Summary of Scholar Rock Holding FY Conference Call (December 04, 2025) Company Overview - **Company**: Scholar Rock Holding (NasdaqGS:SRRK) - **Focus**: Development of therapies for spinal muscular atrophy (SMA) and other neuromuscular disorders Key Points Industry and Company Developments - **Significant Transformation**: 2025 marked a year of transformation for Scholar Rock, particularly following the positive readout of the Sapphire study in October 2024, which was pivotal for the company's future activities [4][5] - **BLA Submission**: The company filed its Biologics License Application (BLA) with the FDA in January 2025 based on the Sapphire study results [4] - **FDA Priority Review**: In April 2025, the FDA accepted the BLA under priority review due to the high unmet need in SMA, marking the first muscle-targeted therapeutic for the condition [5] Leadership Changes - **CEO Transition**: Jay Backstrom stepped down as CEO in April 2025, with David Hallal taking over. A new executive team was assembled to focus on scaling and growth [6][7] Clinical Trials and Efficacy - **Sapphire Study Results**: The phase 3 trial demonstrated that patients receiving apitegromab showed a gain in motor function compared to those on placebo, achieving a statistically significant p-value of 0.019 [12] - **Response Rates**: Approximately one-third of patients on apitegromab achieved a three-point improvement on the Hammersmith Motor Function Scale, compared to 12% on placebo, indicating a significant therapeutic benefit [13] Regulatory Outlook - **Complete Response Letter (CRL)**: The company received a CRL in September 2025 due to compliance issues at the fill/finish facility, which is now owned by Novo Nordisk. The drug substance facility was not a concern [9][18] - **Type A Meeting with FDA**: A constructive Type A meeting was held in November 2025, where the FDA indicated a willingness to expedite reinspection once Novo Nordisk is ready [20] Future Plans - **Resubmission Timeline**: Scholar Rock expects to resubmit the BLA and launch in the U.S. in 2026, pending resolution of the facility issues [20] - **Second Indication**: The company plans to announce a second indication for apitegromab in a rare neuromuscular disorder in 2026 [9] Market and Payer Strategy - **Payer Discussions**: The company is confident in securing coverage for apitegromab, emphasizing its ability to stabilize and improve motor function in SMA patients compared to existing therapies [33] - **Market Opportunity**: There are approximately 7,000 patients in the U.S. who have received SMN-targeted therapies, with a global patient population of around 35,000, indicating a significant market opportunity for apitegromab [35] Community Engagement - **Building Relationships**: The company is focusing on strengthening relationships with the SMA community, including healthcare providers and patients, to enhance disease awareness and education [32] Additional Insights - **Operational Challenges**: The delay in the approval process has allowed the company to better prepare for launch, including establishing relationships with payers and refining its reimbursement processes [30] - **Importance of Muscle Health**: The company emphasizes that optimal outcomes for SMA patients require addressing both motor neuron survival and muscle health, which apitegromab aims to achieve [31]

Financial Data and Key Metrics Changes - The company reported a significant milestone with the successful readout of its phase III trial in October 2024, marking it as the first muscle-targeted treatment for SMA [2][5] - The company has a cash balance of $369 million, which is expected to sustain operations into 2027 [54] Business Line Data and Key Metrics Changes - The primary asset, apitegromab, is positioned to serve patients globally with SMA, with plans for clinical development programs for additional myostatin inhibitors [5][21] - The phase III trial demonstrated a statistically significant improvement in motor function for patients receiving apitegromab alongside SMN-targeted therapies, with a p-value of 0.01 [18] Market Data and Key Metrics Changes - In the U.S., approximately 7,000 patients have received at least one SMN-targeted treatment, with a global total of about 35,000 patients [20] - The combined annual revenue from existing SMN-targeted therapies is approximately $5 billion, indicating a robust market for SMA treatments [21] Company Strategy and Development Direction - The company aims to build a global biotech powerhouse, focusing on rare neuromuscular diseases, starting with SMA and expanding into other indications [3][5] - Plans include a methodical expansion into Europe, Asia-Pacific, and Latin America, targeting a 50-country operating platform [5][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the unique approach to myostatin inhibition, which differentiates the company from competitors focusing solely on motor neuron survival [12][24] - The company anticipates a resubmission of its BLA and a potential launch in the U.S. in 2026, following a constructive meeting with the FDA [47][52] Other Important Information - The company is currently addressing manufacturing issues that led to a Complete Response Letter (CRL) from the FDA, with a focus on remediation plans at its drug product manufacturer [41][44] - The company is also advancing its pipeline with SRK-439, a next-generation myostatin inhibitor, expected to enter clinical trials soon [48][50] Q&A Session Summary Question: What is the state of FDA interactions post-CRL? - The company received a CRL due to manufacturing issues at its drug product manufacturer, but management remains optimistic about resolving these issues and expects to resubmit and launch in 2026 [41][47] Question: How does the company plan to execute its commercial strategy? - The company plans to leverage its experience in rare diseases to identify and treat patients already diagnosed with SMA, ensuring a smooth market entry for apitegromab [26][28]

Financial Data and Key Metrics Changes - The company reported a significant milestone with the successful readout of its phase III trial in October 2024, marking it as the first muscle-targeted treatment for SMA [2][5] - The company has a cash balance of $369 million, which is expected to sustain operations into 2027 [54] Business Line Data and Key Metrics Changes - The primary asset, apitegromab, is positioned to serve patients globally with SMA, with plans for clinical development programs for additional myostatin inhibitors [5][21] - The phase III trial demonstrated a statistically significant improvement in motor function, with a p-value of 0.01, indicating the drug's effectiveness when combined with existing SMN-targeted therapies [17][18] Market Data and Key Metrics Changes - In the U.S., approximately 7,000 patients have received at least one SMN-targeted treatment, while globally, the number is around 35,000 [20] - The combined annual revenue from existing SMN-targeted therapies is approximately $5 billion, indicating a robust market for SMA treatments [21] Company Strategy and Development Direction - The company aims to build a global biotech powerhouse, focusing on rare neuromuscular diseases, starting with SMA and expanding into other indications [3][32] - Plans include a methodical expansion into Europe, Asia-Pacific, and Latin America, targeting a multi-billion dollar business model [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the approval process for apitegromab, viewing the recent CRL as a de-risking event that clarifies the path to approval [52] - The company anticipates launching apitegromab in the U.S. in 2026, with ongoing discussions with the FDA regarding manufacturing compliance [47][45] Other Important Information - The company is also developing SRK-439, a next-generation myostatin inhibitor, which is expected to enter clinical trials soon [48][49] - The management team has been strengthened with experienced leaders from previous successful biotech ventures, enhancing the company's operational capabilities [4][6] Q&A Session Summary Question: What is the state of FDA interactions post-CRL? - The company received a CRL due to manufacturing issues at the drug product facility, but they are working closely with Novo Nordisk to address these concerns and expect to resubmit in 2026 [41][45] Question: How does the company plan to execute its commercial strategy? - The company plans to leverage existing patient networks and funding mechanisms for rare disease therapies to facilitate the launch of apitegromab [26][28]

Financial Data and Key Metrics Changes - The company reported a significant transformation over the past 12 to 14 months, particularly following the positive readout of its phase III trial in October 2024, marking it as the first muscle-targeted treatment for SMA [2][5] - The company has a cash balance of $369 million, which is expected to sustain operations into 2027, with plans to expand its loan facility to support the upcoming launch [50] Business Line Data and Key Metrics Changes - The primary asset, apitegromab, is positioned as a muscle-targeted treatment for SMA, with clinical trials demonstrating statistically significant improvements in motor function when used alongside existing SMN-targeted therapies [16][20] - The company anticipates a multi-billion dollar opportunity for apitegromab, estimating over $2 billion in annual revenue from SMA alone [21] Market Data and Key Metrics Changes - In the U.S., approximately 7,000 patients have received at least one SMN-targeted treatment, with a global total of about 35,000 patients [19] - The existing SMN-targeted therapies generate approximately $5 billion in annual revenues, indicating a robust market for SMA treatments [20] Company Strategy and Development Direction - The company aims to build a global operating platform across 50 countries, focusing on expanding its reach in Europe, Asia-Pacific, and Latin America [5] - Future plans include entering clinical trials for other rare neuromuscular disorders, with indications such as FSHD and DMD being assessed [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming the recent CRL issued by the FDA, emphasizing that the remaining issue is solvable and that approval is a matter of when, not if [48][49] - The company is committed to a collaborative approach with the FDA and its manufacturing partners to expedite the approval process for apitegromab [42] Other Important Information - The company has established a world-class executive team to drive its strategic vision, with leadership experienced in building successful biotech companies [3][4] - The company is also developing SRK-439, a next-generation myostatin inhibitor, which is expected to enhance its rare neuromuscular franchise [45][46] Q&A Session Summary Question: What is the state of FDA interactions post-CRL? - The company received a CRL due to manufacturing issues at its drug product manufacturer, but management remains optimistic about resolving these issues and expects to resubmit and launch in 2026 [32][44] Question: How does the company plan to execute its commercial strategy? - The company plans to leverage its existing knowledge of the rare disease market, focusing on patients already diagnosed and receiving treatment, to effectively launch apitegromab [26][27]

Core Insights - The FDA has approved Novartis AG's Itvisma as the first and only gene replacement therapy for spinal muscular atrophy (SMA) in children aged two years and older, teens, and adults [1] - Itvisma targets the genetic cause of SMA by replacing the mutated SMN1 gene, potentially reducing the need for ongoing treatments associated with other therapies [2] - The approval is supported by data from the Phase 3 STEER study and the Phase 3b STRENGTH study, showing significant improvements in motor function over 52 weeks [3] Company Insights - Novartis AG's Itvisma is a one-time fixed dose therapy that does not require adjustments based on age or body weight, making it a unique offering in the SMA treatment landscape [1] - The safety profile of Itvisma was consistent across both pivotal studies, indicating a favorable risk-benefit ratio for patients [3] Industry Insights - SMA is a rare genetic neuromuscular disease affecting approximately 9,000 individuals in the US, caused by a mutation in the SMN1 gene, which is crucial for motor neuron health [4] - The recent FDA approval of Itvisma may shift the treatment paradigm for SMA, potentially impacting the market dynamics for existing therapies [2][3]

Core Insights - Scholar Rock Holding Corp. (NASDAQ:SRRK) experienced a significant share price increase of 29.2% week-on-week, driven by positive developments regarding its drug candidate for spinal muscular atrophy (SMA) [1][4] Company Developments - The company recently met with the Food and Drug Administration (FDA) and its manufacturing contractor, Catalent Indiana, to discuss the biologics license application (BLA) for apitegromab, following a previous rejection due to inspection issues [2][3] - Catalent reported progress in its remediation plan, with plans for the facility to be ready for reinspection by the end of the year [3] - Scholar Rock aims to resubmit the BLA application, targeting an official launch of apitegromab next year and seeking European Medicines Agency (EMA) approval by mid-2026 [4] Financial Performance - In the third quarter, Scholar Rock widened its net loss by 58% to $102 million, compared to $64.5 million in the same period last year, primarily due to a 60% increase in operating loss to $103.5 million from $64.78 million year-on-year [5]

Financial Data and Key Metrics Changes - The company ended Q3 2025 with $369.6 million in cash and cash equivalents, reporting operating expenses of $103 million, which includes $18.3 million in non-cash stock-based compensation [24][25] - Excluding stock-based compensation, operating expenses were $85.3 million, reflecting ongoing investments in infrastructure to support regulatory approval and commercial readiness [25] Business Line Data and Key Metrics Changes - The company is focused on advancing apitegromab for spinal muscular atrophy (SMA) and has initiated dosing in a phase two OPAL trial for infants and toddlers under the age of two [16][18] - The phase III SAPPHIRE study demonstrated apitegromab's potential to reverse the trajectory of SMA, showing significant benefits in motor function [13][20] Market Data and Key Metrics Changes - Annual revenue for current SMA treatments is trending to approximately $5 billion globally, indicating a growing demand for treatments [20][21] - There are an estimated 35,000 people with SMA who have received an SMN-targeted therapy and could be eligible for treatment with apitegromab [23] Company Strategy and Development Direction - The company aims to be a global biotech powerhouse, leveraging its expertise in myostatin biology to deliver transformative therapies for neuromuscular disorders [5][6] - The strategy includes strengthening the balance sheet, adding redundancy to the supply chain, and preparing for a commercial launch of apitegromab [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that apitegromab will eventually be approved for SMA, emphasizing the urgency to serve the patient community [7][9] - The regulatory challenges faced are viewed as temporary, with significant opportunities ahead to serve patients [11][18] Other Important Information - The company has secured commercial capacity for a second fill-finish facility, expected to commence in Q1 2026, and anticipates submitting an SBLA for this facility later in 2026 [10][15] - The company is also advancing SRK-439 into clinical development, with an IND cleared by the FDA [17][18] Q&A Session Summary Question: Financing opportunities and operational risks during the transition to a new facility - The company plans to prioritize extending its loan facility for financing, with equity being a last resort [32] - Transitioning to a new facility is expected to be seamless operationally, minimizing risks [34] Question: Confidence in the remediation efforts at the Bloomington facility - Management highlighted the commitment from Novo Nordisk to quality and compliance, expressing optimism about the remediation efforts [40][41] Question: BLA submission strategy and EMA review status - The plan is to submit the BLA after the reinspection of the Bloomington facility, with a decision from the EMA expected by mid-next year [16][49] Question: Timelines for reinspection and potential pivot to a second fill-finish facility - A successful reinspection is crucial, but the company is prepared to pivot to the second facility if necessary [56][57] Question: Disclosure plans regarding the reinspection process - The company will maintain open communication regarding the reinspection timeline and outcomes, sharing material information as it becomes available [74][75]

Financial Data and Key Metrics Changes - The company ended Q3 2025 with $369.6 million in cash and cash equivalents, reporting $103 million in operating expenses, which includes $18.3 million in non-cash stock-based compensation [24][25] - Excluding stock-based compensation, operating expenses were $85.3 million, reflecting ongoing investments in infrastructure to support regulatory approval and commercial readiness [25] - The company strengthened its balance sheet by adding $141.7 million during the quarter, which included net proceeds of $91.7 million from the sale of approximately 2.8 million shares and a $50 million drawdown from an existing debt facility [25][24] Business Line Data and Key Metrics Changes - The company is focused on advancing apitegromab for spinal muscular atrophy (SMA) and has initiated dosing in a phase two OPAL trial evaluating apitegromab in infants and toddlers under the age of two [16][17] - The company is also progressing SRK-439 into clinical development, with plans to initiate a phase one study in healthy volunteers before the end of the year [18] Market Data and Key Metrics Changes - The global annual revenue for current SMA treatments is trending to approximately $5 billion, indicating a growing demand for treatments in this market [20] - There are an estimated 35,000 people with SMA who have received an SMN-targeted therapy and could be eligible for treatment with apitegromab [23] Company Strategy and Development Direction - The company aims to be a global biotech powerhouse, leveraging its expertise in myostatin biology to deliver transformative therapies for neuromuscular disorders [5] - The strategy includes executing a strong commercial launch for apitegromab and advancing its pipeline, including a second indication for apitegromab and the development of SRK-439 [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the eventual approval of apitegromab, emphasizing the urgency to serve the SMA community and the commitment to quality and compliance in the remediation efforts at the Bloomington facility [7][8] - The company remains focused on executing its plans with financial discipline, aiming to bring apitegromab to market as rapidly as possible while managing its cash runway effectively [28][29] Other Important Information - The company has secured commercial capacity for a second fill-finish facility, expected to commence in Q1 2026, and anticipates submitting an SBLA for this facility later in 2026 [10][15] - The company is operating with a tight financial plan and has deferred investments in several areas to prioritize strategic initiatives [25] Q&A Session Summary Question: Financing opportunities and operational risks during facility transition - Management indicated that the first objective is to bridge financing until approval, with a preference for extending the loan facility before considering equity options [32] - Regarding operational risks, management assured that transitioning between facilities should be seamless, focusing on maintaining consistency in vial configuration and analytical testing [34][35] Question: Confidence in remediation efforts at the Bloomington facility - Management acknowledged the facility's history but expressed confidence in Novo Nordisk's commitment to quality and compliance, highlighting the collaborative efforts in the remediation plan [40][41] Question: BLA submission strategy and EMA review status - The plan is to submit the BLA after the reinspection of the Bloomington facility, with expectations for a decision from the EMA on the marketing authorization application by mid-next year [16][49] Question: Timelines for reinspection and potential pivot to second fill-finish facility - Management stated that a successful reinspection is the goal, and if issues arise, the second fill-finish facility could be pivoted to serve as the primary submission strategy [56][57] Question: Disclosure plans regarding inspection outcomes - Management committed to maintaining open communication regarding important developments, including the outcomes of inspections and any material information related to the facility [74][75]

Financial Data and Key Metrics Changes - The company ended Q3 2025 with $369.6 million in cash and cash equivalents, reporting $103 million in operating expenses, which includes $18.3 million in non-cash stock-based compensation [21][22] - Operating expenses, excluding stock-based compensation, were $85.3 million, reflecting ongoing investments in infrastructure to support regulatory approval and commercial readiness [21][22] - The company strengthened its balance sheet by adding $141.7 million during the quarter, which included net proceeds of $91.7 million from the sale of approximately 2.8 million shares and a $50 million drawdown from an existing debt facility [22][23] Business Line Data and Key Metrics Changes - The company is focused on advancing apitegromab for spinal muscular atrophy (SMA) and has initiated dosing in a phase two OPAL trial evaluating apitegromab in infants and toddlers under the age of two [14][15] - The company is also progressing SRK-439 into clinical development, with plans to initiate a phase one study in healthy volunteers before the end of the year [15][16] Market Data and Key Metrics Changes - The global annual revenue for current SMA treatments is trending to approximately $5 billion, indicating a growing demand for treatments in this market [17] - There are an estimated 35,000 people with SMA who have received an SMN-targeted therapy and could be eligible for treatment with apitegromab [20] Company Strategy and Development Direction - The company aims to bring apitegromab to market as the world's first muscle-targeted therapy for SMA, with a focus on regulatory approval and commercial readiness [17][20] - The company is strategically investing in a second fill-finish facility to ensure redundancy in its supply chain and to support the anticipated launch of apitegromab [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that apitegromab will eventually be approved in the U.S. for patients with SMA, emphasizing the commitment to the SMA community [6][10] - The regulatory challenges faced are viewed as temporary, with significant opportunities ahead to serve patients [10][21] Other Important Information - The company is working closely with Novo Nordisk to ensure the Bloomington facility is ready for reinspection by the end of the year, which is critical for the resubmission of the BLA [7][13] - The company has adjusted its operating plan to defer investments in certain areas while prioritizing key initiatives [22][23] Q&A Session Summary Question: How does the company view further financing opportunities? - The company aims to extend its loan facility as the first option for financing, with royalty financing as a secondary option, and equity financing as a last resort [29][30] Question: What operational risks are associated with transitioning between facilities? - The company believes that the transition should be seamless, focusing on maintaining consistency in vial configuration and analytical testing [31][33] Question: How confident is the company in the remediation efforts at the Bloomington facility? - Management expressed confidence in Novo Nordisk's commitment to quality and compliance, highlighting the collaborative efforts to ensure the facility is ready for reinspection [39][40] Question: What is the timeline for the reinspection and potential approval? - The company expects the reinspection to occur by the end of the year, with plans to resubmit the BLA following a successful inspection [52][55] Question: Will the company disclose information regarding the reinspection? - The company plans to maintain open communication and disclose important information as it becomes available, particularly regarding the reinspection timeline and outcomes [75][78]

Core Insights - Earnings season presents opportunities for lesser-known companies to gain attention, with three stocks highlighted for potential comebacks if their earnings reports are favorable [2] Company Overview - Scholar Rock Holding Corp. (NASDAQ: SRRK) is a biotech firm focused on developing protein therapeutics for neuromuscular diseases [3] - The lead asset, apitegromab, targets Type 2 and Type 3 Spinal Muscular Atrophy (SMA) and has shown promising Phase 3 data, indicating strong potential for regulatory approval in 2026 [4] Financial Performance - Scholar Rock's shares have declined approximately 33% year-to-date due to manufacturing site issues, raising short-term concerns [4] - The company is projected to report a loss per share of 76 cents for the third quarter, with no revenue expected yet [6] Clinical Development - A Phase 2 study of apitegromab demonstrated over 54% lean mass preservation compared to control when combined with GLP-1 agonist tirzepatide, indicating the drug's therapeutic promise [5] - Investors should look for updates on apitegromab and other drugs in the pipeline during the upcoming earnings report [6] Market Sentiment - Quarterly earnings reports can significantly impact share prices, with Scholar Rock, along with Globant and NiCE, being identified as companies that may see a rebound if they deliver strong earnings [7]