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

It's great to be here with you. Maybe just for those on the webcast that are maybe not as familiar with the story, just give us a quick like 2 minute, and we'll get right into some of the Q&A.

Yes. So quickly, we're at an exciting moment in time for the company, 15 years since we founded the organization and now really 3 weeks away from our PDUFA date with the FDA for a monoclonal antibody, apitegromab, which is the first and only myostatin inhibitor that's ever been proven to deliver statistically significant and clinically meaningful benefits in a Phase III trial despite the fact that nearly all major pharma and biotech companies have tried to drug myostatin since it was discovered at Johns Hopkins in 1997 as the body's natural negative regulator for growing muscle. So obviously, if one could harness the potential of safely inhibiting myostatin and effectively inhibiting myostatin, you could restore and deliver muscle growth, muscle strength for a whole host of diseases. And we, of course, are focused on a set of muscular atrophies and muscular dystrophies. The first, of course, is spinal muscular atrophy, where 35,000 patients globally are receiving at least one SMN targeted therapy. And in our 7-year development program where we took no shortcuts, our Phase III trial was 188 patients, and we delivered a statistically meaningful benefit in the highest bar, the Hammersmith Motor Function Scale for returning motor function improvement in those patients. And so on file with the FDA and ready to launch. Geoff, we'll talk about that with our time together this morning. The action date for the FDA is September 30. Looking to resubmit our MAA in Europe because we've recently withdrawn, all tied to the compliance issues at our third-party fill/finish manufacturing facility. And then, of course, we are really excited to announce that we have an agreement with PMDA to file our JNDA by the end of this year, needing no additional clinical trials in a local Japanese population. And this really advances our ambition to reach these 35,000 patients and upwards to 50 countries around the world as Vikas and I and the team have done at other companies. And so we're super excited about that and look forward to digging in with Geoff this morning.

Yes. So let's talk about the Catalent facility and kind of the background there. So that is -- now you're talking about proceeding the BLA, right, through the alternative facility. What -- maybe what gives you the confidence that you're -- there's no remaining kind of hurdles. Just give us kind of an update on the manufacturing.

Absolutely. Look, Geoff is appropriately so asking probably the question on everyone's mind, which is if we had a PDUFA date last year of September 22, 2025, all signs read positive for an approval. We were discussing the label essentially a day or two before our PDUFA date. And then we received a CRL for the sole approvability issue being a general site inspection at our third-party fill/finish facility, Catalent, Indiana owned by Novo Nordisk. And that same facility now has just had another plant inspection in April of 2026. That was a reinspection that was supposed to clear the facility. Why are we confident that being back on file with the FDA with an action date in just 20 days, why are we confident that we're heading toward an approval? And that's -- it really dates back to the following. At the same time that we were working with Novo Nordisk and the FDA for them to remediate their facility and improve their GMP practices, we were also standing up an alternate fill/finish facility that was in good standing with both U.S. and European regulators. We actually announced on November 14, which was our third quarter earnings call of 2025 that we were under a contract with an alternate fill/finish facility and that we had secured commercial manufacturing at that facility in the first half of 2026. So we did that very, very quickly. We rolled out tech transfer in breakneck speed. And on December -- early December, first week in December, we actually requested a Type C meeting with the FDA to talk about the progress at our alternate or second fill/finish facility. That led to a March 3 Type C meeting where really what was on the table was the progress that we had made at this second fill/finish facility. And Geoff, it was during that Type C meeting with all the leaders of the FDA, OMQ and OPQ, who oversee facilities and product quality that they said, look, this is an important drug for an important patient population. Our suggestion is that we actually have a horse race, resubmit your BLA with both Catalent, Indiana, and your alternate fill/finish facility, whichever one enables approval fastest stays in the BLA, whichever one would not, you remove from the BLA with no time line hit, no major amendment, and away we go. So that was March 3 of this year. On March 31 of this year, we announced that we had resubmitted our BLA just the day before and that we had resubmitted it under -- within complete alignment with the FDA with both fill/finish facilities. Now look, when we heard inspector showed up at Catalent, Indiana on April 13, so just like a couple of weeks after we resubmitted our BLA, you might imagine with all the attention that Novo Nordisk was putting on remediating this plant, we thought that would have obviously been the fastest path to an approval. We would have dropped our alternate site and then we would have resubmitted that alternate site as an sBLA after approval. We now all know that inspection from April 13 to April 24 didn't go so well. The Form 483 had multiple observations that all read like the poor inspection in 2025. There was definitely improvements at the plant, but not enough to get the FDA through downgrading that facility. And so it kind of started to read for us like the most expeditious path was going to be this alternate facility. Importantly, we have now vialed more commercial apitegromab at the second facility than we ever did at Catalent, Indiana. And vials from this second facility are now awaiting labeling and packaging in our third-party provider on the day of approval. And so we are in a very good position from a launch perspective. Now specifically to Geoff's question, was it a poor inspection and we removed Catalent, Indiana, and we're kind of flying blind on the second facility -- the answer to that question is no. In fact, what gives us great confidence is that we're in ongoing dialogue with the FDA. Based upon the OAI classification of the April reinspection, we actually said to the FDA, we think it's time to remove Catalent, Indiana. The FDA said, "Wait a minute, let us just complete our review of your alternate facility, and then we'll actually walk you through the process to remove Catalent, Indiana. And of course, in early August, we did announce by press release that we had removed Catalent, Indiana from the BLA under FDA guidance. And that was following their review. I don't want to say that the FDA is ever completely done, but they definitely had a checkpoint in the way. So Things are reading positive from both the CMC review and then the clinical review. There just isn't very much to do since the label was essentially finalized during the last cycle, and we remain very confident that we're going to be receiving an approval here in September.

Let me do one more, and then I'll hand over to you for a few. So just when you talk about the alternate facility, is the capacity similar? Talk about the ability to scale and maybe the early stages of the launch.

It's an important point. This is not a boutique or opaque fill/finish facility. It's a substantial facility with a track record globally. They've had European positive inspections as well as U.S. regulator positive inspections over the long run and recently. One of the things, Geoff, that we thought was important when we identified this facility was that they would have multiple lines that were actually ideal where they had lines that were qualified for a vial configuration. Now why was that important? That was important for speed because if you change anything about your packaging, that would definitely not enable us to add a second vial as quickly as we did. So we validated multiple lines with our engineering and PPQ runs. We've scaled up manufacturing there, which, of course, again, it is fill/finish. So it's -- they're taking our drug substance and they're vialing it. Their work has been extraordinary so far. As I noted, they're in good standing with U.S. and European regulators. They're on file with a number of Japanese applications as well. And over the long run, Vikas and I will always look for redundancy in our supply chain. But for now, we feel really good with this fill/finish facility. One other important note I would like to make, when we disclosed that we had removed Catalent, Indiana from our BLA, it was only as a commercial supplier of the drug, their data remains in our BLA. The -- we continue to use the drug. No one's ever claimed the apitegromab that's been vialed there is not a high-quality product. In fact, that's the product that we continue to dose our long-term clinical trial patients now for upwards to 7-plus years. So technically, some of the Catalent data is in our BLA. They are just removed as a commercial supplier of apitegromab for now.

Great. Yes. Thank you so much for giving us an overview of some of what's been going on behind the scenes. You touched upon that the labeling was pretty much completed during the last cycle review back in 2025. So maybe help remind us some of who are listening about some of the discussions that had happened and maybe expectations for ambulatory versus non-ambulatory or maybe a broad label that could happen?

Yes. These are excellent questions. And I guess I would first start because we've worked -- while we've been disappointed with the delay of first and only muscle-directed muscle-targeted treatment for SMA, we have been very grateful to the FDA for their collaboration during these past few months since the CRL. And so it would be maybe inappropriate for me to comment specifically on the label. But what I have said in the past is we were pleased with where the label was at the last exchange that we had with FDA, which was September 18, 2025. So that was just 2 business days before the PDUFA date. We had historically seen that the FDA as it relates to SMA has usually seen SMA as a single disease rather than a disease where they're chopping it up by age group, copy numbers, subtypes or ambulatory status. Like if you just look at the other drugs that they have approved, they've generally not done that. Obviously, the gene therapy was in a very young patient population. So our feeling is that, obviously, the under 2-year-old population will not be on label because we just hadn't studied that in our clinical trials. It was really 2 and older. We do believe that very much in our label discussions, we were very much talking about SMA more broadly and the benefits of SAPPHIRE that our Phase III SAPPHIRE trial were able to demonstrate. And so we were pleased -- just to give you guys a sense of the exchange, when you submit a BLA, you submit with your draft label. I'm on record of saying we were never -- even in the first red line from the FDA, we were never in a different stratosphere from the FDA on what the label should look like. We were always kind of seeing things very similarly. And so it was very collaborative in the last cycle. They sent us the latest red line on -- it was like 10:00 a.m. on Thursday, September 18, and why we thought we were going to get approved in that cycle. Remember, this is before Catalent, Indiana was classified as OAI and before they got a warning letter. So here we are in deep label discussions. They sent us the label the morning of September 18. They wanted it the morning of September 19, which was Friday. The PDUFA was Monday, the 22nd. We sent back comments to that. We had sand paper out. We definitely didn't have major -- we didn't have major tools, chainsaws, out at all. We were sandpapering some of their comments. We sent it back in the evening of September 18. What they asked for in this cycle and this rereview of the application is for us to go back to the label we sent to them on the evening of the 18th. That was the starting point for this cycle. So that's why we were -- I've also -- I'm also on record of saying even if they took none of our comments that we sent back on the 18th, we were in a win scenario for the SMA community. We were in a spot where we would have been able to serve a meaningful proportion of the SMA community that could benefit from apitegromab therapy. And hopefully, we'll be able to share in a lot of detail the label in just a few weeks.

Awesome. That's great to hear. So maybe let's then shift to what could happen after apitegromab launches, and we're all very interested in hearing what the branded name will be. Maybe just as the initial patients start to flow through, maybe tell us about your expectations for age 2 years above or what adult status, ambulatory status, background SMN-targeted therapy, maybe prior treatment history. Just trying to get a sense of where you're thinking of the flow of patients coming in and what they may look like.

It's an excellent question. So where do we think the demand comes from? Is it the younger patients who perhaps doctor's ambition is to provide as much normal musculature before atrophy sets in? Is it adult patients who maybe have missed some of the benefits of the SMN-targeted therapies because they had a lot of motor neuron deterioration even in 2016 when SPINRAZA was first approved, when the first drug was approved? And it's a little bit of all. It really depends on the patient, the family and the doctors, and maybe I can walk you through that. So as a reminder, we took patients that on average had been on either SPINRAZA or Evrysdi for about 5 years in our Phase III trial. Those patients were randomized to either receive nothing at all, placebo or apitegromab. And what we demonstrated in that trial is that those patients that were on Evrysdi and SPINRAZA over the 12-month treatment period, actually were losing motor function. And that's actually pretty consistent with some of the long-term data that even those companies have shared of their registration trials that patients do better initially when they get more SMN protein, they gain motor function, they plateau and then they can actually start actually losing motor function again. And what we demonstrated in the SAPPHIRE trial was patients went from a loss of motor function to a gain of motor function. And in fact, what we believe will be the recommended dose, the 10-milligram per kilogram dose, there was a 2.2-point difference in the Hammersmith Motor Function Scale, which is the gold standard and highest bar to hit even Evrysdi did not hit that prospectively in their Phase III trial, and we had a statistically significant benefit there. And then we had a 3.8x greater likelihood of a 3-point improvement or more when patients on SPINRAZA and Evrysdi were randomized to apitegromab versus not. And this is, again, a pretty broad patient population. So the TOPAZ study, we did have children as early as 2 years old in that study. They've done exceptionally well. So what we're hearing is the following: 90% to 95% of patients claim today with SMA that their #1 need is muscle strength and more motor function. So nearly the entire community is saying we need more muscle. 75% of neurologists are now saying that we believe the best way to treat SMA patients is by treating both the motor neuron with SMN protein and the muscle by eliminating myostatin because it's those two things that actually make up the motor unit, which actually is what provides patients motor function. And why would anyone want to have the body's natural negative regulator for muscle growth floating around their body if they had SMA? So we think the dynamics are really solid for demand for the drug at approval. We'll get into, I'm sure, reimbursement and access here as well. But I think what I -- the way I would answer your question is I think it depends on the patient, their patient demand for the drug and the physician as to whether or not there will be more children or more adults. I think it will be a pretty balanced mix across the board, dependent upon the physician, the patient and the family. But we just know there is very strong support to access apitegromab once it is approved because each and every patient feels like they can benefit from more motor function driven by muscle strength and muscle growth.