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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 March 31, 2026


☐	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)

(650) 338-3533

(Registrant’s telephone number, including area code)

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 May 7, 2026, the registrant had 45,075,533 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS


		Page


PART I.	FINANCIAL INFORMATION	vii

Item 1.	Financial Statements (unaudited)	vii
	Condensed Balance Sheets	vii
	Condensed Statements of Operations and Comprehensive Loss	viii
	Condensed Statements of Stockholders’ Equity	ix
	Condensed Statements of Cash Flows	x
	Notes to Condensed Financial Statements (unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION	33

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	93
Item 3.	Defaults Upon Senior Securities	94
Item 4.	Mine Safety Disclosures	94
Item 5.	Other Information	94
Item 6.	Exhibits	95
Signatures		96

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 SEP-479 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 SEP-479 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;

•

the 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 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 United States 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 (such as the recent conflict in Iran, as well as ongoing conflicts in Ukraine, and in the Middle East) on our business, including inflationary pressures and capital market disruptions, changes in or disruptions of U.S. governmental agencies, whether from a future 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 this Quarterly Report.

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 “Summary of Material and Other Risks Associated With our Business” below and under the caption “Risk Factors” in our filings with the Securities and Exchange Commission (the “SEC”) 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 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

iii

documents. Copies of some of the documents referred to herein have been filed as exhibits to this Quarterly Report. Unless the context otherwise requires, reference in this Quarterly Report to the terms “Septerna,” “the Company,” “we,” “us,” “our,” and similar designations refer to Septerna, Inc.

SUMMARY OF MATERIAL AND OTHER RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks and uncertainties and are subject to change based on various factors, including those highlighted in this section, and in the section entitled “Risk Factors” in our filings with the SEC and elsewhere in this Quarterly Report. These risks include, but are not limited to, the following:

•

We have a limited operating history and have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.

•

We will require substantial additional funding in order to finance our operations. If we are unable to raise additional capital when needed on acceptable terms, or at all, we may be forced to delay, reduce, or terminate certain of our research and product development programs, future commercialization efforts or other operations.

•

We are early in our development efforts. We have not successfully completed any advanced clinical trials, and as a result it will be years before we commercialize a product candidate, if ever. If we are unable to identify and advance product candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed.

•

Preclinical and clinical drug development is a lengthy and expensive process, with uncertain timelines and outcomes. If preclinical studies or clinical trials of our product candidates are prolonged or delayed, we may be unable to obtain required regulatory approvals, and therefore be unable to commercialize our therapeutic candidates or any of our future therapeutic candidates on a timely basis or at all.

•

We may encounter substantial delays in the commencement, enrollment or completion of our planned clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, which could prevent us from commercializing any product candidates we determine to develop on a timely basis, if at all.

•

Serious adverse events, undesirable side effects or other unexpected properties of our product candidates may be identified during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on the use of our product candidates, any of which would limit the commercial potential of such product candidate.

•

Our product candidates are subject to extensive regulation and compliance obligations, which is costly and time-consuming and which may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

•

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, which could adversely affect our business, operating results and prospects.

•

Our proprietary Native Complex Platform® is based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval, and we may not be successful in our efforts to expand our development portfolio of product candidates.

•

We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may invest significant resources to develop these capabilities. If we are unable to establish marketing, sales or distribution capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.

•

Even if any of our product candidates receive marketing approval, such product candidate may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable.

•

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than us.

•

We rely on third-party manufacturers, clinical research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and suppliers to supply, develop and test components of our product candidates. The loss of our third-party manufacturers, CROs, CMOs, or suppliers, their failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, or at all, or changes in methods of product candidate manufacturing, development or formulation would materially and adversely affect our business.

The material and other risks summarized above should be read together with the text of the full risk factors and in the other information set forth in our filings with the SEC and in this Quarterly Report, including our financial statements and the related notes,

as well as in other documents that we file with the SEC. If any such material and other risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

SEPTERNA, INC.

Condensed Balance Sheets

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

(Unaudited)


	March 31,			December 31,
	2026			2025
Assets
Current assets:
Cash and cash equivalents	$	71,605		$	120,722
Marketable securities		275,796			270,367
Accounts receivable		10,842			10,356
Prepaid expenses and other current assets		9,815			9,519
Total current assets		368,058			410,964
Marketable securities, non-current		174,691			157,569
Property and equipment, net		4,328			4,434
Operating lease right-of-use assets		20,933			21,499
Restricted cash		905			905
Other non-current assets		773			816
Total assets	$	569,688		$	596,187
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	7,464		$	10,283
Accrued expenses and other current liabilities		8,629			12,167
Deferred revenue, current		59,763			62,269
Operating lease liabilities, current		2,309			2,212
Total current liabilities		78,165			86,931
Deferred revenue, non-current		92,184			105,917
Operating lease liabilities, non-current		20,781			21,413
Other non-current liabilities		100			—
Total liabilities		191,230			214,261
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized as of March 31, 2026 and December 31, 2025; no shares issued and outstanding as of March 31, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value per share, 500,000,000 shares authorized at March 31, 2026 and December 31, 2025; 44,916,572 and 44,806,272 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively; 75,247 and 131,224 shares subject to repurchase as of March 31, 2026 and December 31, 2025, respectively		45			45
Additional paid-in capital		554,872			548,517
Accumulated other comprehensive (loss) income		(569	)		617
Accumulated deficit		(175,890	)		(167,253	)
Total stockholders' equity		378,458			381,926
Total liabilities and stockholders' equity	$	569,688		$	596,187

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

vii

SEPTERNA, INC.

Condensed Statements of Operations and Comprehensive Loss

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

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Revenue	$	26,523		$	219
Operating expenses:
Research and development		29,535			19,271
General and administrative		10,288			6,858
Total operating expenses		39,823			26,129
Loss from operations		(13,300	)		(25,910	)
Other income, net:
Interest income		5,031			4,462
Other expense, net		(31	)		(28	)
Total other income, net		5,000			4,434
Loss before provision for income taxes		(8,300	)		(21,476	)
Provision for income taxes		(337	)		—
Net loss attributable to common stockholders	$	(8,637	)	$	(21,476	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.19	)	$	(0.49	)
Weighted-average shares outstanding, basic and diluted		44,758,800			43,937,410
Comprehensive loss:
Net loss	$	(8,637	)	$	(21,476	)
Net unrealized (loss) gain on marketable securities		(1,186	)		142
Total other comprehensive (loss) income		(1,186	)		142
Comprehensive loss	$	(9,823	)	$	(21,334	)

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

viii

SEPTERNA, INC.

Condensed Statements of Stockholders’ Equity

(In thousands, except for shares data)

(Unaudited)


					Additional		Accumulated Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Loss (Income)			Deficit			Equity
Balance at December 31, 2025		44,806,272	$	45	$	548,517	$	617		$	(167,253	)	$	381,926
Issuance of common stock upon exercise of stock options		110,300		—		335		—			—			335
Vesting of restricted common stock		—		—		5		—			—			5
Stock-based compensation expense		—		—		6,015		—			—			6,015
Net unrealized loss on marketable securities		—		—		—		(1,186	)		—			(1,186	)
Net loss		—		—		—		—			(8,637	)		(8,637	)
Balance at March 31, 2026		44,916,572	$	45	$	554,872	$	(569	)	$	(175,890	)	$	378,458


					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

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

SEPTERNA, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(8,637	)	$	(21,476	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		421			397
Non-cash operating lease expense		566			516
Stock-based compensation		6,015			1,482
Accretion of discounts, net		(755	)		(965	)
Other		3			(11	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(294	)		(488	)
Accounts receivable		(486	)		(79	)
Other non-current assets		43			(9	)
Accounts payable		(2,302	)		1,186
Accrued expenses and other current liabilities		(3,533	)		(3,446	)
Deferred revenue		(16,239	)		—
Operating lease, net		(535	)		(450	)
Other non-current liabilities		100			—
Net cash used in operating activities		(25,633	)		(23,343	)
Cash flows from investing activities:
Purchases of property and equipment		(832	)		(382	)
Purchases of marketable securities		(105,230	)		(49,715	)
Maturities of marketable securities		82,245			45,223
Net cash used in investing activities		(23,817	)		(4,874	)
Cash flows from financing activities:
Proceeds from exercise of stock options		333			66
Net cash provided by financing activities		333			66
Net decrease in cash, cash equivalents and restricted cash		(49,117	)		(28,151	)
Cash, cash equivalents and restricted cash, beginning of period		121,627			239,101
Cash, cash equivalents and restricted cash, end of period	$	72,510		$	210,950

Cash, Cash Equivalents and Restricted Cash:


	As of March 31,
	2026		2025
Cash and cash equivalents	$	71,605	$	210,045
Restricted cash		905		905
Total cash, cash equivalents and restricted cash at end of period	$	72,510	$	210,950

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.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) stated in U.S. dollars and include all adjustments necessary for the fair presentation of the Company’s interim financial information.

The condensed balance sheet data at December 31, 2025 was derived from the audited financial statements included in Septerna’s Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission (“SEC”) on March 9, 2026. 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, 2025.

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 satisfy its liabilities in the normal course of business.

As of March 31, 2026, the Company had cash, cash equivalents and marketable securities of $522.1 million, which the Company believes will be sufficient to fund its planned operations for a period of, at least, twelve months following the date of filing of this report.

Significant Accounting Policies

During the three months ended March 31, 2026, 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, 2025.

Recently Adopted Accounting Pronouncements

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 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 determined there is no impact of adopting ASU 2025-05 as it does not develop forecasts as part of estimating expected credit losses.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

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 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. The ASU is 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 this update will have on its disclosures.

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 March 31,		As of December 31,
	2026		2025
Prepaid expenses	$	5,917	$	4,622
Interest receivable		3,448		3,384
Prepaid bonus		340		361
Other current assets		110		1,152
Prepaid expenses and other current assets	$	9,815	$	9,519

Property and Equipment, Net

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


	As of March 31,			As of December 31,
	2026			2025
Lab equipment	$	6,761		$	6,339
Furniture, fixtures, and office equipment		1,222			1,222
Leasehold improvements		717			717
Computer equipment		401			401
Construction in progress		—			107
Total property and equipment		9,101			8,786
Less: Accumulated depreciation and amortization		(4,773	)		(4,352	)
Property and equipment, net	$	4,328		$	4,434

Depreciation and amortization expense was $0.4 million for each of the three month periods ended March 31, 2026 and 2025.

Accrued Expenses and Other Current Liabilities

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


	As of March 31,		As of December 31,
	2026		2025
Accrued research and development expense	$	4,932	$	5,179
Accrued employee compensation expense		1,621		5,606
Accrued general and administrative expense		912		915
Employee stock purchase plan liability		801		319
Other current liabilities		363		148
Accrued expenses and other current liabilities	$	8,629	$	12,167

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

Note 3. Revenue

Novo Collaboration Agreement

On May 13, 2025, the Company and Novo entered into a global Collaboration and License Agreement (the “Novo Collaboration Agreement”). Under the Novo Collaboration Agreement, the Company is exclusively collaborating with Novo 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. The collaboration objective is to discover and develop several novel mono-, dual-, or triple-acting oral small molecule drug candidates directed across five GPCRs, including the GLP-1, GIP, and glucagon receptors (the “Collaboration Targets”). The collaboration included the Company's most advanced preclinical metabolic program focused on developing an oral small molecule agonist to the GIP receptor.

After the Novo Collaboration Agreement became effective on July 1, 2025, the Company and Novo commenced four simultaneous research and development programs (each an “R&D Program”) with each pursuing one or more Collaboration Targets from discovery through development candidate selection. Beginning with investigational new drug-enabling activities, Novo will then be responsible for all further global development and commercialization for each product candidate at its sole cost and expense. Subject to certain limitations, Novo has the right to modify the research plans and explore additional combinations of the existing Collaboration Targets for one or more of such R&D Programs provided that no more than four R&D Programs will be pursued simultaneously. Novo reimburses 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. Novo is also responsible for all commercialization costs subject to the Company's profit and loss share option described below for up to one program under the collaboration.

Under 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 its other research and development programs.

In July 2025, Novo paid the Company a one-time, non-refundable upfront payment of $195.0 million. For each R&D Program, the Company is also eligible to receive up to approximately $498.0 million in research, development, regulatory, and commercial milestone payments. 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. The royalty payments are subject to certain step-down provisions including reductions due to valid patent claim expiration, generic product market share on a country-by-country basis, payments made under certain licenses for third party intellectual property and application of Inflation Reduction Act maximum fair price provisions (with such cumulative reductions in most cases subject to a royalty reduction floor). Subject to certain terms, conditions and limitations, the Company holds an option to elect a profit and loss sharing arrangement (in lieu of milestones and royalties) for one product candidate under the Novo Collaboration Agreement, which must be exercised by the Company within a specified time period following completion of either IND-enabling studies or the first Phase 1 clinical trial for such product (the "Profit Share Option").

The Company periodically assesses the probability of receiving payments from achieving the research and development, collaboration target, and regulatory milestones, and includes the milestone amounts in the transaction price when they are considered probable. As of March 31, 2026, the Company determined that two discovery research milestones became probable of achievement. As a result, $2.0 million of milestone consideration was included in the transaction price and allocated to the performance obligations to which they relate. Revenue associated with these milestones is recognized over time using an input method, as discussed further below. Although the Company's contractual right to payment associated with these two collaboration milestones has not yet arisen under the Novo Agreement, recognition of milestones consideration within the allocated transaction price, and recognition of revenue during the three months ended March 31, 2026 March 31, 2026 is appropriate in accordance with ASC 606.

No royalty revenue has been recognized and the Profit Share Option was deemed improbable with no amount recognized for repayment of certain reimbursements to Novo as of March 31, 2026.

Royalties and commercial sale milestones are recognized when the subsequent sales occur based on the sales or usage-based royalty exception. The Company also periodically reassesses the probability of exercising the Profit Share Option.

The Company recognizes revenue related to the combined license and research services performance obligations 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.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

The following table presents revenue recognized, transaction price including the portion associated with the milestones that are probable, and estimated revenue expected to be recognized in the future as of March 31, 2026 (in thousands):


	Transaction Price
Combined license, research and manufacturing services	$	247,846
Material right		41,190
Discovery research milestones(1)		2,000
Total transaction price(2)	$	291,036
Revenue recognized(3)		(71,900	)
Unrecognized transaction price as of March 31, 2026	$	219,136

_____________________

(1)

As of March 31, 2026, the Company determined that two discovery research milestones became probable of achievement. Accordingly, the Company recognized these milestones within the transaction price. The milestones recognized within the transaction price are allocated to the applicable R&D Program performance obligations to which they relate and are recognized as revenue using the input method.

(2)

Comprised of the allocation of the $195.0 million one-time, non-refundable upfront payment, of which $153.8 million was allocated to the four R&D programs and manufacturing services and $41.2 million was allocated to the material right. In addition, $94.0 million of variable consideration related to estimated research and manufacturing services for the four R&D Programs, and $2.0 million of variable consideration related to the two milestones deemed probable of achievement was allocated to the transaction price as of March 31, 2026.

(3)

For the three months ended March 31, 2026, the Company recognized revenue of $26.5 million, which was comprised of $10.3 million variable consideration related to research services for the four R&D Programs and manufacturing services, $15.7 million recognition of deferred revenue for the one-time, non-refundable upfront payment, and $0.5 million milestone revenue recognized on the two milestones discussed above. The Company recognized $26.8 million of the one-time, non-refundable upfront payment and $18.6 million variable considerations related to research services for the four R&D Programs and manufacturing services during the year ended December 31, 2025.

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 condensed 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 condensed balance sheets.

The following table summarizes the changes in deferred revenue (in thousands):


Balance at January 1, 2026	$	168,186
Recognized in revenue during the three months ended March 31, 2026		(15,708	)
Netting against contract asset(1)		(531	)
Balance at March 31, 2026(2)	$	151,947

_____________________

(1)

During the three months ended March 31, 2026, the Company recognized $0.5 million of milestone revenue as described above and recorded a related contract asset as the contractual right to payment associated with the discovery research milestones under the Novo Collaboration Agreement had not arisen. In accordance with ASC 606, contract assets and liabilities associated within an agreement are considered interdependent and are recorded net in the condensed balance sheets. Accordingly, the contract asset was netted against the deferred revenue balance as of March 31, 2026.

(2)

Comprised of $59.8 million of deferred revenue, current and $92.2 million of deferred revenue, non-current, which is expected to be recognized over approximately 3.3 years. As of March 31, 2026, all of the Company's performance obligations associated with its deferred revenue balances are outstanding.

As of March 31, 2026 and December 31, 2025, the Company’s accounts receivable was entirely attributed to Novo, and no allowance for credit loss was recorded related to accounts receivable.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

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):


	March 31, 2026
			Fair Value Measurement
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	48,411	$	48,411	$	—	$	—
Commercial paper		15,978		—		15,978		—
Corporate securities		2,266		—		2,266		—
Marketable securities, current:
U.S. treasury securities		151,153		—		151,153		—
Corporate securities		62,820		—		62,820		—
Commercial paper		43,351		—		43,351		—
U.S. government agency securities		18,472		—		18,472		—
Marketable securities, non-current:
U.S. treasury securities		126,328		—		126,328		—
Corporate securities		32,682		—		32,682		—
U.S. government agency securities		15,681		—		15,681		—
Total measured at fair value	$	517,142	$	48,411	$	468,731	$	—

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)


	As of December 31, 2025
			Fair Value Measurement
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	63,736	$	63,736	$	—	$	—
Commercial paper		50,163		—		50,163		—
Corporate securities		2,190		—		2,190		—
Marketable securities, current:		—
U.S. treasury securities		141,984		—		141,984		—
Commercial paper		67,784		—		67,784		—
Corporate securities		32,573		—		32,573		—
U.S. government agency securities		28,026		—		28,026		—
Marketable securities, non-current:		—
U.S. treasury securities		117,632		—		117,632		—
Corporate securities		35,713		—		35,713		—
U.S. government agency securities		4,224		—		4,224		—
Total measured at fair value	$	544,025	$	63,736	$	480,289	$	—

Marketable Securities

As of March 31, 2026 and December 31, 2025, 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 March 31, 2026 or December 31, 2025. 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 March 31, 2026 and December 31, 2025, 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 March 31, 2026 or December 31, 2025.

Interest receivable as of March 31, 2026 and December 31, 2025 was $3.4 million and is recorded as a component of prepaid expenses and other current assets on the Company’s condensed balance sheets.

As of March 31, 2026 and December 31, 2025, all marketable securities in an unrealized loss position had been in an unrealized loss position for less than 12 months. As of March 31, 2026, the Company held 167 marketable securities in an unrealized loss position. As of December 31, 2025, the Company held 44 marketable securities in an unrealized loss position.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

As of March 31, 2026, 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
U.S. treasury securities	Less than 1	$	151,062	$	124	$	(33	)	$	151,153
Corporate securities	Less than 1		65,210		—		(124	)		65,086
Commercial paper	Less than 1		59,348		—		(19	)		59,329
U.S. government agency securities	Less than 1		18,465		8		(1	)		18,472
Total maturity less than 1 year			294,085		132		(177	)		294,040
U.S. treasury securities	1 to 2		126,680		17		(369	)		126,328
Corporate securities	1 to 2		32,802		4		(124	)		32,682
U.S. government agency securities	1 to 2		15,733		—		(52	)		15,681
Total		$	469,300	$	153	$	(722	)	$	468,731

As of December 31, 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 Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Estimated Fair Value
Commercial paper	Less than 1	$	117,939	$	17	$	(9	)	$	117,947
U.S. treasury securities	Less than 1		141,688		296		—			141,984
Corporate securities	Less than 1		34,755		14		(6	)		34,763
U.S. government agency securities	Less than 1		27,992		34		—			28,026
Total maturity less than 1 year			322,374		361		(15	)		322,720
U.S. treasury securities	1 to 2		117,376		257		(1	)		117,632
Corporate securities	1 to 2		35,699		24		(10	)		35,713
U.S. government agency securities	1 to 2		4,223		2		(1	)		4,224
Total		$	479,672	$	644	$	(27	)	$	480,289

As of March 31, 2026, the following table summarizes marketable securities in an unrealized loss position (in thousands):


	Remaining Contractual Maturity (in years)	Fair Value		Gross Unrealized Loss
Corporate securities	Less than 1	$	64,093	$	(124	)
Commercial paper	Less than 1		57,636		(19	)
U.S. treasury securities	Less than 1		49,876		(33	)
U.S. government agency securities	Less than 1		6,060		(1	)
Total maturity less than 1 year			177,665		(177	)
U.S. treasury securities	1 to 2		115,720		(369	)
Corporate securities	1 to 2		29,168		(124	)
U.S. government agency securities	1 to 2		15,681		(52	)
Total		$	338,234	$	(722	)

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

Note 5. Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal proceedings, claims and litigation, as the Company operates in an industry susceptible to patent or other legal claims. The Company is not currently a party to any legal proceeding that, if determined adversely to the Company, in management’s opinion, is expected to individually or in the aggregate have a material adverse effect on its business, financial condition or liquidity and results of operations.

Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its officers and directors.

The maximum potential amount of future payments that the Company could be required to make under these provisions is not determinable; however, the Company currently holds director and officer liability insurance. This insurance limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. In addition, the Company is not currently aware of any indemnification claims that could have a material effect on its condensed financial statements. Accordingly, the Company did not record any liabilities associated with these indemnification rights and agreements as of March 31, 2026 and December 31, 2025.

Note 6. Common Stock

As of March 31, 2026 and December 31, 2025, the Company was authorized to issue 500.0 million shares of common stock, par value $0.001 per share.

The Company reserved the following shares of common stock, on an as-converted basis, for future issuance:


	As of March 31,		As of December 31,
	2026		2025
Options issued and outstanding		6,295,470		4,378,484
Shares reserved for future grants under 2024 Stock Option and Incentive Plan and 2026 Inducement Plan		4,970,667		4,257,640
Shares reserved for issuance under 2024 Employee Stock Purchase Plan		620,613		251,211
		11,886,750		8,887,335

At-the-Market Equity Program

In March 2026, the Company entered into an ATM Equity OfferingSM Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., acting as the Company’s sales agent and/or principal (the “Sales Agent”), with respect to an “at-the-market offering” program pursuant to which the Company may, from time to time, at its sole discretion, issue and sell shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agent (the “ATM Program”). Pursuant to the Sales Agreement, any shares will be sold pursuant to the automatic shelf registration statement on Form S-3ASR (File No. 333-294185) filed with the SEC on March 10, 2026, which became automatically effective upon filing, including the base prospectus and the sales agreement prospectus contained therein. As of March 31, 2026, the Company had not sold any shares of its common stock under the ATM Program.

Note 7. Stock-Based Compensation

Stock Plans

In October 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Stock Option and Incentive Plan (the “2024 Plan”), which became effective immediately prior to the effective date of the Company's initial public offering (“IPO”) and superseded the Company’s 2021 Stock Option and Grant Plan, as amended (the “2021 Plan”) (together, the “Stock Plans”).

On January 1, 2026, the number of shares of common stock available under the 2024 Plan increased by 2.2 million shares pursuant to an evergreen provision of the 2024 Plan. As of March 31, 2026, there were 4.6 million shares available for issuance under the 2024 Plan.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

Inducement Plan

In February 2026, the Company’s board of directors adopted the 2026 Inducement Plan (the “Inducement Plan”). The Inducement Plan initially reserved 0.5 million shares of common stock to be issued exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to such individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market. The Inducement Plan was adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4).

As of March 31, 2026, there were 0.3 million shares available for issuance under the Inducement Plan.

2024 ESPP

In October 2024, the Company’s board of directors adopted the 2024 Employee Stock Purchase Plan (the “2024 ESPP”), which became effective immediately prior to the effective date of the Company's IPO.

On January 1, 2026, the number of shares of common stock available under the 2024 ESPP increased by 0.4 million shares pursuant to an evergreen provision of the 2024 ESPP. As of March 31, 2026, there were 0.6 million shares available for issuance under the 2024 ESPP. There were no issuances of common stock under the 2024 ESPP during the three months ended March 31, 2026. As of March 31, 2026, total unrecognized stock-based compensation expense related to ESPP was $1.4 million, which is expected to be recognized over a weighted average period of 1.0 years.

Restricted Stock Awards

The following summarizes restricted stock award activity:


	Number of Shares Outstanding			Weighted-Average Grant Date Fair Value Per Share
Balance at December 31, 2025, subject to repurchase		131,224		$	1.81
Restricted stock awards vested		(55,977	)		1.87
Balance at March 31, 2026, subject to repurchase		75,247			1.75

The aggregate grant date fair value of shares vested during the three months ended March 31, 2026 was $0.1 million.

Stock Options

The following summarizes stock option activity under the Stock Plans and the Inducement Plan:


	Stock Options Outstanding
	Total Stock Options Outstanding			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2025		4,378,484		$	7.97		8.79	$	87,194
Granted		2,074,850			25.44
Exercised		(110,300	)		3.04
Cancelled		(47,564	)		18.31
Outstanding as of March 31, 2026		6,295,470			13.73		8.92		67,796
Exercisable as of March 31, 2026		1,431,786		$	6.69		7.96	$	24,935

The aggregate fair value of stock options that vested during the three months ended March 31, 2026 was $4.8 million. The stock options granted in the three months ended March 31, 2026 had a weighted-average grant-date fair value per share of $20.10 and a total grant-date fair value of $41.7 million. The total intrinsic value of stock options exercised during the three months ended March 31, 2026 was $2.8 million.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

Stock Option Valuation

The weighted-average assumptions used to value employee and non-employee stock option awards granted under the Stock Plans and the Inducement Plan using the Black Scholes option pricing model, were as follows:


	Three Months Ended March 31,
	2026			2025
Fair value of common stock	$	20.10		$	9.32
Risk-free interest rate		3.88	%		4.35	%
Expected volatility		96.3	%		88.6	%
Expected term (years)		6.05			5.99
Expected dividend yield	—%			—%

Stock-based Compensation Expense

Stock-based compensation expense for restricted stock awards and stock options recognized in the Company’s condensed statements of operations and comprehensive loss is presented as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Research and development expense	$	2,440	$	662
General and administrative expense		3,575		820
Total stock-based compensation expense	$	6,015	$	1,482

As of March 31, 2026, total unrecognized stock-based compensation expense related to unvested restricted stock awards and unvested stock options was $60.5 million, which is expected to be recognized over a weighted-average period of 3.0 years.

Note 8. Related Parties

Third Rock Ventures

In August 2021, the Company entered into a service agreement (the “TRV service agreement”) with Third Rock Ventures, LLC (“TRV”), a holder of more than 5% of the Company’s outstanding capital stock, under which TRV provides consulting services to the Company. For the three months ended March 31, 2026 and 2025, the Company incurred no fees under the TRV service agreement. There were no expenses related to TRV in accrued expenses and other current liabilities on the Company’s condensed balance sheets at March 31, 2026, or December 31, 2025.

A member of the Company’s board of directors is affiliated with TRV (the “TRV Board Member”). In December 2024, the Company entered into a separate consulting agreement with the TRV Board Member, which includes cash compensation to be paid directly to the TRV Board member.

For the three months ended March 31, 2026 and 2025, the fees attributed to consulting services provided by the TRV Board Member were nominal.

During the three months ended March 31, 2026, no fees related to the TRV Board Member’s consulting services were recorded in accrued expenses and other current liabilities. As of December 31, 2025, there was a nominal expense recorded in accrued expenses and other current liabilities and a nominal outstanding accounts payable to the TRV Board Member.

Note 9. Net Loss Per Share

The Company had 6,483,046 shares of potentially dilutive securities, comprised of 6,295,470 outstanding stock options, 75,247 unvested restricted stock awards subject to repurchase, and 112,329 shares issuable under the 2024 ESPP, not included in the calculation of diluted net loss per share for the three months ended March 31, 2026 because to do so would be anti-dilutive.

Note 10. Segment Information

The Company operates in one segment, which is GPCR oral small molecule drug discovery. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The measure of segment profit or loss is net loss, which is also reported on the condensed statements of operations and comprehensive loss as net loss.

SEPTERNA, INC.

Notes to UNAUDITED Condensed Financial Statements (CONTINUED)

The measure of segment assets is reported on the condensed balance sheet as total assets. The CODM uses segment net loss to monitor spending, assess performance for the Company and management, evaluate the progress of completing corporate goals, decide how to allocate resources among the Company’s clinical and pre-clinical portfolios, and make strategic decisions about business development opportunities.

The CODM is regularly provided with the following significant segment expenses:


	Three Months Ended March 31,
	2026			2025
Revenue	$	26,523		$	219
Employee-related expenses, excluding stock-based compensation		10,589			6,845
Stock-based compensation		6,015			1,482
External research and development expenses		14,557			10,239
External general and administrative expenses		2,506			2,652
Other segment expenses*		6,156			4,911
Total operating expenses		39,823			26,129
Loss from operations		(13,300	)		(25,910	)
Other income, net		5,000			4,434
Loss before provision for income taxes		(8,300	)		(21,476	)
Provision for income taxes		(337	)		—
Net loss	$	(8,637	)	$	(21,476	)

(*) Other segment expenses include facility related and office costs, information technology costs, general laboratory costs, depreciation and amortization of property and equipment, net, and other operating expenses.

As of March 31, 2026 and December 31, 2025, all of the Company’s property and equipment was maintained in the U.S. For the three months ended March 31, 2026 and 2025, the Company’s revenue was generated from providing research services and was earned in the U.S.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed financial statements and related notes included elsewhere in this Quarterly Report and audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”), filed with the SEC on March 9, 2026. This discussion and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans, and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors including, but not limited to, those set forth under the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our other filings with the SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and you should carefully read the section titled “Risk Factors” in this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biotechnology company pioneering a new era of GPCR oral small molecule drug discovery powered by our proprietary Native Complex Platform®. Our industrial-scale platform aims to unlock the full potential of GPCR therapies and has led to the discovery and development of our deep pipeline of drug candidates focused initially on treating patients in three therapeutic areas: endocrinology, immunology and inflammation, and metabolic diseases.

Our proprietary Native Complex Platform® replicates the natural structure, function, and dynamics of GPCRs outside of cells at an industrial scale for, as we believe it, the first time. Our foundational technologies enable us 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. We then apply 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 our platform, we conduct GPCR oral small molecule drug discovery using an industrialized and iterative structure-based drug design approach for a diverse collection of GPCR targets. Our Native Complex Platform® is designed to enable us to target specific GPCRs, uncover novel binding pockets for validated receptors, and pursue a wide spectrum of pharmacologies, including agonists (which activate GPCR signaling), antagonists (which inhibit GPCR signaling), and allosteric modulators (which either increase or decrease the degree of GPCR activation by endogenous ligands), to affect GPCR signaling in different ways to achieve desired therapeutic effects.

We are advancing a deep portfolio of oral small molecule GPCR-targeted programs with novel mechanistic approaches to treat diseases across multiple therapeutic areas for patients with significant unmet needs. Our pipeline of wholly-owned and partnered programs is summarized in the figure below.

Recent Developments

•

SEP-479 PTH1R Agonist Program:

On April 13, 2026, we announced the dosing of the first participants in our Phase 1 clinical trial of SEP-479, our oral small molecule PTH1R agonist being developed for the treatment of patients with hypoparathyroidism. The Phase 1 clinical trial is a single-ascending dose (“SAD”) and multiple-ascending dose (“MAD”) clinical trial to evaluate the safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of SEP-479 in healthy adult volunteers. The randomized, placebo-controlled Phase 1 clinical trial is expected to enroll up to 150 healthy adult participants. The SAD portion of the clinical trial will evaluate the safety and tolerability of SEP-479 at escalating oral doses. The MAD portion of the clinical trial is designed to evaluate the safety and tolerability of once-daily oral dosing of SEP-479 over multiple days of treatment, with secondary and exploratory endpoints including PK and PD, with the latter assessed by changes in endogenous PTH and serum calcium, as well as other biomarkers. We anticipate reporting data from the trial in late 2026 or early 2027.

Financial Overview

We have incurred significant operating losses since our inception, except for the year ended December 31, 2023. Our revenue to date has been generated solely from research services. Since our founding, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, developing our proprietary and structure-based drug discovery platform, identifying and discovering our product candidates, establishing our intellectual property portfolio, conducting research and preclinical studies, including IND-enabling studies, initiating and conducting clinical trials, establishing arrangements with third parties for the manufacture of our product candidates and related raw materials, and providing general and administrative support for these operations. We have not had any products approved for sale and have not generated any revenue from product sales. Further, we do not expect to generate revenue from commercial product sales until such time, if ever, that we are able to successfully complete the development and obtain marketing approval for one or more of our product candidates. Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates.

Our net loss was $8.6 million and $21.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $175.9 million. We have incurred net losses in each year since inception, except for the year ended December 31, 2023. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

We expect to continue to incur significant and increasing net operating losses for the next several years as we:

•

continue to advance our product candidates through preclinical studies and into clinical trials;

•

attract, hire and retain additional personnel;

•

continue to operate as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, legal, auditing, insurance expenses, investor relations activities, and other administrative and professional services;

•

continue our research and development efforts and expand our pipeline of product candidates;

•

acquire, discover, validate, and develop additional product candidates;

•

manufacture supplies for our preclinical studies and clinical trials;

•

obtain, maintain, expand, and protect our intellectual property portfolio;

•

implement operational, financial and information management systems;

•

make royalty, milestone or other payments under any future, license or collaboration agreements;

•

potentially seek to identify, assess, acquire, or in-license or develop new technologies or additional product candidates;

•

potentially experience any delays, challenges, or other issues associated with the clinical development of our product candidates, including with respect to our regulatory strategies;

•

pursue regulatory approval of product candidates that successfully complete clinical trials; and

•

establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval and related commercial manufacturing build-out.

Our net losses may fluctuate significantly from period to period, depending upon the timing of our expenditures on research and development activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses and other current liabilities, which includes accrued research and development, in the condensed statements of cash flows included elsewhere in this Quarterly Report.

As a result, we will require substantial additional funding to further develop our product candidates and support our continuing operations. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. See the section titled “Liquidity and Capital Resources - Future Funding Requirements” below for additional information.

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and collaboration arrangements with other companies. In March 2026, we entered into an ATM Equity OfferingSM Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., acting as our sales agent and/or principal (the “Sales Agent”) with respect to an “at-the-market offering” program pursuant to which we may, from time to time, at our sole discretion, issue and sell shares of our common stock having an aggregate offering price of up to $150.0 million through the Sales Agent (the “ATM Program”). As of March 31, 2026, we have not sold any shares of our common stock under the ATM Program.

We believe our cash, cash equivalents, and marketable securities of $522.1 million as of March 31, 2026 will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

We use contract research and development organizations to conduct our preclinical works and clinical trials. Additionally, we utilize third-party CMOs, to manufacture and supply our preclinical and clinical materials during the development of our product candidates. We expect to use similar contract resources for the commercialization of our products, at least until our resources and operations are at a scale that justifies investment in internal manufacturing capabilities.

We conduct research and manufacturing work outside of the United States, including China, that may be affected by tariffs, including tariffs that have been or may in the future be imposed by the United States or other countries through reciprocal tariffs. While we do not currently believe tariffs will have a material impact on our business or results of operations, we will continue to carefully monitor the situation. Additionally, we continue to actively monitor macroeconomic conditions and market volatility resulting from global and national economic developments, political unrest, inflationary pressures, interest rate fluctuations, disruptions in capital markets, changes in international trade relationships, changes in or the disruptions of U.S. governmental agencies, whether from a future U.S. federal government shutdown or reduced resources, new laws and regulations or amendments to existing laws and regulations in the U.S. and foreign countries, and military conflicts, such as the recent conflict in Iran, as well as ongoing conflicts in Ukraine, and in the Middle East. While we believe such factors have had no significant impact on our business or financial results during the periods presented, future developments and potential impacts on our business are uncertain and cannot be predicted with confidence.

Collaboration, Research Services, and Asset Purchase Agreements

Novo Collaboration Agreement

In May 2025, we entered into a global Collaboration and License Agreement with Novo (the "Novo Collaboration Agreement"). Under the Novo Collaboration Agreement, we and Novo are exclusively collaborating to leverage our 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. The collaboration objective is to discover and develop several novel mono-, dual-, or triple-acting oral small molecule drug candidates directed across five GPCRs, including the GLP-1, GIP, and glucagon receptors (the "Collaboration Targets"). The collaboration includes our most advanced preclinical metabolic program focused on developing an oral small molecule agonist to the GIP receptor. We and Novo have initially commenced four simultaneous research and development programs (each an “R&D Program”) with each pursuing one or more Collaboration Targets from discovery through development candidate selection.

In July 2025, the Novo Collaboration Agreement became effective and, subsequently, we received a one-time, non-refundable upfront payment of $195.0 million, which was recorded as deferred revenue in our condensed balance sheet. For each R&D Program, we are also eligible to receive up to approximately $498.0 million in research, development, regulatory, and commercial milestone payments. In addition, we are 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.

For the three months ended March 31, 2026, our revenue was derived solely from research activities performed for Novo under the Novo Collaboration Agreement. As of March 31, 2026, our accounts receivable was entirely attributed to Novo. See Note 3 to the condensed financial statements in this Quarterly Report for additional information.

Vertex Research Service Agreement

In connection with the entry into asset purchase agreement with Vertex in September 2023, we also entered into a research service agreement with Vertex (“Vertex Research Service Agreement”) under which we agreed to perform certain exploratory research activities for Vertex. For the three months ended March 31, 2025, our revenue was derived solely from research activities performed for Vertex under the Vertex Research Service Agreement. The Vertex Research Service Agreement expired in September 2025.

Components of Results of Operations

Revenue

We have not generated any revenue from product sales and do not expect to do so in the foreseeable future. Our ability to generate product revenue, if ever, will depend on the successful development and eventual commercialization of any product candidates that we identify. If we fail to complete the development of any future product candidates in a timely manner or to obtain regulatory approval for such product candidates, our ability to generate future revenue and our results of operations and financial position would be materially adversely affected. Our revenues to date have been exclusively related to license and research and development (“R&D”) services and achievement of milestones. Our license and research service revenue consists of amounts recognized from the portions of the non-refundable upfront payment and R&D services performed by us.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development

Research and development expenses account for the largest component of our total operating expenses. Research and development expenses consist primarily of direct and unallocated costs incurred for the research and development of our product candidates. Our research and development expenses consist of:

•

direct costs, including:

▪

clinical program costs, which include external costs to conduct clinical trials, including costs paid to CROs, the production of clinical materials and fees paid to contract manufacturers, costs incurred in connection with clinical laboratory operations, materials and supplies;

▪

preclinical and research program costs, which include external research and development costs related to (i) the production of preclinical materials, including fees and milestones paid to contract manufacturers and (ii) agreements with contract development organizations, consultants and other third-party contract organizations to conduct our

preclinical studies and other research and development activities on our behalf, costs incurred in connection with laboratory operations, materials and supplies, and other preclinical studies; and

•

unallocated costs, including:

▪

payroll-related costs, including salaries, benefits and stock-based compensation for employees engaged in research and development activities;

▪

external research and development costs, including contract research and development and professional service fees for consulting and related services;

▪

facility-related and office costs, including lease/rent, building-related expenses, facility-related overhead, and depreciation expense; and

▪

other costs, including expenses related to our funded, sponsored research activities and technology licenses, laboratory operations, information technology (“IT”)-related expenses

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

A significant portion of our research and development costs have been external costs, which we track by stage of development. However, we do not track our unallocated costs on a program specific basis because these costs are deployed across multiple projects and, as such, are not separately classified.

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We expect that our research and development expenses will increase substantially in absolute dollars for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to conduct new clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, and as we incur expenses associated with hiring additional personnel to support our research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control, including the uncertainty of:

•

the scope, timing and progress of preclinical and clinical development activities;

•

the number and scope of preclinical and clinical programs we decide to pursue;

•

our ability to maintain our current research and development programs and to establish new ones;

•

establishing an appropriate safety profile with IND-enabling studies;

•

the number of sites and patients included in the clinical trials;

•

the countries in which the clinical trials are conducted;

•

our ability to replicate positive results from a completed clinical study in a future clinical study;

•

per patient trial costs;

•

successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates;

•

the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to FDA, European Medicines Agency (“EMA”), or any other comparable foreign regulatory authorities;

•

delays or disruptions in review, approval, inspection, or other actions by the FDA or other applicable U.S. or foreign government regulatory authorities that could impact the timing, initiation, conduct, or completion of our clinical trials or marketing applications;

•

the number of trials required for regulatory approval;

•

the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities;

•

our ability to maintain existing collaborations and strategic relationships, to identify and establish any future collaboration arrangements on favorable terms, if at all, and to realize the intended and potential benefits of such agreements and collaborations;

•

the performance of any current or future collaborators;

•

establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

•

significant and changing government regulation and regulatory guidance;

•

the impact of any business interruptions to our operations or to those of the third parties with whom we work;

•

obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

•

launching commercial sales of our product candidates, if approved, whether alone or in collaboration with others; and

•

maintaining a continued acceptable safety profile of the product candidates following regulatory approval.

Any changes in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our product candidates. For example, if the FDA, EMA or any other comparable foreign regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development. We may never obtain regulatory approval for any of our product candidates.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, costs related to maintenance and filing of intellectual property, legal fees related to corporate matters, professional fees paid for accounting, auditing, consulting, tax and investor relations services, insurance costs, general corporate expenses, and IT-related and facility-related costs not otherwise included in research and development expenses. Personnel-related costs include salaries, benefits, and stock-based compensation for our personnel in executive, legal, finance and accounting, human resources, and other administrative functions.

We expect that our general and administrative expenses will increase in absolute dollars for the foreseeable future as we continue to increase our headcount to support our business growth and to advance our research and development programs.

Other Income, Net

Interest Income

Interest income consists of interest earned on our cash, cash equivalents and marketable securities during the period.

Other Expense, Net

Other expense, net consists primarily of changes in the fair value of our cash equivalents held in money market funds, loss on disposal of our fixed assets and foreign currency transaction gain or loss.

Provision for Income Taxes

We are subject to corporate U.S. federal and state income taxation. Our provision for income taxes is recorded in accordance with Accounting Standard Codification 740, Accounting for Income Taxes, which provides for deferred taxes using an asset and liability approach. We establish a valuation allowance against all of our net deferred tax assets. We consider all available evidence, both positive and negative, including but not limited to our historical operating results, income or loss in recent periods, cumulative losses in recent years, forecasted earnings (losses), future taxable income (loss), and significant risk and uncertainty related to forecasts, and concluded the deferred tax assets are not more likely than not to be realized.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

Our results of operations for each of the periods indicated are summarized in the table below (in thousands):


	Three Months Ended March 31,
	2026			2025			Change
Revenue	$	26,523		$	219		$	26,304
Operating expenses:
Research and development		29,535			19,271			10,264
General and administrative		10,288			6,858			3,430
Total operating expenses		39,823			26,129			13,694
Loss from operations		(13,300	)		(25,910	)		12,610
Other income, net:
Interest income		5,031			4,462			569
Other expense, net		(31	)		(28	)		(3	)
Total other income, net		5,000			4,434			566
Loss before provision for income taxes		(8,300	)		(21,476	)		13,176
Provision for income taxes		(337	)		—			(337	)
Net loss	$	(8,637	)	$	(21,476	)	$	12,839

Revenue

Our total revenue of $26.5 million for the three months ended March 31, 2026 was generated from research activities performed for Novo, of which $15.7 million was recognized from deferred revenue associated with the upfront payment from Novo, $10.3 million of variable consideration related to estimated research services, and $0.5 million associated with the recognition of revenue for two discovery research milestones deemed probable of achievement as of March 31, 2026. All of our revenue for three months ended March 31, 2025 was generated from research activities performed for Vertex.

Operating Expenses

Research and Development

The following table summarizes our research and development expenses for the periods indicated by direct and unallocated costs (in thousands):


	Three Months Ended March 31,
	2026		2025		Change
Direct costs:
SEP-631 (MRGPRX2)	$	2,466	$	1,022	$	1,444
PTH1R		2,354		4,209		(1,855	)
Other programs		9,621		4,200		5,421
Unallocated costs:
Payroll-related costs		10,121		5,413		4,708
Facility-related and office costs		2,243		1,926		317
External research and development costs		918		1,246		(328	)
Other costs		1,812		1,255		557
Total research and development expense	$	29,535	$	19,271	$	10,264

Research and development expenses were $29.5 million and $19.3 million for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to (i) $5.0 million of higher direct costs associated with our clinical, preclinical and research programs, which includes $0.3 million of lower clinical trial expenses, (ii) $4.7 million of higher employee-related costs as a result of increased headcount to support our growing our research and development activities, which includes $1.5 million of higher stock-based compensation expenses as a result of additional new grants during the period, (iii) $0.6 million in other research and development expense and (iv) $0.3 million of higher facility-related and office costs, partially offset by $0.3 million of lower expenses attributable to unallocated external research and development costs. We expect to continue to incur increased research and development expenses as we advance SEP-631, SEP-479, and other programs in our pipeline.

General and Administrative

General and administrative expenses were $10.3 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively, primarily due to $3.4 million of higher employee-related costs as a result of increased headcount to support our growing operations. This amount includes $1.9 million of higher stock-based compensation expenses as a result of additional new grants during the period.

Other Income, Net

Interest Income

Interest income was $5.0 million and $4.5 million for the three months ended March 31, 2026 and 2025, respectively. The increase was due to higher interest rates and higher balances of cash equivalents and marketable securities.

Provision for Income Taxes

We recorded $0.3 million for provision for income taxes for the three months ended March 31, 2026. We did not record any benefit or provision for income taxes for the three months ended March 31, 2025.

Liquidity and Capital Resources

Sources of Liquidity

Our net losses were $8.6 million and $21.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $175.9 million. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and strategic collaborations with other companies. In March 2026, we entered into the Sales Agreement for a $150.0 million ATM Program. As of March 31, 2026, we have not sold any of our shares of common stock under the Sales Agreement.

As of March 31, 2026, we had $522.1 million in cash, cash equivalents, and marketable securities, which, we believe, will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

We do not have any material off-balance sheet arrangements other than our indemnification agreements as described in Note 5 to our unaudited condensed financial statements included elsewhere in this Quarterly Report.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):


		Three Months Ended March 31,

Septerna, Inc. 10-Q