Episode Details

Spyre Therapeutics, Inc. (SYRE) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): no product revenue, ever. Net loss $36.200M vs $36.717M. EPS -$0.36 vs a -$0.759 bar - but the entire beat was a $40.0M pegzilarginase milestone on a drug sold in 2023, which the 10-Q says is owed to CVR holders. Ex-milestone EPS -$0.768: no beat. Cash $1,145.3M, no debt. Released 4:02pm ET Aug 4 (AMC), so Aug 5 is the reaction: $104.94 to $104.35, DOWN 0.56%. Spyre lost 36 cents against a 76-cent bar - a forty-cent beat at a company with no product and no revenue. The beat was a $40.0M milestone on pegzilarginase, a drug Spyre SOLD in 2023, triggered when the buyer sold a priority review voucher. That is 40.3 cents a share: the entire beat, to the cent. THE CALL: AVOID (3/5, GREAT SCIENCE, AND THE TAKEOUT PRICE IS ALREADY PAID) — base-case value ~$62.00 vs ~$104.91 today. KEY METRICS: - CALL: AVOID 3/5, fair value $62 vs the $104.91 close - about 41% below. No cash flows exist, so we use cash plus a probability-weighted sum of the parts, not a DCF. Bull $150 (takeout) / base $48 / bear $25, weighted 30/50/20 = $61.50. - THE PRINT, EPS BASIS PROVEN: R&D $65.503M (+63.2%), G&A $16.136M, net loss $36.200M vs $36.717M - flat on ~50% higher spend. Two-class method: common EPS -$0.36 and preferred -$14.60 recover the 40:1 conversion; 84,729,435 + 361,430x40 = 99,186,635 equivalents gives -$0.3650 exactly. - THE BEAT WAS THE MILESTONE, TO THE CENT: a $40.000M gain on sale of in-process R&D - a pegzilarginase milestone from the 2023 Immedica sale, triggered by the buyer selling a priority review voucher. $40.0M / 99,186,635 = $0.4033; the beat was $0.3939. Ex-milestone EPS -$0.768 vs -$0.759. - NOT SHAREHOLDERS' MONEY. 10-Q Note 10: milestone payments received by July 3, 2026 'will be distributed to CVR holders'. The CVR liability rose $34.873M in H1, $22.933M was paid out, $38.620M is still owed. - VALUATION: 88,064,133 common + 346,045 Series A preferred at 40:1 (13.84M) = 101.91M shares. At $104.91 that is a $10.69B market cap, not the $9.11B on screens. Less $1,145.3M cash, no debt: EV $9.55B. Cash $11.24/sh, the other $93.67 is pipeline. - THE REVERSE TEST: $9.55B of EV at a 2.75x peak-sales multiple and a 10% discount needs ~$22B of unrisked peak sales at 25% probability of success, or $9.3B even at a heroic 60%. Entyvio, the drug SPY001 targets, does ~$6.5B a year. - THE DATA IS OPEN-LABEL: SPY001 (n=43) cut Robart's Histopathology Index 9.2 points, 40% remission; SPY002 (n=48) cut it 10.7 points, 33%. Both p<0.0001, both SKYLINE Part A, which Spyre calls 'an open-label assessment'. Placebo-controlled Part B: 2027. - A FALSIFICATION WE PUBLISHED: we assumed anti-TL1A was broken. On June 22, 2026 Merck's tulisokibart met its primary endpoint in Phase 3 ATLAS-UC - the first anti-TL1A to win a Phase 3 in UC. It de-risks SPY002/SPY072, but Merck arrives first. - WHO SOLD: on June 23, a day after Merck's Phase 3 win, founding investor Fairmount sold 4,684,781 shares at $85.31 in one block - $399.7M (13D/A Amd 7). The CMO sold 20,000 at $100 on June 22; the CEO sold in June, July and Aug 3. ~$411M in ten weeks. - STREET: 12 Buy, 1 Hold, 0 Sell. Three raises the morning after - Wedbush $130, Baird $120, Wells Fargo $115, all Aug 5, 2026. High $135, low $49. Consensus $105.36 vs a $104.91 close: even the bulls see 0.4% upside. What to watch: UP: $1,145.3M cash, no debt, runway into 2H 2029; SPY001 and SPY002 both hit primary endpoints; Merck validated anti-TL1A in Phase 3 on June 22; six readouts in 2026. DOWN: the EPS beat is a milestone owed to CVR holders; every efficacy figure is open-label with no control until 2027; EV is $9.55B on $0 of revenue. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.