Aeglea BioTherapeutics acquires startup Spyre in bid to go after Merck’s Prometheus, Roivant’s Telavant

After putting up the strategic alternative signs in April, rare disease drug developer Aeglea BioTherapeutics is now looking to go in a new direction with the acquisition of Spyre Therapeutics.

The combined company will have $220 million in cash and equivalents at close to fund itself into 2026. The biotech will go after big ambitions in autoimmune diseases, targeting the same mechanism of action as Takeda’s Entyvio and the blockbuster-hyped TL1A drugs out of Merck’s Prometheus and Roivant’s Telavant, which came out with more ulcerative colitis data this morning.

Antibody engineering company Paragon Therapeutics spun out Spyre. Paragon also launched another biotech, anti-inflammatory startup Apogee Therapeutics, last fall with a $149 million Series B. Multiple of the same investors back both companies, including Fairmount Funds, Deep Track Capital, Venrock, RTW Investments, RA Capital and Wellington Management, among others.

Spyre is working on long-acting antibodies, combination therapies and precision immunology. Its two lead programs are slated to enter clinical trials next year in inflammatory bowel disease.

Cameron Turtle

Similar to Entyvio, SPY001 goes after a4b7. The second asset, aptly named SPY002, targets TL1A like that of the heated showdown between Merck’s PRA023 and Telavant’s RVT-3101 (from Pfizer). Down the road, Spyra envisions drugs going after a combination of a4b7 and IL-23, a4b7 and TL1A, and TL1A and IL-23. It also has a drug going after just IL-23.

“The concurrent launch of Spyre and acquisition by Aeglea will provide immediate access to the public capital markets and the opportunity to accelerate research and development efforts for our broad pipeline of biologics,” said Cameron Turtle, who recently became Aeglea’s operating chief, in a statement. Per his LinkedIn, Turtle’s résumé includes strategy and business chief roles at BridgeBio and Eidos Therapeutics and venture partner at Foresite Labs.

The first clinical data for the combined company will likely come around the end of next year for SPY001. Data on SPY002 will follow a quarter or two later. Both are extended half-life therapies delivered under the skin. The combination portion of the pipeline will enter Phase II studies in 2025, Aeglea expects.

Aeglea president and CFO Jonathan Alspaugh called it a “phenomenal outcome” for the company’s shareholders, noting management and its board think they can “capture a sizable share of the growing IBD market” with the two key Spyre programs. The company touted deal activity in the immunology and inflammation space in recent years to pad its case: Merck-Pandion, Merck-Prometheus, Takeda-Nimbus, Sanofi-Kymab and Pfizer-Arena.

Certain Aeglea stockholders might get stock and/or cash payments down the road if the company sells its legacy assets, which included Phase I/II stage pegtarviliase, a drug being tested to reduce levels of homocysteine in patients with the rare disease cystathionine beta-synthase deficiency.

In transactions like these, usually dubbed reverse mergers to describe a public company shelving its assets to make way for a private biotech’s pipeline, the acquired company’s name gets adopted. In this case, Aeglea will keep its name and ticker symbol, but “the company may rebrand in the future to further align with the company’s new direction and strategy,” a spokesperson told Endpoints News in an email.

The $220 million comes largely from a $210 million private placement that happened concurrently with the stock-for-stock Spyre acquisition.

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