• Cash Balance: Pro forma cash balance of approximately $463 million as of September 30, 2024.
• Follow-on Offering: Completed an upsized follow-on offering of $345 million.
• SAPPHIRE Study Results: Achieved a 1.8 point improvement in Hammersmith Functional Motor Scale with a p-value of 0.0192.
• Patient Improvement: 30% of patients on apitegromab achieved a 3 point improvement in Hammersmith scores.
• Revenue Potential: Apitegromab has a total revenue potential of greater than $1 billion.

• Warning! GuruFocus has detected 3 Warning Sign with SRRK.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Scholar Rock Holding Corp (NASDAQ:SRRK) reported successful results from the Phase III SAPPHIRE study for apitegromab in spinal muscular atrophy (SMA), meeting the primary endpoint with a statistically significant improvement.
• The company completed an upsized follow-on offering of $345 million, increasing their cash balance to approximately $463 million, which supports their strategic initiatives.
• Enrollment for the EMBRAZE Phase II proof-of-concept study was completed ahead of schedule, with top-line results expected earlier than planned in Q2 2025.
• Scholar Rock Holding Corp (NASDAQ:SRRK) expanded its management team by hiring Beth Shafer as Chief Business Officer to enhance investment decisions and partnering opportunities.
• The company is preparing for the commercial launch of apitegromab in the US by Q4 2025, with plans to follow in Europe, assuming regulatory approvals are obtained.

Negative Points

• Despite the positive results, the company faces the challenge of navigating regulatory approvals for apitegromab, which could impact the timeline for commercialization.
• The competitive landscape in SMA treatment is significant, with existing therapies targeting the SMN protein, which may affect market penetration for apitegromab.
• Scholar Rock Holding Corp (NASDAQ:SRRK) is still in the early stages of payer discussions for apitegromab, which could influence pricing and reimbursement strategies.
• The company is entering the obesity market with SRK-439, but faces competition from established treatments like semaglutide and tirzepatide, which may impact market adoption.
• There is uncertainty regarding the potential approval of apitegromab for the full age range of 2 to 21 years, which could affect the scope of its market reach.

Q & A Highlights

Q: Could you discuss the differences in trial design and patient population between your EMBRAZE study and Lilly's new Phase II trial? Also, what are the key parameters for your obesity data readout next year? A: Our EMBRAZE study focuses on selectively targeting anti-myostatin with apitegromab, primarily assessing lean muscle mass over 24 weeks. It's a proof-of-concept to guide SRK-439 development. Lilly's trial explores doses against tirzepatide. For our obesity data, we're looking to maintain lean muscle mass, which is crucial for durable weight management and glucose metabolism.

Q: Regarding the OPAL study, how are you considering dosing based on SAPPHIRE's findings? Also, how do you view myostatin inhibition compared to other muscle preservation approaches in obesity? A: For OPAL, we're leveraging PK/PD data from TOPAZ and SAPPHIRE to determine dosing, likely focusing on 10 mg/kg. In obesity, while therapies like tirzepatide and semaglutide lead the market, our strategy with SRK-439 is to complement these by preserving lean mass, crucial for effective weight management.

Q: Will you seek approval for both 10 and 20 mg/kg doses of apitegromab in SMA, and do you expect approval for the full age range? How are initial payer discussions going? A: We plan to proceed with the 10 mg/kg dose due to its consistent performance. We anticipate approval for the full age range, 2 to 21, given the consistent data. Initial payer discussions are positive, with recognition of the value apitegromab adds to existing therapies.

Q: Will you hire the 50 reps before or after approval for apitegromab? A: We aim to be financially prudent, balancing readiness with capital efficiency. We'll ensure we're prepared for launch without premature expenditure.

Q: Could apitegromab receive a broad label irrespective of ambulatory status, and are there differences in how FDA and EC view SMA? A: We anticipate a broad label from the FDA, similar to existing SMA treatments, recognizing SMA as a continuum. The European approach is expected to align, supported by our PRIME designation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.