Scholar Rock Soars 11% on FDA Catalyst Looming – Is Approval the Final Piece?

Summary
• Scholar Rock (SRRK) surges 11.34% intraday to $38.40, driven by anticipation of a September 22 FDA decision on apitegromab.
• The stock trades 13.3% above its 52-week low of $6.76 but remains 30% below its January 2025 peak of $46.98.
• A Complete Response Letter (CRL) issued for apitegromab due to manufacturing site compliance issues, not clinical concerns, adds near-term uncertainty.
• The biotech sector remains volatile, with Amgen (AMGN) up 0.44% as the sector leader.

Scholar Rock’s dramatic intraday rally reflects a mix of regulatory optimism and manufacturing risk. With the FDA decision imminent, investors are weighing the potential for approval against the likelihood of a delayed timeline. The stock’s sharp move highlights the sector’s sensitivity to catalyst-driven events.

FDA Decision and Manufacturing Risk Fuel Volatility
Scholar Rock’s 11.34% intraday surge is directly tied to the impending FDA decision on apitegromab, its muscle-targeted therapy for spinal muscular atrophy (SMA). The drug’s pivotal Phase 3 trial demonstrated statistically significant motor function improvements, positioning it as a complementary treatment to existing SMN-targeted therapies. However, a CRL was issued due to manufacturing compliance issues at a third-party facility, not clinical data concerns. While this delays approval, the CRL underscores that the FDA’s review is focused on operational readiness rather than the drug’s efficacy or safety. Investors are interpreting this as a temporary hurdle rather than a rejection, fueling short-term optimism.

Biotech Sector Volatility Amid Regulatory Uncertainty
The biotech sector remains in a holding pattern as investors await key regulatory decisions. Amgen (AMGN), the sector leader, rose 0.44% on the day, reflecting broader market confidence in established players. In contrast, smaller biotechs like SRRK face heightened volatility due to their reliance on single-product approvals. The sector’s mixed performance highlights the risk-reward dynamic of late-stage catalysts, where a single regulatory outcome can redefine a company’s trajectory.

Options Playbook: Leveraging Volatility with Gamma and Theta
• 200-day average: 35.59 (below current price); RSI: 64.15 (neutral); MACD: -0.09 (bearish signal); Bollinger Bands: 30.42–34.68 (current price above upper band).
• SRRK’s intraday range of $34.61–$38.62 suggests a breakout pattern, with key support at $34.61 and resistance at $38.62.
• The stock’s short-term bullish trend aligns with a high-volatility options strategy, given its proximity to the FDA decision.

Top Options Picks:
• SRRK20251017C35 (Call, $35 strike, Oct 17 expiry):
- IV: 62.97% (moderate)
- Delta: 0.775 (high sensitivity)
- Theta: -0.089 (rapid time decay)
- Gamma: 0.050 (moderate sensitivity to price swings)
- Turnover: 178,575 (high liquidity)
- Leverage ratio: 8.25% (moderate)
- Payoff at 5% upside (40.32): $5.32 per contract. This call option offers aggressive upside if the stock breaks above $35, leveraging high delta and gamma for rapid gains.

• SRRK20251017C40 (Call, $40 strike, Oct 17 expiry):
- IV: 65.61% (moderate)
- Delta: 0.461 (moderate sensitivity)
- Theta: -0.0865 (rapid time decay)
- Gamma: 0.0636 (high sensitivity to price swings)
- Turnover: 46,411 (high liquidity)
- Leverage ratio: 19.39% (high)
- Payoff at 5% upside (40.32): $0.32 per contract. This option balances leverage and liquidity, ideal for a conservative bullish bet if the stock consolidates near $40.

Trading Setup: Aggressive bulls should prioritize SRRK20251017C35 for a breakout above $35, while SRRK20251017C40 offers a safer play if the stock tests $40. Both contracts benefit from high gamma and moderate IV, making them responsive to post-FDA news. A stop-loss below $34.61 would protect against a CRL-driven selloff.

Backtest Scholar Rock Holding Stock Performance
The event-study back-test is complete. From 1 Jan 2022 to 26 Sep 2025, Scholar Rock (SRRK.O) posted 29 trading days with ≥ 11 % one-day gains. A 30-day, buy-and-hold test after each such surge shows:• Cumulative return after 30 days: +16.7 %, versus +9.9 % for the benchmark • Win-rate on day 30: 64 % (19 wins / 29 events) • Out-performance appears positive but individual daily effects were not statistically significant at the 95 % level. Parameter notes (auto-filled): 1. Price type set to “close” because intraday tick data were not required for a daily-bar event test. 2. Back-test window 2022-01-01 – 2025-09-26, matching your request for “2022 to now.” 3. Surge threshold defined as daily change ≥ +11 % (close-to-close), the closest proxy available to intraday jumps given daily history. You can explore the full interactive report below.Feel free to drill into the visual module for detailed day-by-day performance and distribution metrics, or let me know if you’d like to refine the event definition, holding window, or risk controls.

FDA Decision Imminent – Position for Approval or Buy-the-Dip
Scholar Rock’s 11.34% intraday surge reflects a critical juncture ahead of the September 22 FDA decision. While the CRL introduces near-term uncertainty, the drug’s clinical differentiation and strong unmet need in SMA suggest approval remains likely. Investors should monitor the stock’s reaction to the CRL and the FDA’s final verdict. Amgen’s 0.44% gain underscores broader biotech resilience, but SRRK’s catalyst-driven profile offers higher reward potential. Act now: Buy SRRK20251017C35 for a breakout above $35 or SRRK20251017C40 for a conservative bullish play. A post-CRL dip could present a strategic entry point if the FDA delays approval.