Scholar Rock's Q3 2025 Earnings Call: Contradictions Emerge in CDMO Reinspection, BLA Strategy, and FDA Collaboration

Guidance:

• Resubmit BLA and pursue U.S. approval; anticipate U.S. launch following approval in 2026.
• Novo Nordisk expects the Bloomington facility to be reinspection-ready by end-2025; Scholar Rock secured second fill-finish commercial capacity starting Q1 2026 and will file an SBLA for that site later in 2026.
• EMA MAA decision expected near mid-2026.
• Initiated OPAL phase 2 in infants/toddlers; a second apitegromab indication program to start by year-end with details in early 2026.
• SRK-439 IND cleared; phase 1 in healthy volunteers to start before end-2025; SAP data expected in 2026.
• Cash ~$369.6M plus ~ $60M expected from warrants; cash runway into 2027; 2026 operating expense guidance to be provided on Q4 call.

Business Commentary:

* Regulatory Challenges and Progress: - Scholar Rock received a CRL on September 22, 2025, due to issues with its third-party fill-finish facility in Bloomington, Indiana, owned by Novo Nordisk. - The company is working expeditiously to resolve these issues and anticipates resubmitting the BLA and launching apitegromab in 2026.

• R&D and Pipeline Advancements:
• The phase III trial for apitegromab demonstrated a statistically significant and clinically meaningful benefit in motor function for SMA patients.

• Scholar Rock is advancing its pipeline, with the phase two OPAL study and plans to initiate clinical development activities for apitegromab in a second rare, debilitating neuromuscular disorder by year-end.

• Commercial Readiness and Marketing Strategy:

• Scholar Rock's pre-commercial field deployment is underway, with a focus on enhancing engagement with potential prescribing physicians and understanding the patient journey.

• The company is strengthening its partnership with the SMA patient community and expanding its market access strategy to ensure broad access to apitegromab post-approval.

• Financial and Strategic Investments:

• The company raised $141.7 million through an ATM and drew down $50 million from its existing debt facility, adding to its cash balance of $369.6 million.
• Scholar Rock is focusing on strategic investments, including a second fill-finish facility and R&D activities, while operating with a tight financial plan, extending its cash runway into 2027.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "We know that it is not a matter of if, but when apitegromab will be approved in the U.S." They described the FDA Type A meeting as "encouraging," noted Novo Nordisk expects the Bloomington facility to be "ready for reinspection by the end of this year," and highlighted a strengthened balance sheet ("$369.6 million in cash" and runway "into 2027").

Q&A:

• Question from Mani Farouhar (Lyrinc Partners): How are you thinking about financing options (debt vs royalty/equity) and, operationally, how risky is transitioning product between fill-finish facilities during early launch?
  Response: Prefer non-dilutive capital first (expand loan facility), royalties next, equity last; ATMs are opportunistic. Second fill-finish secured for Q1 2026 with tech transfer underway and minimal vial/analytics changes to enable an almost seamless operational transition.

• Question from Eric Schmidt (Cantor): Given Catalent/Bloomington's history, how confident are you that remediation is on sound footing and the inspection will go well; do you expect a class one or class two outcome?
  Response: Novo has committed senior ownership, staffed and integrated Novo quality systems, and told FDA they expect reinspection readiness by year-end; company encouraged by the constructive meeting but will await inspection outcomes (management did not predict class level).

• Question from Tessa Romero (JPMorgan): Will the 2026 BLA resubmission include Catalent as primary fill-finish and add the second site later, and how is the EMA manufacturing review progressing?
  Response: Plan is to resubmit with Catalent as primary filler and add the second filler subsequently; second filler acceleration is insurance. EMA Q&A is progressing and a decision is expected mid-2026.

• Question from Tazeen Ahmad (Bank of America): What is the latest acceptable timing for a Catalent reinspection to still meet 2026 launch expectations, and if reinspection fails how quickly could you pivot to make the second fill-finish the primary filing?
  Response: A reinspection could extend into 2026 and still support resubmission/launch timing; the accelerated second vial provides a viable pivot and management expects regulatory pathways exist to expedite making the second site primary if needed.

• Question from Kripa Devarakonda (Truist Securities): Will you wait for the reinspection to resubmit the BLA; could Novo request inspection and have they engaged outside consultants?
  Response: Base case is to await a successful reinspection before resubmitting; Novo has signaled readiness for reinspection (likely unannounced) and is working with outside experts to execute remediation.

• Question from Edsur Dara (Barclays): What will the FDA Type A meeting minutes reveal about resubmission requirements and expected review timelines once refiled?
  Response: Minutes will document the constructive meeting and Novo's reinspection readiness but will not specify review timelines; review timing will be determined after resubmission, and management expects the agency to act with urgency.

• Question from Marc Frahm (TD Cowen): What will you disclose and when regarding inspections at a third-party facility you don’t own — will you announce inspection timing or wait for Form 483s?
  Response: Company will disclose material information; expects inspections may produce Form 483s and will share important, material developments promptly while maintaining open communication with investors.

• Question from Evan Siegerman (BMO Capital Markets): With the delay, how are you identifying patients ahead of launch and could extended pre-launch engagement speed uptake?
  Response: Extended field deployment is deepening engagement with SMA treatment teams and advocacy groups, improving patient identification and understanding of the care pathway; combined with apitegromab’s safety and differentiated muscle-targeting, this supports readiness and potential for strong uptake.

Contradiction Point 1

CDMO Reinspection and Facility Classification

It involves the status and impact of reinspection at CDMOs, which directly affects the production and regulatory process for Scholar Rock's product, potentially influencing launch timelines and investor confidence.

When can the reinspection be completed, and what impact would unresolved issues have on timelines? - Tazeen Ahmad (Bank of America)

2025Q3: We can confirm that we are working with the FDA to address the observations, and our goal is to reclassify the facility to a Class 1 site. - Keith Woods(COO)

Can you clarify the specific observations at the two CDMO sites, whether reinspection is required, and if the facilities can currently release other pharmaceutical products? - Eric Schmidt (Cantor)

2025Q2: No new information about reinspections, but collaboration with CDMOs and constructive late cycle meeting with FDA indicate progress towards PDUFA date. - David Hallal(CEO)

Contradiction Point 2

BLA Submission Strategy

It involves the strategic approach to the BLA submission, which is critical for regulatory approval and product launch, impacting financial forecasts and investor expectations.

Why is Catalent included in the BLA submission, and how is the EMA review progressing? - Tessa Romero (JPMorgan)

2025Q3: We will now be aligning our regulatory resubmission with the EMA's review of apitegromab. In doing so, we are effectively filing in parallel as we have all of the requirements for EMA in the BLA submission. - Keith Woods(COO)

Can you discuss interactions with the FDA regarding the apitegromab review, the potential for a broad label, and payer receptiveness? - Allison Bratzel (Piper Sandler)

2025Q2: We are fully aligned with the EMA on the filing strategy. The filing is going to be identical as I noted earlier in the call. We're simply aligning timing with both the EMA and FDA. - Keith Woods(COO)

Contradiction Point 3

BLA Submission and Catalent Involvement

It involves the strategy and timing regarding the BLA submission for apitegromab, which directly impacts regulatory approval and launch timelines, crucial for company revenue and investor expectations.

Why is Catalent included in the BLA submission, and how is EMA review progressing? - Tessa Romero (JPMorgan)

2025Q3: With respect to the BLA, we have targeted the resubmission for the middle of next year. And that will include the Catalent data, aligning with EMA timelines, which will also be an insurance policy with a second vial. - Keith Woods(COO)

Has the mid-cycle meeting with regulators been completed? If so, comment on labeling and the need for an adcom? - Tessa Romero (JPMorgan)

2025Q1: We expect to complete the mid-cycle meeting with the FDA in Q2, and we remain on track for the September 22nd PDUFA date. - Akshay Vaishnaw(CMO)

Contradiction Point 4

FDA Collaboration and Remediation Efforts

It reflects differing levels of confidence and communication with the FDA, which is critical for regulatory approval and launch strategy.

When will the reinspection be completed, and how would unresolved issues affect timelines? - Tazeen Ahmad (Bank of America)

2025Q3: We have had a very constructive and collaborative meeting with the FDA in late January. We have discussed our plans for addressing the site classification and also shared our path forward with respect to the revised timeline for submission. - Akshay Vaishnaw(CMO)

Has the mid-cycle meeting with regulators been completed? Have discussions regarding labeling and the need for an adcom been discussed? - Tessa Romero (JPMorgan)

2025Q1: We continue to have constructive discussions with the FDA, and we are on track for the September 22nd PDUFA date. - Akshay Vaishnaw(CMO)

Contradiction Point 5

Resubmission and Timing with Regulatory Bodies

It involves differing statements about the timing of resubmission and the level of collaboration with regulatory bodies, which could impact the company's approval timeline and investor expectations.

How confident are you in the remediation at Catalent's Bloomington facility, and will it be Class 1 or Class 2? - Eric Schmidt(Cantor)

2025Q3: We anticipate the FDA would require an inspection of the Catalent facility following the remediation efforts and prior to product release. - Keith Woods(COO)

Can you highlight the key additional data points from SAPPHIRE at MDA that will be most impactful for patients and doctors? - Allison Bratzel(Piper Sandler)

2024Q4: We continue to be very constructive in our dialogue with the FDA during this process. - Jay Backstrom(CEO)