Scholar Rock (NASDAQ:SRRK) Releases Earnings Results, Meets Estimates

Key Points

• Scholar Rock met earnings expectations, reporting a quarterly loss of $0.84 per share versus the consensus estimate of a $0.84 loss, improving from a $0.98 loss per share a year earlier.
• U.S. approval of apitegromab remains targeted for September 30, but uncertainty over FDA classification of the Catalent Indiana facility continues to delay the company’s European approval timeline.
• The company is preparing for a potential commercial launch across about 140 treatment centers and 2,600 physicians, while advancing multiple clinical programs and ending the quarter with $492 million in liquidity. Shares rose 10% in trading following the results.

Scholar Rock (NASDAQ:SRRK - Get Free Report) announced its quarterly earnings results on Thursday. The company reported ($0.84) EPS for the quarter, meeting analysts' consensus estimates of ($0.84), FiscalAI reports. During the same period in the prior year, the firm earned ($0.98) earnings per share.

Here are the key takeaways from Scholar Rock's conference call:

• U.S. approval remains on track for September 30, with FDA review of apitegromab progressing and two independent fill-finish approval paths. The second facility has submitted all required data, has more launch-ready vials than Catalent Indiana, and is considered fully independent.
• The FDA’s classification of the Catalent Indiana facility remains pending beyond the expected 90-day guidance period, creating continued regulatory uncertainty. Europe’s MAA also depends on this issue or on the EMA accepting the second facility, so the company has not provided an updated European approval timeline.
• Scholar Rock says its U.S. commercial organization is launch-ready across approximately 140 treatment centers and 2,600 prescribing physicians, with patient-support and reimbursement activities underway. However, prior authorization is expected for most patients, and the company estimates that early-launch patients may wait more than 60 days for infusion while a J-code and coverage policies are established.
• The company initiated the randomized phase II FORGE trial of apitegromab in facioscapulohumeral muscular dystrophy, while enrollment continues robustly in the pediatric OPAL SMA study. The phase I study of high-potency anti-myostatin antibody SRK-439 is also progressing, with top-line data expected later this year.
• Scholar Rock ended the quarter with $492 million in cash, equivalents, and marketable securities, including $63 million of net ATM proceeds. Following approval, it may access an additional $150 million under its debt facility and plans to monetize a priority review voucher to strengthen liquidity.

Scholar Rock Trading Up 10.0%

Shares of NASDAQ:SRRK traded up $4.77 during trading on Thursday, reaching $52.64. The stock had a trading volume of 1,617,010 shares, compared to its average volume of 1,045,770. Scholar Rock has a 52 week low of $27.07 and a 52 week high of $58.49. The company has a debt-to-equity ratio of 0.71, a quick ratio of 8.64 and a current ratio of 8.64. The firm's fifty day moving average is $49.99 and its 200 day moving average is $47.82. The stock has a market cap of $6.31 billion, a price-to-earnings ratio of -14.66 and a beta of 0.69.

Analyst Upgrades and Downgrades

Several equities analysts have commented on SRRK shares. Weiss Ratings reiterated a "sell (d-)" rating on shares of Scholar Rock in a research report on Friday, July 17th. Cantor Fitzgerald restated an "overweight" rating on shares of Scholar Rock in a report on Thursday, June 18th. HC Wainwright upped their price objective on Scholar Rock from $58.00 to $65.00 and gave the company a "buy" rating in a research note on Friday, May 8th. Canaccord Genuity Group started coverage on shares of Scholar Rock in a report on Monday, April 20th. They issued a "buy" rating and a $62.00 price objective for the company. Finally, Barclays lifted their target price on shares of Scholar Rock from $53.00 to $55.00 and gave the stock an "overweight" rating in a research report on Friday, May 8th. Four equities research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Scholar Rock currently has an average rating of "Buy" and a consensus price target of $56.21.

Insider Activity

In other news, Director Kristina Burow sold 3,053 shares of Scholar Rock stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $53.74, for a total value of $164,068.22. Following the completion of the sale, the director owned 114,657 shares in the company, valued at $6,161,667.18. The trade was a 2.59% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Joshua Reed sold 3,053 shares of the business's stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $53.74, for a total transaction of $164,068.22. Following the transaction, the director owned 19,518 shares in the company, valued at $1,048,897.32. The trade was a 13.53% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 17,149 shares of company stock worth $923,108. 10.30% of the stock is owned by insiders.

Institutional Investors Weigh In On Scholar Rock

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Invesco Ltd. raised its holdings in shares of Scholar Rock by 21.0% during the fourth quarter. Invesco Ltd. now owns 82,462 shares of the company's stock valued at $3,632,000 after purchasing an additional 14,291 shares during the period. Mercer Global Advisors Inc. ADV bought a new stake in shares of Scholar Rock during the fourth quarter valued at approximately $308,000. Mackenzie Financial Corp acquired a new position in shares of Scholar Rock during the fourth quarter worth approximately $221,000. Empowered Funds LLC bought a new position in shares of Scholar Rock in the 4th quarter worth $114,000. Finally, KVP Capital Advisors LP bought a new position in shares of Scholar Rock in the 4th quarter worth $1,982,000. 91.08% of the stock is owned by institutional investors.

Scholar Rock Company Profile

Scholar Rock is a clinical-stage biotechnology company focused on the discovery and development of protein therapeutics that selectively target growth factors involved in disease processes. The company's research platform is designed to modulate endogenous growth factor activation and signaling with high specificity, aiming to restore normal biological function across a range of disorders. Scholar Rock's approach is distinguished by its emphasis on engineering antibodies and biologics that interact with growth factor precursors or latent complexes rather than the active form, potentially offering improved safety and efficacy profiles.

The company's lead program, SRK-015 (appercept), is an investigational monoclonal antibody targeting the activation of latent myostatin proproteins and is being evaluated for the treatment of spinal muscular atrophy (SMA).

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