H.C. Wainwright has increased its price target for Scholar Rock (NASDAQ: SRRK) to $35.00 from the previous $30.00 while maintaining a Buy rating on the stock.
The adjustment follows Scholar Rock's announcement of positive topline results from the SAPPHIRE trial on Monday. The trial assessed the efficacy of apitegromab in non-ambulatory patients with Types 2 and 3 Spinal Muscular Atrophy (SMA) who were also receiving SMN-targeted therapies.
The SAPPHIRE trial data showed a 1.8-point improvement in Hammersmith Functional Motor Scale Expanded (HFMSE) score over placebo, with a p-value of 0.0192, indicating statistically significant benefits.
The results demonstrated consistent and clinically meaningful advantages for patients across a wide age range, from 2 to 21 years old. Notably, 30% of patients treated with apitegromab saw an improvement of more than 3 points on the HFMSE scale.
In addition to the efficacy outcomes, the safety profile of apitegromab remained positive, aligning with the over 48-month experience from the Phase 2 TOPAZ trial. These findings have solidified the base-case revenue projections for the firm, with an anticipated initial launch in the fourth quarter of 2025.
The initial sales are forecasted at $3.4 million, with the potential to grow to $1.1 billion by 2034. These projections were already incorporated into the firm's financial model, which does not yet account for additional opportunities such as treatment for patients under two years old or potential broader use in ambulatory patients.
Looking forward, Scholar Rock is poised to submit applications to the FDA and EMA in the first quarter of 2025, seeking priority review and accelerated assessment, respectively. The firm's outlook for Scholar Rock is optimistic, as it expects the stock to surpass Street consensus for apitegromab.
In other recent news, Scholar Rock Holding (NASDAQ:SRRK) Corporation has revealed plans for a public offering aimed at raising $275 million. The biopharmaceutical company intends to use the net proceeds to fund various projects, including the commercialization of apitegromab. This follows the successful results from their Phase 3 SAPPHIRE clinical trial, which showed significant improvement in motor function in patients with spinal muscular atrophy treated with apitegromab. Analysts from TD Cowen, Truist Securities, and BMO Capital Markets have maintained a Buy rating on Scholar Rock, bolstered by these trial results.
In addition to these developments, Scholar Rock has appointed Beth Shafer, Ph.D., as Chief Business Officer, tasked with guiding the company's long-term corporate and business development strategy. The company has also made significant strides with its apitegromab EMBRAZE study in obesity, with preliminary data expected in the second quarter of 2025.
InvestingPro Insights
Scholar Rock's recent positive trial results are reflected in its market performance, as evidenced by InvestingPro data. The company's stock has shown remarkable strength, with a 360.13% return over the last week and a 365.13% return over the past year. This aligns with the optimistic outlook presented in the article and the increased price target from H.C. Wainwright.
InvestingPro Tips highlight that Scholar Rock is trading near its 52-week high, which is consistent with the positive momentum generated by the SAPPHIRE trial results. Additionally, two analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in the company's prospects.
However, it's important to note that Scholar Rock is not currently profitable, with a negative gross profit of $150.76 million in the last twelve months as of Q2 2024. This is not unexpected for a biotech company in the development stage, especially one with promising trial results that could lead to significant future revenues.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for Scholar Rock, providing a deeper understanding of the company's financial health and market position.
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