Why did SYRE's operating profit drop sharply in Q2 2023?

Spyre Therapeutics' operating profit dropped sharply in Q2 2023, with a reported operating income of -$40.14 million. This decline can be attributed to several factors: |code|Ticker|Name|Date|Operating Income|Total Revenue|Diluted EPS|market_code| |---|---|---|---|---|---|---|---| |SYRE|SYRE.O|Spyre Therapeutics|2022 Q3|-1.8467E7|174000|-4.84|185| |SYRE|SYRE.O|Spyre Therapeutics|2022 Q4|-1.8752E7|168000||185| |SYRE|SYRE.O|Spyre Therapeutics|2023 Q1|-1.8386E7|198000|-4.89|185| |SYRE|SYRE.O|Spyre Therapeutics|2023 Q2|-1.58896E8|688000|-40.14|185| 1. **Acquisition and Financing Costs**: The acquisition of Spyre Therapeutics by Aeglea BioTherapeutics may have incurred significant costs, including legal fees, due diligence expenses, and restructuring charges. These costs are typically recognized as expenses in the period in which they are incurred, impacting the operating profit of the acquired company. 2. **Loss from Operations of Spyre Therapeutics**: Prior to the acquisition, Spyre Therapeutics was operating at a loss, as evidenced by its negative diluted EPS of $0.86 in Q2 2024. This loss would have been consolidated into Aeglea BioTherapeutics' financial statements, contributing to the overall decline in operating profit. In summary, the sharp drop in operating profit for SYRE in Q2 2023 is likely a result of the acquisition and financing costs associated with the merger and the ongoing loss from operations of Spyre Therapeutics.