Scholar Rock Holding Corporation

Good morning and welcome to Scholar Rock's third quarter financial results and business update call. All participants will be in listen only mode. After the company's prepared remarks, call participants will have an opportunity to ask questions. To ask a question, you may press star then 1-1 on your touchtone phone. To withdraw your question, please press star 1-1 again. Please note, this event is being recorded. Before we begin, I'd like to point out that we will be making various statements about Scholar Rock's expectations, plans, and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions on the Private Securities Litigation Reform Act of 1995. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any future date. I encourage you to go to the investors and media sections of our website to find our most -to-date SEC statements and filings. A recording of today's event will also be available on our website should you want to re-watch at a later date. I would now like to turn the conference over to Jay Backstrom, President and CEO of Scholar Rock. Jay, please go ahead.

Thank you, Carmen. Good morning and welcome, everyone. Thank you for joining our third quarter business update. It's a very exciting time at Scholar Rock. With the success of SAFIRE, our Phase III registration study on spinal muscular atrophy, and a successful financing, we have great momentum heading to the end of 2024. I'm joined on today's call by Ted Miles, our Chief Operating Officer and Chief Financial Officer. For our call this morning, I will start with a company overview. Ted will provide a financial and business update, and I'll provide a few closing remarks before opening the call up for questions. As shown on slide six, we had another very successful quarter, building on the momentum that we created throughout 2024. The dedication and commitment across the organization has been remarkable. The teams continue to execute and deliver all of our key milestones on time or ahead of schedule. For our lead program with the Pitigrmab and Spinal Muscular Atrophy, the clinical team did an outstanding job delivering the SAFIRE data with great skill, speed, and high quality, enabling us to report out the successful results in early October. This flawless execution allows us to advance toward the next important milestones of submitting the BLA and MAA in Q1 of 2025, and keeps us on track to have our first commercial launch in the U.S. in Q4 2025, with Europe to follow, assuming regulatory approvals. In addition for our embraced Phase II proof of concept with the Pitigrmab, we completed enrollment ahead of schedule, positioning us to report out top-line results earlier than planned, now targeting Q2 of 2025. Similarly, the research team continues to deliver a steady cadence of informative non-clinical data with SRK 439, our novel, highly selective anti-myostatin program obesity and cardiometabolic disorders. In addition to our focused execution, we expanded our management team with the addition of Beth Schaefer. Beth is an industry veteran who joined in September as Chief Business Officer to help guide our investment decisions and partnering opportunities to enable us to take full advantage of our validated platform that has produced a robust pipeline of high-value potential products. Turning to slide seven, before I provide more detail of our third quarter results, I want to start with a reminder as to why we are here. Our purpose is to create new possibilities for those living with SMA, like Liza, who made it clear that they want more. More means gaining muscle strength and function in order to maintain independence for basic daily activities such as feeding yourself, turning in bed, or operating a motorized wheelchair. Activities that can be maintained or achieved with a one to two point improvement on the Hammersmith Functional Motor Scale, a scale designed specifically for SMA. When asked what she was seeking, Liza made it clear, muscle. Muscle is everything. Not a slight age. As we announced in October, our pivotal phase three sapphire study met the primary end points with a 1.8 point improvement of epitagromab plus standard of care compared to placebo plus standard of care as measured by the gold standard SMA specific Hammersmith Functional Motor Scale at week 52. This clinically meaningful benefit was statistically significant with a P value of 0.0192. Patients receiving epitagromab demonstrated early and increasing motor function improvement versus placebo as measured by the Hammersmith Scale with the epitagromab patients gaining function while those receiving placebo lost function despite being on standard of care. Importantly, epitagromab demonstrated consistency of effect across doses and age groups of 2 to 21 in a broad SMA population. Further, epitagromab showed transformative clinical activity with 30% of patients who were already receiving standard of care achieving an additional three-pointer greater improvement in their Hammersmith scores. With respect to safety and tolerability, sapphire confirmed the epitagromab's favorable safety profile which was consistent with the established safety profile seen in over four years of treatment at SMA based on our phase two topaz study. The observed safety profile is consistent with the epitagromab's highly selective approach to blocking myosten. We are thrilled with these results and what it means for the SMA community, patients, their families, caregivers, and physicians. We believe these data collectively show that epitagromab has the potential to become part of a new standard of care in SMA. Turning to slide nine, to put our results into context, it is helpful to understand the normal trajectory for those receiving standard of care treatment. Despite the availability of three approved therapies targeting the SMN protein, individuals like Liza are still at risk of losing function over time given the inherent progressive nature of SMA. This was illustrated at the Cure SMA meeting in June of this year. The graph represents the Hammersmith motor function scores over time for the NUSA nurse and treated patients from Cherish Shine study with the orange line representing the trajectory of those randomized to NUSA nurse and referred to as early dose group. As shown, the motor function improved for the first two years after starting treatment with NUSA nurse and followed by a plateau where there's no further improvement in motor function. After four years of treatment, however, there's a progressive loss of motor function of approximately one point per year despite the continued treatment with this standard of care therapy. The purple shaded box represents the time period in terms of duration of NUSA nurse and treatment that is similar to the median treatment duration of NUSA nurse and for those enrolled in SAFIRE, a time period where the SAFIRE patients were clearly on the declining phase of their treatment journey while on standard of care. Now to take a look at how the epitagromab affects motor function over time, slide 10 displays the change from baseline in Hammersmith scores by visit. These line graphs beautifully articulate the treatment benefit of epitagromab over the course of the treatment period. As you can see, the Hammersmith scores improved in patients on epitagromab as early as eight weeks, the first post baseline assessment. By contrast, the scores decreased in those on placebo with a change from baseline of minus 1.2 points, similar to the long-term data on NUSA nurse and that indicated a loss of about one point per year after four years of treatment. There's early separation between epitagromab and placebo. The difference widens by the end of the treatment period, underscoring the effect of epitagromab on the disease course from losing function despite being on standard of care to gaining function by adding epitagromab. The strength of the results is illustrated by the force plot for all of the pre-specified analyses shown in slide 11. As shown, there's consistency across analyses with all showing improvement favoring epitagromab, including across doses and across age groups. These analyses speak to the strength and the robustness of our results. Moving to slide 12. To further underscore functional improvement, we see 30% of SAFIRE patients on epitagromab achieving a three-point improvement versus .5% for those on placebo. This transformative magnitude of improvement is extraordinary on top of standard of care. Again, the strength and consistency of the results demonstrate the ability of epitagromab to alter the course of disease from losing function to gaining function with a potential for profound impact on the lives of those living with SMA. We believe epitagromab is suitable for chronic treatment for a broad SMA population based on the efficacy seen with SAFIRE, with improvements seen across all age groups 2 to 21. The well-tolerated safety profile with safety supported by more than four years of experience in SMA, and we are working with urgency to finalize our regulatory applications and submit the BLA and MAA in the first quarter of 2025. Now moving to our cardiometabolic program on slide 14. The recent approvals and rapid adoption of semaglutide and terzepotide has had very positive impact on those living with obesity. However, a key issue that has emerged is the significant loss of lean muscle mass associated with these highly effective treatments. Given the important role muscle plays in energy metabolism and glucose homeostasis, maintaining appropriate levels of lean muscle is essential to healthy living. We believe our approach to preserving lean muscle mass with our highly selective novel anti-myostatin SRK439 when used with a GLP-1 receptor agonist can preserve lean muscle mass and promote healthy weight management. We see SRK439 as part of the next wave of innovation in the treatment of obesity and are working to submit the IND targeted for midyear 2025. Now to slide 15. We designed a comprehensive non-clinical program with SRK439, and to date we've demonstrated strong scientific rationale and promising non-clinical evidence including demonstrating preservation of lean mass during GLP-1 receptor agonist-induced weight loss, improvement in fasting glucose beyond GLP-1 receptor agonist alone, increase in lean mass and attenuation of fat mass regain following GLP-1 receptor agonist withdrawal, greater potency compared to an anti-ACTOR2 antibody, and most recently an increase in lean mass and lowered fat mass gain following treatment with metformin and SRK439. Turning to slide 16. We entered into the area of obesity as we believe we have an elegant solution to preserving lean muscle mass with a potential attractive risk benefit profile for long-term healthy weight management. We have the right target. Inhibition of myostatin, a negative regulator of muscle, is known to promote muscle growth and function. We have a validation of our approach given the results of SAFIRE demonstrating improvement in motor function. And further, preserving lean mass has the potential to improve durability of weight loss. And our highly selective approach in targeting the pre and latent form of myostatin minimizes unwanted toxicities and supports the potential for a favorable benefit risk profile. I will now invite Ted to provide a financial and business update. Ted?

Thanks, Jay. It's been a very busy few months and I'm excited to provide some additional insight into areas focused recently and in the months to come. Turning to slide 18. Based on the positive SAFIRE data that we disclosed in October, we completed an upsized follow-on offering of $345 million. On a pro forma basis, this puts our September 30 cash balance at approximately $463 million, which enables us to scale up and focus on driving key priorities forward, namely expanding our anti-myostatin platform and preparing for the commercialization of a Pythagorean Abb, if approved. The success of the SAFIRE trial derists the epitagromab program and provides an opportunity to expand the number of SMA patients that epitagromab may help. As we have disclosed previously, we are looking forward to initiating the OPAL clinical trial in mid-2025 to explore epitagromab in combination with standard of care in patients under two years of age. Another key priority for our anti-myostatin platform is advancing our novel selective anti-myostatin antibody, SRK439. We expect to file our IND for SRK439 next year, and we look forward to reporting the results of our EMBRAISE trial in the second quarter of 2025. EMBRAISE is a proof of concept study of epitagromab in a patient population living with obesity, testing the hypothesis of a selective anti-myostatin as an important therapeutic approach to healthy weight management. And of course, we are fully engaged in commercial launch preparations of epitagromab and SMA. As we have disclosed previously, before we had positive data, the company was being very thoughtful about planning the work that needed to occur while managing resources carefully, not to invest too much too early. With the positive data and the upsized raise, we are now actioning those plans focused on the following key initiatives. The first is continued engagement of critical stakeholders such as HCPs and the patient community. The second is ensuring an optimal treatment experience for those with SMA. And the third is building a world-class commercial team to deliver both the US and European launch. Turning to slide 19, I'll provide a bit more insight into our approach to market over the near and intermediate term. We have strategically invested in foundational activities over the past several years. Among the most important of these investments, we've been building strong relationships with HCP, patient, and advocacy communities and payers in both the US and Europe. We continue to partner, listen, and learn from these very important stakeholders. Our MSL team has been engaging with healthcare providers at key SMA treatment sites, including Cure SMA and MDA centers. We also began hiring our payer accounts team to engage and educate national, regional, and government payers. This past June, we launched Life Takes Muscle, the first muscle-focused disease education campaign in SMA, which reflects what we have heard from the community that more is needed beyond current standard of care to treat SMA. There's been positive reaction to the campaign from patients, caregivers, and treaters with engagement on social media channels. In 2025, as we eye successful launch of Epidermab, we're committed to ensuring an excellent and customized treatment experience for patients we aim to serve. This also includes working with channel and hub partners to deliver excellent patient services support and providing the option for monthly home infusion of Epidermab. Finally, we look to complete the build of our field team. We believe that with a total of fewer than 50 full-time employees, we can reach and support the US market in a capital-efficient and highly effective manner. As we look to 2026, it's with full awareness that SMA is a global disease, and our goal is to make Epidermab available to as many SMA patients as possible. If approved, we plan to commercialize in selected European countries and will partner with distributors and strategic partners to reach patients outside of the US and Europe. Turning to slide 20, we see a potential path to blockbuster status for Epidermab and SMA. A few key market dynamics give us high confidence that Scholarock's first commercial launch is the right market, the right medicine, and the right approach. The current treatment landscape for SMA is $4.5 billion and growing. While these treatments address motor neuron component of SMA, the muscle component of the disease is yet to be addressed. We're committed to developing Epidermab for as many SMA patients as possible who may benefit from this cutting-edge therapy. Importantly, we look to our clinical success to demonstrate that Epidermab is safe and effective and is addressing an important unmet medical need for patients with SMA. We know where the SMA patients are, and we know many of the physicians who are treating these patients. While there's still a great deal of work to be done, and as we continue to educate the broader community, there is a high degree of awareness that muscle-targeted therapy is the next important frontier for patients living with SMA. Based on these dynamics, we believe Epidermab has a total revenue potential of greater than $1 billion, and that assumes a competitive muscle-targeted therapies market in SMA. Turning to slide 21, there is no doubt that ScholarRock is firing on all cylinders. We have a very exciting 2025 ahead of us, and we're running with a sense of urgency and excitement as we strive for continued operational excellence. There are multiple upcoming milestones and value inflection points for ScholarRock. Our team remains on track to complete the regulatory submissions in the first quarter of 2025. We're expanding our Myostatin clinical efforts as we look to the under-2 SMA population, as well as those living with obesity, and we're driving forward to transitioning ScholarRock into a commercial company with the planned launch of Epidermab in SMA. Now I'll pass back to Jay for some concluded comments before we open the line for questions. Jay? Thank you,

Ted. Moving on to slide 22, with the success of SAFIRE, we are getting closer to fulfilling our mission of creating new possibilities for people living with serious diseases, starting with SMA. SAFIRE is a validation of our industry-leading scientific platform and of our selective Myostatin inhibition programs, and further reinforces our confidence in our approach to healthy weight management and obesity. In closing, we believe Epidermab has the potential to transform the standard of care in SMA. SAFIRE met its primary endpoint with a .8-point improvement for Epidermab plus standard of care compared to placebo plus standard of care, as measured by the gold standard SMA-specific Hammersmith functional motor scale. This improvement is both clinically meaningful and statistically significant, with Epidermab patients showing a gain in their functional scores compared to a decline in scores for those randomized to placebo, despite receiving standard of care. We believe Epidermab is suitable for chronic treatment for a broad SMA population based on the efficacy data from SAFIRE, with motor function improvements seen across all age groups 2 through 21, and the well-tolerated safety profile, with the safety data from SAFIRE further supported by more than four years of experience in SMA. As Ted highlighted, we are working urgently to bring Epidermab as soon as possible to those living with SMA and are finalizing our regulatory applications and preparing for commercial launch, assuming approval. The success in SMA will serve as a catalyst for us to become a fully integrated commercial biotech company, as well as becoming the foundation for a neuromuscular franchise with multibillion-dollar potential. Clearly, a very exciting time at Scalarock. That concludes our prepared remarks. We'll now open the call up for questions.

Thank you so much. And as a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw yourself, press star 1-1 again. One moment for our first question. It comes from the line of Jenna Lee with Jeffreys. Please proceed.

Hi, good morning. Thanks for taking our questions. This is Jenna Lee on the line for Michael E. We know that Lilly recently started a new phase 2. Could you just talk about the differences in trial design, those the methods of administration and patient population, etc., and how do you put that into context against your Epidermab? And then secondly, could you also walk us through the different scenarios of how your obesity data may read out next year and what are the key parameters that you're looking for that could define good data? Thank you.

Yes, thank you. Good morning. So this is Jay. So with respect to the Lilly trial and our EMBRACE study, let's start with our EMBRACE trial. Our EMBRACE study is designed to assess our ability to target selectively antimisostatin with the epidermab with the primary endpoint of lean muscle mass to validate our thinking around our approach to preserving lean muscle. It has a 24-week endpoint with lean mass as its primary endpoint. And we have additional safety as well as exploratory endpoint. So it's really a proof of concept to guide our thinking around SRK439. We are using a epidermab because we can. SRK439 will be a sub-q presentation. That's the reason why we're focused on it going into clinic. The Lilly trial is looking at still a number of doses exploring their program against the tersepidide. Our program is looking at tersepidide as well, as we included that in our study. So we're kind of moving forward. I think we're in a very good place with SRK439 to open up our IND mid-year next year. And that will position us to be able to continue to run forward and assess this more formally in clinic. With respect to what we want to see from our EMBRACE trial, we're looking to assess our ability to maintain and preserve lean muscle mass. As we've shared throughout all of our non-clinical experiments, that preservation is really clinically meaningful. It enhances the ability to manage weight loss durably. It has an effect on reducing fat mass. It has an effect on glucose metabolism. So a lot of interest, a lot of interesting ideas on the exploratory endpoints that we'll carry into clinic with SRK439.

Daddy, thank you so much.

Okay. Thank you. One moment for our next question, please. And it's from the line of Etzer DeRuyt with BMO Capital Markets. Please proceed.

Great. Thanks for taking the questions. A couple ones. First on the OPAL study, just was wondering, given sort of what you learned with the Pitigr Mab from SAFIRE, how you're thinking about sort of those for that in combination in the OPAL study. And then also maybe on obesity, just how you're thinking about the differences in some of the combination approaches, you know, the profiles of myosin inhibition with respect to something like the amylins or other sort of muscle preservation approaches that are being explored and how you're, you know, anything that you've kind of seen in terms of sort of differences or similarities in these different approaches and muscle preservation just broadly. Thank you.

Okay. Thank you for the question. So let's start with OPAL. You know, it's a study under two and of course we're authorized to study two and above. I'm very keen to get that trial open. With respect to dosing, we're going to take full advantage of all of the PK PD data that we have, not only from the TOEPATH study, but also now with the SAFIRE data and really do modeling to kind of assess the doses. Our team is working on that now. You know, I'd mentioned previously, we've been authorized to proceed with that study. We've socialized that both with FDA and the European authorities. We're really waiting to get the final clinical data, the PK PD data, which will help us understand because it's milligram per kilogram dosing. It'll really be based on our assessment that 10 milligram per kilogram is going to be the effective dose. But it would be a combination of assessing all of the data together to guide the dosing in that under two patient population. And then with respect to, you know, the emerging therapies in the weight loss field, you know, clearly what we have today are the leaders with tricepid and semaglutide. And obviously, there's a lot of innovation following, you know, as we as we mentioned at our New York event and you heard from Dr. Yostraboff at Yale, lean muscle loss happens almost regardless of the means of weight loss, including bariatric surgery, for example. So as we think about these other therapies going forward, still going to be a component of lean mass loss, still critical to maintain that lean mass loss. And frankly, our strategy with targeting SRK 439 will be similar to what we thought about in SMA. We will be agnostic to the treatment therapy because we believe that our safety profile and target lends itself to combination strategies. So as those things get closer to clinic, we'll have an opportunity to further assess it. But for now, I think our program is still built around combination with semaglutide and tricepid.

Thank you. Thank you. And as a reminder, that is star one one if you do have a question. Our next question is from Gary Nachman with Arainmond James. Please proceed.

Good morning and congrats on all the progress. So as you're preparing the filing in SMA, will you be seeking approval for both doses, 10 and 20 mgs per kig or just the lower dose? And do you think FDA and EU will approve for the entire FDA and EU? And how do you see the FDA's age range? Two to 12 and also the exploratory 13 to 21. It sounds like you're pretty confident in that. And I guess are you having a pre-NDA meeting with the FDA specifically to ensure that you're aligned on that front? And then just one more. How have I know you just set up the the payer team, but how have initial payer discussions been going for Pettigrew Web and SMA? How are they viewing the SAFIRE data and any updates on, I guess, how you thinking about pricing some range maybe you could give us that's factored into that greater than a billion opportunity? Thanks.

Yeah, OK, Gary, good morning. So maybe kind of start and see if I got your questions in kind of rank order. So first of all, with respect to dose, as we mentioned when we released the data, 10 and 20 performed interchangeably. And so as a result of that, we're going to go forward with the 10 milligram dose. Do not expect that we will have two doses in the label given the consistency of the results and FDA's thinking around lowest dose is best dose. So we feel very, very good about that. And so we're going to go forward with the 10 milligram dose with respect to the label and relationship to age. And again, as we anticipated the data coming from SAFIRE before we saw it, our thinking was that if the point estimate of effect size was similar between the 13 and 21 year old group, we were in very, very good shape to demonstrate that this should be used independent of age. And as you saw with our SAFIRE data, it was spot on the exact point estimate. So FDA views this as a single disease. There's no reason to believe that it will work in someone 12 and not 13. So we're going into this feeling confident that we have the full age age range in there, given the consistency of data. So feel good about that. And of course, more to come. But frankly, from FDA's labeling approach, they really don't define it by age short of gene therapy, which is approved under two. So feel very good about the age and the breadth of that in our label. Had really good interactions already from the regulatory front. We've already engaged with. We've already engaged with a pre-submission meeting with the European agency, given the fact we have prime designation. So we're all teed up for the regulatory applications. We've already engaged FDA and helping understand how they'd like to see our data presented. So feel very good about that. And yet, it's good corporate practice to have a pre-BLA meeting with the FDA just to be sure there's nothing else that they consider. But we feel very good about where we are. And so we're off and running on that with respect to the payer interaction. Maybe I should make a comment. I'll kind of hand over to Ted to add some additional color. As you can imagine, it's early days with the SAFIRE data. We've already done some preliminary look and interaction with the payers. What I can tell you is I think about our data. Just just look at the data that we've presented so far. Gaining functions that are losing function, helping preserve and maintain function, the value on top of the additional therapy. I think we have a really very good value proposition and the potential to really make a significant impact on those living with SMA. And so feel that that will be recognized by the payers as we go forward. But more to come on the specifics.

Yeah, and thanks, Jay. And Gary, as you may expect, it's a bit early for us to unveil our pricing assumptions and provide guidance in that regard. What I can comment on further to Jay's comments is that the payer discussions have been going on, payer work's been going on since even before we had SAFIRE data. SAFIRE data exceeded our expectations. So that only helps helps our case. What I can point to is current market dynamics and what we're seeing in the market right now is that patients, for example, would get on gene therapy and in some cases, ultimately end up on an SMN corrector. And so reimbursement for two million dollar gene therapy followed by an expensive SMN corrector. And in some cases, patients will switch from one SMN corrector to another. So what we're seeing in the market is that payers are supporting these patients. The patient advocacy group is very well organized and very impactful to help patients in their treatment paradigm. They're very motivated, as we talked about earlier, to not only maintain function that they have, but gain more. And so we think the wind's at our back and we're going to continue to do our work and we'll continue to update the market as we learn more.

OK, great. Just one quick follow up, Ted, are you going to hire the 50 or so reps prior to approval and have them ready to go or are you going to wait till you actually get the approval just in terms of how we're modeling that?

Thanks. So I think it's safe to assume that we'll continue to be very financially prudent and capital efficient to make sure that we're running through the start line, but we're also not going to disadvantage ourselves when we launch. So as we think about the way we balanced building a scaffolding and being ready to get ready in advance of data that we released last month and now we're executing on the plans that we had thoughtfully developed prior to having data, we're kind of pulling the same playbook as we get ready for commercial launch. So that that fine balance of making sure that we're deploying the capital, the right amount of capital at the right time. OK, great.

Thank you.

Thank you. Our next question is from the line of Kripa Devarakonda with Truist Securities. Please proceed.

Hi, this is Alex Sanagat from Kripa. And building on Gary's question, labeling a little bit, given that a political match has benefited across all the patient populations and how SMA is viewed with the FDA, what are the chances that you might get a broader label that also includes irrespective of ambulatory status? And are there any differences in how the FDA or the ECs view SMA that would alter their interpretation and ultimately labeling decisions?

Yeah, good question. So if you take a look at the current FDA approach to labeling, if you look at the Nusineursin and Rizdaplan labels, FDA tends to see SMA as a monogenic disease, a single disease, a kind of a continuum. And so their labeling approach is broad. It's for the treatment of pediatric and adult patients with SMA, not confined by type, by ambulatory status, but rather for the treatment of SMA as a continuum. And we anticipate that they will follow the same labeling convention for our program. And of course, more to come on that, but no reason to believe that they would do differently. So that's what we're anticipating with respect to that. Europe tends to follow a similar approach. They may, depending, there is a little bit of different thinking around sometimes what does get in or doesn't get in the label. But I can tell you from our pre-submission interaction so far, we feel like they're seeing this similarly. They see it as a single disease. We have prime designation, which underscores they recognize the value and potential of this going forward. So, again, more to come as we get closer down the road. You know, labeling negotiation tends to be toward the end of the approval process. But going into it, given the strength of our data, we feel very good about our position going forward and the potential for a broad label.

Thanks. And congrats on the progress. Thank you.

Thank you. And as I see no further questions in the queue, I will conclude our Q&A session and program for today. Thank you all who participated, and you may now disconnect.