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Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Paragon and Parapyre each beneficially own less than 5% of the Company's capital stock through their respective holdings of the Company's Common Stock. Fairmount Funds Management LLC ("Fairmount") beneficially owns more than 5% of the Company's capital stock on an as-converted basis, has two seats on the Company's board of directors (the "Board") and beneficially owns more than 5% of Paragon, which is a joint venture between Fairmount and FairJourney Biologics. Fairmount appointed Paragon's board of directors and
has the contractual right to approve the appointment of any executive officers. Parapyre is an entity formed by Paragon as a vehicle to hold equity in Spyre in order to share profits with certain employees of Paragon.
The following is the summary of expenses related to the Paragon Agreement and License Agreements, which were ultimately settled in cash (in millions) and recorded within Research and development in the consolidated statement of operations for the periods presented:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Reimbursable costs under the Paragon Agreement$2.3 $1.2 $14.0 $1.2 
License Agreements milestone and sublicensing fees5.6 — 5.6 — 
Total related party expense$7.9 $1.2 $19.6 $1.2 
The following is the summary of Related party accounts payable and other current liabilities (in millions):
June 30,
2024		December 31,
2023
Reimbursable costs under the Paragon Agreement$1.2 $16.6 
Parapyre warrants liability6.9 — 
License Agreements development milestone liability (see Note 7)2.5 — 
Total related party accounts payable$10.6 $16.6 
Paragon Agreement
In connection with the Asset Acquisition, the Company assumed the rights and obligations of Pre-Merger Spyre under the Paragon Agreement. Under the Paragon Agreement, Spyre is obligated to compensate Paragon for its services performed under each research program based on the actual costs incurred with mark-up costs pursuant to the terms of the Paragon Agreement. Spyre is also obligated under the Paragon Agreement to issue Parapyre annual equity grants of warrants in accordance with the Parapyre Option Obligation.
For the three and six months ended June 30, 2024, the Company recognized expenses related to services provided by Paragon subsequent to the Asset Acquisition totaling $9.7 million and $26.8 million, respectively, which included $1.5 million and $6.9 million, respectively, of stock-based compensation expense, and were recorded as Research and development expenses in the consolidated statements of operations.
For the three and six months ended June 30, 2024, the Company made payments totaling $11.3 million and $29.5 million respectively, in connection with the Paragon Agreement.
On July 12, 2023, December 14, 2023, and June 5, 2024, the Company exercised the Option available under the Paragon Agreement with respect to the SPY001, SPY002 and SPY003 research programs, respectively. Our Option available under the Paragon Agreement with respect to the SPY004 program remains unexercised. Please refer to Note 7 for additional information on the License Agreements related to the exercised options.
On May 14, 2024, the Company, Paragon and Parapyre entered into a second amended and restated antibody discovery and option agreement 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 SPY003 research program, including without limitation, (a) establishing an SPY003 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 SPY003 from Paragon until all project antibodies under the SPY003 research program have been selected; (b) reducing the development costs invoiced to the Company for the SPY003 research program incurred from and after April 1, 2024 through completion of the SPY003 antibody selection process by 50%; (c) requiring Paragon to reimburse the Company
for 50% of the development costs for the SPY003 research program incurred prior to April 1, 2024; provided, that Paragon receives rights to at least one SPY003 project antibody following completion of the SPY003 antibody selection process; (d) obligating the Company to exercise its option to license the intellectual property rights to SPY003 project antibodies and technology following the completion of the SPY003 antibody selection process; and (e) establishing a license agreement term sheet for the SPY003 research program with substantially similar milestone payment terms and royalty payment terms as the SPY001 License Agreement. Please refer to Note 7 for additional disclosures.
During the second quarter of 2024, the SPY003 antibody selection process was completed and the Company recognized a $5.9 million receivable and a corresponding reduction in Research and development expenses in its condensed consolidated statements of operations for the three and six ended June 30, 2024. As of June 30, 2024, the $5.9 million receivable was outstanding and included as a reduction to Related party accounts payable and other current liabilities on the Company's consolidated balance sheet.
Parapyre Option Obligation
Pursuant to the Paragon Agreement, the Company agreed to issue Parapyre an annual equity grant of warrants, on the last business day of each of the years ended December 31, 2023 and December 31, 2024, to purchase 1% of the then outstanding shares of the Company's Common Stock, on a fully diluted basis, during the term of the Paragon Agreement.
Paragon License Agreements
See Note 7 for disclosures related to the License Agreements entered into with Paragon.
Mark McKenna Option Grant
On February 1, 2024, the Board appointed Mark McKenna as a Class I director. Mr. McKenna and the Company are parties to a consulting agreement, pursuant to which Mr. McKenna agreed to continue to provide consulting services as an independent contractor to the Company, with an effective date of August 1, 2023 (the “Vesting Commencement Date”). As compensation for Mr. McKenna’s consulting services, on November 22, 2023, he was granted non-qualified stock options to purchase 477,000 shares of the Company’s Common Stock under the 2016 Plan (as defined in Note 8) with an exercise price of $10.39 per share, which vest as to 25% on the one year anniversary of the Vesting Commencement Date and thereafter vest and become exercisable in 36 equal monthly installments, subject to Mr. McKenna’s continued service to the Company through each applicable vesting date. For the three and six months ended June 30, 2024, the Company recognized $0.2 million and $0.5 million, respectively, in stock-based compensation expense related to Mr. McKenna's consulting agreement. There was no such expense for the three and six months ended June 30, 2023.