Shares of Spyre Therapeutics (NASDAQ: SYRE) declined 13% on Thursday after the biotech company announced it would not advance its SPY072/TL1A rheumatoid arthritis program following topline results from the Phase II SKYWAY-RA trial.
Guggenheim reiterated its Buy rating and $130 price target for Spyre, emphasizing the company’s focus on its inflammatory bowel disease (IBD) program. The firm’s valuation remains anchored to potential catalysts from the IBD pipeline, including the SKYLINE-UC program, with topline monotherapy and combination readouts expected in 2025.
The SKYWAY-RA results showed evidence of target engagement and statistically significant or numerically greater efficacy improvement over placebo across both doses in TNF-naive and TNF-experienced rheumatoid arthritis patients. However, Spyre stated the magnitude of the effect did not meet internal thresholds to justify prioritizing SPY072 monotherapy development. Safety data aligned with the known TL1A profile, with no drug-induced serious adverse events reported.
Analysts at Stifel maintained a Buy rating with a $123 price target, while Mizuho raised its target to $120 from $84. Wolfe Research downgraded Spyre to Peerperform from Outperform, citing valuation concerns and uncertainty around upcoming catalysts. InvestingPro analysis also flagged the stock as overvalued relative to its Fair Value estimate, ranking it among the most overvalued in the biotech sector.
Spyre’s pipeline includes a Phase II hidradenitis suppurativa combination program and a remaining basket study for psoriatic arthritis and axial spondyloarthritis to assess TL1A’s potential. The company’s IBD program, particularly SPY120, showed promising clinical remission rates in the SKYLINE Part A trial, supporting Guggenheim’s bullish outlook.
The stock closed at $93.61 on Wednesday, down from $93.61 the prior session, and has surged 446% over the past year despite the recent setback. Fairmount Healthcare Fund II L.P. sold over 4.6 million shares worth approximately $399.7 million, reducing its holdings to zero.
