Septerna, Inc. (SEPN) and Novo Nordisk A/S (NVO) Wednesday announced partnership to develop and sell oral small molecule medicines for obesity, type 2 diabetes and other cardiometabolic diseases. Following the news, Septerna shares surged more than 67% in pre-market activity.

The companies will initially develop four oral small molecule therapies for select G protein-coupled receptor (GPCR) targets, including the GLP-1, GIP and glucagon receptors.

As per the terms of the agreement, Septerna is eligible to receive about $2.2 billion from Novo Nordisk. This includes more than $200 million in upfront and near-term milestone payments. Septerna is also eligible to get tiered royalties on sales of marketed products. Septerna and Novo Nordisk will jointly discover and develop the therapies and Novo Nordisk will cover all research and development expenses.

"Septerna has demonstrated strong capabilities in GPCR drug discovery, and we are excited about the opportunity to develop oral small molecule medicines directed at multiple targets," said Marcus Schindler, executive vice president and chief scientific officer of Novo Nordisk.

Septerna stock had closed at $6.73, down 3.58% on Tuesday. It has traded in the range of $4.17 - $28.99 in the last 1 year.

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