Scholar Rock Secures $300M for Neuromuscular Disease Drug Filings and Launch

Scholar Rock asserts that its innovative drug for spinal muscular atrophy (SMA) can achieve outcomes unattainable by current treatments for this rare disease. Following promising data from a crucial study that boosted the biotech firm's stock price, Scholar Rock has secured $300 million through a stock offering. This funding will aid in regulatory submissions and preparations for the potential launch of its first commercial product.

This capital influx follows the release of Phase 3 study results earlier in the week, which indicated that Scholar Rock’s drug, apitegromab, successfully demonstrated improvement in muscle function for SMA patients. The Cambridge, Massachusetts-based company aims to submit regulatory applications to the FDA and the European Medicines Agency early next year.

SMA is caused by mutations in the gene responsible for producing the survival motor neuron (SMN) protein, vital for motor neuron health. Patients with this rare genetic disorder experience progressively worsening muscle weakness. There are limited treatment options for SMA. Biogen’s Spinraza, an antisense oligonucleotide, was the first therapy designed to boost the production of functional SMN protein. Novartis provides Zolgensma, a one-time gene therapy that replaces the faulty gene with a functional one. Another treatment, Evrysdi, developed by PTC Therapeutics and marketed by Roche, aims to increase SMN protein production by targeting the SMN2 gene through an oral small molecule.

Scholar Rock’s approach to SMA treatment is unique and could complement existing therapies. Current treatments that focus on SMN protein levels help prevent further degeneration of motor neurons but do not address muscle atrophy directly. Scholar Rock’s drug, apitegromab, is a monoclonal antibody intended to inhibit myostatin, a protein that restricts muscle growth. The drug is administered intravenously every four weeks. The placebo-controlled Phase 3 study tested apitegromab in patients already receiving the standard SMA therapies, Spinraza or Evrysdi. The trial included 188 participants aged between 2 and 21.

Preliminary results revealed that apitegromab led to statistically significant and meaningful improvements in muscle function over 12 months, as measured by a standard scale for SMA patients. A score increase indicates better muscle function. Thirty percent of patients receiving apitegromab saw a three-point or greater improvement on the scale, compared to 12.5% in the placebo group. Early motor function improvements were noted at eight weeks, with continued benefits observed at the 52-week mark. The drug was well tolerated, with no serious adverse events reported.

Scholar Rock’s CEO, Jay Backstrom, emphasized the importance of these findings, stating that they clearly demonstrate significant and meaningful motor function improvements for SMA patients. He expressed the company’s commitment to delivering the potential transformative benefits of apitegromab to SMA patients globally.

The results of the apitegromab study will be presented at the World Muscle Society’s Annual Congress in Prague. Scholar Rock highlighted that apitegromab is the first muscle-targeted treatment to show both statistically significant and clinically meaningful functional improvements in SMA. Furthermore, it is the first anti-myostatin therapy to demonstrate muscle improvement in a Phase 3 study. However, Biohaven’s experimental SMA therapy, taldefgrobep alfa, might present competition, with Phase 3 data expected by the year’s end.

Following the positive data release, Scholar Rock’s shares surged over 300%. Seizing this opportunity, the company priced an offering of over 10.2 million shares at $28.25 each, including pre-funded warrants for an additional 353,983 shares at the same price. Scholar Rock granted underwriters a 30-day option to purchase up to 1.5 million more shares, potentially raising an additional $42 million.

The company plans to initiate regulatory submissions for apitegromab in the U.S. and Europe in the first quarter of next year, aiming for a potential market launch by the fourth quarter of 2025. Scholar Rock is also exploring other uses for apitegromab, such as preventing muscle loss in patients using GLP-1 drugs for weight loss. Muscle loss is a known side effect of GLP-1 drugs, prompting various companies to seek solutions.

Scholar Rock stated that the proceeds from the stock offering, combined with its existing capital, would support the commercialization of apitegromab and further development programs. The company estimates that this funding will sustain operations until the fourth quarter of 2026.