Scholar Rock Holding Corporation (SRRK) Earnings Call Transcript & Summary

Welcome, everyone, to the 39th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Tessa Romero and Matt Bannon from the team. Our next presenting company is Scholar Rock. And presenting on behalf of the company, we have CEO, Tony Kingsley. Before I turn it over to Tony, just wanted to highlight to those on the webcast, you can submit a question to me. We have the ask-the-question feature in the portal. So I recommend you guys do that, and I'm happy to ask the question on your behalf. With that, I'll pass it over to you, Tony. Tony?

Good. Thank you, Anupam, and good afternoon, everyone. Delighted to share the Scholar Rock story with you today. I'll start by pointing you to our disclaimers about forward-looking statements and the like on Page 2 of the presentation and encourage you to consult the risk factors in our relevant SEC filings. Turning to Page 3, 2020 was a year of great achievement for Scholar Rock. In October, we announced the exciting results of the 6-month interim analysis of our TOPAZ Phase II trial of apitegromab in spinal muscular atrophy. We initiated the Phase I DRAGON trial for immuno-oncology asset, SRK-181. We significantly strengthened our balance sheet and cash runway and exited the 2020 with $340 million in cash. We received rare pediatric disease designation for apitegromab in SMA and made a number of moves to strengthen our IP portfolio. So on Page 4, let's look at a snapshot of what lies ahead in the coming quarters. And I think you'll see a nice cadence of additional potential value creation. First, on apitegromab, we continue to expect top line 12-month data from TOPAZ in Q2 of this year, with the expectation of initiating a registrational trial later in the year. Discussions with regulators are ongoing about the regulatory path forward, and we will obviously provide an update at the right time. We do also continue to evaluate additional indications for apitegromab. In immuno-oncology with SRK-181, Part A of our Phase I DRAGON trial continues to make progress, positioning us to move into Part B, a multi-cohort proof-of-concept experiment this year. We currently anticipate initiating Part B in the second quarter. While DRAGON remains our highest near-term priority for SRK-181, we believe there are other potential opportunities leveraging the promising science of TGFß in immuno-oncology. Our fibrosis partnership with Gilead enters its third year, and we continue to invest in the scientific platform to identify other interesting drug candidates that leverage our expertise in creating antibodies to growth factors that play an important role in disease progression. As you can see, multiple programs and numerous potential data events create the opportunity for multiple value inflection points, and it gives the company significant optionality. So turning to Page 5. Scholar Rock's success has been built on great science, targeting growth factors in the TGF-beta superfamily. Where we have applied that successfully has been in area where the underlying biology is well understood and well validated, but the targets have historically proven difficult to hit. Our ability to target the precursor or latent form of the growth factor has allowed us to achieve exquisite specificity and to avoid off-target effects. So apitegromab with myostatin is an example of that. And the TOPAZ data in SMA is the first that we think a powerful validation of our scientific approach. Starting on Page 7, let me spend a few minutes talking about how excited we are about the potential for apitegromab in SMA. First, SMA is a devastating genetic disease with an estimated prevalence of 30,000 to 35,000 in the U.S. and Europe. The good news is there are now 3 approved SMN upregulators that address the underlying SMN deficiency. But as we'll discuss, for many patients, these therapies appear primarily to stabilize the disease course, and patients still have significant functional deficits. We see apitegromab as a complementary therapeutic approach that can improve motor function by acting on the muscle directly. Page 8 summarizes the design of our ongoing 12-month TOPAZ Phase II trial of apitegromab in type 2 and type 3 SMA. The primary objective of this trial is to test the efficacy of apitegromab in addition to an approved SMN upregulator using the well-validated Hammersmith motor function scale as the primary endpoint. Cohorts 1 and 2 include patients who started nusinersen therapy after the age of 5. Cohort 1 includes ambulatory patients and cohort 2 includes nonambulatory patients. Clinical data from nusinersen's CHERISH trial suggests that for most patients who start nusinersen therapy after the age of 5, the primary benefit is stabilization. As such, in TOPAZ, we are looking for demonstration of increased Hammersmith scores associated with treatment by apitegromab. Cohort 3 is designed to explore other questions. First, the patients are younger, having started on nusinersen as early as age 2. Second, within this cohort, we embedded a double-blind, randomized high-dose/low-dose comparison. The trial enrolled 58 patients. We had a single patient drop out of the trial early for non-drug-related reasons. And I can tell you that as of January 8, 56 of the 57 ongoing patients had completed their full 12-month assessment, and we are happy to say that all those patients have opted into the extension study. In October 2020, we released top line data from a preplanned interim analysis at 6 months. Page 9 summarizes the results that give us high confidence in apitegromab's potential. First, across all cohorts, we saw mean improvements from baseline Hammersmith scores, and 67% of all patients achieved at least a 1-point gain. Second, 35% of all patients achieved at least a 3-point improvement in Hammersmith score. Clinicians recognize this as a very high bar outcome. And finally and compellingly, we saw clear evidence of a dose effect in cohort 3, where high dose consistently outperformed low dose across all-time periods and PK/PD data confirmed higher drug exposure and target engagement. The waterfall plots for each cohort on Page 10 provide further detail. Again, in each cohort, a majority of patients saw improvement, and the mean effect is not driven by outliers. Page 11 shows time course data for the cohort. We note that a plateau in improvement does not appear to have been reached, and we look forward to the upcoming 12-month data to elucidate this further. And finally, on Page 12, we saw no safety signals at the 6-month mark. So turning to Page 13, we're obviously thrilled with the positive 6-month interim analysis and the potential that we see to help patients with still tremendous unmet need in SMA. These data also provide the first proof-of-concept of the therapeutic potential of targeting the latent form of myostatin and the first proof-of-concept of our platform approach to blocking the latent form of growth factors. And we believe that suggests additional potential opportunities, including expanding apitegromab's use in other SMA subpopulations; applying this approach to other diseases where myostatin plays a role; and of course, additional diseases that may be tractable by blocking the latent form of growth factors, notably SRK-181, our next -- most advanced program in immuno-oncology, which I will turn to now starting on Page 14. As we all know, checkpoint inhibitors have been a revolution in oncology, but as many as 80% of patients do not respond to these therapies. A really big question is why. There is an emerging body of evidence that TGFß1 is a factor in resistance to checkpoint inhibitors. And turning to Page 15, this has attracted a lot of interest in the industry. A seminal paper by Genentech in 2018 first elucidated this phenomenon. Several companies, including GSK, BMS and Merck, have partnered for programs to pursue a TGFß approach. And you may have seen that Novartis published another paper in nature in December with further evidence of this hypothesis. So turning to Page 16, let me highlight some of the evidence. The left panel is from Genentech's work studying failures with checkpoint inhibitors. They found that a large portion of solid tumors, that's the blue portions of the pie charts, show what is called an immune-excluded phenotype, where the CD8+ T cells appear to recognize the tumor but are unable to penetrate. The right panel reflects work that we did utilizing the MCI database, where we looked at TGFß expression across a wide range of solid tumors. And we found that the majority of expression was TGFß1 type 1 as opposed to type 2 and type 3. So the evidence increasingly points to TGFß1 as the culprit, and that's where we think SRK-181 can play an important role. So the science is hot, it's moving fast. Let me use Page 17 to describe our approach and why we believe we may be advantaged in this field. Again, because we target the latent form, we can be highly specific for TGFß1 and avoid potential dose-limiting toxicity issues from hitting type 2 or type 3. As such, we believe we have the potential to increase the therapeutic window and hit the target hard. And additionally, because we view SRK-181 as a stand-alone molecule that could be paired with any checkpoint inhibitor, that would allow dosing flexibility and the ability to optimize across both agents. So turning to Page 18, the DRAGON Phase I study of SRK-181, which is our current proof-of-concept study. The study has 2 parts. Part A is dose escalation, including both single agent and combination therapy with a checkpoint inhibitor. We are making good progress. As of January 8, we are dosing as a single agent at the highest targeted dose, 2,400 milligrams; and the combination arm is currently evaluating 800 milligrams. Part B of the study, which we project to start in Q2 2021 will have 4 parallel arms of different tumor types. It will enroll patients who have demonstrated primary resistance to a checkpoint inhibitor and redose them with the same checkpoint inhibitor plus SRK-181. We believe this is an efficient way to test the hypothesis and get the proof-of-concept quickly. We're extremely excited about SRK-181's potential, and we look forward to sharing data as it becomes available from the DRAGON trial. So I'll close on Page 19. In 2020, we strengthened and expanded the leadership team at Scholar Rock. Obviously, we had the exciting TOPAZ interim readout and made good progress at moving SRK-181 forward in the DRAGON study. And we significantly strengthened the balance sheet. As that momentum carries forward into 2021, we're laser-focused on our top value creation priorities: 12-month data from TOPAZ, clarifying the registrational pathway for apitegromab in SMA, identifying additional indications at myostatin and moving DRAGON forward to proof of concept while continuing to invest in the scientific platform that's driven the success to date. Each of these priorities positions us to advance the cause for patients in areas of great unmet need, and the whole team remains committed and passionate about that purpose. So with that, Anupam, I think I'll pause and open it up for questions. And I'm happy to introduce that Yung Chyung, our Chief Medical Officer, will join us for the Q&A session as well as Ted Myles, who is our CFO and Head of Business Operations. So thanks.

Yes. [Operator Instructions] But Tony, maybe we'll start with the Phase II TOPAZ data upcoming here, the full 12-month data. In your presentation, you talked about how you haven't seen a plateau effect yet. So how do we think about the 3 cohorts across different endpoints? And what's a win scenario there? And what additional analyses we should be thinking about?

Yes. So great question. I'll let Yung Chyung in a second. Look, we really were thrilled with the 6-month data. And as we look forward, we're obviously going to look for durability effect at a minimum, at 12 months. If we saw the same effect at 12 months that we saw at 6 months, we'd be thrilled. We don't see evidence that a therapeutic plateau has been reached. So it could be that the data gets better, but we don't know. We're in an unknown territory at that point. But again, we're very pleased with the 6-month data and would be very happy to see that sustained at the 12-month level. Yung, do you want to add anything about durability and/or improvement?

Yes, yes. No. As you pointed out, we're looking forward to learning more from the 12-month readout and testing the question of whether or not the clinical effects that we observed at the 6-month time point are sustained or not as well as the possibility for further improvement over time. Beyond the primary efficacy analysis at the 12-month time, we'll also look at additional and more exploratory outcome measures and analyses as well as, of course, a comprehensive look at safety, PK/PD and antidrug antibody. So yes, we are very much looking forward to coming back with additional information once we get to the 12-month time point.

And should we be thinking about presentations of the TOPAZ data, whether 6 months or 12 months, at scientific meetings or medical congresses in 2021? Will there be 1 12-month one and multiple? How should we think about that?

Good question. We haven't guided to a specific conference. Obviously, there are -- those are things one looks at on the calendar. We, as you know, did the 6-month data as a press release and a conference call, which made sense in that context. So could include that or could be a scientific conference. We haven't specifically given guidance on that. But we do think Q2 is the time frame when we'll be prepared to talk about it.

I think Tessa from the team has a question.

Yes. I think I'd just ask, yes, just as you're thinking about your next steps for the apitegromab program, sort of what are the kind of key factors that are guiding your decision on what that trial might look like? Because I know in your Phase II study, right, you studied a bunch of different populations, from ambulatory to nonambulatory in combination with nusinersen. So can you give us a sense of how you're thinking about that right now? And will the 12-month data be important to kind of guiding that decision?

Yes. Great. Thanks, Tessa. What -- we like the result. We did test 3 different cohorts. It was -- TOPAZ is a complicated experiment intentionally because we thought there were multiple potential intersections of efficacy in subpopulations. We're pleased with the results over 6 months in the 3 cohorts. None of them discouraged us. I guess I would put it that way. Obviously, it's a type 2, type 3 focused trial. And our aspiration as we go registrational trial would be to purse type 2, type 3 and as broad a population as we reasonably could, all subject to discussions with regulators. We do -- as I think some people know, the TOPAZ trial protocol was written to use apitegromab in addition to any approved SMN upregulator. From a practical standpoint, nusinersen or Spinraza was really the only one available. We would like the product that we believe the product should be used across the multiple upregulators. So that would be part of how we think about the registrational path as well. Yung, anything you'd like to add to that?

Yes. None, you covered it.

And would you -- like, I guess, to follow up, would you have to sort of run separate studies, kind of like what some other competitors have done where they split the population up? Or could you do just one trial? And then I guess my follow-up question is quickly, how are you thinking about sort of next potential disorders or diseases that you would go into? And then when might we know further about sort of next steps?

Yes. So on the registration, the answer is, yes, it's possible, both of the ways you described it. There are a couple of different ways to get at this. We're obviously hesitant to get too specific in speculating on that and as of being able to communicate some clarity from regulators, but it could be parallel arms. It could be one thing -- those are the considerations that we're thinking through. Just as I think you know, we've anticipated -- our business plan has always anticipated starting a registrational trial in the second half of 2021. The things that are agnostic to that ultimate design, like CMC and drug supply and CRO selection and as all systems go, it's really regulatory that we'll need to get clarity on before we describe that in a lot of detail. In terms of next indications, Yung, do you want to talk about how we think about that? We do think there are some additional diseases that may be tractable with this approach with our myostatin specific approach.

Yes. So we're continuing to apply our translational thinking that first guided us to select SMA as the lead indication for apitegromab. Those 4 key criteria that we've discussed -- as discussed previously, include looking at populations that tend to be younger, looking at indications for which the muscle itself is generally intact and then as well as indications where the primary unmet medical need to be addressed by -- potentially addressed by boosting fast-twitch fiber function. Of course, related to that is looking for areas where there are clinical trial outcome measures endpoints that directly link up to fast-twitch fiber function. Obviously, SMA links up quite nicely with all 4 features. And so -- and we're excited about the proof-of-concept results from our interim analysis and look forward to further investigating the potential of apitegromab in SMA. But beyond SMA, there are a number of muscle disorders that have the potential to fill some of -- many of these key attributes. And so in due course, in due time, we anticipate providing more clarity around -- an update around our thinking on it.

We've got a question from the e-mail portal here, which is, "Strategically, what's your path forward with SRK-015?" I guess the question really relates to how you think about maybe partnerships regionally in the EU or globally retaining U.S. rights, that type of thing. How do you think about that?

Yes. So great question. Look, we intend to bring the asset forward. We think we can. We are obviously responsible and agnostic to thinking about how you maximize the value of the asset. We'd be the open to the idea of partnering if it made sense at some point, but we think the best way to proceed with the asset is on our own at this point.

Maybe I will switch gears a little bit to oncology and 181 here. So I guess I think the presentation at 2Q '21 start for DRAGON B. So what are the gating factors there to getting that study started?

Well, we have to complete Part A because Part A is dose escalation, right? We have to pick a dose. That's the main thing. We are doing the work on identifying sites and working with CROs, and we will probably have to pay for a little checkpoint inhibitor and acquiring products and things like that. We're a little cautious about COVID these days as everyone is. It's nothing specific to us. We think we'll be able to initiate the trial in Q2, but we're obviously monitoring very closely on a site-by-site basis. Access for these patients is challenging currently. So not specific to us, I don't think, Anupam, but probably a general caution you're hearing from people in settings like this, as we speak.

And it's probably a little early to speculate on this. But DRAGON B, I think we might get some sort of update readout in the second half of this year. Like any thoughts on the size and scope of the data that we might be getting?

Yes. We'll see. We will have -- in the second half of the year, we'll likely see some things from Part A, too, which, in some ways, hasn't been answered in Part B, a little bit less controlled, right? But it's primary resistance, it's redose, small numbers, so we don't want to overset expectations on that. We'll certainly see that for the second half of the year. It depends on how fast B gets up to -- will start. But late in the year, there may be a chance to see some interesting data from B as well.

And then maybe a final question here. Just in terms of the Gilead fibrosis collaboration, any potential sort of clinical development or financial milestones we should be thinking about associated with this collaboration?

Ted, do you want to speak to that?

Sure. So we're in year 3 -- the very beginning of year 3 of a 3-year collaboration. It's been incredibly productive, collaborative. They're great partners. Of the economic service story will -- the next step would be nomination of a product candidate to go into the clinic. The milestones associated with that next step are not particularly material. What would be more important is down the road as they advance in the clinic and get to commercialization, that's where the economics get more interesting. So near term, it's really more about continuing the collaboration with Gilead and moving the products forward for the good of patients as they choose.

Okay. Well, Tony and Ted and Yung, I want to thank you guys so much for a productive session here to cap off the first day of the conference.

Awesome. Thank you. Appreciate it. Thanks.