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September 5, 2024
Jeffrey Finer, M.D, Ph.D.
President and Chief Executive Officer
Septerna, Inc.
250 East Grand Avenue
South San Francisco, CA 94080
Re: Septerna, Inc.
Draft Registration Statement on Form S-1
Submitted on August 2, 2024
CIK No. 0001984086
Dear Jeffrey Finer M.D, Ph.D.:
We have reviewed your draft registration statement and have the
following comments.
Please respond to this letter by providing the requested information
and either submitting
an amended draft registration statement or publicly filing your registration
statement on EDGAR.
If you do not believe a comment applies to your facts and circumstances or do
not believe an
amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to this letter
and your amended
draft registration statement or filed registration statement, we may have
additional comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Overview, page 1
1. Please delete the overly speculative statements included in the Summary
and throughout
your filing. Given the early stage of your candidates development,
your unproven, novel
technologies, the limited evidence supporting the feasibility of
developing therapeutic
treatments based on your platform, and the number of other companies
focused on GPCRs
and platform technologies, these statements are do not appear
supportable. Illustrative
examples include:
we have transformed GPCR oral small molecule drug discovery to an
industrialized
and iterative structure-based drug design approach to expand the
landscape of
druggable GPCR targets with novel oral small molecule medicines for
patients.
we believe our team, scientific and technical advisors, and our
proprietary Native
Complex PlatformTM uniquely positions us to become the leading
GPCR-focused
September 5, 2024
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biotechnology company.
we believe we are at the forefront of industrial-scale GPCR drug
discovery and
development.
we are advancing cutting-edge science and rigorously developing a
broad and deep
portfolio of GPCR-targeted programs for patients.
We note there are other companies with platforms focused on GPCR drug
discovery,
which are led by teams with extensive experience in the
pharmaceutica/biotechnology
industry.
2. Your summary presents an unbalanced discussion of your business and
potential
opportunity by providing limited information that can put your
statements in the proper
context and isolating such information towards the end of the Summary.
Please revise
your summary to include balance by including equally prominent
disclosure of
information about your status as a company with no commercial products,
information
about the competitive conditions in the industry, and the status of your
product
candidates. For example:
Balance the statement that SEP-786 is the only clinical stage,
oral small molecule
agonist targeting Parathyroid Hormone 1 Receptor for the treatment
of
hypoparathyroidism with statements that there are other product
candidates in
development that target PTH1R for hypoparathyroidism, including a
candidate that is
in Phase 3 and has recently been granted fast track status by the
FDA.
Balance your belief that your team, scientific and technical
advisors, and our
proprietary Native Complex PlatformTM uniquely positions you to
become the
leading GPCR-focused biotechnology company to clarify that there are
other
companies that have developed platforms in use to develop
GPCR-focused product
candidates, some of which are led by leadership teams with extensive
experience in
the pharmaceutical/biotechnology field. Many of these companies are
private
companies, therefore there may not be a lot of information publicly
available about
their platforms, product candidates and current stage of
development.
Balance your belief that you are at the forefront of
industrial-scale GPCR drug
discovery and development with information that there are other
companies with
platforms that are focused on GPCR drug discovery
3. Please refer to Item 503 of Regulation S-K and note that the Summary
should be brief,
should not contain all the detailed information in the prospectus and
should focus on
providing a brief overview of the key aspects of the offering without
merely repeating the
text of the prospects. As currently drafted the first eight pages of
your Summary are
repeated almost word for word on the first eight pages of your Business
section, and much
of the information was also repeated in Management s Discussion and
Analysis of
Financial Condition and Results of Operations and Management. The only
subsections
that were summarized were the discussions of your strategy and risk
factors. Please revise
September 5, 2024
Page 3
your summary to eliminate the repetitive information from within the
Summary and avoid
merely repeating detailed discussions from the prospectus. To the
extent you decide to
keep both graphics summarizing your pipeline on pages 2 and 5. Please
why both are
necessary as most of the information in the graphic on page 2 is also
in the graphic on
page 5.
4. We note your explanation of your Native Complex Platform. We understand
that there are
other companies focused on developing GPCR-targeting drugs using
alternate
technologies, given the difficulty in isolating GCPRs. Please explain
why the "unique
position" of your technology will be sufficient to make up for the
competitive advantage
other companies, who may be further along developing similar drugs.
5. Please define agonists, antagonists and allosteric modulators the first
time the terms are
used.
Our Pipeline and Programs, page 4
6. Please remove the "Other Therapeutic Areas of Interest/Focus" from your
pipeline table.
The pipeline table should only include references to your currently
material product
candidates and programs.
SEP-786 - Oral Small Molecule PTH1R Agonist for Hypoparathyroidism, page 5
7. Please remove statements about your conclusions from your preclincial
studies from the
summary. Such statements should be accompanied by a description of the
studies, which
is more appropriate for the Business section. Similarly revise the
descriptions of your
other product candidates and programs.
Our future ability to utilize our net operating loss carryforwards and certain
other tax attributes
may be limited., page 47
8. Please quantify your current net operating loss carryforward.
We are conducting, and will conduct, clincial trials for our current product
candidates outside of
the United States..., page 48
9. We note your disclosure on page 143 that you have submitted a CTN in
Australia. Please
revise to clarify your plans to conduct trials in Australia and
indicate whther you currently
have plans to conduct trials in other jurisdictions.
We may not be able to obtain orphan drug designation for our product
candidates..., page 52
10. Please clarify which candidates, if any, may qualify for orphan drug
status. Similarly
revise the risk factor titled "While we may in the future seek
designations for our product
candidates with the FDA, EMA and other comparable foreign regulatory
authorities that
are intended to confer benefits..." to identify other candidates that
may qualify for
programs providing for an accelerated regulatory pathway or regulatory
excusivity.
We currently depend and in the future may continue to depend on single or
limited-source
suppliers..., page 68
11. We note you currently depend on single and limited source suppliers.
Please clarify
whether you have supply agreements in place. If you do, please file
such agreements as
September 5, 2024
Page 4
exhibits pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K.
We intend to rely on third parties to conduct, supervise and monitor our
preclinical studies...,
page 68
12. We note your disclosure that if your relationships with your CROs
terminates, you may
not be able to enter into arrangements with alternative CROs or do so on
commercially
reasonable terms. Please identify any CROs you are substantially
dependent on and file
agreements with these parties as exhibits to the registration statement.
In an appropriate
location in your registration statement, include descriptions of the
material terms of these
agreements.
Risks Related to Intellectual Property, page 69
13. Please revise your discussion of risk relating to intellectual property
to include a
disclosure, as mentioned on page 157, that your proprietary Native
Complex Platform is
not patented. Specifically, discuss the additional risk associated with
protecting this
intellectual property with things such as confidentiality agreements in
lieu of patent
protection.
Our insurance policies are expensive and only protect us from some business
risks ..., page 95
14. Please expand the discussion to identify commonly insured risks for
which you are
currently not carrying insurance coverage. To the extent that you are
aware that you are
maintaining a policy with a coverage amount that is less than adequate,
please provide
information about the risk and quantify the shortfall.
Use of Proceeds, page 100
15. We note your intention to advance the development of your two lead
product candidates
with the proceeds of this offering. Please expand on this discussion to
disclose how far
along in the development process you expect to get with the proceeds of
this offering.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Estimates, Significant Judgments and Use of Estimates
Stock-based compensation, page 120
16. Once you have an estimated offering price or range, please explain to us
how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your common
stock leading
up to the initial public offering and the estimated offering price. This
information will
help facilitate our review of your accounting for equity issuances.
Please discuss with the
staff how to submit your response.
Our Solution: Oral Small Molecule MRGPRX2 NAM, page 144
17. Please remove statements here and elsewhere that SEP-631 has the
potential to be an
"insurmountable" NAM. Given the development stage of this treatment,
such statements
appear to be premature and inappropriately assume regulatory approval at
this stage.
Our solution: Oral Small Molecule Single- and Multi-Incretin Receptor Agonists,
page 153
18. Please include a textual description explaining what the table in Figure
14 is intended to
September 5, 2024
Page 5
convey.
Government Regulation, page 159
19. We note that you have submitted a CTN in Australia to conduct your
SEP-786 Phase 1
clincial trial. To the extent you are planning to seek approval of this
candidate in
Australia, please discuss the applicable review and approval process or
clarify that it is
not your intention to seek approval in Australia.
Employees and Human Capital Resources, page 178
20. Please revise to quantify the number of full-time employees.
Management, page 180
21. Please disclose where Ms. Sharp has been employed since October 2020.
Principal Stockholders, page 211
22. Please identify in a footnote to the table all natural persons who have
voting and/or
investment power over the shares held by Samsara BioCapital, L.P., Invus
Public
Equities, L.P., and Deep Track Biotechnology Master Fund, Ltd.
General
23. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Please contact Ibolya Ignat at 202-551-3636 or Angela Connell at
202-551-3426 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Tamika Sheppard at 202-551-8346 or Suzanne Hayes at 202-551-3675 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences