Spyre Therapeutics(SYRE) - 2023 Q4 - Annual Results

Executive Summary & Corporate Update Spyre Therapeutics announced Q4 and FY2023 results, corporate updates including new CEO and Nasdaq listing, and pipeline progress for IBD drug candidates Fourth Quarter and Full Year 2023 Highlights Spyre Therapeutics reported Q4 and FY2023 results, detailing corporate changes, positive preclinical data for SPY001 and SPY002, and a strong cash position with runway into H2 2026 - Corporate name changed to Spyre Therapeutics, Cameron Turtle appointed CEO, and began trading on Nasdaq under 'SYRE'[1] - SPY001 (anti-α4β7 antibody) demonstrated an updated half-life of 22 days in non-human primates, a greater than three-fold increase relative to vedolizumab; remains on track to begin first-in-human (FIH) studies in H1 2024, with interim proof-of-concept data expected year-end 2024[1] - SPY002 (anti-TL1A antibody) remains on track to begin FIH studies in H2 2024, designed for enhanced potency to both TL1A monomers and trimers, and extended half-life[1] Key Financial and Funding Highlights | Metric | Value | | :----- | :---- | | Private Placement Equity Financing | $180 million | | Cash, Cash Equivalents, Marketable Securities, and Restricted Cash (as of Dec 31, 2023) | $340 million | | Expected Cash Runway | Into H2 2026 | CEO Statement CEO Cameron Turtle emphasized 2023's foundational work in building an IBD drug portfolio and securing significant capital, with 2024 focused on clinical studies and potential best-in-class properties - 2023 focused on building the foundation for IBD therapies, including a portfolio of three promising drug candidates targeting α4β7, TL1A, and IL-23[2] - Company capitalized with nearly $400 million from top-tier investors[2] - 2024 ambitions include entering clinical studies across multiple programs and demonstrating potential best-in-class properties. Phase 2 evaluation of rational therapeutic combinations in IBD patients is anticipated in 2025[2] Development Pipeline Overview Spyre Therapeutics details its strategic approach to IBD treatment, focusing on best-in-class antibody engineering and a pipeline of four preclinical drug candidates Company Approach and IBD Focus Spyre Therapeutics leverages advanced antibody engineering and precision immunology for IBD treatments, targeting approximately 2.4 million US individuals with four preclinical programs for infrequent subcutaneous dosing - Company's approach combines best-in-class antibody engineering, rational therapeutic combinations, and precision immunology with the goal of maximizing efficacy, safety, and convenience of its IBD treatments[3] - IBD, including ulcerative colitis (UC) and Crohn's disease (CD), is estimated to affect approximately 2.4 million individuals in the United States[4] - Company has four programs in preclinical development, three targeting IBD (α4β7, TL1A, IL-23) and one novel target, with potential for infrequent subcutaneous dosing[5] Key Pipeline Candidates Spyre's pipeline includes SPY001 (anti-α4β7), SPY002 (anti-TL1A), and SPY003 (anti-IL-23), all engineered for high potency, selectivity, and extended half-life, aiming for infrequent subcutaneous dosing in IBD SPY001 (anti-α4β7 antibody) SPY001 is an investigational anti-α4β7 monoclonal antibody engineered for high potency, selectivity, and extended half-life, enabling infrequent subcutaneous dosing - SPY001 is a highly potent and selective investigational anti-α4β7 monoclonal antibody engineered with half-life extension technology and formulated for high concentration and subcutaneous, infrequent dosing[6] SPY002 (anti-TL1A antibody) SPY002 is a highly potent, selective, and half-life extended anti-TL1A investigational monoclonal antibody with potential best-in-class binding affinity - SPY002 is a highly potent, selective, half-life extended, anti-TL1A investigational monoclonal antibody with potential best-in-class subnanomolar binding affinity for both the monomer and trimer forms of the target[7] - TL1A has emerged as one of the most promising targets in IBD and broader immunology indications[7] SPY003 (anti-IL-23 antibody) SPY003 is a highly potent and selective investigational monoclonal antibody targeting the p19 subunit of IL-23 with half-life extension technology - SPY003 is a highly potent and selective investigational monoclonal antibody targeting the p19 subunit of IL-23 engineered with half-life extension technology[8] Recent Corporate and Program Updates Spyre Therapeutics provides updates on the preclinical and clinical development progress of its SPY001, SPY002, and SPY003 programs, alongside corporate governance and financing activities SPY001 Program Updates SPY001 is advancing to FIH studies in H1 2024, with preclinical data showing a 22-day half-life and interim healthy volunteer data expected by year-end 2024 to support infrequent dosing - SPY001 development candidate selected in Q3 2023, progressing through IND-enabling studies, and expected to enter FIH studies in H1 2024[10] - Expanded preclinical data for SPY001 presented in Feb 2024 showed an updated half-life of 22 days in non-human primates, a greater than three-fold increase relative to vedolizumab, supporting a target human half-life of more than 35 days[10] - Interim data from a healthy volunteer study are expected by the end of 2024, aiming to demonstrate proof of concept for SPY001 to potentially be dosed subcutaneously in an every-eight-week or every-twelve-week dosing interval[10] SPY002 Program Updates Two SPY002 candidates, licensed from Paragon, show subnanomolar potency and extended half-lives, with FIH studies expected in H2 2024 and interim data in H1 2025 - Two lead SPY002 development candidates nominated and option exercised to exclusively license related intellectual property rights under agreement with Paragon Therapeutics. Candidates bind both TL1A monomers and trimers with in vitro subnanomolar potency and pharmacokinetic half-lives that potentially exceed all clinical-stage TL1A antibodies[10] - Preclinical data for a lead SPY002 development candidate presented in Feb 2024 demonstrated subnanomolar binding affinity and potency, as well as a pharmacokinetic half-life of 24 days in non-human primates, representing a two to three-fold increase compared to clinical-stage anti-TL1As[10] - FIH studies of one or both SPY002 candidates expected in H2 2024 with healthy volunteer interim data expected in H1 2025[10] SPY003 Program Updates Spyre continues preclinical development for a potential best-in-class IL-23 monoclonal antibody. Recent Phase 3 SEQUENCE study data for risankizumab validates targeting the p19 subunit over the p40 subunit. The company expects to nominate a development candidate in mid-2024 and move into IND-enabling studies in H2 2024 - Company continues preclinical development efforts on a potential best-in-class IL-23 monoclonal antibody[10] - Recent data from the Phase 3 SEQUENCE study of risankizumab versus ustekinumab in Crohn's disease validates targeting the p19 subunit as it demonstrated superiority to targeting the p40 subunit[10] - Company expects to nominate a development candidate in mid-2024 and move into IND-enabling studies in H2 2024[10] Corporate Governance and Financing Spyre secured $180 million in private placement financing, extending its cash runway into H2 2026, and made key leadership and Board appointments in late 2023 and early 2024 Private Placement Equity Financing | Metric | Value | | :----- | :---- | | Gross Proceeds (Dec 2023) | $180 million | | Cash Runway Extension | Into H2 2026 | - Cameron Turtle appointed Chief Executive Officer and Board member in November 2023. Jeffrey Albers and Laurie Stelzer also appointed to the Board of Directors[19] - Mark C. McKenna appointed to the Board of Directors in February 2024[19] - Stockholders approved conversion of Series A Preferred Stock to common stock and an increase to authorized shares in November 2023[19] Fourth Quarter 2023 Financial Results Spyre Therapeutics reports its Q4 2023 financial performance, detailing cash position, R&D and G&A expenses, asset sale gains, other income/expense, and net loss Cash Position As of December 31, 2023, Spyre Therapeutics held $339.6 million in available cash, cash equivalents, marketable securities, and restricted cash. Net cash used in operating activities for Q4 2023 was $31.0 million. The company raised $180.0 million in gross proceeds from a private placement in December 2023 Cash Position (as of Dec 31, 2023) | Metric | Amount (Millions) | | :----- | :---------------- | | Available Cash, Cash Equivalents, Marketable Securities, and Restricted Cash | $339.6 | | Net Cash Used in Operating Activities (Q4 2023) | $31.0 | | Gross Proceeds from Private Placement (Dec 2023) | $180.0 | Research and Development (R&D) Expenses R&D expenses significantly increased to $33.7 million in Q4 2023 from $14.3 million in Q4 2022, primarily due to increased preclinical development and manufacturing expenses for the IBD pipeline, including equity grants under the Paragon agreement, partially offset by decreased expenses for the legacy rare disease pipeline R&D Expenses (Q4 YoY) | Period | R&D Expenses (Millions) | YoY Change | | :----- | :---------------------- | :--------- | | Q4 2023 | $33.7 | +135.7% | | Q4 2022 | $14.3 | - | - The increase was primarily related to increases in preclinical development and manufacturing expenses for the Company's IBD pipeline, including expenses related to the annual equity grant under the agreement with Paragon, partially offset by a decrease in expenses associated with the Company's legacy rare disease pipeline[12] General and Administrative (G&A) Expenses G&A expenses rose to $14.1 million in Q4 2023 from $5.1 million in Q4 2022, mainly driven by increased stock compensation expense and legal/professional service fees related to the Spyre acquisition G&A Expenses (Q4 YoY) | Period | G&A Expenses (Millions) | YoY Change | | :----- | :---------------------- | :--------- | | Q4 2023 | $14.1 | +176.5% | | Q4 2022 | $5.1 | - | - This increase was primarily due to an increase in stock compensation expense, as well as legal and other professional service fees related to the Spyre acquisition[13] Gain on Sale of In-Process Research & Development Asset In Q4 2023, Spyre recognized an additional $1.8 million gain from the sale of global rights for pegzilarginase, resulting from a cash reimbursement from Immedica for a prior expenditure Gain on Sale of In-Process R&D Asset (Q4 2023) | Metric | Amount (Millions) | | :----- | :---------------- | | Gain on Sale (Q4 2023) | $1.8 | Other (Expense) Income Other expense totaled $17.3 million in Q4 2023, primarily driven by an increase in the CVR liability due to the increased likelihood of milestone payments related to pegzilarginase reimbursement in European markets, partially offset by interest earned on cash and marketable securities Other (Expense) Income (Q4 YoY) | Period | Other (Expense) Income (Millions) | | :----- | :-------------------------------- | | Q4 2023 | $(17.3) | | Q4 2022 | $0.4 | - Other (expense) income for the fourth quarter totaled $17.3 million expense primarily driven by an increase in the Company's CVR liability related to the increased likelihood of certain milestone payments related to pegzilarginase reimbursement in European markets, partially offset by interest earned on the Company's cash and marketable securities[15] Net Loss Net loss for Q4 2023 significantly increased to $63.2 million, compared to $18.8 million in Q4 2022. This includes non-cash stock compensation expense of $17.3 million in Q4 2023, up from $1.4 million in Q4 2022 Net Loss (Q4 YoY) | Period | Net Loss (Millions) | YoY Change | | :----- | :------------------ | :--------- | | Q4 2023 | $(63.2) | +236.2% | | Q4 2022 | $(18.8) | - | Non-Cash Stock Compensation Expense (Q4 YoY) | Period | Non-Cash Stock Compensation Expense (Millions) | YoY Change | | :----- | :------------------------------------------- | :--------- | | Q4 2023 | $17.3 | +1135.7% | | Q4 2022 | $1.4 | - | About Spyre Therapeutics Spyre Therapeutics is a biotechnology company focused on developing next-generation inflammatory bowel disease products through advanced antibody engineering and precision medicine - Spyre Therapeutics is a biotechnology company focused on creating next-generation inflammatory bowel disease (IBD) products[17] - The company combines best-in-class antibody engineering, rational therapeutic combinations, and precision medicine approaches[17] - Spyre's pipeline includes investigational extended half-life antibodies targeting α4β7, TL1A, and IL-23[17] Forward-Looking Statements This section outlines forward-looking statements regarding future results, financial position, and development activities, subject to various risks and uncertainties - This press release contains forward-looking statements regarding future results, financial position, business strategy, funding sufficiency, market size, growth opportunities, preclinical and clinical development activities, efficacy and safety profiles, therapeutic benefits, timing of studies and data, and regulatory activities[21] - Forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including macroeconomic conditions, geopolitical instability, and risks described in the Company's SEC filings[22] - The Company cautions against relying on forward-looking statements as predictions of future events and undertakes no obligation to update them, except as required by law[23] Contact Information Provides contact details for media and investor inquiries regarding Spyre Therapeutics - Media Contact: Amanda Sellers, Verge Scientific Communications (amanda.sellers@vergescientific.com)[24][25] - Investor Contact: Eric McIntyre (eric.mcintyre@spyre.com)[25] Consolidated Financial Statements Presents the company's consolidated balance sheets and statements of operations for the reported periods, detailing financial position and performance Consolidated Balance Sheets The consolidated balance sheet shows a significant increase in total assets from $71.1 million in 2022 to $341.9 million in 2023, primarily driven by increases in cash and marketable securities. Total liabilities also increased from $20.8 million to $73.3 million, largely due to CVR liability and related party payables. Total stockholders' equity grew from $50.3 million to $184.0 million Consolidated Balance Sheet Highlights (Year-end) | Metric | Dec 31, 2023 (Thousands) | Dec 31, 2022 (Thousands) | YoY Change (Thousands) | | :-------------------------------- | :----------------------- | :----------------------- | :--------------------- | | Cash and cash equivalents | $188,893 | $34,863 | +$154,030 | | Marketable securities | $150,384 | $20,848 | +$129,536 | | Total current assets | $341,528 | $62,258 | +$279,270 | | Total assets | $341,859 | $71,144 | +$270,715 | | CVR liability (current & non-current) | $42,700 | $0 | +$42,700 | | Related party accounts payable and other current liabilities | $16,584 | $0 | +$16,584 | | Total liabilities | $73,288 | $20,839 | +$52,449 | | Total stockholders' equity | $184,016 | $50,305 | +$133,711 | Consolidated Statements of Operations For the full year 2023, Spyre reported a net loss of $338.8 million, significantly higher than $83.8 million in 2022. This was driven by a substantial increase in R&D expenses ($89.5M vs $58.6M), G&A expenses ($39.9M vs $28.5M), and a large 'Acquired in-process research and development' expense of $130.2 million, along with a significant 'Change in fair value of forward contract liability' expense of $83.5 million. Revenue from development fees and royalties decreased Consolidated Statements of Operations Highlights (Full Year YoY) | Metric | FY 2023 (Thousands) | FY 2022 (Thousands) | YoY Change (Thousands) | | :-------------------------------------- | :------------------ | :------------------ | :--------------------- | | Total revenue | $886 | $2,329 | $(1,443) | | Research and development expenses | $89,504 | $58,579 | +$30,925 | | General and administrative expenses | $39,946 | $28,531 | +$11,415 | | Acquired in-process research and development | $130,188 | $0 | +$130,188 | | Gain on sale of in-process R&D asset | $(16,449) | $0 | $(16,449) | | Loss from operations | $(242,303) | $(84,781) | $(157,522) | | Change in fair value of forward contract liability | $(83,530) | $0 | +$(83,530) | | Net loss | $(338,790) | $(83,815) | $(254,975) | | Net loss per share, basic and diluted | $(49.12) | $(24.86) | $(24.26) | Consolidated Statements of Operations Highlights (Q4 YoY) | Metric | Q4 2023 (Thousands) | Q4 2022 (Thousands) | YoY Change (Thousands) | | :-------------------------------------- | :------------------ | :------------------ | :--------------------- | | Total revenue | $0 | $168 | $(168) | | Research and development expenses | $33,682 | $14,251 | +$19,431 | | General and administrative expenses | $14,072 | $5,079 | +$8,993 | | Loss from operations | $(45,914) | $(19,162) | $(26,752) | | Other expense, net | $(21,392) | $(32) | $(21,360) | | Net loss | $(63,180) | $(18,822) | $(44,358) | | Net loss per share, basic and diluted | $(4.05) | $(5.00) | +$0.95 |