Scholar Rock(SRRK) - 2023 Q1 - Quarterly Report

Financial Performance - The company reported a net loss of $39.4 million for the three months ended March 31, 2023, with an accumulated deficit of $550.0 million[77]. - Revenue for the three months ended March 31, 2023 was $0, a decrease of $33.2 million or 100.0% compared to $33.2 million in the same period of 2022[96]. - The net loss for the three months ended March 31, 2023 was $39.4 million, compared to a net loss of $8.0 million in the same period of 2022, reflecting an increase of $31.4 million or 395.3%[95]. - Total operating expenses increased to $40.5 million for Q1 2023, up from $40.1 million in Q1 2022, representing a change of $0.4 million or 1.0%[95]. - Research and development expenses were $29.7 million for Q1 2023, an increase of $0.3 million or 1.3% from $29.4 million in Q1 2022[99]. - General and administrative expenses remained stable at $10.8 million for both Q1 2023 and Q1 2022, but are expected to increase as the company invests in commercial readiness[101]. - Net cash used in operating activities was $43.1 million for Q1 2023, compared to $42.6 million for Q1 2022[116]. - Cash and cash equivalents increased to $151.3 million as of March 31, 2023, compared to $103.3 million as of December 31, 2022[107]. Research and Development - Apitegromab is in a pivotal Phase 3 clinical trial (SAPPHIRE) for spinal muscular atrophy (SMA), with enrollment expected to complete in 2023 and top-line data readout anticipated in 2024[72]. - SRK-181 is being developed for cancers resistant to checkpoint inhibitor therapies and is currently in a Phase 1 clinical trial (DRAGON) with updates expected in 2023[75]. - The company expects substantial ongoing expenses related to research and development, particularly for product candidates apitegromab and SRK-181[121]. - The company has identified additional diseases where myostatin inhibition may provide therapeutic benefits, expanding its potential market[74]. Capital and Funding - The company expects existing cash, cash equivalents, and marketable securities to fund operating expenses and capital expenditures into 2025, but additional capital will be required for clinical development and commercialization of current programs[122]. - Future capital requirements will depend on various factors, including costs and timing of clinical trials for product candidates apitegromab and SRK-181, as well as manufacturing costs impacted by the COVID-19 pandemic[122]. - The company anticipates financing cash needs through equity offerings, debt financings, collaborations, and licensing arrangements, which may dilute common stockholder ownership interests[125]. - If additional funds are not raised, the company may need to delay or terminate product development and commercialization efforts[126]. - The company sold 68,696 shares of common stock through its ATM program, generating $0.8 million in net proceeds during the quarter[108]. Accounting and Compliance - The company has not experienced material changes to critical accounting estimates from the previous year[128]. - There are currently no off-balance sheet arrangements as defined under applicable SEC rules[129]. - Recent accounting standards reviewed by the company are not expected to have a material impact on financial statements[130]. Business Operations - The company has not generated any revenue from product sales and does not expect to do so in the near future[80]. - The Gilead Collaboration Agreement, which began recognizing revenue in 2019, has been terminated, resulting in the recognition of $33.2 million in deferred revenue in January 2022[83]. - The company continues to build its infrastructure to support operations as a public company, including hiring additional personnel and expanding its intellectual property portfolio[83]. - The company has incurred significant operating losses since inception and expects to continue incurring substantial expenses for ongoing development activities[77]. - The company has a proprietary platform for developing monoclonal antibodies targeting growth factors, with a focus on serious diseases such as cancer and fibrosis[69].