and December 31, 2024, respectively 45 44 Additional paid-in capital 544,826 538,321 Accumulated other comprehensive income 375

View Full Filing

View this 10-Q filing on SEC EDGAR