Spyre Therapeutics (SYRE) Enters Licensing Agreement with Paragon over SPY001

On May 14, 2024, Spyre Therapeutics (NASDAQ: SYRE), and Paragon Therapeutics, Inc., a Delaware corporation (“Paragon”), entered into (i) a license agreement (the “SPY001 License Agreement”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting α4ß7 integrin and (ii) a license agreement (the “SPY002 License Agreement” and, together with the SPY001 License Agreement, the “License Agreements”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain licensed antibodies and products targeting TL1A, respectively.

Under the terms of each License Agreement, the Company is obligated to pay Paragon up to $22.0 million based on specific development, regulatory and clinical milestones for each licensed research program, including a $1.5 million fee for nomination of a development candidate, as applicable, and a further milestone payment of $2.5 million upon the first dosing of a human patient in a Phase 1 trial. In addition, the following summarizes other key terms of each License Agreement:

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Paragon will provide the Company with an exclusive license to its patents covering the related antibody, the method of use and its method of manufacture.

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Paragon will not conduct any new campaigns that generate anti-α4ß7 or anti-TL1A monospecific antibodies for at least 5 years.

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The Company will pay Paragon a low single-digit percentage royalty for single antibody products and a mid single-digit percentage royalty for products containing more than one antibody from Paragon.

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There is a royalty step-down of 1/3rd if there is no Paragon patent in effect during the royalty term.

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The royalty term ends on the later of (i) the last-to-expire licensed patent or Company patent directed to a derived antibody or (ii) 12 years from the date of first sale of a Company product.

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Agreement may be terminated on 60 days’ notice by the Company; on material breach without cure; and to the extent permitted by law, on a party’s insolvency or bankruptcy.

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With respect to the SPY002 License Agreement only, on a product by product basis, the Company will pay Paragon sublicensing fees of up to approximately $20 million upon the achievement of mostly commercial milestones.

Also on May 14, 2024, the Company, Paragon and Parapyre Holding LLC entered into a second amended and restated antibody discovery and option agreement (the “Second AR ADOA”) that amends and restates that certain amended and restated antibody discovery and option agreement, dated September 29, 2023, by and between Paragon, Parapyre and Spyre Therapeutics, LLC, in order to, among other things, (i) replace the Company’s subsidiary with the Company as a party to the agreement and (ii) amend certain terms related to the IL-23 research program, including without limitation, (a) establishing an IL-23 antibody selection process pursuant to which the Company and Paragon shall alternate in turn to select a project antibody to be included and excluded, respectively, from the Company’s rights under its option to license certain intellectual property rights related to IL-23 from Paragon until all project antibodies under the IL-23 research program have been selected; (b) reducing the development costs invoiced to the Company for the IL-23 research program incurred from and after April 1, 2024 through completion of the IL-23 antibody selection process by 50%; (c) requiring Paragon to reimburse the Company for 50% of the development costs for the IL-23 research program incurred prior to April 1, 2024; provided, that Paragon receives rights to at least one IL-23 project antibody following completion of the IL-23 antibody selection process; (d) obligating the Company to exercise its option to license the intellectual property rights to IL-23 project antibodies and technology following the completion of the IL-23 antibody selection process; and (e) establishing a license agreement term sheet for the IL-23 research program with substantially similar milestone payment terms and royalty payment terms as the SPY001 License Agreement.

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