This week in the biotech sector, Austin-based clinical-stage biotechnology company, Aeglea BioTherapeutics Inc. (“Aeglea”), (NASDAQ: AGLE), announced the completion of the acquisition of Spyre Therapeutics Inc. (“Spyre”), a privately held biotech company dedicated to advancing the treatment of inflammatory bowel disease (IBD).
The Acquisition: A Strategic Move
In a strategic acquisition, Aeglea fortifies its foothold in the sector by joining forces with Spyre, a company committed to transforming IBD treatment through potentially best-in-class long-acting antibodies and precision immunology approaches. This move is expected to significantly strengthen Aeglea’s portfolio as it gains access to Spyre’s advanced product pipeline, led by SPY001 and SPY002.
The announcement simultaneously unveiled the successful private investment round of $210 million, a testament to Aeglea’s strength in the market. The influx of capital from the oversubscribed round positions the company to expedite the advancement of Spyre’s IBD portfolio. Investors, led by Fairmount Funds Management LLC, included high-profile names such as Fidelity Management & Research Company, Venrock Healthcare Capital Partners, and Wellington Management Company LLP, amongst others.
The IBD Market: A Rising Opportunity
IBD, which includes Crohn’s disease and ulcerative colitis, causes chronic inflammation of the digestive tract leading to debilitating symptoms. The disease affects approximately 1.7 million patients in the U.S., presenting a significant and growing market opportunity. Biologics are preferred for moderate-to-severe patients due to their superior benefit-risk profile. The IBD global market is projected to surpass $29 billion by 2028, underscoring the potential impact of Aeglea’s latest acquisition.
Spyre’s strong portfolio focuses on both proven and novel mechanisms of action to combat IBD. SPY001 and SPY002, the company’s two parallel lead programs, aim to target a4b7 and TL1A, respectively, and build upon the validation of these targets by existing commercial and clinical-stage antibody therapeutics.
Building a Strong Leadership Team
Along with the acquisition, Aeglea has strategically expanded its management team, appointing key Spyre members. Cameron Turtle, DPhil, has been appointed as Chief Operating Officer, while Janet Gunzner-Toste, Ph.D., is set to assume the role of SVP, Operations, amongst other significant appointments.
The synergy between Aeglea’s established leadership and the incoming talent from Spyre is expected to add immense value to Aeglea’s quest to transform IBD treatments.
Financial Transaction Details
The acquisition was structured as a stock-for-stock transaction. Alongside the acquisition, Aeglea also entered a definitive agreement for a PIPE investment with existing and new investors to raise $210 million. This move is expected to result in gross proceeds of approximately $210 million, which are intended to be used to advance Spyre’s IBD portfolio through various data milestones, and fund operations into 2026.
As part of the transaction, Aeglea’s Board of Directors will now include names like Russell Cox, Hunter Smith, Alison Lawton, and others, ensuring that the company benefits from a pool of experienced industry leaders.
A Step Forward for Aeglea
The acquisition of Spyre by Aeglea is a strategic move that aligns with Aeglea’s mission to redefine the potential of human enzyme therapeutics for patients with rare metabolic diseases. This acquisition will bolster Aeglea’s resources and research capabilities, and ultimately accelerate the development of Spyre’s IBD product candidates.
Moreover, the successful concurrent private investment underscores the confidence to save space. Aeglea BioTherapeutics Announces Acquisition of Spyre Therapeutics: A Transformative Move in the IBD Space
June 22, 2023
In a major move, Aeglea BioTherapeutics, a clinical-stage biotechnology company, has announced its completed acquisition of Spyre Therapeutics. This acquisition, alongside a concurrent oversubscribed $210 million private investment, fortifies Aeglea’s standing in the biotechnology space, particularly within the Inflammatory Bowel Disease (IBD) segment. With these strategic steps, Aeglea is setting the stage for a new era in IBD treatment that could revolutionize patient outcomes and create attractive growth opportunities for investors.
Decoding the Spyre Acquisition
Spyre Therapeutics, the second spinout from Paragon Therapeutics, has been making waves with its innovative portfolio of product candidates. Its lead programs, SPY001 and SPY002, are poised to become best-in-class antibodies, targeting a4b7 and TL1A respectively, and are expected to enter the clinic in 2024.
This strategic acquisition by Aeglea BioTherapeutics means that Aeglea is now in possession of Spyre’s promising pipeline. The deal paves the way for Aeglea to leverage Spyre’s expertise in antibody engineering and biologics development to unlock new possibilities in IBD treatment.
Financial Footprint of the Deal
The total cash or cash equivalents of the merged entity at the close of this deal is expected to be about $220 million. The capital raised through the concurrent private placement is expected to finance operations into 2026, underpinning the company’s financial stability and future growth.
The Series A non-voting convertible preferred stock sale, a part of the private investment, was led by Fairmount Funds Management LLC. Other participating institutions included Fidelity Management & Research Company, Venrock Healthcare Capital Partners, Commodore Capital, Deep Track Capital, Perceptive Advisors, RTW Investments, Cormorant Asset Management, Driehaus Capital Management, Ecor1 Capital, RA Capital Management, Surveyor Capital (a Citadel company), Wellington Management Company LLP, and other undisclosed institutional investors.
The Unmet Need in IBD and Aeglea’s Solution
IBD, a condition that causes chronic inflammation of the digestive tract, affects approximately 1.7 million patients in the U.S alone. The condition can range from mild to life-threatening and often results in debilitating symptoms such as diarrhea, rectal bleeding, abdominal pain, fatigue, and weight loss.
With the global IBD market forecasted to surpass $29 billion by 2028, the acquisition of Spyre places Aeglea in a prime position to address the unmet need in IBD treatment and capture a significant share of this growing market.
Management and Organization
Aeglea has also announced a string of appointments to bolster its management team, including Cameron Turtle, DPhil, who is the newly appointed Chief Operating Officer of Aeglea. The existing management team at Aeglea, comprising Jonathan D. Alspaugh, President & Chief Financial Officer, and Cortney Caudill, Chief Product Officer, will continue to serve their roles, providing continuity in leadership and strategic direction.
The board members of Aeglea following the acquisition will include representatives from both Aeglea and Fairmount Funds, ensuring a strategic balance of insights and direction.
The Promise of the Future
This acquisition is a significant milestone in Aeglea’s journey to revolutionize IBD treatment. Not only does it provide immediate access to public capital markets, but it also accelerates research and development efforts for Aeglea’s broad pipeline of biologics.
With the financial backing and strategic leadership in place, Aeglea is poised for significant strides in the biotechnology space. Their ability to drive the development of promising therapeutics for IBD and their deepened access to capital allows for an optimistic outlook on their future progress.
Further, this acquisition can create a potential ripple effect in the IBD treatment market, as Aeglea’s robust pipeline and strengthened financial position may spur other companies to advance their own research and development initiatives.
From a business perspective, this deal underscores Aeglea’s commitment to growth and expansion. As they integrate Spyre’s programs into their portfolio and continue to attract the interest of prominent institutional investors, Aeglea stands as a company to watch in the field of IBD research and treatment.
Looking ahead, as the company continues to leverage its strengthened position and its expanded therapeutic arsenal, it remains poised to make a significant impact on patients’ lives who are battling IBD, offering the potential for transformative treatments and possibly even cures.
Aeglea’s acquisition of Spyre Therapeutics is a reminder of the vast potential of the biotechnology sector, as well as the vital role that mergers and acquisitions play in driving forward medical advancements and breakthroughs.
SOURCE Aeglea BioTherapeutics, Inc.
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