All right, good morning, everyone. My name is Cory Kasimov, one of the senior managing director here at Evercore ISI, and it's my pleasure to host our next discussion with Scholar Rock and the company's CEO, David Hallal. David, thank you for being here with us today.
Great to be here, Cory. Thank you.
I guess just to kick things off and sort of level set the conversation, as 2025 comes to a close, you know, I'd love to hear your take on what's been a quite an eventful year for Scholar Rock and kind of sum things up, and we'll go from there.
Yeah, you know, it really has been a busy year and one of very significant transformation for the company. To first lay the groundwork for 2025, I think what was most important for us, Cory, after taking no shortcuts with our seven-year development program for spinal muscular atrophy for the first and only therapeutic that has now made it through a pivotal Phase 3 trial, was the readout of the Sapphire study in October of 2024, and you and I will speak about that shortly, but by reading out positively and hitting stat sig on our pivotal Phase 3 trial in Q4 2024, that then really directed all of our activities for 2025. In January of this year, we did file our BLA with the FDA based on the strength of the Phase 3 Sapphire study.
Then in April of this year, we received acknowledgment from the FDA that they had accepted our BLA under priority review, given the high unmet need in SMA and really the first of its kind therapeutic that apitegromab represented after they have approved, you know, three different therapeutics for motor neuron survival. This was really the first one to address the muscle component of SMA. Later on in April, after eight years of being board chairman at Scholar Rock, we announced that Jay Backstrom, who is a dear friend and somebody I personally recruited to the CEO role of Scholar Rock, was stepping down. Jay had, I talked him out of retirement to take the role back in 2022 to help us enroll our Phase 3 trial, and he did an extraordinary job.
But after really transforming the company from the Phase 2 readout to the Phase 3 readout, and now we were heading toward commercialization, Jay stepped down. I came in as CEO, and on that same day, Cory, I brought in some dear friends who I've built some really wonderful companies with, Vikas Sinha, who's here with me today. We've been working uninterrupted since 2006, and of course, he was our longtime CFO when we built out our 50-country operating platform at Alexion. I hired for the third time Keith Woods, who we worked together at Amgen and Alexion, and he did maybe his best work without me, which was at argenx, where he was the chief operating officer and really the architect of the Vyvgart launch. Keith also retired, talked him out of retirement, and he came back in to sort of build out our operating platform at Scholar Rock.
And then a dear friend who I've known since 2002, Akshay Vaishnaw, who we worked at Biogen back in the early days of this century, spent 19 years as the head of R&D at Alnylam and really building that remarkable platform there. He had also recently retired, and I talked to him about stepping back into an operating role. So on the same day, April 28th, myself coming down as chairman and now CEO, Vikas, Akshay, and Keith. And the reason why we really made that change was as we were looking for sort of what were the key priorities for the company. It was really all about scale and growth.
With this positive Phase 3 trial, with the accepted BLA under priority review, and a global opportunity to serve patients that is quite remarkable, we felt like this was the executive team that's kind of been there and done that and could do this once again. And so that was a key sort of milestone for us in 2025. What we've done since is we had a readout on our cardiometabolic study, the Phase 2 EMBRACE study, where we tested our muscle, sort of our world-leading myostatin biology platform with t irzepatide compared to tirzepatide alone, and we showed that we could safely and potently grow muscle and strength and preserve muscle in those patients that would otherwise lose, you know, a 1/3 of their muscle mass while on their first six months of tirzepatide treatment.
But more importantly, in 2025, we advanced our BLA right through the September 22nd PDUFA date while we received a CRL due to one single issue, which is our fill/finish facility at Catalent, Indiana, now owned by Novo Nordisk. Everything else in our application was really clean, and it really de-risked the company where we are now sort of, you know, looking at a 2026 resubmission approval and U.S. launch, and that has really been directing our activity. The final thing I'll say, and we'll shed more light on this early in 2026, we'll announce our second indication for apitegromab in a rare neuromuscular disorder in 2026. And we are also now dosing healthy volunteers with SRK-439, which is our second myostatin inhibitor, a high affinity, high potency, infrequent subcutaneous injection , and we're looking forward to having that initial readout in 2026 as well.
But what next year is about for sure is going to be getting over the finish line finally for the children and adults that desperately need the first muscle-targeted treatment and serving them with what we believe is potentially transformative medicine to help them achieve their optimal outcomes with spinal muscular atrophy.
Perfect. Well, if there's anything clear from that, it's that you're quite persuasive at talking people out of retirement. So I guess, you know, as we dig into SMA, you know, you mentioned the Phase 3 Sapphire study. Can you just give us very high level, like, what are the key takeaways from the efficacy and the safety of the product in that study that has you so excited about its outlook?
Thanks, Cory. It's really important, and I think I can say this in about three or four points. First of all, we took no shortcuts. Rare disease development programs sometimes have single-arm studies. They have natural history cohorts. We did a 188-patient randomized double-blind placebo-controlled trial, and every patient in that trial was on sort of background standard of care, otherwise known as SMN-targeted therapies. They were either on Spinraza or Evrysdi, and then they were randomized to either receive placebo, apitegromab at 10 mgs, and apitegromab at 20 mgs. Now, we did those two doses. They're pharmacologically identical, but we wanted to see if 10 mgs, if as effective as 20 mgs, you would always want to launch in collaboration with the FDA with the lowest effective and maximally effective dose.
What we saw in that trial is we set a very high bar for a primary endpoint, which was the gold standard Hammersmith Motor Function Scale for SMA. This is the one, by the way, some therapies have been approved that have missed that endpoint. So this is the highest bar. And what we found was that for the patients who were on SMN-targeted therapies alone, over the course of our first 52 weeks, which was our primary endpoint, there was a loss of motor function. When those patients were randomized onto apitegromab, there was a gain of motor function. So that was really important to change the trajectory. And then importantly, we hit a stat sig of a p-value with very low numbers of 0.019 for those patients who had received apitegromab versus those patients who had received p lacebo. And we were really gratified with those results.
The next key sort of secondary endpoint that was important was the highest response rate that one would be looking for, which is a three-point improvement in that Hammersmith Motor Function Scale. And in our case, about a 1/3 of patients hit that bar when they had apitegromab with their background SMN-targeted therapy, whereas it was only about 12% of patients on placebo in background therapy hit that high bar, a three to four times greater likelihood of achieving the highest level of motor function improvement. And so based upon that and a continued predictable solid safety profile, we think this puts a lot of wind at our back for what should be a special launch starting in the U.S., but then followed up in Europe, Asia-Pacific, Latin America, and beyond, sort of following our history of a 50-country operating platform.
Excellent. All right, so we have to obviously talk about the regulatory outlook here. You completed your Type A FDA meeting in November. Like, what are the, just remind us of the key takeaways there and importantly how it shapes the regulatory path going forward?
If it's okay, Cory, I'll just kind of quickly, because the last three to four months have felt like three to four years, but I'll kind of do a quick run-up to the Type A meeting.
Absolutely.
So in our Q2 call, which was on August 6th, we had acknowledged that through the review process, while things were going well, the FDA through a pre-license inspection at our drug substance CDMO and a general site inspection at our fill/finish or drug product CDMO had issued Form 483s with observations at both of those facilities. So in the spirit of full disclosure, we just wanted to be transparent that that was pretty close to our PDUFA date, but we felt like both of those facilities with strong remediation plans could get up and down by the time of our priority review PDUFA date of September 22nd. So that was on August 6th, and that was actually after our late cycle meeting with the FDA, which was incredibly positive.
When we got to September 22nd, we had woken up that day and expected to receive an approval because right, we ran right through the tape on September 18th and September 19th, that Thursday and Friday before the PDUFA date, and everything was moving along very swiftly and robustly with pretty much a final label and patient brochure with the agency. We were disappointed after 6:00 on September 22nd to receive a complete response letter. Now, we received that complete response letter, and what it clearly articulated actually was the drug substance manufacturing facility was absent on that CRL. So their responses to the Form 483 clearly met the bar with the FDA. It was the responses of the drug product facility, which again, is Catalent, Indiana, now owned by Novo Nordisk. They were listed as the sole really approvability issue because they were not in compliance.
We think that was because those observations were repeat observations from prior inspections before Novo Nordisk even owned the plant. And so the good news, and I think the reason why the stock kind of performed well is it was kind of a de-risking event. When you get a CRL versus a major amendment, you know exactly what your issue was. It was no longer the drug substance manufacturing plant, and it certainly was not efficacy and safety of the product. What we indicated at that time is we expected that once this plant were to be remediated, we would refile and be approved. On October 9th, Novo Nordisk then received a new classification for the facility, which was OAI, Official Action Indicated.
That's the worst classification that you could receive, which meant to us now that before we were going to get an approval, it was going to require a reinspection of this facility by the FDA. And so what we wanted to do leading up to that Type A meeting in November, just a month after that OAI classification, is make sure that Novo Nordisk joined us at the Type A meeting, that the Patient Association, Cure SMA, joined us at that meeting to make sure that we could reiterate the high unmet need for this patient community and really sort of agree with the FDA that there needed to be a shared sense of urgency due to the unmet need. Just because we received a CRL doesn't mean the principles of us receiving a priority review should lead to less urgency.
Coming out of that Type A meeting, we felt it was really constructive, very collaborative, and the FDA certainly signaled that when Novo Nordisk was ready for a reinspection, that they could really try to expedite sending inspectors out there in 2026, so really based upon how constructive and collaborative the Type A meeting was, we provided guidance just two days later. The Type A meeting was on November 12th. Our Q3 earnings call was on November 14th, and what we indicated then is we expected to resubmit and then upon approval, launch in the U.S. in 2026. I understand that that is a wide range of 12 months, but we felt like that's about as tight as we could be, but we felt really comfortable that that was the range that we would be in.
Subsequently, I just want to make one more note for you all, which is we have learned and we issued an Form 8-K on Monday that Novo Nordisk did receive a warning letter based upon, you know, the inspection back in June and July. And that really wasn't a surprise to us, Cory, because in the Type A meeting, what the FDA had indicated is the next step would be a correspondence from the FDA to Novo Nordisk. Novo Nordisk would then need to respond to that correspondence. Then there would be a meeting between Novo Nordisk and the FDA. And provided everybody could agree that the gaps have been addressed, they will expedite a reinspection for the facility. Now, that correspondence could have been one of two things. It could have been an untitled private letter or a public warning letter. FDA chooses to make it a public warning letter.
The contents of it do not change, and it really does not change our path forward.
Okay. I was going to ask about that. We anticipated the warning letter, but we weren't sure if it was any significance, just part of the process.
As you know, like when the FDA gets to this point, and this has been very public because of us and Regeneron and major amendments and CRLs, but I think the FDA has gotten to a point where this is so public, why not make it public and actually send a message across the industry that, you know, compliance really matters in these facilities. The warning letter, of course, will be issued on the FDA website anytime now.
As we all look for updates going forward, should we expect disclosures from Novo Nordisk? Would it be from you or would it just be like the resubmission of the BLA?
Yeah, it's a great question. I would expect more from us because it's not really a material event for Novo Nordisk. As you all know, Novo Nordisk bought this plant for their own internal needs over time. So Catalent was running it as a CDMO. Novo Nordisk is going to convert this into an internal fill/finish facility. And everybody needs to get out of there. We were already planning to move to another fill/finish facility, and we did announce on November 14th. We made meaningful progress on that with commercial capacity scheduled for Q1, Q2 to start the process to be qualified in that facility later in 2026, that new facility. But I would expect you would get disclosures from us because it's so material for us.
Right.
Resubmission, reinspection. I think we found the right relationship with Novo Nordisk, the FDA, and the investment community of not handwaving and announcing every time there's something to say, but when it's meaningful, when people can interpret what's going on, and we'll continue that path forward in 2026.
Okay. I can only imagine how frustrating this whole process has been, but are there any silver linings to the delay in terms of your launch prep and things like that?
Totally. I mean, Cory's so experienced, he would ask that question because the fact of the matter is somebody like Keith Woods would have been hired two years before a PDUFA date. And we brought him in four and a half months before a PDUFA date. And he deployed his team, a team that many of us have worked with in the past. These folks came from Alexion and argenx and places where we built some meaningful businesses in the rare disease community. And we deployed them six to eight weeks before the PDUFA date. That's not enough time.
It's not enough time to meet with national payers, regional payers, all the neuromuscular specialists that manage the SMA community, test your back office reimbursement platform so that when the enrollment forms for patients come in, it's going to be whistle clean with the pharmacies and infusion centers that you're working with. That's been a big silver lining. I'd say the other silver lining is that, look, our disease awareness and education campaign needs more time, but there is going to be tremendous demand for this product given the efficacy and safety that I've already noted. But really, the anchor of this disease awareness and educational initiative is this: motor function is a sum of motor neuron survival and muscle health.
And so you've been able over the last 10 years with Spinraza, Zolgensma, and Evrysdi to address the motor neuron survival component of the disease, but not the muscle component of the disease. And we think that essentially every patient is going to be a candidate for apitegromab given an optimal outcome for motor function is the combination of motor neuron survival and apitegromab as the first and ever, first ever muscle targeted treatment for SMA. And so having a little bit of that extra time, Cory, and building those relationships is important. Last thing I'll say, one of the most valuable assets a rare disease company can ever have is their relationship with the community, the physicians, the nurses, the physical therapists, and the patient community themselves. And we are really using this time to build a very strong relationship with the community.
Okay, that's great. On the payer front, how are these discussions progressing? And you know, how confident are you that an add-on therapy to an already expensive class of drugs will be broadly covered?
It's a great question. We're confident that, you know, given the strength of our data, is that with apitegromab showing sort of reversing the trend of at some point, right, initially when you get an SMN targeted therapy, there is an initial response. We think the long-term data of those products alone generated by those companies who manufacture and market those products show that there is a return to the progressive form of the disease with motor function loss. Our data is pretty profound, and we're sharing that data with the payer community, and they're like, wow, so you guys are able to stabilize and in fact return the patients into motor function gain versus motor function loss. We also have our Phase 2 data where we now have patients out five and six years.
What we've shown there is those patients never really give up their motor function gains over four to five years. That's not the case with the SMN-targeted therapies alone. Finally on pricing, I think given where the SMN-targeted therapies are, given the very low numbers of patients in the U.S., maybe 7,000 have received an SMN-targeted therapy, we think the combination of that price point and our price point is still within range of what is spent on an annual basis for new innovation for most rare disease products. The patient numbers are low enough where we also see the, you know, the budget impact is going to be relatively modest. I'll just close with this: 7,000 patients in the U.S. have received at least one SMN-targeted therapy, some more than that.
In fact, Cory, to answer your question, some payers are already reimbursing for more than one SMN targeted treatment, and then finally, there's 35,000 patients globally, inclusive of that 7,000 in the U.S., and that's why we are excited about the global opportunity as well.
Excellent. Well, I look forward to future conversations where it's all about the commercial and not about the regulatory.
I can't wait for that, Cory. Thank you so much.
David, thank you very much.
Okay, bye-bye.