Raymond James has initiated coverage on Scholar Rock Holding
The analysis focuses on the potential of their lead program, apitegromab, for Spinal Muscular Atrophy (SMA), which is currently in a Phase 3 trial (SAPPHIRE) with data expected in Q4 2024.
Apitegromab benefits from robust Phase 2 data (TOPAZ) and shows promise as an add-on therapy to existing treatments for SMA.
The analyst commences coverage of Scholar Rock with a Strong Buy rating and a price target of $30.
Additionally, Scholar Rock is exploring opportunities in the obesity market with SRK-439, a next-generation myostatin inhibitor, which has shown positive preclinical data in preserving lean muscle mass alongside GLP-1s for weight loss.
These data showed that SRK-439 maintained lean mass and improved fat mass loss when combined with a GLP-1 receptor agonist (GLP-1 RA; in separate experiments with Novo Nordisk A/S’s
SRK-439 treatment also led to incremental lowering of fasting glucose beyond the levels seen with semaglutide alone.
A proof-of-concept trial for apitegromab in obesity will start in mid-2024, with results expected in mid-2025, coinciding with the IND filing for SRK-439.
The company also has other promising candidates, like SRK-181 targeting latent TGFβ1 in solid tumors, which has shown encouraging results in early trials.
Scholar Rock’s valuation appears attractive, considering its pipeline opportunities and favorable risk/reward profile. Given their relevance in sizable markets, the company’s treatments could be appealing for acquisition.
The company ended 2023 with approximately $280 million in cash, cash equivalents, and marketable securities, which is expected to fund operations into 2H 2025.
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