Scholar Rock Holding Corporation ($SRRK)

Good morning, everyone. My name is Etzer Darout, senior biotech analyst at Barclays. It's my pleasure to have Scholar Rock with us this morning. With us on stage, we have David Hallal, Chief Executive Officer and Chairman at Scholar Rock. David, thank you for joining us this morning. I'm sure most folks are familiar with the Scholar Rock story. But maybe just to help those that are not, maybe just a brief introduction, some introductory remarks would be great.

Thanks, Etzer. So Scholar Rock is a biotech company that this year, will celebrate our 15th anniversary. We were formed with some highly innovative technology out of Tim Springer and Len Zon's lab back in 2012. The focus of this was to develop antibody technology to block otherwise difficult to inhibit growth factors in the body, largely around a family of growth factors and proteins. And through this technology, we've been able to target some prior very difficult to drug targets in the body by biotech and pharma for several decades. And as Etzer and many of you know, our most prolific success so far has been the inhibition of myostatin, which has led to, after 3 decades of pharma and biotech looking to effectively drug myostatin, the first positive pivotal trial targeting myostatin, in this case, in children and adults living with spinal muscular atrophy. We reported out on that data at the end of 2024 and are now eagerly awaiting an FDA and EMA approval and eventual launch this year. So we're super excited about the position that we are in.

right. No, that's great. And you recently announced a new debt instrument, and one of the questions that we've gotten around that is whether or not you think that this is something that could get you to profitability, again, assuming that everything goes as planned for apitegromab.

Yes. So we announced this $550 million debt instrument last week on our Q4 call, and we're going to be pulling down an additional $100 million by the end of this quarter. And it's important that we fund our operations because, Etzer, as you know, 2026 is set up to be a transformative year for Scholar Rock. As I noted, we are in the final stages of the regulatory processes in the U.S. and Europe, and we're planning commercial launches in both of those territories this year. We also expect to be building a 50-country operating platform and to fund the build-out of our operations in Asia Pacific and Latin America. And we'll be providing updates on that over time. In addition to that, we're continuing to advance our pipeline. And we were proud to announce a couple of key Phase II clinical trials that we are undertaking, one to make sure that no patients are left behind with spinal muscular atrophy, so our Phase II OPAL study to study apitegromab with the gene therapy that stimulates SMN1 protein in infants and toddlers under the age of 2. And then in addition to that, we were pleased to announce a Phase II trial that will commence later this year for FSHD to study apitegromab in 60 patients, randomized double-blind, placebo-controlled. And I think we'll talk about that in a little bit. And so we want to continue to fund the pipeline. And we want to continue to innovate. As I noted, apitegromab has been our first lead asset based on this highly innovative platform that we have to inhibit antibodies, but we have 2 additional opportunities to continue to bring innovation to patients. And that's a subcutaneous version of apitegromab, which we announced some Phase I data just a few months ago, and also our highly innovative SRK-439, which is a high-affinity, high-potency, also subcutaneously administered myostatin inhibitor that is now in a Phase I study. We hope to have data on that later this year. So there's a lot going on, and yet SMA and FSHD are just the first 2 rare neuromuscular disorders that we think we can apply our very unique platform and great success in targeting myostatin where the industry has failed to. So it comes back to our runway. We want to fund a lot of things. We want to fund our commercial readiness and commercial preparation and eventual commercial launches in the U.S. and Europe. We want to continue to fund our pipeline with these additional Phase II studies. And then we want to continue to invest in all of the clinical regulatory and manufacturing work around subcutaneous apitegromab and SRK-439. That was why we went out and secured $550 million debt instrument. That is why we're going to pull down $100 million. We did finish the year at a $368 million cash balance. That was before the $100 million that we're going to pull down. And a couple of things about our runway, Etzer, as you know, that are not factored into our runway. We do qualify for a rare pediatric disease priority review voucher, which we would expect to monetize at approval. And we're not able preapproval to have any sales sort of in our calculation for runway as well. So we'll be thoughtful about continuing to manage dilution while we also think about funding what we believe is the basis for the next great global biotech company, which is Scholar Rock, on the basis of the opportunity to serve patients with SMA.

And obviously, the remediation process with Catalent is something that's top of mind for folks as far as the apitegromab refiling. But I guess one of the things that I wanted to touch on with respect to that is what additional conversations are you having with KOL in the meantime? Because it does kind of offer you a window, if you will, to have more conversations with KOLs around SMA and the SMA community. What has those dialogues have been like?

Thank you, Etzer. It's very perceptive of you. Obviously, for many reasons, our delay to approval based on a sole approvability issue right now for apitegromab is the state of compliance across our fill/finish facility, which is owned by Novo Nordisk. That's Catalent Indiana in Bloomington. And so we were disappointed while we were being reviewed under priority review to essentially get there on the full review and yet received a complete response letter until that plan is remediated. And I'm sure we'll talk about that in a moment. I would say that this extra time has not benefited most, most certainly patients who are suffering from irreversible muscle loss, muscle wasting and a loss of motor function. And our data certainly underscores that despite the use of every motor neuron surviving drug that might be available today, one needs to address the muscle. But the one group that has maybe benefited a little bit from the delay has been our Chief Operating Officer, Keith Woods, and our commercial team in that we have only just hired them a few weeks before our original PDUFA and we had trained and deployed the team. But Keith came in, in the end of April, early May from the great work he did at argenx with VYVGART and probably didn't have all the time that he would have liked in planning for the commercial launches in the U.S., Europe and around the world. And that additional time both in training the team and putting together our patient assistance program, which as we've indicated is going to be called Scholar Rock Supports, our disease education program, Life Takes Muscle Version 2.0, is now launched. The team, both the medical affairs team and many of our other team members, have been working with KOLs. And what we hear from them is that our message resonates, and that is to have optimal motor function in SMA. We've had this incredible innovation for the last 10 years, and that has been brought to bear by the drugs that stimulate the increase in either SMN1 or SMN2 protein. And that allows the motor neuron to survive a bit more. This is the origin of SMA. But the principal organ that is clinically affected in SMA is the muscle. And there's never been anything that has been able to target the muscle until now with apitegromab. And so what the KOLs are telling us is there's a great appreciation amongst their patient community and the families that by being able to address the muscle, and we've got about 250 patients from our Phase II, Phase III clinical trial that remain on treatment, that one is seeing a tremendous benefit as opposed to patients plateauing and eventually beginning to lose motor function again on an SMN-targeted therapy alone. Patients are able to gain function and hold those gains over a longer period of time. And that's certainly exciting the community to now address the muscle component associated with this devastating genetic disease and not just the motor neuron.

Right. One of the questions around sort of the potential resubmission we get on apitegromab for SMA is around the potential timing just the approval. And I guess are there any rare disease drug resubmission analogs that we could maybe use to proxy as to how long would the FDA ultimately take to review the resubmission?

Thank you, Etzer. You're raising a really important point, which is 99% of the conversation is about the timing of a reinspection and resubmission. But I think what you're hitting on is when you get there, there's this whole other thing called the new review time. And within that new review time, even though this is the sole approvability issue, the inspection report probably will be evaluated by the FDA. And the FDA will make a decision to reclassify the facility, which is downgrading it from the OAI designation, which is official action indicated, to like a VAI or NAI, VAI as voluntary action indicated. And that's really the green light for us and any other application that's being held up at Catalent Indiana. So what Etzer is raising is what we announced on March 3 is a steady drumbeat of rapid progress from our complete response letter to a Type A meeting on November 12 that we had with the FDA, which, by the way, was an in-person meeting. It included all of the leadership from the relevant groups at the FDA. We brought Cure SMA, Kenneth Hobby, the President of Cure SMA, to that meeting so the patient voice was heard about the impact of a delay. And interestingly enough, we also brought Novo Nordisk, which to that point hadn't really had a constructive communication pathway with the FDA, even though the bad inspection that happened at that plant was July of '25. So their first audience with the FDA was really November of '25. Since that point, there's now been this extremely rapid progress taking place, where Novo responded to the warning letter right after our Type A meeting to the FDA by mid-December. Just a few weeks later, the FDA reached out and scheduled an early Q1 meeting with Novo. That meeting went well and the FDA indicated that there were no new asks in the remediation plan. And then since then, there's been a field visit to the site that was also constructive, no new asks. And the FDA indicated that they would return for a formal reinspection since Novo had resumed routine manufacturing activities, which they resumed those at the end of February. But what Etzer is raising is, let's just say, okay, now we know the near-term horizon suggests there's going to be a reinspection. We have indicated that our base case is that we will resubmit our BLA with some evidence of a positive reinspection. So let's just say that, that happened shortly after a reinspection. The FDA then has 30 days to either call our resubmission a Class 1 resubmission which is a 60-day review or a Class 2 resubmission which is a 6-month review. And it dates back to the day we file. So 30 days later, if it's a Class 1, we got 30 more days left. 30 days later, if it's a Class 2, we've got 5 more months left. The best sort of example that I can point to, Etzer, is in the very same plant, in 2023, based on inspection findings, originally EYLEA HD received a complete response letter. They resubmitted. And oftentimes, reflexively at the FDA, these resubmissions get a Class 2 even if there's not a lot to do. So they did get a Class 2 resubmission. But the drug was approved within a 30- to 60-day window after they had resubmitted. So while we're sort of almost expecting a Class 2, we think the same sort of shared sense of urgency with the FDA that was created at our in-person Type A meeting in November needs to carry through not just through the reinspection of the plant, but all the way through the review period to reclassify the facility and ultimately resulting in what patients are waiting for, which is an approval letter from the review division, the neuro division at the FDA so we can get on with launch. So I know it's not super clear answer. But we certainly believe that the community ought to be aware that a Class 2 is likely. But we believe beating that timeline by quite a bit is very realistic given some other examples.

Great. And I guess the other question related to that, that we've sort of gotten questions on, and it would be great to hear your thoughts there, is around the timing of approval. And does that have an impact on the priority voucher itself when you think about the anniversary, if you will, of the PDUFA going back to September 22? And is there any difference in having an approval pre or post sort of the anniversary of that PDUFA?

Etzer brings up a good point. There was a lot of focus on our CRL. Hopefully our audience knows the value of a PRV, these priority review vouchers, has been ranging between $150 million to just over $200 million recently. So these are transferable to companies who would really benefit from being able to accelerate one of their own filings. And we've indicated that we would look to monetize this. The reason why there was a thought that we had to be approved within a year is because Congress needed to renew the program, and the program was expected to expire at the end of September 2026. It just so happened our original PDUFA was September 22, 2025. So there was this thought, is it a year later and then the PRV goes away? No. What we just needed was Congress to renew the program. And I'm pleased to announce to you all, and many of you may have seen this in some of our trades, Congress did renew the program now into 2029. And so we don't necessarily -- believe me, Etzer, we have a sense of urgency to get done by September for sure because patients need us. But the PRV doesn't necessarily go away if for some reason we were approved on October 1, as an example. And thank you. While we can all think about where maybe Congress goes slow or can't reach an agreement, thank goodness, they reached an agreement on extending the priority review voucher program into 2029.

Great. And you've guided to potential EMA decision mid-2026. You talked about Germany potentially being the first country there that you would take apitegromab to. Maybe just help us understand the SMA community and Germany access? Anything that you could provide in terms of sort of that market for SMA.

Yes. And again, thankfully, when we were together, Keith, at Alexion, you went and led a major European country. We always talk about how valuable that would be for all of the things you would do on a global scale. And then, of course, Germany was an extremely successful market with myasthenia gravis and VYVGART. But it's not just Keith success and experience there. Germany typically is the first country in Western Europe to launch after an EMA approval. And that is because access is already established. There will be a longer-term sort of pricing and reimbursement review process, but patients will have access. So we have established leadership in Germany. Some folks that, I don't know, Keith and I tend to fall back on people that we've been in the trenches with and built some amazing companies with, like either Amgen or Alexion or argenx. So leadership is in place. They're interacting in the community, our medical affairs team with KOLs. We do have an early access program ongoing in Germany. The review, as Etzer noted, is ongoing with EMA, and we would expect a decision near midyear. And so we think we're poised obviously in Europe. It's more of a staged launch, Germany. And then country by country, we'll go through the reimbursement and access processes in countries like Italy, France, Spain and so on and so forth. But we think we're well positioned not only to launch in the U.S. in 2026 but also in Germany in the second half of this year. And we look forward to keeping you all apprised. And remember, these will be the first 2 countries across a 50-country operating platform that is our ambition so that we can reach the 35,000 patients with SMA that have received at least one SMN-targeted therapy is our target audience. About 7,000 of those are in the U.S., 28,000 of those are outside of the U.S. And so we think we have a tremendous opportunity to serve patients with the world's first and only muscle-directed treatment. And we think that, that bodes well for the growth of Scholar Rock well through the end of this decade and into the next. What a tremendous growth engine. And yet that's why we feel indebted to this SMA community to deliver for them. And then we'll continue to work on our rare neuromuscular franchise with what we do best, in inhibiting myostatin over the long run. But it all starts in the U.S. and Germany, and then we'll be providing progress from there.

Great And you're developing a subcutaneous version of apitegromab. What do you expect the path to approval to look like for that formulation?

Yes. Also a very important program. One of the things that I say often is one of the greatest honors, I think, that we have in our company is that we're going to have an opportunity to serve these remarkable patients and families that are impacted by SMA. We have to make a commitment to that because we believe when they start on apitegromab, it's the start of a 5-, 10- or 15-year relationship with that family. And we believe we need to continue to invest in innovation for them. So the launch of apitegromab again will be with our Q4 week dosing, which has delivered via IV. Important to note that while visits for a Q4 week, every 28-day infusion, are not trivial for the SMA community, more than 90%, about 95% of our patients that enrolled in clinical trials remain on treatment and on time every 4 weeks. But we've also said to ourselves, let's keep bringing innovation to patients. Let's give them a lot of options. In an IV form, let's give options on any way to access the drug, including through home infusion. And Keith has established a 10,000 infusion nurse network in the U.S. to help patients with that. But what about subcu? We think that would be a great value add. So in January, what we presented at JPMorgan was 45 healthy volunteers that were broken up in 3 groups. 15 healthy volunteers got 100 mg per kg of apitegromab. But most notably, what we compared was 800 mg -- I'm sorry, not per kg: 100 mg, 800 mg IV and 800 mg subcu. What we saw is beautiful overlapping pharmacodynamic curves between IV and subcu. So we said, this is possible. We've done some incredible formulation work. We'll select the device. And then what I guided last Tuesday is the clinical regulatory path will be determined by, and I think it's wise to do this, staging the discussions with regulators after we have the final approval for IV apitegromab. And then we'll look forward to updating you all as to whether or not that's a bridging study or some other ask of the FDA. And we'll keep you apprised of that. But we think we have the right formulation, and we think it's going to be needed innovation for the patient community.

Great. And then for FSHD, you're initiating the Phase II FORGE study. I think you've guided to mid-2026 for that study. Maybe just the rationale for apitegromab in FSHD?

There's been a lot of attention on this, Etzer, as you know. And it's because, okay, if you guys at Scholar Rock have succeeded where every other company has failed, and most recently, companies have failed again trying to target myostatin. So it's one of those things. The novelty isn't if you can effectively drug myostatin, you're going to have a successful therapeutic on your hands. The novelty is that we have been able to do it in multiple Phase II trials and a pivotal Phase III trial. And we think that's because of the uniqueness of inhibiting pro and latent myostatin, the pro form of the growth factor as opposed to the mature form of the growth factor or the receptor. And so if you can do this and you've had success in SMA, it seems to make sense that there would be a set of genetic or acquired neuropathic diseases or myopathies that you could apply this unique platform to, also why it's important for us to move forward beyond IV apitegromab and the subcu apitegromab and SRK-439. So I know we're running short on time. We chose FSHD. This is 30,000 patients diagnosed in the U.S. and Europe. Onset of disease is adolescents and early adulthood. It's a bad disease with about 1/5 of patients ending up being wheelchair-dependent. The hallmark is dysfunctional muscle but they still have patches of functional muscle. And that's what we think we can target with apitegromab. And that's how we've designed the trial to focus on moderate patients, to focus with an endpoint of lean mass volume, which is a precursor of functional endpoints, which we will be measuring as well. As I noted, 60 patients, randomized, double-blind, placebo-controlled. And we think that this is an ideal disease, whether alone or in combination with a corrector down the line, where we can make a meaningful impact on these patients suffering with FSHD. Two other data points. We don't just think that this is the right disease. We've proven it in our preclinical models where we've developed with a FLExDUX4 mouse model. We've used our antibody and shown significant improvements in muscle mass, muscle force and exercise endurance. And then lastly, very importantly, there's been rigorous clinical programs with physical therapy, which patients cannot do outside of the setting of a clinical trial, where physical therapy and targeting the muscle has had an impact on patients. And then there have been some studies with anabolic agents like human growth hormone and testosterone that again showed that by targeting the muscle, one can have some benefit. So we think both clinically and preclinically, we have the rationale to advance this. And we're looking forward to providing you updates on the FORGE study in the near future.

Great. So we're up on our time. David, as always, thank you for a great discussion. And we'll be back shortly with our next session.

Thanks, Etzer. Bye-bye.