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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-42382

Septerna, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	84-3891440
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
250 East Grand Avenue South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 338-3533

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, par value $0.001 per share

     SEPN

     The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2025 the registrant had 44,774,192 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS


		Page


PART I.	FINANCIAL INFORMATION	1

Item 1.	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	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37
Item 1A.	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		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.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

•

the initiation, timing, progress, results and costs of conducting our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our current and future programs;

•

the potential therapeutic benefits of our product candidates, including our PTH1R agonist and SEP-631 programs;

•

our ability to demonstrate, and the timing of, preclinical proof-of-concept in vivo and ex vivo for multiple programs;

•

our ability to replicate positive results achieved in our preclinical studies or clinical trials in current or future clinical trials;

•

our ability to obtain and maintain regulatory approval for our current and future product candidates and research and development programs, including our PTH1R agonist and SEP-631 programs, and to advance any product candidates that we may identify and successfully complete any clinical studies, including the manufacture of any such product candidates;

•

the timing, scope and likelihood of regulatory filings and approvals, including timing of Investigational New Drug (“IND”) applications or comparable foreign applications, and final U.S. Food and Drug Administration (the “FDA”) approval of our product candidates;

•

the timing, scope or likelihood of foreign regulatory filings and approvals;

•

the implementation of our business model, and strategic plans for our business, product candidates, and technology;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•

developments relating to our competitors and our industry;

•

our ability to leverage programs within our initial target indications and to progress additional programs to further develop our pipeline;

•

our ability of our preclinical studies and clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;

•

the partnership with Novo Nordisk A/S (“Novo”) and the intended and potential benefits thereof, including the receipt of potential milestone payments and royalty payments from commercial product sales, along with tiered royalties based on global net sales, if any;

•

Novo's ability to develop and commercialize potential oral small molecule therapies for metabolic-related diseases and the potential of G protein-coupled receptors, including the GLP-1, GIP, and glucagon receptors, to address the unmet medical need for treating obesity, type 2 diabetes and other related conditions;

•

our ability to maintain existing collaborations and strategic partnerships, to identify and enter into future license agreements and collaborations, and to realize the intended and potential benefits of such agreements and collaborations;

•

our ability to rely on third-party manufacturers and successfully manufacture product candidates for preclinical use, clinical trials and on a larger scale for commercial use, if approved;

•

our ability to realize the benefits of collaborations for the development and commercialization of our product candidates;

•

our ability to commercialize any of our product candidates;

•

developments related to our proprietary Native Complex Platform™;

•

regulatory developments in the U.S. and foreign countries;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

the size and growth potential of the markets for our product candidates and our ability to serve those markets;

•

our need for and ability to attract and retain key scientific, management and other personnel and to identify, hire, and retain additional qualified professionals;

•

our expectations regarding the period during which we will remain an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”);

•

the period over which we expect our existing cash, cash equivalents and investments will be sufficient to fund our operating expenses and capital expenditure requirements;

•

our anticipated use of our existing resources;

•

our financial performance and estimates of our future expenses, capital requirements, and our needs for additional financing;

•

the impact of macroeconomic and geopolitical developments on our business, including rising inflation and capital market disruptions, changes in or disruptions of U.S. governmental agencies, whether from a continued U.S. federal government shutdown or reduced resources, new or increased international tariffs and retaliatory tariffs, trade protection measures, economic sanctions and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our common stock and our ability to access capital markets; and

•

other risks and uncertainties, including those listed under the section titled “Risk Factors” in Part II, Item 1A.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “seek,” “predict,” “future,” “project,” “potential,” “continue,” “target,” “contemplate,” “possible,” “can,” or the negative of these terms or other comparable terminology, and similar expressions, although not all forward-looking statements contain these identifying words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the Securities and Exchange Commission (the “SEC”) thereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Quarterly Report represent our views as of the date of this Quarterly Report. We do not undertake any obligation to publicly update any forward-looking statement except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. All of the market data used in this Quarterly Report involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our product candidates include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

This Quarterly Report contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed as exhibits to this Quarterly Report. Unless the context

iii

otherwise requires, reference in this Quarterly Report to the terms “Septerna,” “the Company,” “we,” “us,” “our,” and similar designations refer to Septerna, Inc.

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

SEPTERNA, INC.

Condensed Balance 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			56
Accumulated deficit		(156,515	)		(118,374	)
Total stockholders' equity		388,731			420,047
Total liabilities and stockholders' equity	$	606,653		$	456,554

The accompanying notes are an integral part of these condensed financial statements.

SEPTERNA, INC.

Condensed Statements of Operations and Comprehensive Income (Loss)

(In thousands, except for share and per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenue	$	21,495		$	176		$	21,833		$	863
Operating (income) expenses:
Research and development		24,264			17,832			65,723			46,020
General and administrative		7,117			4,894			20,884			10,948
Gain on sale of non-financial asset		(12,500	)		—			(12,500	)		—
Total operating expenses		18,881			22,726			74,107			56,968
Income (loss) from operations		2,614			(22,550	)		(52,274	)		(56,105	)
Other income, net:
Interest income		5,565			1,900			14,192			4,709
Other expense, net		(6	)		(9	)		(59	)		(72	)
Total other income, net		5,559			1,891			14,133			4,637
Income (loss) before benefit for income taxes		8,173			(20,659	)		(38,141	)		(51,468	)
Benefit for income taxes		—			136			—			338
Net income (loss) attributable to common stockholders	$	8,173		$	(20,523	)	$	(38,141	)	$	(51,130	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.18		$	(8.40	)	$	(0.86	)	$	(21.87	)
Diluted	$	0.18		$	(8.40	)	$	(0.86	)	$	(21.87	)
Weighted-average shares outstanding used in computing net income per share attributable to common stockholders:
Basic		44,343,085			2,443,678			44,150,041			2,337,891
Diluted		45,602,099			2,443,678			44,150,041			2,337,891
Comprehensive income (loss):
Net income (loss)	$	8,173		$	(20,523	)	$	(38,141	)	$	(51,130	)
Net unrealized gain on marketable securities		199			184			319			176
Total other comprehensive income		199			184			319			176
Comprehensive income (loss)	$	8,372		$	(20,339	)	$	(37,822	)	$	(50,954	)

The accompanying notes are an integral part of these condensed financial statements.

SEPTERNA, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except for share data)

(Unaudited)


						Additional		Accumulated Other						Total
	Common Stock					Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares			Amount		Capital		Income			Deficit			Equity
Balance at December 31, 2024		44,422,505		$	44	$	538,321	$	56		$	(118,374	)	$	420,047
Issuance of common stock upon exercise of stock options		25,930			—		66		—			—			66
Vesting of restricted common stock		—			—		5		—			—			5
Stock-based compensation expense		—			—		1,482		—			—			1,482
Net unrealized gain on marketable securities		—			—		—		142			—			142
Net loss		—			—		—		—			(21,476	)		(21,476	)
Balance at March 31, 2025		44,448,435			44		539,874		198			(139,850	)		400,266
Issuance of common stock upon exercise of stock options		119,456			1		338		—			—			339
Vesting of restricted common stock		—			—		6		—			—			6
Stock-based compensation expense		—			—		1,806		—			—			1,806
Net unrealized loss on marketable securities		—			—		—		(22	)		—			(22	)
Net loss		—			—		—		—			(24,838	)		(24,838	)
Balance at June 30, 2025		44,567,891			45		542,024		176			(164,688	)		377,557
Issuance of common stock upon exercise of stock options		73,424			—		264		—			—			264
Vesting of restricted common stock		—			—		6		—			—			6
Repurchase of unvested restricted common stock		(2,612	)		—		—		—			—			—
Stock-based compensation expense		—			—		2,532		—			—			2,532
Net unrealized gain on marketable securities		—			—		—		199			—			199
Net income		—			—		—		—			8,173			8,173
Balance at September 30, 2025		44,638,703		$	45	$	544,826	$	375		$	(156,515	)	$	388,731


	Convertible Preferred Stock													Additional		Accumulated Other						Total
	Series A				Series B				Common Stock					Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount		Capital		Loss			Deficit			Deficit
Balance at December 31, 2023		75,000,000	$	74,694		60,828,720	$	74,521		3,168,134		$	3	$	8,199	$	—		$	(46,576	)	$	(38,374	)
Issuance of common stock upon exercise of stock options		—		—		—		—		217			—		1		—			—			1
Vesting of restricted common stock		—		—		—		—		—			—		6		—			—			6
Repurchase of unvested restricted common stock		—		—		—		—		(11,517	)		—		—		—			—			—
Stock-based compensation expense		—		—		—		—		—			—		577		—			—			577
Net unrealized loss on marketable securities		—		—		—		—		—			—		—		(7	)		—			(7	)
Net loss		—		—		—		—		—			—		—		—			(14,097	)		(14,097	)
Balance at March 31, 2024		75,000,000		74,694		60,828,720		74,521		3,156,834			3		8,783		(7	)		(60,673	)		(51,894	)
Issuance of Series B Convertible Preferred Stock, net of issuance costs of $479		—		—		60,828,732		74,942		—			—		—		—			—			—
Issuance of common stock upon exercise of stock options		—		—		—		—		6,186			—		10		—			—			10
Vesting of restricted common stock		—		—		—		—		—			—		4		—			—			4
Stock-based compensation expense		—		—		—		—		—			—		628		—			—			628
Net unrealized loss on marketable securities		—		—		—		—		—			—		—		(1	)		—			(1	)
Net loss		—		—		—		—		—			—		—		—			(16,510	)		(16,510	)
Balance at June 30, 2024		75,000,000		74,694		121,657,452		149,463		3,163,020			3		9,425		(8	)		(77,183	)		(67,763	)
Issuance of common stock upon exercise of stock options		—		—		—		—		2,730			—		5		—			—			5
Vesting of restricted common stock		—		—		—		—		—			—		6		—			—			6
Repurchase of unvested restricted common stock		—		—		—		—		(2,782	)		—		—		—			—			—
Stock-based compensation expense		—		—		—		—		—			—		683		—			—			683
Net unrealized gain on marketable securities		—		—		—		—		—			—		—		184			—			184
Net loss		—		—		—		—		—			—		—		—			(20,523	)		(20,523	)
Balance at September 30, 2024		75,000,000	$	74,694		121,657,452	$	149,463		3,162,968		$	3	$	10,119	$	176		$	(97,706	)	$	(87,408	)

The accompanying notes are an integral part of these condensed financial statements.

SEPTERNA, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(38,141	)	$	(51,130	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,203			1,013
Gain on sale of non-financial asset		(12,500	)		—
Non-cash operating lease expense		1,564			890
Stock-based compensation		5,820			1,888
Accretion of premiums (discounts), net		(2,561	)		(601	)
Deferred income tax		—			(338	)
Other		26			52
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(2,956	)		(1,249	)
Accounts receivable		(8,474	)		(60	)
Other non-current assets		(238	)		(173	)
Accounts payable		530			2,419
Accrued expenses and other current liabilities		20			579
Operating lease, net		(1,366	)		198
Deferred revenue		182,250			—
Net cash provided by (used in) operating activities		125,177			(46,512	)
Cash flows from investing activities:
Purchases of property and equipment		(453	)		(1,491	)
Proceeds from sale of non-financial asset		12,500			22,625
Purchases of marketable securities		(223,515	)		(65,828	)
Maturities of marketable securities		167,416			17,335
Net cash used in investing activities		(44,052	)		(27,359	)
Cash flows from financing activities:
Proceeds from issuance of Series B Convertible Preferred stock, net of issuance costs		—			74,942
Repurchases of unvested restricted common stock		(1	)		(1	)
Proceeds from exercise of stock options		669			16
Payments of deferred offering costs		—			(1,327	)
Net cash provided by financing activities		668			73,630
Net increase (decrease) in cash, cash equivalents and restricted cash		81,793			(241	)
Cash, cash equivalents and restricted cash, beginning of period		239,101			89,388
Cash, cash equivalents and restricted cash, end of period	$	320,894		$	89,147
Supplemental cash flow information:
Cash paid for income taxes	$	—		$	232
Supplemental disclosure for noncash investing and financing activities:
Right-of-use asset recognized in exchange for operating lease liability	$	—		$	(12,462	)
Unpaid deferred offering costs included in accounts payable and accrued expenses and other current liabilities	$	—		$	1,882
Property and equipment included in accounts payable and accrued expenses and other current liabilities	$	—		$	321

Cash, Cash Equivalents and Restricted Cash:


	As of September 30,
	2025		2024
Cash and cash equivalents	$	319,989	$	88,242
Restricted cash		905		905
Total cash, cash equivalents and restricted cash	$	320,894	$	89,147

The accompanying notes are an integral part of these condensed financial statements.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements

Note 1. Organization and Basis of Presentation

Description of the Business

Septerna, Inc. (“Septerna” or the “Company”) is a clinical-stage biotechnology company with a world-class team of G protein-coupled receptor (“GPCR”) experts and drug developers advancing cutting-edge science to unlock the full potential of GPCR therapies for patients with significant unmet needs. The Company’s proprietary Native Complex Platform™ is designed to enable new approaches to GPCR drug discovery and has led to the development of a diverse pipeline of novel oral small molecule drug candidates. The Company is advancing programs in endocrinology, immunology and inflammation, metabolic diseases and additional therapeutic areas, both independently and with partners.

The Company’s proprietary Native Complex Platform™ replicates the natural structure, function, and dynamics of GPCRs outside of cells at an industrial scale. The Company’s foundational technologies enable it to isolate, purify, and reconstitute full-length, properly folded GPCR proteins within ternary complexes with ligands and transducer proteins in a lipid bilayer that mimics the cell membrane. The Company then applies state-of-the-art discovery tools and technologies to these defined and tunable protein complexes to structurally design, screen for, and optimize potential product candidates. Leveraging its platform, the Company has 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. The Company’s Native Complex Platform™ is designed to enable it to target certain GPCRs for the first time, uncover novel binding pockets for validated receptors, and pursue a wide spectrum of pharmacologies, including agonists, antagonists, and allosteric modulators, to affect GPCR signaling in different ways to achieve desired therapeutic effects.

The Company was incorporated in Delaware in December 2019, under the name GPCR NewCo, Inc. In June 2021, the Company changed its name to Septerna, Inc. The Company is headquartered in South San Francisco, California.

Reverse Stock Split

On October 18, 2024, the Company effected a 1-for-8.6103 reverse stock split of its issued and outstanding shares of common stock. Upon the effectiveness of the reverse stock split, (i) all shares of outstanding common stock were adjusted; (ii) the conversion ratio of the convertible preferred stock was adjusted; (iii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable were adjusted; and (iv) the exercise price of each outstanding option to purchase common stock was adjusted. All of the outstanding common stock (including shares of common stock subject to the Company’s options and as converted for the outstanding convertible preferred stock), share prices, exercise prices and per share amounts contained in the condensed financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. The number of authorized shares did not change.

Initial Public Offering

In October 2024, the Company completed its initial public offering (“IPO”), pursuant to which it issued and sold an aggregate of 18.4 million shares of its common stock at the IPO price of $18.00 per share, including 2.4 million shares that were issued to the underwriters pursuant to the full exercise of their option to purchase additional shares, resulting in net proceeds of $302.8 million, net of total offering costs of $28.4 million. Immediately prior to the closing of the IPO, the Company’s then outstanding convertible preferred stock automatically converted into 22,839,774 shares of common stock.

Following the closing of the IPO, no shares of convertible preferred stock were authorized or outstanding. In connection with the completion of the IPO, on October 28, 2024, the Company’s certificate of incorporation was amended and restated to (i) authorize 500.0 million shares of common stock, par value $0.001 per share, which eliminates all references to the previously existing series of convertible preferred stock; and (ii) authorize 10.0 million shares of undesignated preferred stock, par value $0.001 per share, that may be issued from time to time by the Company’s board of directors in one or more series.

Liquidity and Capital Resources

The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which assumes that the Company will realize its assets and satisfies its liabilities in the normal course of business. The Company is subject to risks inherent in operating an early-stage biotechnology business. These risks include, but are not limited to, dependence

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

on the development of marketable products, the ability to attract, retain, and motivate qualified personnel, rapid technological changes and the rapidly evolving nature of the biotechnology industry.

The Company has incurred significant losses and negative cash flows from operations since its inception and expects to incur losses as a result of its continued research and development activities. To date, none of the Company’s product candidates have been approved by the U.S. Food and Drug Administration (the “FDA”) for commercial sale and, therefore, the Company has not generated any revenue from product sales.

The Company historically financed its operations primarily through the issuance of convertible promissory notes, convertible preferred stock, the sale of its common stock in an IPO, and most recently, through a one-time, non-refundable upfront payment upon commencement of its collaboration agreement with Novo Nordisk A/S (“Novo”) and achievement of a milestone event pursuant to its agreement with Vertex Pharmaceuticals Incorporated ("Vertex"). The Company will need additional financing to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through equity offerings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. The Company may not be able to obtain funding on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders.

For the nine months ended September 30, 2025 and 2024, the Company incurred net losses of $38.1 million and $51.1 million, respectively. The Company had an accumulated deficit of $156.5 million as of September 30, 2025. The Company believes its cash, cash equivalents, and marketable securities of $561.6 million as of September 30, 2025 will be sufficient to fund its operations for at least 12 months from the date of issuance of the unaudited condensed financial statements.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of the unaudited interim condensed financial statements for the periods presented have been included. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Updates (“ASUs”), of the Financial Accounting Standards Board (“FASB”). The interim condensed financial statements are unaudited. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for the full year or for any other future annual or interim period. Actual results could differ materially from estimates and assumptions. As appropriate, the Company assesses estimates each period and updates them to reflect current information, and generally reflect any changes in estimates in the period first identified.

The balance sheet data at December 31, 2024 was derived from the audited financial statements included in Septerna’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 27, 2025. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Significant Accounting Policies

During the nine months ended September 30, 2025, there were no changes to the Company’s significant accounting policies as described in Note 2 of the audited financial statements for the year ended December 31, 2024, except as described below.

Revenue Recognition

The Company accounts for revenue in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). Under ASC 606, the Company recognizes revenue when the customer obtains control of the promised goods or services at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following four steps: (i) confirm it has a contract with a customer that creates enforceable rights and obligations; (ii) identify promised products or services to be transferred to a customer; (iii) determine the transaction price, or the amount it expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

of the uncertainty, is determinable and allocated to the performance obligations; and (iv) recognize revenue when or as performance obligations are satisfied.

Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract. To the extent a contract includes multiple promised goods and services, the Company applies judgment to determine whether promised goods and services are both capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. For arrangements that include multiple performance obligations, the Company allocates the transaction price to the identified performance obligations based on the standalone selling price of each distinct performance obligation. In instances where standalone selling price is not directly observable, the Company develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract using a cost plus margin approach, which is an estimation method used when standalone selling price is not directly observable. Key assumptions used within this estimation method may include full-time equivalent personnel effort and estimated external costs associated with the performance obligation.

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in management’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.

The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized over time if either (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.

The Company’s revenues are primarily derived through its license and research and development service arrangements. Payments to the Company under these arrangements typically include one or more of the following: one-time, non-refundable upfront payment, research and development service funding, milestone and other contingent payments to the Company for the achievement of defined collaboration objectives and certain collaboration, research and development and commercial milestones, as well as royalties based on net sales of approved drugs.

Consideration received prior to revenue recognition is recorded as deferred revenue in the condensed balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. Contract assets represent research and development services which have been performed but have not yet been billed and are reduced when they are subsequently billed. Such contract assets include accounts receivable when the Company’s right to consideration is unconditional. For its current contracts, the Company recognizes revenue as the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and, if over time, revenue recognized is based on the use of an input method.

When no remaining performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer.

The terms of the Company’s collaborative arrangements include one or more of the following:

(i)

Licenses of intellectual property, or IP - If the license to the Company’s IP is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from consideration allocated to the license when the license is transferred to the customer and the customer can use and benefit from the licenses. For a license that is determined not to be distinct, it is combined with other promises and the Company utilizes judgment to assess the

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company generally recognizes revenue using the cost incurred to date as compared to the total estimated cost of each performance obligation. The impact on revenue of changes in total estimated costs are recognized on a cumulative basis in the period that the change occurs. If estimates of the total cost change, or if contract amendments change the scope of the performance obligation, the required adjustments to revenue could be material.

(ii)

Customer options - The Company evaluates the customer options for material rights or options to acquire additional goods or services at no incremental consideration or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised and performance obligations are satisfied. If an option is not exercised before the option right expires, the Company will accelerate and recognize all remaining revenue related to the material right performance obligation.

(iii)

Research and development services - The promises under the Company's collaboration agreement include research and development services to be performed by the Company for or on behalf of the customer. Payments or reimbursements resulting from the Company's research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements are recognized in revenue in the Company’s condensed statements of operations and comprehensive loss. Expenses incurred as part of the Company’s efforts to perform the research and development services are recognized in research and development expense in the Company’s condensed statements of operations and comprehensive loss.

(iv)

Manufacturing services - The promises under the Company's collaboration agreement include manufacturing services to be performed by the Company. Payments or reimbursements resulting from the Company's manufacturing services are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements are recognized in revenue in the Company’s condensed statements of operations and comprehensive loss. Expenses incurred to perform the manufacturing services are recognized in research and development expense in the Company’s condensed statements of operations and comprehensive loss.

(v)

Milestone payments - At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s, such as regulatory approvals, are not considered probable of being achieved until those approvals are received, and therefore, consideration included in the transaction price is constrained. The Company applied the variable consideration allocation exception under ASC 606 whereby variable milestone payments are not estimated and included in the transaction price at inception. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

(vi)

Commercial milestone payments and royalties - For arrangements that include sales-based royalties, including milestone payments based on levels of sales, if the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB, under its Accounting Standards Codification (“ASC”) or other standard setting bodies, and adopted by the Company as of the specified date.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts during the application of the current expected credit loss model for current accounts receivable and current contract assets arising from transactions

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

under ASC 606. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-05.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, an accounting standard update that requires the Company to disclose more detailed information about the types of expenses (including employee compensation, depreciation, and amortization) included in each relevant income statement expense caption. In January 2025, the FASB issued ASU 2025-0, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date", to clarify the effective date of ASU 2024-03. These amendments are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that these updates will have on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The standard is intended to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective reporting are permitted. The Company is currently evaluating the impact of ASU 2023-09 on its interim condensed financial statements.

Note 2. Balance Sheet Components

Restricted Cash

Restricted cash is comprised of cash that is restricted as to withdrawal or use under the terms of certain contractual agreements. In connection with the Company’s lease agreement, the Company is required to maintain a collateral account to secure a letter of credit issued to its landlord. The collateral account is classified as restricted cash on the Company’s condensed balance sheets.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	As of September 30,		As of December 31,
	2025		2024
Prepaid expenses	$	3,973	$	3,114
Interest receivable		1,928		953
Prepaid clinical trial costs		1,250		1,164
Other receivable		1,152		174
Other current assets		387		325
Prepaid expenses and other current assets	$	8,690	$	5,730

Property and Equipment, Net

Property and equipment, net consist of the following (in thousands):


	As of September 30,			As of December 31,
	2025			2024
Lab equipment	$	6,036		$	5,679
Furniture, fixtures, and office equipment		1,222			1,222
Leasehold improvements		717			717
Computer equipment		401			401
Total property and equipment		8,376			8,019
Less: Accumulated depreciation and amortization		(4,060	)		(2,929	)
Property and equipment, net	$	4,316		$	5,090

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

Depreciation and amortization expense was $0.4 million and $1.2 million for the three and nine months ended September 30, 2025, respectively. Depreciation and amortization expense was $0.4 million and $1.0 million for the three and nine months ended September 30, 2024 respectively.

Deferred Revenue

Deferred revenue consists of amounts received prior to satisfying revenue recognition criteria (see Note 3).

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	As of September 30,		As of December 31,
	2025		2024
Accrued employee compensation expense	$	3,533	$	4,129
Accrued research and development expense		2,859		2,888
Accrued general and administrative expense		725		703
Employee stock purchase plan liability		604		—
Other current liabilities		112		78
Accrued expenses and other current liabilities	$	7,833	$	7,798

Note 3. Collaboration and Research Service Arrangements

For the nine months ended September 30, 2025, the Company's revenue is comprised solely of arrangements with Novo and Vertex. For the nine months ended September 30, 2024, the Company's revenue was solely comprised of arrangements with Vertex.

Novo Collaboration Agreement

On May 13, 2025, the Company entered into a Collaboration and License Agreement with Novo (the “Novo Collaboration Agreement”). Under the Novo Collaboration Agreement, the Company and Novo are exclusively collaborating to leverage the Company’s proprietary Native Complex Platform™ to discover, develop and commercialize multiple potential oral small molecule therapies for metabolic-related diseases based on certain specified molecular targets.

Upon effectiveness of the Novo Collaboration Agreement on July 1, 2025, the Company and Novo have commenced four simultaneous research and development programs (each an “R&D Program”), each pursuing one or more Collaboration Targets (as defined in the Novo Collaboration Agreement) from discovery through development candidate selection. Subject to certain limitations, Novo also has a right to modify the research plan with the option to commence additional R&D Programs. Novo will reimburse the Company for 100% of the fully burdened costs arising from all research and development activities undertaken by the Company under the Novo Collaboration Agreement. After development candidate selection, beginning with investigational new drug-enabling activities, Novo will be responsible for all further global development and commercialization for each product candidate at its sole cost and expense unless the profit share option described below is exercised. Novo is also responsible for all commercialization costs subject to the Company’s profit share option for up to one program under the Novo Collaboration Agreement. Pursuant to the terms of the Novo Collaboration Agreement, the Company will provide Novo with exclusive licenses to enable Novo to develop and commercialize products directed at the Collaboration Targets. The Company retains all other rights to its Native Complex Platform™ and all of the Company’s other research and development programs.

Upon effectiveness of the Novo Collaboration Agreement, the Company received a one-time, non-refundable upfront payment of $195.0 million in July 2025, which was recorded as deferred revenue in its condensed balance sheet. The Company is also eligible to receive up to $498.0 million in research, development, regulatory, and commercial milestone payments for each R&D Program. In addition, the Company is entitled to escalating, tiered royalties ranging from mid to high single-digits based on global product sales on a country-by-country and product-by-product basis with respect to a R&D Program until the later of ten years after the date of first commercial sale of the first product in such R&D Program in such country, expiration of specified patent rights covering such product in such country or the expiration of specified regulatory exclusivity for the first product in such R&D Program in such country.

Under the Novo Collaboration Agreement, the Company has a one-time option to share in the global development costs and operating profits or losses (in lieu of milestones and royalties) with respect to one licensed product (the "Profit Share Option"), subject

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

to certain terms, conditions and limitations. In the event that the Company chooses to exercise the Profit Share Option, it will be required to pay Novo all previously reimbursed developmental costs pertaining to that program and reimburse Novo for a portion of the R&D costs incurred under the selected licensed product and will share in the profits resulting from the commercialization of the licensed product.

Unless earlier terminated, the term of the Novo Collaboration Agreement continues until expiration of the last royalty term for the applicable product in the applicable country. The Novo Collaboration Agreement is subject to customary termination provisions, including termination by a party for the other party’s uncured, material breach. The Novo Collaboration Agreement also includes customary representations and warranties, covenants and indemnification obligations.

The Company concluded the Agreement is not within the scope of Accounting Standards Codification 808, Collaborative Arrangements as the Company does not share equally in the exposure to significant risk. Accordingly, the Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Novo, is a customer.

At commencement, the Company identified several potential performance obligations within the Novo Collaboration Agreement, including research and development services on research targets, option rights held by Novo, license to use the Company’s intellectual property to conduct research and development activities, and participation on the joint steering committee (“JSC”). At inception of the Novo Collaboration Agreement, the Company identified the following performance obligations:

(i)

Four combined performance obligations comprised of the license, related research services, and participation of the JSC for the four R&D Programs;

(ii)

Manufacturing services related to one of the R&D Programs; and

(iii)

A material R&D Program modification right held by Novo.

The Company concluded that the license granted at contract inception is not distinct from the research services as the research services significantly modify the intellectual property underlying the license. As a result, for each R&D Program, the license has been combined with the research services and JSC participation into a single performance obligation, which is the combined performance obligation comprised of the license, related research services, and JSC participation.

In assessing whether the various options under the Novo Collaboration Agreement represent material rights, the Company considered the additional consideration the Company would be entitled to upon option exercise and the standalone selling price of the underlying goods and services. For the material rights identified above, the Company concluded that each of the options provided Novo with a discount that it otherwise would not have received.

The Company recognizes revenue related to the combined license and research services performance obligation and the manufacturing performance obligation over time using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of actual cost incurred to date to the total estimated cost at completion of the performance obligations, which the Company believes best measures its progress towards satisfying the performance obligations. A cost-based input method of revenue recognition requires management to make estimates of cost to complete the performance obligation. Judgment is required to evaluate assumptions related to cost estimates. The estimated standalone selling prices for the material rights were determined based on the estimated discount provided to Novo and the probability that Novo would exercise the options.

The following table presents revenue recognized, unrecognized transaction price, and estimated revenue expected to be recognized in the future as of September 30, 2025 (in thousands):


	Transaction Price
Combined license, research and manufacturing services	$	247,846
Material right		41,190
Total transaction price(1)	$	289,036
Revenue recognized(2)		(21,258	)
Unrecognized transaction price as of September 30, 2025	$	267,778

_____________________

(1)

Comprised of the allocation of the $195.0 million one-time, non-refundable upfront payment, $153.8 million to the four R&D programs and manufacturing services and $41.2 million to the material right, and $94.0 million of variable consideration related to estimated research and manufacturing services for the four R&D Programs.

(2)

Recorded within revenue in the condensed statement of operations for the three and nine months ended September 30, 2025,

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

comprised of $12.8 million of the one-time, non-refundable upfront payment and $8.5 million variable considerations related to estimated research services for the four R&D Programs.

Amounts due to the Company for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the Novo Collaboration Agreement are recorded as accounts receivable in the Company’s balance sheets. Contract liabilities consist of amounts received prior to satisfying the revenue recognition criteria, which are recorded as deferred revenue in the Company’s balance sheets.

The following table summarizes the changes in deferred revenue for the nine months ended September 30, 2025 (in thousands):


Balance at January 1, 2025	$	—
Deferred revenue		195,000
Recognized revenue		(12,750	)
Balance at September 30, 2025(1)	$	182,250

_____________________

(1)

Comprised of $61.6 million of deferred revenue, current and $120.6 million of deferred revenue, non-current, which is expected to be recognized over the next 3.8 years. As of September 30, 2025, all of the Company's performance obligations are outstanding.

The Company periodically assesses the probability of receiving payments from achieving the research and development, collaboration target, and regulatory milestones and includes the payment in the transaction price when they are deemed probable. Royalties and commercial sale milestones will be recognized when the subsequent sales occur based on the sales or usage-based royalty exception. The Company also periodically reassesses the Profit Share Option. As of September 30, 2025, none of the milestones were deemed probable and no royalty revenue has been recognized, and the Profit Share Option was deemed improbable with no expense recognized for repayment of reimbursements to Novo.

As of September 30, 2025, $8.5 million of the Company’s accounts receivable was attributed to the Novo Collaboration Agreement.

As of September 30, 2025 and December 31, 2024, no allowance for credit loss was recorded related to accounts receivable.

Vertex Asset Purchase and Research Service Agreement

Vertex Asset Purchase Agreement

In September 2023, the Company entered into an asset purchase agreement with Vertex, under which Vertex acquired an in-process research and development ("IPR&D") asset related to a GPCR program, including all intellectual property, materials, and compounds associated with the program (the “Vertex Asset Purchase Agreement”). The Vertex Asset Purchase Agreement also provides for a potential milestone payment payable to the Company contingent upon the achievement of a milestone event.

In July 2025, this milestone event was determined to have been achieved and, as a result, the Company received a payment of $12.5 million in August 2025, which was recorded as a gain on sale of non-financial asset within total operating expenses in the Company’s condensed statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2025. The Company will not receive any other payments related to this IPR&D asset.

Vertex Research Service Agreement

In conjunction with the Vertex Asset Purchase Agreement in September 2023, the Company entered into research service agreement with Vertex under which the Company agreed to perform certain exploratory research activities for Vertex (the "Vertex Research Service Agreement"). The Company recognized service revenue associated with the Vertex Research Service Agreement over the performance period of the research services as the services are provided in accordance with ASC 606. The Vertex Research Service Agreement expired in September 2025.

During the three and nine months ended September 30, 2025, the Company recorded service revenue of $0.2 million and $0.5 million, respectively, related to research activities performed in connection with the Vertex Research Service Agreement. During the

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

three and nine months ended September 30, 2024, the Company recorded service revenue of $0.2 million and $0.9 million, respectively, related to research activities performed in connection with the Vertex Research Service Agreement. As of September 30, 2025 and December 31, 2024, $0.2 million of the Company’s accounts receivable was attributed to the Vertex Research Service Agreement.

Note 4. Marketable Securities and Fair Value Measurements

The Company records marketable securities and cash equivalents at their estimated fair values, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data.

Fair value is determined based on a three-tier hierarchy under the authoritative guidance for fair value measurements and disclosures that prioritizes the inputs used in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurements and unobservable (i.e., supported by little or no market activity).

Money market funds are highly liquid investments and are classified as Level 1. The pricing information for these assets is readily available and can be independently validated as of the measurement date. Marketable securities, including U.S. Treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities, are classified as Level 2. These securities are valued using fair value from third-party pricing services, which may use observable inputs based on real-time trade data for similar assets, broker/dealer quotes, bids and/or offers and other observable inputs.

The carrying amounts of the Company’s prepaid and other current assets, accounts payable, and accrued and other current liabilities approximate fair value due to their short maturities.

The fair value measurements of the Company’s cash equivalents and marketable securities are identified at the following levels within the fair value hierarchy (in thousands):


	September 30, 2025
			Fair Value Measurement
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	272,696	$	272,696	$	—	$	—
Commercial paper		39,862		—		39,862		—
U.S. treasury securities		—		—		—		—
Marketable securities, current:
U.S. treasury securities		108,095		—		108,095		—
U.S. government agency securities		18,631		—		18,631		—
Commercial paper		24,174		—		24,174		—
Corporate debt securities		3,457		—		3,457		—
Marketable securities, non-current:
U.S. treasury securities		79,899		—		79,899		—
U.S. government agency securities		4,835		—		4,835		—
Corporate securities		2,478		—		2,478		—
Total measured at fair value	$	554,127	$	272,696	$	281,431	$	—

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)


	As of December 31, 2024
			Fair Value Measurement
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	141,779	$	141,779	$	—	$	—
Commercial paper		82,527		—		82,527		—
U.S. government agency securities		8,059		—		8,059		—
Marketable securities, current:
U.S. treasury securities		73,555		—		73,555		—
Commercial paper		23,487		—		23,487		—
U.S. government agency securities		14,193		—		14,193		—
Corporate debt securities		1,492		—		1,492		—
Marketable securities, non-current:
U.S. treasury securities		65,406		—		65,406		—
U.S. government agency securities		2,514		—		2,514		—
Corporate debt securities		1,946		—		1,946		—
Total measured at fair value	$	414,958	$	141,779	$	273,179	$	—

Marketable Securities

As of September 30, 2025 and December 31, 2024, the Company’s marketable securities consist of debt securities, including U.S. Treasury and agency securities, corporate debt securities and commercial paper. These marketable securities are carried at fair value and are included in the tables above. The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. At each reporting date, the Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. The Company evaluates, among others, whether the Company has the intention to sell any of these marketable securities and whether it is not more likely than not that the Company will be required to sell any of them before recovery of the amortized cost basis. Neither of these criteria were met at September 30, 2025 or December 31, 2024. The credit ratings of the securities held remain of the highest quality. Moreover, the Company continues to receive payments of interest and principal as they become due, and the Company's expectation is that those payments will continue to be received timely. Based on this evaluation, as of September 30, 2025 and December 31, 2024, the Company determined that unrealized losses of its marketable securities were primarily attributable to changes in interest rates and non-credit related factors. As such, no allowances for credit losses were recorded at September 30, 2025 or December 31, 2024.

Interest receivable as of September 30, 2025 and December 31, 2024 was $1.9 million and $1.0 million, respectively, and is recorded as a component of prepaid expenses and other current assets on the Company’s condensed balance sheets.

As of September 30, 2025 and December 31, 2024, all marketable securities in an unrealized loss position had been in an unrealized loss position for less than 12 months. As of September 30, 2025, the Company held 31 marketable securities in an unrealized loss position. As of December 31, 2024, the Company held 36 marketable securities in an unrealized loss position.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

As of September 30, 2025, the following table summarizes the amortized cost and the unrealized gains (losses) of the marketable securities presented within marketable securities and cash equivalents (in thousands):


	Remaining								Aggregate
	Contractual								Estimated Fair
	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Value
Commercial paper	Less than 1	$	64,041	$	1	$	(6	)	$	64,036
U.S. treasury securities	Less than 1		107,913		185		(3	)		108,095
U.S. government agency securities	Less than 1		18,603		28		—			18,631
Corporate debt securities	Less than 1		3,451		6		—			3,457

Septerna, Inc. 10-Q