Spyre Therapeutics Shares Fall 13 Percent to $81 After Pricing a $350 Million Stock Offering at $85 a Share

Spyre Therapeutics shares fell 13 percent on Tuesday after the company priced a $350 million stock sale at a discount, giving back part of a year in which the shares had more than doubled.

The stock traded at $81.11, down $11.61, or 12.52 percent. Monday's close was $92.72. In premarket trading the shares were down about 4 percent at $88.90 after the terms were announced late Monday. The company is selling about 4.1 million shares at $85, an 8.3 percent discount to that close. It had about 88.2 million shares outstanding before the deal. Jefferies, TD Cowen, Leerink and Stifel are joint book-runners.

Spyre said the proceeds will fund programs in gastroenterology, rheumatology and dermatology, and will move SPY072 into later-stage development for hidradenitis suppurativa, a chronic skin disease. A follow-on at a discount is a standard way for a clinical-stage biotech to refill cash. It is also immediate dilution, which is why the shares opened below the offer price and kept falling.

The science the offering is meant to pay for is a mixed set. In September, Spyre said SPY003, an antibody against IL-23, met the main goal of part A of the phase 2 SKYLINE study in ulcerative colitis. Patients had a 10-point reduction in a histology index at 12 weeks. "SPY003 demonstrated a highly statistically significant 10-point reduction in RHI and meaningful clinical remission and endoscopic outcomes in line with the anti-IL-23 class," Deanna Nguyen, senior vice president of clinical development, said. The company said that readout completed proof of concept for the three pieces of its inflammatory-bowel combination pipeline, after earlier part A results for SPY001 and SPY002. Part B, testing combinations, is expected to report induction data in 2027.

SPY072, the drug the new money will push, has a harder recent record in one disease and a remaining path in others. In a rheumatoid-arthritis substudy, two doses showed what Spyre called proof of mechanism, and the lower dose reached statistical significance on the main activity measure, a 1.9-point reduction against 1.3 for placebo. The higher dose missed. Spyre said the results did not meet its "internal bar" for pursuing the drug as a single agent in rheumatoid arthritis. It is keeping SPY072 for other autoimmune conditions, with psoriatic arthritis and axial spondyloarthritis data expected in the fourth quarter, and a combination study in hidradenitis suppurativa aimed at late 2027 or early 2028.

Chief Executive Cameron Turtle said at a conference in June that SPY072 had a chance to be first in its class in a rheumatic disease. The rheumatoid-arthritis decision narrowed that claim. Merck's tulisokibart later succeeded in a dermatology trial aimed at the same TL1A pathway, and Spyre shares rose about 5 percent on Sept. 30 as analysts read the result as support for the class.

Tuesday's decline is the financing, not a new failed study. A stock up 183 percent this year, with 16 of 17 analysts at buy or strong buy before the deal, was priced for the bowel-disease combinations and the next SPY072 readouts. Selling 4.1 million shares at $85 tells existing holders the company would rather have the cash than wait. At $81 the market is marking both the discount and the extra shares. The data Nguyen cited are unchanged. The cash to run the next trials is what the company just paid for.