On May 16, 2022 Scholar Rock (NASDAQ: SRRK), a Phase 3 clinical-stage biopharmaceutical company focused on the treatment of serious diseases in which protein growth factors play a fundamental role, reported financial results for the first quarter ended March 31, 2022 (Press release, Scholar Rock, MAY 16, 2022, View Source [SID1234614640]).
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Business Strategy & Update
Prioritize R&D Activities to Support Progression and Completion of the Apitegromab Phase 3 SAPPHIRE Trial in Spinal Muscular Atrophy. Scholar Rock is focusing its expertise in inhibiting the activation of latent growth factors on completing the Phase 2 TOPAZ extension clinical trial and the Phase 3 SAPPHIRE clinical trial, both of which are evaluating the potential of apitegromab to address motor function impairments in patients with spinal muscular atrophy (SMA). The SRK-181 program for the treatment of patients with solid tumors showing primary resistance to anti-PD-(L)1 therapy remains a priority with strategic value. While investment in the existing scientific platform continues, the Company is narrowing the scope of discovery programs it expects to pursue.
Focused Strategy to Increase Operational Efficiency, Reduce Cash Burn and Extend Runway. The Company reported a restructuring of its business to prioritize and focus on its clinical stage assets resulting in a reduction to its workforce by approximately 25%, in addition to the curtailment of previously planned hiring. The reduction in operating expenses relates to general and administrative spend and research activities related to earlier stage programs. In conjunction with the pipeline prioritization, these changes are expected to extend the cash runway into the fourth quarter of 2023.
"We are highly confident in the transformative potential of apitegromab based upon the Phase 2 TOPAZ data we have released to date. We look forward to presenting two-year extension trial data in the coming weeks," said Nagesh Mahanthappa, Ph.D., Founding Chief Executive Officer of Scholar Rock. "Based upon the strength of the data released to date and our commitment to the SMA community, this narrower focus and associated headcount reduction is necessary to execute our core mission — completing the Phase 3 SAPPHIRE trial to bring apitegromab, our highly innovative therapeutic candidate, to patients suffering with this devastating disease."
Dr. Mahanthappa continued, "Parting with employees who have dedicated their talent and expertise to evolving a scientific platform into a Phase 3-stage company is very difficult, and we are extremely grateful for their contributions to our mission to support patients and help position us to potentially deliver the next big innovation to patients with SMA."
Changes to Development Leadership
The Company also announced today that Yung Chyung, M.D. has decided to step down as Chief Medical Officer (CMO) to explore new career opportunities, including his interest in global health. Dr. Chyung will remain with Scholar Rock through June 30 to work with the executive team and the development organization on a transition plan, and a retained search for a new CMO is ongoing.
"I am incredibly proud of the progress we’ve achieved to date at Scholar Rock and am humbled to have served alongside the amazing and talented employees across the company," said Dr. Chyung. "I am enthusiastic about the potential of apitegromab and SRK-181 to transform the lives of individuals impacted by serious diseases. With operational momentum continuing to build and the outstanding, high performing teams in place, I feel this is an appropriate time for me to explore my other long-term career interests, such as global health."
"The Board and I sincerely thank Yung for his ingenuity and leadership over the years, which have brought the apitegromab program forward through a successful Phase 2 proof-of-concept study and now into Phase 3, creating hope for patients and families suffering from SMA that muscle-directed therapy could have the potential to make a meaningful impact on their lives," said Dr. Mahanthappa. "While the search for a new CMO is a top priority and we are committed to identifying a medical leader with a strong track record in late-stage drug development and product launch, the significant depth of talent in our development team allows us to continue to build momentum in the SAPPHIRE pivotal and Phase 1 DRAGON proof-of-concept clinical trials without disruption."
Pipeline Updates
Apitegromab is a selective inhibitor of myostatin activation being developed as the potential first muscle-directed therapy for the treatment of spinal muscular atrophy (SMA).
Enrollment Ongoing for Phase 3 SAPPHIRE Clinical Trial Evaluating Apitegromab in Patients with Non-Ambulatory Type 2 and 3 SMA. The randomized, double-blind, placebo-controlled Phase 3 SAPPHIRE clinical trial is evaluating apitegromab for patients on either nusinersen or risdiplam. The clinical trial design plans for approximately 156 patients aged 2-12 years old with non-ambulatory Type 2 and 3 SMA to be enrolled in the main efficacy population.
Clinical Data from the Phase 2 TOPAZ 24-Month Extension Trial to be Presented at Cure SMA Annual Meeting in June.
Data from the Phase 2 TOPAZ Trial Presented at the Muscular Dystrophy Association (MDA) Clinical & Scientific Conference and the American Academy of Neurology Annual Meeting in March, as well as the European Paediatric Neurology Society Congress in April.
SRK-181 is a selective inhibitor of latent TGFβ1 activation being developed with the aim of overcoming primary resistance to and increasing the number of patients who may benefit from checkpoint inhibitor therapy.
Enrollment Ongoing for Part B of the Phase 1 DRAGON POC Clinical Trial for SRK-181. Part B consists of multiple proof-of-concept cohorts focused upon evaluating the ability of SRK-181 to overcome primary resistance to anti-PD-(L)1 therapy. Each cohort will enroll up to 40 patients with various solid tumors, including urothelial carcinoma (UC), cutaneous melanoma (MEL), non-small cell lung cancer (NSCLC), clear cell renal cell carcinoma (ccRCC), and other solid tumors. The biomarker strategy in part B of DRAGON will explore early signs of SRK-181 activity, including target engagement and pathway modulation. This will include measuring effects on both circulating and tumor immune contexture, such as CD8+ T cell infiltration and reductions in myeloid-derived suppressor cell (MDSC) populations as well as analysis of TGFβ-related pathway signaling. Initial evidence of drug activity and safety data are anticipated in 2022.
First Quarter 2022 Financial Results
For the quarter ended March 31, 2022, net loss was $8.0 million or $0.21 per share compared to a net loss of $27.7 million or $0.76 per share for the quarter ended March 31, 2021.
Revenue was $33.2 million for the quarter ended March 31, 2022 compared to $4.7 million for the quarter ended March 31, 2021 and was related to the Gilead fibrosis-focused research collaboration, which was executed in December 2018 and concluded in December 2021.
Research and development expense was $29.4 million for the quarter ended March 31, 2022 compared to $22.5 million for the quarter ended March 31, 2021. The increase year-over-year primarily reflects increased clinical costs associated with apitegromab and higher personnel costs. The Company expects research expenses to decline beginning in the third quarter of 2022 due to the portfolio updates and workforce reduction announced today.
General and administrative expense was $10.8 million for the quarter ended March 31, 2022 compared to $9.4 million for the quarter ended March 31, 2021. The increase year-over-year was primarily attributed to higher personnel costs. As a result of our reduction in force, we expect our employee-related expenses to decline in the second half of the year as compared to the first half of 2022.
As of March 31, 2022, Scholar Rock had cash, cash equivalents, and marketable securities of approximately $210 million. The Company expects that the updates and changes announced today will fund its anticipated operating and capital expenditure requirements into the fourth quarter of 2023.
"While we have paused many of our discovery programs, we are continuing to progress selected pre-clinical programs which best exemplify the value of our platform. As a platform company, business development remains an important part of our strategy and we continue to explore partnerships for these programs which could be a source of non-dilutive capital in the future," said Ted Myles, Chief Operating Officer and Chief Financial Officer at Scholar Rock. "Our streamlined focus and structure allow us to channel the majority of our resources to supporting the SAPPHIRE trial and SRK-181, which we believe are key near- and long-term value drivers."