Form 4: RA Capital Management Reports Beneficial Ownership Changes in Septerna, Inc. Following IPO

RA Capital Management and related entities report changes in beneficial ownership of Septerna, Inc. common stock following the conversion of preferred stock in connection with the company's IPO.

Summary

• RA Capital Management, L.P., along with related entities including RA Capital Healthcare Fund, L.P., RA Capital Nexus Fund III, L.P., Peter Kolchinsky, and Rajeev Shah, filed a Form 4 detailing changes in beneficial ownership of Septerna, Inc. (SEPN) common stock.
• The filing reflects transactions occurring on October 28, 2024, related to the conversion of Series B Preferred Stock into common stock upon the closing of Septerna's initial public offering (IPO).
• Each share of Series B Preferred Stock converted into common stock at a ratio of one-for-8.6103.
• RA Capital Healthcare Fund, L.P. acquired 1,695,515 shares of common stock through conversion and purchased 3,828,400 shares at $18 per share, resulting in a total holding of 5,523,915 shares.
• RA Capital Nexus Fund III, L.P. acquired 1,130,343 shares of common stock through conversion and purchased 341,600 shares at $18 per share, resulting in a total holding of 1,471,943 shares.
• RA Capital Management, L.P., as the investment manager for the Funds, and its general partner, RA Capital Management GP, LLC, along with Dr. Peter Kolchinsky and Mr. Rajeev Shah, disclaim beneficial ownership of the reported securities except to the extent of their respective pecuniary interest.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The filing reflects standard post-IPO transactions and continued investment by a major shareholder, indicating confidence in the company's prospects.

Positives

• The conversion of preferred stock to common stock simplifies the capital structure of Septerna, Inc. following its IPO.
• RA Capital's continued investment, including open market purchases at $18 per share, signals confidence in Septerna's future prospects.

Industry Context

Form 4 filings are standard practice for significant shareholders following material transactions, especially after an IPO. RA Capital's continued involvement is typical for venture firms that backed a company pre-IPO.

Comparison to Industry Standards

• RA Capital's investment strategy is similar to other healthcare-focused venture capital firms like OrbiMed Advisors and NEA, which often maintain significant positions in their portfolio companies post-IPO.
• The reported transactions are consistent with standard procedures for converting preferred stock to common stock upon an IPO, as seen in other biotech IPOs such as those of CG Oncology and ArriVent BioPharma.

Stakeholder Impact

• The filing provides transparency to shareholders regarding the ownership structure of Septerna, Inc.
• The continued investment by RA Capital may be viewed positively by the market, potentially supporting the stock price.

Key Dates