Septerna, Inc. (SEPN) shares are soaring 5.25% in Friday's pre-market trading following a significant upgrade from Wells Fargo. The investment bank raised its rating on the drug developer from Equal Weight to Overweight and substantially increased its price target from $18 to $28, signaling strong confidence in the company's future prospects.

The upgrade is primarily driven by Wells Fargo's optimism about Septerna's drug pipeline, particularly the SEP-479 compound, an oral PTH1R agonist. Analysts expressed confidence in the safety profile of SEP-479 and its differentiation from the company's previous programs. A key factor in this assessment is a study conducted on cynomolgus monkeys, which suggests that SEP-479 does not have the bilirubin issues associated with the company's previous drug candidate, SEP-786.

Investors are also eyeing several near-term catalysts for Septerna. Wells Fargo highlighted the upcoming phase 1 results for the company's SEP-631 compound as an important milestone. Additionally, data from the SEP-479 compound is expected in late 2026, potentially providing further upside for the stock. These developments are seen as crucial for Septerna's growth trajectory, prompting the significant upgrade and driving today's stock surge.