Scholar Rock contends its experimental drug for spinal muscular atrophy can achieve what none of the currently available therapies can do to treat this rare disease. After positive data from a pivotal study sent the biotech’s shares skyward, Scholar Rock has raised $300 million from a stock offering that will be applied toward regulatory submissions and launch preparation of what could become its first commercialized product.
The stock sale follows the company’s Phase 3 data readout earlier this week showing its drug, apitegromab, met the goal of showing muscle function improvement in spinal muscular atrophy (SMA). The Cambridge, Massachusetts-based biotech is planning regulatory submissions to the FDA and the European Medicines Agency early next year.
SMA stems from mutations to the gene that codes for survival motor neuron (SMN), a protein key to keeping motor neurons healthy. Patients who have the rare inherited disease develop progressively worsening muscle weakness. Few therapies are available for SMA. Biogen was first with Spinraza, an antisense oligonucleotide intended to increase production of functional SMN protein. Novartis offers a one-time treatment with Zolgensma, a gene therapy that replaces the defective gene with a functioning one. Evrysdi, a drug developed by PTC Therapeutics and commercialized by Roche, offers another approach. This oral small molecule is designed to get the SMN2 gene to produce more SMN protein.
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Scholar Rock takes a different and perhaps complementary approach to available SMA therapies. Treatments that target SMN prevent further degeneration of motor neurons, but they do not directly affect muscle atrophy, the company said in an investor presentation. Apitegromab is a monoclonal antibody designed to block activation of myostatin, a protein in skeletal muscle that inhibits muscle growth. It’s administered as an intravenous infusion every four weeks. The placebo-controlled Phase 3 test evaluated the study drug in patients who were already taking the standard chronic SMA therapies Spinraza or Evrysdi. This trial enrolled 188 SMA patients ages 2 to 21.
In preliminary results reported Monday, Scholar Rock said the drug achieved statistically significant and clinically meaningful improvement at 12 months, measured according to a scale used to assess muscle function in SMA patients (a higher score indicates better muscle function). The company added that 30% of patients who received the study drug showed a 3 point or greater improvement in score compared to 12.5% of patients in the placebo group. Early motor function improvement was observed at eight weeks and that benefit expanded at week 52, as measured according to the rating scale. The drug was well tolerated and no serious adverse events were reported.
“The results clearly demonstrate robust and clinically meaningful improvement in motor function in patients with SMA,” Scholar Rock CEO Jay Backstrom said in a prepared statement. “At Scholar Rock, we are working with urgency to deliver the potentially transformative benefits of apitegromab to children and adults with SMA in the U.S., Europe, and around the world.”
The apitegromab results will be presented on Friday during the Annual Congress of the World Muscle Society meeting in Prague. In the investor presentation, Scholar Rock claimed its drug is the first and only muscle-targeted therapy to show both clinically meaningful and statistically significant functional improvement in SMA. The company added that apitegromab is the first and only anti-myostatin therapy to show muscle improvement in a Phase 3 study. Biohaven might have something to say about that soon. That company’s experimental SMA therapy, taldefgrobep alfa, an inhibitor of both myostatin and the activin A pathway, is expected to post Phase 3 data by the end of this year.
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Shares of Scholar Rock soared more than 300% after the biotech’s data release, and the company seized on the opportunity to raise money. Late Tuesday, Scholar Rock priced an offering of more than 10.2 million shares at $28.25 each. The offering includes pre-funded warrants to purchase 353,983 shares at the public offering price. Scholar Rock has also granted underwriters a 30-day option to purchase up to 1.5 million shares of stock at the public offering price, which could raise $42 million more.
Scholar Rock said regulatory submissions for apitegromab in the U.S. and Europe are planned for the first quarter of next year, setting the stage for a potential fourth quarter 2025 commercial launch. Scholar Rock sees additional potential applications for apitegromab. The company is evaluating the drug as a way to help preserve muscle in patients taking a GLP-1 drug for weight loss. Muscle loss is a known side effect of the GLP-1 drug class, leading a growing number of companies to try and address the complication. Late last month, BioAge Labs’ IPO raised more than $200 million to continue clinical development of an oral small molecule intended to preserve muscle mass. A Phase 2 study is underway evaluating the BioAge drug in combination with Eli Lilly obesity drug Zepbound; preliminary results are expected in the third quarter of 2025. By then, Scholar Rock should already have topline results for the obesity study, which is on track to post data in the second quarter of 2025.
In the prospectus, Scholar Rock said proceeds from the offering combined with its existing capital will be used to support commercialization of apitegromab and advance other programs. The company estimates the stock offering provides enough capital to fund operations into the fourth quarter of 2026.
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