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

Good day, everybody. My name is Ash Verma. Welcome to UBS Virtual Obesity Therapeutics Day. I'm a biotech analyst at UBS. And with us, our next company for the Obesity Day is Scholar Rock. And so with us, we have Jay Backstrom, who is the CEO; and Mo Qatanani, who is the Chief Scientific Officer. Hi, guys. Can you hear me okay?

Yes. Good morning.

Good morning.

Excellent. So thanks for taking the time. Really exciting to hear about the story and how the environment has been on the obesity market. I saw that you announced the initiation of this Phase II EMBRAZE trial yesterday. So I know a lot of people paying attention to the space and broadly your pipeline overall. So maybe it might be helpful just to orient the audience a little bit, if you can give a little bit of a high-level overview of apitegromab and sort of the rationale for how you're targeting obesity and why it makes sense from an anti-myostatin therapy's perspective?

Yes. Sure, happy to do that. So I'm Jay Backstrom, for those who are listening in, the CEO of the company. I took over as the CEO back in October of 2022, and we've really made enormous progress over the course of the time that I've been here. To start, I mean, Scholar Rock was really founded on the understanding of how to selectively target the TGF-beta superfamily of growth factors. So selectivity for us is really important because it's a very complicated biology and the historic approaches you would get off-target effects and unwanted toxicity such as bleeding. So we've been very focused on selectivity. To that end, that's where apitegromab comes in. Apitegromab is highly selective, targets what's referred to as the latent or precursor form of the growth factor. It's important to understand that the myostatin, which is what we're blocking, it has one primary function, and that's to regulate skeletal muscle. So if you block it, you release the intracellular mechanisms, you get more muscle. So it's a very clean target. You hit it, you get more muscle. So we selectively target that. And as a result, what we've seen in our early indication with apitegromab is, in spinal muscular atrophy, we've seen functional improvement in this motor neuron neuromuscular disorders. So we've got really good proof of concept and principle and clinical data to say that we can enhance muscle and improve function. So that's kind of the framework to start. If we look about the obesity field, which is you're following at everybody, you can't -- it's everywhere, all the time, right? It's just such a large market and such interest. And it's because, quite honestly, the current therapy is the GLP-1 receptor agonist and versions of that are so highly effective in losing weight. They're highly effective. But what has emerged is, within that weight loss, there's a loss of lean muscle mass. And the whole goal of managing weight loss or the treating of obesity is to improve outcomes. And so lean muscle plays such a critical role that it's an obvious place to go if you have a drug that can target myostatin that regulates muscle and can increase muscle mass, to then consider how that could be used to enhance, if you will, the profile of the current therapies who are -- we're seeing more and more the obvious loss of lean muscle mass. So that was the concept, right? We start with a selective target. We hit myostatin and only myostatin. And what our program has done is that we've taken apitegromab to the proof-of-concept study that you just described, the EMBRAZE trial. Apitegromab, to be clear, is our SMA program. So we are going to push that forward. We're going to talk more, I believe, on the call about our next generation, if you will, SRK-439, anti-myostatin for obesity. But we took advantage of that apitegromab in clinic to allow us to do a proof-of-concept study to demonstrate, and that's the trial's goal, that can we preserve lean muscle mass in the setting of standard of care, so either tirzepatide or semaglutide, so that everybody gets that, plus apitegromab, can we demonstrate that we can preserve lean muscle? That's the goal. And we do it very selectively. So we show that, then I think we have the answer that we would like, that we can run -- we're running now. We'll have data, assuming we -- it depends on the enrollment, there's a lot of interest in the trial, so it's going to probably roll quickly. But we've indicated that we'll have data about this time next year. And that's right around the time where Mo and his team will get the SRK-439 into the clinic through the IND. So it's kind of dual track. We'll run the study. We'll get insight, but it's 439 that we'll really be doubling down on as we get that into clinic for the cardiometabolic obesity space.

Great. That's, yes, excellent start. So I think, yes, maybe it might be helpful just to try to understand what are the advantages that you have with 439 compared to apitegromab. And I guess, so you're doing this trial with apitegromab right now and you can naturally transition to 439. Is there some additional steps that you might have to take to sort of justify that the profile carries from one molecule to the other, sort of like how you're thinking about that?

Yes. So 2 things. I'll let Mo give the differences between apitegromab and why we were looking forward to getting SRK-439 into clinic. I would say that mechanistically, targeting myostatin very selectively in its pro form or latent form, that's the consistent theme between apitegromab and 439. So mechanistically, that's what we're really assessing, right? We'll have to do the IND-enabling work to get 439 into clinic. But Mo, do you want to just describe sort of what we're thinking about with 439 and?

Yes. I mean, as Jay mentioned, mechanistically, they're more selective. All our antibodies are selective, which is really critical. We do target the latent form or the precursor. So we lock it into inactive form, so it never really sees the receptor or initiates any signaling, both of them. Now the difference with 439 is that, with 439 from the get-go, it was designed for this specific patient population, the obese patient population. And what you need there is, and what we thought, a higher affinity antibody that will give you efficacy at lower doses to enable subcutaneous dosing out of the gates, from the get-go. So the profile for 439 is higher affinity, efficacy in the relevant models at lower doses and we're seeing that with doses as low as 0.3 mg per kg, to enable subcutaneous development of the molecule. And so far, this is what we've seen with SRK-439.

Yes. To be clear, apitegromab is an IV presentation. It's monthly dosing. Currently, if you look at the Versanis' Lilly program, it's an IV administration, right? And to be clear, I think that -- the Scholar Rock team has been thinking about cardiometabolic and using myostatin as a target probably since 2019, so well before I joined. But that's the reason why we were able to move so quickly into 439 and getting it towards the IND. But it's designed to be able to be subcutaneous, low volume, that would really fit sort of a population we're trying to treat here.

That's helpful. Great. Thanks for that. I guess I mean just mechanistically, like the myostatin, anti-myostatin program that are out there, I mean I cover by, even as I was talking to you about -- I mean how do you think about like what is the competitive advantage that you have, maybe, versus some of the competitors in the field, either Biohaven or Versanis, like in terms of the way that the molecule is binding, and what sort of mechanistic differentiation you're bringing to the table?

Yes, I'm happy to. It's really interesting, right? If you -- we're going to actually see if we can actually project the slide, Ash. Do you think that will come through or no?

I believe so. Should work.

Yes. So we're going to set one up because I think a picture paints a thousand, whatever. If you take a look at the whole signaling pathway with myostatin, it signals through -- here we go. This is a really good presentation. We use this quite a bit. So if you take a look at what the schematic is showing, is at the very bottom of the slide is the ActRIIb receptor, it's represented as ActRIIA/B. But basically that's the receptor, right? And if you kind of track up to the schematic on the left where it says apitegromab SRK-439, that is the pro and latent form of myostatin, which then, if there's proteolytic cleavage, it's open, you form the active growth factor myostatin, and then it signals through the receptor. So that's the myostatin pathway. The pathway to the far right is the activin pathway. So similar -- we're not targeting activin, but to show you that the ActRIIB receptor is the receptor for both activin as well as myostatin. But in addition, what's shown in the middle is GDF11, it's another growth factor. This is a very complicated and complex set of biology. Activin is expressed in lots of tissues. And so if you perturb activin, you are at risk for having unwanted toxicities. Where myostatin, if you block it, you get increased muscle and less fat, that's it. There are clear animals that have the genetic defect. There are double muscled animals, right? As an example. There's human mutations where there's just more evidence of muscle mass. But you don't have any unexpected or untoward effects because myostatin is that pure of what it does for the body. It regulates muscle growth. So I start off by saying Scholar Rock was founded on selectivity. That's because the lack of selectivity has plagued the field for decades. And it's the reason why not many TGF-beta targeted programs have made it to the commercial state, right? So it's been very difficult. If you go back up into this slide. So this is -- I'll give you a walk-through of kind of what's happening in the space. So the current Lilly- Versanis Program, which is bimagrumab, is targeting the receptor at the bottom. So that's a monoclonal antibody of the receptor, so it blocks that. If you click up, myostatin and Activin A, they're growth factors. There are monoclonal antibodies directed to myostatin and Activin A, right? So you can target the growth factor themselves, but these are the mature forms, but you can target that. And then if you click up one more slide on the left, that's where we're coming. We don't even let myostatin get formed. It doesn't even get activated. So we completely block it at the beginning. So that's -- those are kind of the main strategies. So ligand traps would be similar to the bottom. I call out bimagrumab because it's been really the lead and there's been a lot of talk around it. But that's its target, it's that receptor. And if you look at some of the other forms, for example, the Adnectin, which is T-alpha. T-alpha is not a monoclonal antibody, so it's not blocking the antibody specifically. It's an Adnectin -- I think the best way I could characterize it, it's a bit like a sponge, so that when myostatin is activated, it can then bind to it, so it will catch it. Whether it does or doesn't signal through the activin receptor, I can't say, but it definitely has overlap between GDF11, which is another growth factor. And there are some unwanted toxicities associated with all of these approaches. I think what's really important to keep in mind is if we think about the use in the setting of treatment of obesity, it's an extraordinary large exposure. There's so many -- we think over half of Americans will meet that definition by 2030. So you've got a very large population. And this really, as we heard from one of our experts yesterday, Dr. Ania Jastreboff on our -- we hosted an investor call, as an expert in the field, she sees this as lifelong care. This is chronic care. You're going to need to treat for a long time to get to the patient outcomes that you want. So I say all that because if you're starting to perturb the biology that's associated with these signaling pathways, you may not see it in a single healthy volunteer study. You may not even see it in a 6-month approach. But over time, these things will begin to manifest. And so what we're seeing, if you take a look at the profile that we've generated from apitegromab, which is our SMA, spinal muscular atrophy, we've got over 4 years of care for patients on that trial. We've seen none of these events on the right, none of these events, right? It's because myostatin is such a pure target and our strategy is so selective that my phrase is almost by design -- not almost by, it's by design that we're not seeing these things, because of the selection of the target and how we hit it. So it's our view of how to -- where the field is going and what the need is, benefit-risk has to be top of mind. It's all about benefit-risk. And so there's a lot of discussion around the right strategies, and that's because we're generating data. Right now, there's a lot of proof-of-concept studies going, a lot of data being generated and data will help inform us going down the road, right? But from a starting point, from the data that we've generated with spinal muscular atrophy, where we see, we are the first company to demonstrate functional improvement in any clinical study by trying to target myostatin. That was the TOPAZ data, first to do that. So we feel very good about the efficacy side of the equation. But frankly, the safety side is almost irrefutable, to be honest. I mean this is biology that happens when you perturb it. So we feel -- that's why we're excited, we're starting the EMBRAZE trial, we're really looking forward to generating those data. But importantly, really looking forward for Mo and his team to help get SRK-439 into clinic. It's starting to emerge, frankly, from our perspective, as almost a best-in-class profile. But of course, we'll need to generate data to support that. But the nonclinical data looks really, really good.

Yes. That's great. All right. So I guess, I mean, one thing that I wanted to ask like, for 439, I mean so we're seeing some animal data, I believe, that can show and preserve lean muscle mass. I guess what would be like a dose translation in humans and sort of what are your thoughts on that? Anything that you can comment on specifically on what type of dose would be -- I know you mentioned that you have like its efficacy at lower doses because of the high affinity, but just curious what your model suggests in terms of translating from animal to humans.

Yes. I mean, we're building these models as we speak now. We're really encouraged by the efficacy we see in mice. As I mentioned, it's an efficacy with doses as low as 0.3 mg per kg. We've done some [indiscernible] studies as well that actually lines up with some of the findings that we see in the mice. And based on our experience with apitegromab, I mean we've done that years ago and we built these models, the profile that we're driving towards is efficacy with low doses to enable low volumes and low frequency. So the target would be once monthly or so. And so far, things have been lining up. Again, we're still building the model, but so far from the data that we've seen, it looks like SRK-439 will be hitting that target profile.

We just shared yesterday for the first time, so we've -- this is now in the public domain of, again, some of the -- most team is just doing some really incredible kind of series of studies to further give us insight on what we hope to see with 439 to guide us into clinic. And again, one of the questions that really is out there is, are we going to get enough efficacy if we don't engage sort of the activin pathway? Is myostatin sufficient? And then, I just showed you why we believe that avoiding hitting other ligands in this growth factor family is good because of the safety issues. But what Mo did within our nonclinical models is -- I'll let you walk through this data.

Yes. I mean we used the diet-induced obesity model, which is a standard in the field that everybody uses, including GLPs, in their approval. And we did a head-to-head study with SRK-439 or the murine equivalent of bimagrumab, in this case, in gray. And as we've seen every time, when you treat these animals with semaglutide, you do see a significant reduction in lean mass. So this graph actually is a quantitative NMR, looking at percent change in lean mass from start to finish of the study. And as you can see in purple, pretty significant reduction in lean mass when you treat them with semaglutide, as expected, that has been seen in humans as well. Now if you add SRK-439 on top of semaglutide, you see this reversal or preservation of lean mass with doses again starting at 0.3 mg per kg and then maximum at 1 mg per kg, between 1 mg per kg and 3 mg per kg, which is what we've seen in other studies as well. Now if you compare that to the anti-activin receptor antibody, that's the murine bimagrumab, we chose the dose of 20 mg per kg for that antibody, because it's the only dose that was published in a diet-induced obesity. And you can see that you only see preservation at this highest dose 20 mg per kg, but really nothing below that dose compared to our SRK-439 where almost 1 mg per kg is the equivalent of the 20 mg per kg in bimagrumab. So really selectivity is going to get us safety. And we're not losing efficacy by being selective in this case as compared to the receptor -- or antibody against the receptor. So it's more and more data to tell us that the profile of SRK-439 is the best fit for this patient population. Again, this is a chronic disease. These patients have, a lot of times, a lot of different comorbidities. So safety is going to be key, of course, while having efficacy.