SCHEDULE: Fairmount Funds Boosts Dianthus Stake to 9.9%

Fairmount Funds Management and its affiliates increased their beneficial ownership in Dianthus Therapeutics to 9.9% following a $19.8 million share purchase.

Summary

• Fairmount Funds Management LLC and its affiliates (Fairmount Healthcare Fund II L.P., Fairmount SPV III, LLC, Peter Harwin, and Tomas Kiselak) collectively hold 4,052,052 shares of Dianthus Therapeutics, Inc. Common Stock.
• This represents 9.9% of the company's outstanding Common Stock, based on 40,561,085 shares outstanding as of September 11, 2025.
• The holdings comprise 3,307,191 shares of Common Stock and Pre-Funded Warrants to purchase up to 744,861 shares of Common Stock.
• The exercise of Pre-Funded Warrants is subject to a beneficial ownership limitation of 9.99% of the outstanding Common Stock.
• Fairmount Healthcare Fund II L.P. purchased an additional 600,000 shares of Common Stock on September 11, 2025, for $33.00 per share, totaling $19,800,000.
• The purchase was made in an underwritten public offering using working capital.
• Tomas Kiselak resigned from the Board of Directors on March 4, 2025, a decision not related to any disagreement with the company's operations, policies, or practices.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. A significant institutional investor increased its stake and participated in a capital raise, which can be seen as a vote of confidence and provides the company with additional funds. However, the dilution from the public offering and the resignation of a board member from the investing group introduce minor complexities.

Positives

• A significant institutional investor, Fairmount Funds, increased its stake, indicating confidence in Dianthus Therapeutics.
• The $19.8 million investment provides capital to Dianthus Therapeutics, likely strengthening its financial position.

Negatives

• Tomas Kiselak, a managing member of Fairmount Funds, resigned from the Board of Directors, potentially reducing direct influence or oversight from this significant shareholder.
• The public offering on September 11, 2025, which included Fairmount's purchase, implies dilution for existing shareholders due to the issuance of 7,627,879 new shares.

Risks

• The beneficial ownership limitation on Pre-Funded Warrants (9.99%) restricts the immediate conversion of all warrants if it would exceed this threshold.
• Future plans of the Reporting Persons may change, including potentially seeking to influence management or the board of directors, which could lead to strategic shifts.

Future Outlook

Reporting Persons may, at any time, review, reconsider, and change their position or purpose, and may seek to influence management or the board of directors of Dianthus Therapeutics regarding its business and affairs.

Management Comments

• Tomas Kiselak's resignation was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices.

Industry Context

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Management Changes

Stakeholder Impact

• Shareholders: Experience dilution due to the issuance of 7,627,879 new shares in the public offering.
• Company: Benefits from the capital raised through the public offering, including the $19.8 million investment from Fairmount Funds.
• Fairmount Funds: Increased its stake, demonstrating continued investment in Dianthus Therapeutics.

Next Steps

• Reporting Persons may continue to review and potentially change their investment strategy or seek to influence Dianthus Therapeutics' management or board.

Key Dates

Recommendation

While the increased stake by a major institutional investor and the successful capital raise are positive signals, the dilution from the public offering and the resignation of a board member from the investing group warrant a 'hold' stance. Investors should monitor how the new capital is deployed and any future strategic shifts or board appointments.

Keywords

Dianthus Therapeutics, Fairmount Funds Management, Schedule 13D, Beneficial Ownership, Common Stock, Pre-Funded Warrants, Public Offering, Institutional Investment, Share Purchase, Biotechnology, Healthcare Investment