Scholar Rock stock skyrockets on positive trial data for its SMA drug
On Monday, October 7, shares of the biotech company Scholar Rock soared close to 362% following the announcement that its lead candidate, apitegromab, a treatment for spinal muscular atrophy (SMA), had demonstrated clinically significant results in the final, phase III trial. Currently, there are only three approved drugs for this genetic disease, with the SMA market estimated at $3 billion in 2023.
Details
On Monday, Scholar Rock stock surged almost 362% on the Nasdaq to $34.28 per share, reaching highs last seen in November 2021. Before these gains, it had been down about 61% since the beginning of 2024.
The surge came after the company reported that in its phase III clinical trial, apitegromab had demonstrated “statistically significant and clinically meaningful improvement in motor function” in SMA patients. Recall that phase III trials are the final stage of research and development before regulators can approve a drug.
What Scholar Rock announced
Spinal muscular atrophy refers to a group of hereditary disorders that cause progressive muscle degeneration, potentially resulting in death from respiratory failure. It is one of the most common rare diseases, affecting one in 10,000 newborns worldwide. People with SMA have mutations in the SMN1 gene, which encodes a protein crucial for motor neuron survival, while the SMN2 gene does not produce enough protein for the survival of motor neurons.
For a long time, there was no treatment for SMA. The first one to receive approval by the U.S. Food and Drug Administration (FDA) was Biogen’s Spinraza (nusinersen) back in 2016. Later, Roche also saw its drug Evrysdi (risdiplam) approved. Both target the SMN2 gene to boost SMN protein levels, essentially preventing the disease from progressing and helping patients to maintain motor function. The third approved treatment is Novartis’s gene therapy, Zolgensma. Novartis had also been working on a treatment targeting the SMN2 gene but eventually abandoned it.
Scholar Rock’s apitegromab takes a different approach, inhibiting myostatin, a protein that suppresses muscle growth, thereby increasing muscle mass. In clinical trials, patients receiving apitegromab demonstrated improved motor function, with 30.4% seeing an improvement of more than three points on a motor function scale versus 12.5% of patients on placebo.
Scholar Rock plans to file for a U.S. Biologics License Application and EU marketing authorization in the first quarter of 2025. The FDA has granted apitegromab Fast Track designation, which shortens the review process to four months. The drug has a similar status in Europe as well.
Stock performance
According to MarketWatch, all nine analysts who cover Scholar Rock rate it a “buy.” The average target price is $31 per share, 9.5% lower than the close on Monday, October 7, but still 300% higher than the closing price on Friday, October 4 (before the Monday spike).
Jefferies analyst Michael Yee expects apitegromab sales to eventually reach $1.0–1.5 billion a year, reports Barron’s. Meanwhile, market research outfit IMARC Group estimates that the seven major SMA markets (therapy is not available all over the world) reached a value of $3 billion in 2023 and forecasts them to hit $13 billion by 2034.
Jefferies’ Yee also notes that the latest trial data makes Scholar Rock an attractive acquisition target for a larger biopharmaceutical company active in SMA or related areas, similar to how in 2018 Novartis acquired AveXis, the maker of Zolgensma.
