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

This is Rebecca Kotkin from Credit Suisse's Healthcare Equity Capital Markets team. Thank you for joining us this morning. This morning, I am joined by Nagesh Mahanthappa from Scholar Rock. Very pleased to introduce Nagesh on behalf of the team. As many of you know, Nagesh is the Interim Chief Executive Officer of the company and co-founder of the company as well. A really exciting story across SMA as well as early-stage oncology. So pleased to hand it over to Nagesh. As you may see on your screens to, the extent that you have Q&A after Nagesh has finished his presentation, feel free to e-mail me at [email protected], and I'd be happy to facilitate the Q&A. But with that, very pleased to hand it over to you, Nagesh.

Thank you so much, Rebecca, and thank you to Credit Suisse for giving Scholar Rock the opportunity to provide what I believe is an exciting update on the good progress we're making across our programs at Scholar Rock. Again, my name is Nagesh Mahanthappa. I am the interim CEO of the company. And if you will, give me a moment here, I will bring my slides up. Hopefully, you can all see that? Rebecca, can you firm with that? Okay. So again, Scholar Rock making great advances. I will show you the obligatory disclaimers. Of course, all details are in our filings. So with that, let me launch into our actual presentation. 2021 has been to date a tremendous year of execution for us across both of our clinical stage programs, apitegromab being in development for spinal muscular atrophy as well as SRK-181, our immuno-oncology program. But let's not forget that Scholar Rock is founded on the basis of a very strong discovery engine and our discovery programs continue at pace as well. And with that, I would like to say that the momentum we've created in 2021 will carry into 2022 with important activities throughout 2022. Now let me just remind you briefly as to the nature of the platform at Scholar Rock. At Scholar Rock, we are focused on the discovery and development of fully human monoclonal antibodies. What distinguishes what we do at Scholar Rock from other companies is that we are coupling deep structural biology insights, with a cutting-edge antibody discovery platform. And as exemplified by our 2 clinical stage programs targeting TGFß1 and myostatin, respectively, what we're doing that is unique is rather than targeting the mature form of the protein growth factors, we are actually using our structural biology insights to target the precursor forms of these growth factors. The inactive precursors, which are deposited in extracellular depots and on the cell surfaces. And by targeting these so-called proforms or precursor or latent forms of the growth factors, we've actually established truly novel pharmacology across both of these protein growth factors. This is best exemplified by our most advanced program, the antibody that we are developing apitegromab to create a potentially transformative therapy for the treatment of patients with spinal muscular atrophy or SMA. Very quickly to give you an overview of the nature of the disease. In spinal muscular atrophy, patients suffer from a [ generic ] mutation of a particular gene known as SMN. Depending on the nature of the deficiency one sees the spectrum of severity. Type 1 being the most severe form of the disease, Type 3 being still a very significant form of the disease, but somewhat less severe than Type 1. Of course, Type 2 is sitting in the middle. In the U.S. and Europe alone, global prevalence of this disease is on the order of 30,000 to 35,000 patients. And in the case of apitegromab, the TOPAZ trial has focused on Type 2 and Type 3 patients, representing or comprising on the order of 2/3 of the overall population of patients with SMA in the U.S. and Europe. Now you may be aware that there are already 3 approved therapies for the treatment of SMA. These include oligonucleotide approach, small molecule approach and gene therapy. And while these are each very distinct therapeutic modalities, their objective is actually the same, which is to upregulate the expression of the deficient protein SMN. And with all 3 of these therapies, one sees a significant impact on the patients, a positive impact on the patients. But I'd like to emphasize that none of these approaches constitutes a cure. So what is the nature of the opportunity for a therapy or potential therapies such as apitegromab? One of the ways in which patients with spinal muscular atrophy are assessed is as a functional scoring system known as the Hammersmith scale or as abbreviated here, the HFMSE. The HFMSE is an aggregate score of a number of physical activities that the patient is asked to execute, which are scored and in aggregate, can reach a maximum of 66 points. Now to reach 66, one does not need to be an Olympic athlete. A healthy toddler should be able to achieve the score of 66. And what you can see is in the Type 2 and Type 3 SMA patients -- patients with SMA, typically achieve scores slightly over 20 out of 66 points. With treatment with nusinersen, the oligonucleotide therapy, there is a significant increase, almost 4-point increase. And for patients, this is very meaningful. But I think what you can appreciate from the schematic diagram is that, that 4-point increase, while important to patients and important to the patient's families is still a far cry from reaching a full score of 66. So there's significant opportunity for therapies and in addition to SMN upregulators can actually improve muscle function further. Now we know -- a couple of observations I want to share with you, in particular, in relation to nusinersen. We know that nusinersen does not tend to increase the Hammersmith score on average in children who initiate therapy after the age of 5 years. So what you can see here is exemplified from published data on nusinersen is that in patients who've been treated after the age of 5, with nusinersen one sees generally a stabilization of disease, not necessarily a significant improvement of actual motor function. Similarly, what one sees over the course of treatment after the initial phase of increase is that during maintenance therapy, there's essentially, again, stabilization, not what we would characterize as an increase in motor function. Now -- this is the context in which we think about SMN upregulators. This isn't actually only true with nusinersen once these comparable effects with the small molecule risdiplam as well. So what is it that we have actually observed in the TOPAZ trial in treating patients who have already received nusinersen with apitegromab. And the results are really quite dramatic. As you can see here on the upper panel -- upper half of the slide, the majority of non-ambulatory patients actually saw very significant improvement. So this is the totality of non-ambulatory patients. And you can see some patients actually had increases in their Hammersmith scores of as much as 20 points. Now if we actually focus within the non-ambulatory cohorts of patients and those who receive the high dose of therapy, 20 migs per kig, after 12 months, you can see that on average, patients who received nusinersen starting at an age of less than 5 years old had increases on the order of 7 points. For those patients who receive nusinersen treatment after the age of 5, on the average score of increase of slightly more than 0.5 point. But importantly, if we actually look at the breakout, even among these patients, on the order of 2/3 saw at least a 1-point increase and about 1/3 saw a greater than 3-point increase. So the impacts across all age groups are actually very significant. We can look at this in a little further detail. If we look at the non-ambulatory Type 2 cohort initiated at less than age of 5, 88% showed improvements. And of those, essentially 2/3 of the patients showed a greater than 5-point increase and almost half saw a greater than 10-point increase. If you look at the non-ambulatory type 2/3 cohort who initiated nusinersen after the age of 5 or older, you can still see that about 2/3 of the patients saw greater than 1-point increase and roughly 1/3 saw greater than a 3-point increase. So the effects are, in fact, very dramatic. Relatively speaking, you do see larger gains in the younger patients than you do see in the older patients. Nevertheless, it's important to point out that the impact is not a function of how long the patients have actually been receiving nusinersen. So if you look at those patients who started receiving nusinersen relatively early versus those of had multiple doses, you can see that there's not a direct correlation of the impact of the apitegromab. And I make this point to emphasize that therefore, we believe that the effect of apitegromab is on top of nusinersen and independent of nusinersen. Very important distinction to be made there. Now lastly, what I would like to point out is in addition to the Hammersmith scale, we did actually also assess the patients on the World Health Organization or WHO Motor Development Milestones scale. This actually consists of a variety of relatively challenging activities for patients with neuromuscular disorders. And I think it's very important to see that even on this very challenging type of assessment, when we look at the pool of non-ambulatory Type 2/3 patients, we actually had 7 out of 35 patients had increases of 1 or more WHO motor milestones. Again, this is extremely significant. And in fact, we even had 1 patient who gained 3 new motor milestones scores. So we've been very pleased with this, and this is really serving the basis of how we are continuing to now advance the program. Very quickly, let me just touch on what we observed in terms of the safety profile of apitegromab in the TOPAZ study. Making a long story short, I won't read through all of this data. But the important point is that in terms of SAEs, Grade 3 AEs and AE leading to early study discontinuation, all were assessed by investigators as being unrelated to study drug. So the safety profile of this drug is extremely promising, and we are now on track to be initiating the Phase III trial by year-end. At very high -- more details will be forthcoming, but to give you a flavor of where we stand today, it will be a randomized, double-blind placebo-controlled trial, 12-month treatment. Again, apitegromab will be dosed IV monthly. And it will be used as an add-on to even nusinersen or risdiplam. Again, the focus here will be on the non-ambulatory Type 2 and Type 3 patients with SMA. This being the population in which we saw the most robust results in the TOPAZ study. Key objectives again will be assessment on the Hammersmith scale as well as safety. And just to repeat myself, we aim to initiate this trial by the end of this year. Ongoing discussions with regulators have been very promising. As we previously announced, from FDA, we have received Fast Track designation and from the EMA, PRIME designation as well, recognizing the significant, remaining unmet medical need for patients with SMA. Just to wrap up on the apitegromab program. I would like to emphasize that what we intend to assess in the registration trial, as exemplified by sort of Group A here on this slide, really remains the tip of the iceberg. We ultimately would like to see apitegromab developed for the treatment of all patients with SMA who could conceivably benefit. So as we think about future opportunities, these include Type 1 patients, including those who have been treated with gene therapy as well as ambulatory patients. So it is our intention to realize the full potential of apitegromab and the upcoming Phase III trial will be a major step in that direction. Okay. So with that, let me now transition to a discussion of our other clinical stage program, which revolves around a fully human monoclonal antibody called SRK-181, which targets and inhibits the activation of the proform of transforming growth factor beta 1 or TGFß1. Now TGFß and TGFß1 in particular has been receiving a lot of attention as playing a significant role in tumor biology, particularly in the immuno-oncology context. Over the last few years, there have been very important papers published in the scientific literature that have outlined the key role of TGFß and TGFß1 in particular is playing a role in the resistance of tumors to immunotherapies. And this has actually spurred significant interest in the industry as well over the past couple of years. We've seen some very significant transactions between large pharma and companies developing potential drugs targeting TGFß signaling. Now let me just give you a little bit of a background of the biology. What we know about human tumor, schematized on the left-hand side of the slide, is a very significant fraction of a wide variety of solid tumors actually show what is referred to as an immune exclusion phenotype. So on histopathologic assessment, we can see that while immune cells are trying to get into the tumor, they show a lack of penetration into the tumor. And if the lymphocytes can't get into the tumor per se, then agents such as anti-PD-L1 or anti-PD1 cannot actually mediate their therapeutic effect. Now interestingly, what we've also seen, and this is based on some of our own analysis on the right-hand side of the slide is across a wide variety of tumors. We see that there's significant upregulation of TGFß expression but not just any TGFß. As you may be aware, there are multiple isoforms of TGFß. And what we found is that there is significant upregulation of TGFß1 per se. And there is good reason to believe from our work and the work of others as has been published in the literature that this upregulation of TGFß1 is what is actually causing immune exclusion. And we have explored this now in very rigorous preclinical animal models, which really allow us to understand how this works. So to give you -- just to give you the background of SRK-181. Again, it is an inhibitor of the activation of the precursor. And by using this approach, we actually get exquisite selectivity for TGFß1. We avoid hitting beta 2 and beta 3, which is a unique attribute of 181, and as we'll describe in more detail in a few moments, brings along with it other potential safety benefits. With those potential safety benefits, we have the ability to hopefully increase the therapeutic window, and we have therapeutic flexibility, the ability to pair SRK-181 with any checkpoint inhibitor. Now as I said, we have assessed this preclinically and carefully chosen mouse tumor models, which exemplify the immune exclusion phenotype and the upregulation of TGFß. A particular example I'm showing you here today is with the melanoma model, a cell line known as the Cloudman S91 line. And what you can see on the left-hand side are the growth curves of individual tumors in individual mice who are receiving monotherapy of either the mouse equivalent of SRK-181 as shown in orange or an anti-PD1 antibody shown in red. And as you can see, with the monotherapy, there's very significant -- there's very little impact on tumor growth. The tumors actually grow almost exponentially. However, as you can see on the right-hand side, in the blue and the purple. When you combine these 2 agents, an anti-PD1 with SRK-181 at either 10 or 30 milligrams per kilogram once weekly, you see there is a huge impact on the tumors. And in numerous cases, we're actually seeing complete suppression and even regression of tumor growth. As you can see in the lower left quadrant of this slide, that is accompanied by a significant survival benefit looking out to almost greater than 2 months. And when we do a histopathologic analysis and stained tumors taken from these mice for marker of killer T cells, CD8, staining in brown here. You can see in the monotherapy context, tumor derived from an animal treated with anti-PD1 alone, there's very little penetration of those brown-colored killer lymphocytes, whereas in the combination setting, we basically unleashed the lymphocytes. And there's ramp in infiltration of the lymphocytes, which we believe is what is giving rise to the slowing in the regression of the tumors and the survival benefit. Now this is great. But again, it's really important to realize that there's a potential safety benefit associated with selectivity for TGFß1. What's been known for quite some time is lacking selectivity for beta 1. That is showing cross reactivity with beta 2 or beta 3 or showing nonselective inhibition of the signaling pathway is associated with significant cardiac toxicity. And in fact, we've done head-to-head safety testing of the SRK-181 versus a nonselected antibody or a small molecule inhibitor. And schematized here in a rodent study, what we see is that in animals that are receiving either the small molecule, the LY molecule or a pan-TGFß antibody, we see significant cardiac toxicity, significant valvulopathies that the onset of which is very rapid. But with SRK-181 in rodents, we can go to doses as high as 100 milligrams per kilogram dosed weekly for a month and we see no significant cardiac toxicity and generally speaking, no significant toxicities. Similarly, we run 4-week GLP tox in non-human primates, and we went to doses as high as 300 milligrams per kilogram on a weekly basis and see a comparably promising safety profile. So reiterating the attributes of SRK-181 in contrast to other approaches, which have been tested clinically, we see significant potential for a wider therapeutic window because of the selectivity for TGFß1. We see an ability to combine with any checkpoint inhibitor, and this is an important contrast to bispecific constructs, which tie you to a particular checkpoint inhibition strategy. Another aspect of flexibility being able to combine with multiple agents is we can combine at optimal doses of each of these agents. And then finally, I'll make maybe a subtle point, but important is that the location of TGFß expression versus the targets of checkpoint inhibitor intervention are rather spatially distinct in the tumor micro environment. So again, by having 2 distinct therapeutic agents in combination, we are not tied to the actual spatial geography as it were of where the targets lie. So with that, we are now in the DRAGON Phase I study. This is a proof-of-concept trial to evaluate SRK-181's ability to overcome primary resistance to checkpoint inhibition. So these are tumors in patients who have failed to respond to checkpoint inhibitors in the first place. In Part A, we are looking -- we were looking at dose escalation of SRK-181 alone. And then in Part A2, we look at the combination with anti-PD-L1 and in this case, with pembrolizumab. We have now made sufficient progress here. We have announced this morning the abstract is published at SITC for description of Part A. Actual details of the Part A study will be revealed on Friday when the poster comes off of embargo. But I'm pleased to tell you that we have initiated Part B of the study. In Part B of the study, we have 4 distinct cohorts of patients in which we'll be assessing up to 40 patients per cohort having selected tumor types in which we know there is significant based on the literature and our own analysis tumor types in which we know there's significant upregulation of TGFß and where we know that tumor exclusion is a significant issue. So very excited about the study. You'll be learning more about Part A later this week, Part B has initiated, and we are very excited about the prospects starting to see actual clinical signs over the course of 2022 in this study. So just to review where we are today. Apitegromab, we are on track to be starting the Phase III registration study by the end of this year. That will continue over the course of 2022 and very excited to see this study progress and we have great hopes for the patients and their families. In the case of SRK-181, more details coming out this week on the first part of the DRAGON study, Part A. Part B has now initiated 4 distinct multiple tumor -- 4 core tumor types with a particular focus on melanoma, non-small lung cancer and urothelial carcinoma. Here, too, we see multiple opportunities in the future for SRK-181 in other tumor types, various oncology settings, very excited to hear. And I will emphasize once again that making good progress in a variety of very exciting discovery programs. With that, I will bring my comments and presentation to an end and open it up, Rebecca, to questions from you or our virtual viewing audience.

Yes. Perfect. Thank you very much, Nagesh. That was a great overview. Maybe I'll start with just a general question as we let some other questions come in through e-mail right now, which is Scholar Rock had a very busy year. It's clear that 2020 and 2021 will be years of execution. What do you see as the key highlights of 2020? And I think you touched on it a little bit on the slide and then obviously throughout the presentation, but what are you most excited about as you look into next year between apitegromab, 181 and otherwise?

I think 2022 is really going to be focused on execution. We moving apitegromab into registrational studies, I think is a landmark for us. I'm very excited about seeing the combination of apitegromab with nusinersen as well as risdiplam. And based on our preclinical work, we are actually agnostic to the type of SMN upregulator that we believe apitegromab can be combined with. And ultimately, our aspiration is that this will be the backbone of therapy that patients on any SMN upregulator may potentially benefit from being treated with apitegromab as well. As I said, with Dragon Part B study has started. I characterize Part A has sort of been intentionally boring. The Part A was really optimized for us to be able to demonstrate safety and determine the appropriate dose for Part B. Part B is really where the rubber is going to meet the road because we'll be focused on patients with tumors that we believe actually do show this immuno exclusive phenotype that is a product, the TGFß over extraction. And I think in over the course of 2022, we have hopes for actually starting to see initial clinical signs. Obviously, the study won't be completed until it's completed. But as you know, with oncology studies, early signs can be very meaningful, and we are hopeful for such in 2022. And then the early-stage pipeline continues to make progress. There are a variety of interesting targets on which we're working that are both TGFß related and beyond. But we're bringing our cutting-edge antibody discovery capabilities to our structural biology insights on this target. I think we'll continue to be fruitful and allow us to build a pipeline which is really a mixed portfolio of programs that we believe we can take across the finish line on our own and build a proprietary portfolio as well as continuing to advance programs that at some point, may benefit from partnership where a potential partner can bring additional capabilities and resources to really realize the full value of some of the larger market opportunities.

Okay. We have one other -- one question coming on 181, which is that many TGFß approaches have encountered challenges due to toxicity. How is SRK-181 different by targeting TGFß1 specifically? And have you seen any potential toxicity issues in your preclinical or early clinical studies in 181?

Yes. So maybe I'll just go back to this slide. So it is absolutely the case that what is dose-limiting for traditional approaches to TGFß inhibition has been cardiac toxicity. And that has been exemplified and reiterated by our own preclinical work. So as shown on this slide, in rodents treated with LY2109761, which is a small molecule inhibitor of the TGFß signalling pathway, and therefore, does not distinguish among TGFß isoforms or our conventional TGFß antibody, which again is not distinguished among TGFß1, 2 or 3. We very quickly see significant cardiac toxicity. There is mixed cell infiltration, degeneration, necrosis, hemorrhage of the valves. And the onset of this is very rapid. But with SRK-181, whether in rats or in non-human primates, we've been going to doses that I consider whopping doses, 100 milligrams per kilogram weekly in the case of the rodents, 300 milligrams per kilogram weekly in the case of non-human primates, and we essentially see no significant toxicity, let alone cardiac toxicity. This being the very same molecule, which was showing us, again, preclinically in the mouse models, very significant antitumor activity. So I think our ability to get significant antitumor activity over come checkpoint resistance and decouple it from toxicity by having this beta 1 selectivity is really the distinguishing attribute of our approach. So again, molecule preclinically appears to be relatively clean, is not showing as evidence of the type of toxicity associated with the conventional approaches, nonselective antibodies, small molecule inhibitors. And we think the promise is significant.

Great. And the last question, I think you covered it just at the end of your remarks, which was about the news coming out of SITC and what further information you might be able to offer on Part A. And obviously, you mentioned that Part B has been initiated. But it sounds like the answer may be stay tuned for Friday, there's more information to come. But anything else on the SITC that you...

I do have to be respectful of the embargo on the poster. But I mean suffice it to say that we were pleased with Part A. Again, our goals were primarily focused on safety and dose selection. I jokingly call it intentionally boring. But Part B, I think, again, that's really what we're excited about now. We have our dose selected. We've initiated Part B. And I think in these particular tumor types as shown here on this slide in orange, this is where we are hopeful for seeing our first signs, clinical signs over the course of 2022.

Perfect. I think that does it for the submitted Q&A at this point. So I want to thank you on behalf of Credit Suisse. I want to thank everyone for joining but in particular, Nagesh, for joining us this morning. And to the extent there's any follow-up questions, feel free to direct them either to the Credit Suisse or obviously to the Scholar Rock team. So thank you again.

Yes. Thank you so much for the opportunity this morning.

All right. Take care. Thank you.

Goodbye.