SCHEDULE 13D/A: Avidity Partners Reduces Stake in Dianthus Therapeutics to 9.9% Following Significant Share Sale

Avidity Partners Management LP and its affiliates have filed an Amendment No. 2 to Schedule 13D, reporting a decrease in their beneficial ownership of Dianthus Therapeutics, Inc. common stock to 9.9% following a significant share sale.

Summary

• Avidity Partners Management LP and its affiliates (the "Reporting Persons") filed an Amendment No. 2 to Schedule 13D regarding their beneficial ownership in Dianthus Therapeutics, Inc. (the "Issuer").
• The filing reports a greater than 1.00% decrease in the percentage of Common Stock beneficially owned by Avidity Master Fund LP due to the sale of shares.
• As of March 17, 2025, the Reporting Persons collectively beneficially own 3,378,939 shares of Dianthus Therapeutics, Inc. Common Stock.
• This aggregate amount represents 9.9% of the total outstanding Common Stock, based on 32,125,179 shares outstanding as of March 7, 2025.
• Avidity Master Fund LP sold 1,100,000 shares of Common Stock on March 17, 2025, at a price of $20.00 per share.
• The Reporting Persons also hold Pre-Funded Warrants to purchase additional shares, the exercise of which is subject to a beneficial ownership limitation of 9.9% of the outstanding Common Stock.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to a significant sale of shares by a major institutional investor, Avidity Master Fund LP, which reduced the overall beneficial ownership percentage of the Avidity group. While they still maintain a substantial stake, the divestment could signal a shift in investment strategy or a less optimistic outlook, potentially impacting investor confidence.

Positives

• The Reporting Persons, a group of investment funds managed by Avidity Partners, continue to hold a significant stake of 9.9% in Dianthus Therapeutics, Inc., indicating continued interest.
• The funds used for the acquisition of Common Stock and warrants came from the working capital of private funds, with no borrowed funds used for share purchases, suggesting financial stability of the investment group.

Negatives

• Avidity Master Fund LP, a key entity within the Reporting Persons group, sold a substantial 1,100,000 shares of Dianthus Therapeutics Common Stock on March 17, 2025, at $20.00 per share.
• This sale resulted in a greater than 1.00% decrease in the overall percentage of shares beneficially owned by the Avidity group.

Risks

• The Reporting Persons explicitly state they may, from time to time, acquire or dispose of additional shares of Common Stock, which introduces uncertainty regarding future share price movements based on their trading activity.
• The exercise of Pre-Funded Warrants is subject to a beneficial ownership limitation of 9.9% of the outstanding Common Stock, which could restrict the Reporting Persons' ability to increase their stake beyond this threshold through warrant exercise.

Future Outlook

The Reporting Persons state that, consistent with their investment purpose, they may, from time to time, acquire or dispose of additional shares of Common Stock in the open market, privately negotiated transactions, or otherwise, subject to price, market, and general economic and fiscal conditions and other factors. They reserve the right to change their intentions with respect to any or all of these matters and have not made a determination regarding a maximum or minimum number of shares they may hold.

Management Comments

• "The undersigned acknowledge and agree that the foregoing statement on this Amendment No. 2 to Schedule 13D date March 19, 2025 is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements."
• "The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate."
• "Although the Reporting Persons do not have any specific plan or proposal to acquire, transfer or dispose of Common Stock at the time of this filing, consistent with their investment purpose, the Reporting Persons may, either directly or through one or more affiliates, from time to time or at any time and subject to price, market and general economic and fiscal conditions and other factors, acquire or seek to acquire additional shares of Common Stock in the open market, in privately negotiated transactions or otherwise, or dispose of or seek to dispose of all or a portion of such shares of Common Stock now owned or hereafter acquired."

Industry Context

This filing is a routine disclosure of a change in beneficial ownership by an institutional investor in a publicly traded company, Dianthus Therapeutics, Inc. It does not provide information on broader industry trends or the competitive landscape of the biotechnology or pharmaceutical sector in which Dianthus operates.

Related Party Transactions

• Merger Registration Rights Agreement, dated September 11, 2023, by and among the Company, OpCo, and certain former holders of OpCo common stock and OpCo pre-funded warrants, including Avidity Private Master Fund I LP, regarding the registration and resale of certain shares.
• Registration Rights Agreement, dated January 22, 2024, by and among the Company and the purchasers in the Private Placement, including the Reporting Persons, regarding the registration and resale of shares purchased in the Private Placement and shares issuable upon exercise of Pre-Funded Warrants.

Stakeholder Impact

• Shareholders: The sale of a significant block of shares by a major institutional investor could lead to negative market perception and potentially impact the share price. Future acquisitions or dispositions by the Reporting Persons could also influence share price volatility.

Next Steps

• The Reporting Persons may, from time to time, acquire or dispose of additional shares of Common Stock.
• The Reporting Persons reserve the right to change their investment intentions regarding Dianthus Therapeutics.

Key Dates

Keywords

Dianthus Therapeutics, Avidity Partners, SEC filing, Schedule 13D, beneficial ownership, common stock, equity stake, institutional investor, share sale, investment fund