Scholar Rock shares jump 300% after rare disease drug scores trial win

By Christy Santhosh

(Reuters) -Scholar Rock’s experimental drug achieved its main target in a late-stage trial for spinal muscular atrophy, the biotech company said on Monday, sending its shares soaring more than 300% in early trading.

The treatment, apitegromab, was statistically significant in improving motor function measures such as standing and crawling, compared to a placebo, in individuals suffering from the rare disease.

SMA is the leading genetic cause of infant deaths and affects about 1 in 10,000 people, according to U.S. government data. It prevents the body from producing a protein necessary for neuromuscular development and leaves children too weak to walk, talk and swallow.

Apitegromab works to improve muscle strength and development by blocking the effects of myostatin, a protein which inhibits muscle growth.

There are currently three treatments for SMA approved by the U.S. Food and Drug Administration: Biogen’s Spinraza, Novartis’s gene therapy, Zolgensma, and Roche and PTC Therapeutics’ oral drug, Evrysdi. None of these targets muscle development.

Wall Street analysts said they expected apitegromab to gain FDA approval, despite a higher dose falling below efficacy expectations in the trial.

The drug had hit a “bullseye”, said Truist analyst Srikripa Devarakonda, who now forecasts $1.2 billion in peak sales of the drug in SMA patients, from $750 million previously.

A rival drug from Biohaven, also focusing on muscle retention, is in late-stage development for the disease.

Scholar Rock expects to file for FDA approval in the first quarter of 2025.

The latest results could bode well for separate trials testing the drug’s ability to preserve lean muscle mass in obese patients on GLP-1 weight-loss drugs such as Eli Lilly’s Zepbound, analysts said.

Scholar Rock is expected to report data from the obesity studies in the second quarter of 2025.

Its shares were trading at $30.38. Until Friday’s close of $7.42, the stock had lost 60.5% of its value this year.

(Reporting by Christy Santhosh in Bengaluru; Editing by Pooja Desai)