Scholar Rock Holding Corp
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
SRRK$46.94+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001558370-24-011461
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001558370-24-015155
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 108 current paragraphs.
48 unchanged; 29 reworded; 26 added; 4 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 61 previous and 65 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Recent Developments
Current report
Phase 3 SAPPHIRE Trial Top-line Data
Current report
On October 7, 2024, we announced positive top-line data from our Phase 3 SAPPHIRE clinical trial evaluating the efficacy and safety of apitegromab, an investigational muscle-targeted therapy, in patients with SMA.
Current report
SAPPHIRE was a randomized, double-blind, placebo-controlled, Phase 3 clinical trial that evaluated the safety and efficacy of apitegromab in nonambulatory patients with Types 2 and 3 SMA who are receiving current standard of care, either nusinersen or risdiplam. SAPPHIRE enrolled 156 patients ages 2–12 years old in the main efficacy population. These patients were randomized 1:1:1 to receive either apitegromab 10 mg/kg, apitegromab 20 mg/kg, or placebo by intravenous infusion every 4 weeks. An exploratory population that enrolled 32 patients ages 13–21 years old was also evaluated. These patients were randomized 2:1 to receive either apitegromab 20 mg/kg or placebo.
Current report
The study achieved its primary endpoint, demonstrating a statistically significant and clinically meaningful improvement for apitegromab compared to placebo in motor function as measured by the gold standard Hammersmith Functional Motor Scale Expanded (“HFMSE”) in SMA patients on chronic dosing of standard of care therapies (either nusinersen or risdiplam). Based upon the similar pharmacological profile of the 20 mg/kg and 10 mg/kg doses of apitegromab, the statistical analysis plan was prespecified to analyze both the combined dose (10 mg/kg and 20 mg/kg) and the 20 mg/kg dose, each compared to placebo. Statistical significance was achieved per the prespecified statistical analysis plan (Hochberg multiplicity adjustment) where the p-value (≤0.025) is more rigorous if only one prespecified analysis crosses the statistical significance boundary of ≤ 0.05.
Current report
Motor function outcomes were meaningful and consistent across the main efficacy population and in the ages 13–21 exploratory population, and favored apitegromab (n=22) compared to placebo (n=10).
Current report
The table below summarizes the changes from baseline in HFMSE total score at month 12 across the various dose and age groups studied in SAPPHIRE.
Current report
Change from Baseline in HFMSE Total Score at Month 12*
Current report
Abbreviations: CI, Confidence Interval; HFMSE, Hammersmith Functional Motor Scale Expanded; LS, Least Squares;
Current report
*n values at 12-month endpoint
Current report
30.4% of patients receiving apitegromab in the main efficacy population (ages 2-12) had ≥3 point improvement in HFMSE versus 12.5% of patients on placebo, as shown below.
Current report
Proportion of Patients With ≥3 Point Improvement in HFMSE
Current report
Proportion of patients achieving ≥3 Point Improvement in HFMSE was higher for apitegromab vs. placebo in combined dose (odds ratio 3.0, p=0.0256)
Current report
SOC = standard of care
Current report
Patients receiving apitegromab in the main efficacy population (ages 2–12) demonstrated early motor function improvement compared to placebo from the first measured time point at 8 weeks, and clinical benefit expanded at 52 weeks as measured by HFMSE, as shown below.
Current report
HFMSE Improvement vs. Placebo in SAPPHIRE
Current report
Abbreviations: CI=Confidence Interval; HFMSE=Hammersmith Functional Motor Scale Expanded; LS=Least Squares; SOC=standard of care.
Current report
Treatment with apitegromab was well-tolerated across all age groups. There were no clinically relevant differences in the adverse event profile by dose, 10 mg/kg versus 20 mg/kg. No new safety findings were observed in the SAPPHIRE clinical trial; the profile was consistent with that observed in the Phase 2 TOPAZ clinical trial, including an extension study which had over four years of treatment as of the cut-off date. Serious adverse events (“SAEs”) were consistent with the underlying disease and the current standard of care received by patients; no SAEs were assessed as related to apitegromab. There were no study drug discontinuations due to adverse events. The most common adverse events were pyrexia, nasopharyngitis and cough, observed in 29.2%, 24.5% and 24.5% of patients in the main efficacy population (10 mg/kg and 20 mg/kg combined), respectively. The table below summarizes the adverse events observed in the trial.
Current report
Summary of Adverse Events in SAPPHIRE
Current report
We are also continuing our long-term extension study, ONYX, for patients from both the TOPAZ and SAPPHIRE studies, who are receiving apitegromab in conjunction with current standard of care. Following trial completion, 98% of SAPPHIRE patients (185/188) enrolled in the ONYX open-label expansion study.
Current report
The FDA has granted Fast Track, Orphan Drug and Rare Pediatric Disease designations, and the EMA has granted PRIME designation and the EC has granted Orphan Medicinal Product designation to apitegromab for the treatment of SMA. We continue to evaluate the clinical, pharmacokinetic, and other data from SAPPHIRE to inform dose selection discussions with the FDA and EMA. We plan to submit a Biologics License Application to the FDA and a marketing authorization application to the EMA in the first quarter of 2025 and to request priority review and accelerated assessment, respectively. Assuming marketing approval is obtained, we plan to commercially launch apitegromab in the U.S. in the fourth quarter of 2025 with a commercial launch of apitegromab in Europe to follow.
Current report
Follow-on Offering
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
In October 2024, we entered into an underwriting agreement with J.P. Morgan Securities LLC, Jefferies LLC and Piper Sandler & Co., as representatives of the several underwriters named therein, relating to the issuance and sale of an aggregate of 11,858,408 shares of our common stock and pre-funded warrants to purchase 353,983 shares of our common stock, which includes the exercise in full by the underwriters of their option to purchase an additional 1,592,920 shares. The offering price per share was $28.25 and the offering price per pre-funded warrant was $28.2499, which equals the per share public offering price for the common shares less the $0.0001 exercise price for each such pre-funded warrant. The offering resulted in estimated proceeds of approximately $324.4 million, net of underwriting discounts and estimated offering expenses (see Note 12).
Current report
In October 2023, we entered into an underwriting agreement with J.P. Morgan Securities LLC and Piper Sandler & Co., as representatives of the several underwriters named therein, relating to the issuance and sale of an aggregate of 14,270,074 shares of our common stock, which includes the exercise in full by the underwriters of their option to
Current report
purchase an additional 1,861,314 shares. The offering price per share was$6.85. The offering resulted in proceeds ofapproximately $92.4 million, net of underwriting discounts and offering expenses.
Removed paragraphs (4)
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
The change in other income (expense), net was primarily attributable to an increase in interest income earned due to higher interest rates, partially offset by an increase in interest expense related to the Loan and Security Agreement, also due to higher interest rates.
Previous report
In accordance with Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we are required to evaluate whether there are conditions and events, considered in the aggregate, which raise substantial doubt about our ability to continue as a going concern from the issuance date of our consolidated financial statements. We have incurred losses since our inception, and as of June 30, 2024 we had an accumulated deficit of $791.8 million. During the six months ended June 30, 2024, we recorded a net loss of $115.4 million. In addition, during the six months ended June 30, 2024 our cash, cash equivalents and marketable securities balance decreased by $89.4 million, resulting in a cash, cash equivalents and marketable securities balance of $190.5 million as of June 30, 2024. Based on current operating plans, we may not have sufficient cash, cash equivalents and marketable securities to fund our operating expenses and capital requirements beyond one year from the issuance of these consolidated financial statements without receiving additional external financing and, therefore, we have concluded that there is substantial doubt about our ability to continue as a going concern. The financial statements do not
Previous report
include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern.
Reworded paragraphs (29)
Previous wording
Our first product candidate, apitegromab, is a highly selective, fully human, monoclonal antibody with a unique mechanism of action that results in inhibition of the activation of the growth factor, myostatin, in skeletal muscle. Apitegromab is being developed as a potential first muscle-targeted therapy for the treatment of SMA. We are conducting SAPPHIRE, a pivotal Phase 3 clinical trial to evaluate the efficacy and safety of apitegromab in patients with nonambulatory Type 2 and Type 3 SMA (which is estimated to represent the majority of the current prevalent SMA patient population in the U.S. and Europe). We completed enrollment of SAPPHIRE in 2023, with the top-line data readout expected in the fourth quarter of 2024. If successful and if apitegromab is approved, we expect to initiate a commercial product launch in 2025.
Current wording
Our first product candidate, apitegromab, is a highly selective, fully human, monoclonal antibody with a unique mechanism of action that results in inhibition of the activation of the growth factor, myostatin, in skeletal muscle. Apitegromab is being developed as a potential first muscle-targeted therapy for the treatment of SMA. We are conducting SAPPHIRE, a pivotal Phase 3 clinical trial to evaluate the efficacy and safety of apitegromab in patients with nonambulatory Type 2 and Type 3 SMA (which is estimated to represent the majority of the current prevalent SMA patient population in the U.S. and Europe). We completed enrollment of SAPPHIRE in 2023. In October 2024, the Company announced positive top-line results that showed the study achieved its primary endpoint (see Recent Developments). We are planning to submit a U.S. Biologics License Application to the FDA and a European Union marketing authorization application to the EMA in Q1 2025. If apitegromab is approved, we expect to initiate a commercial product launch in 2025 in the United States, with a commercial launch of apitegromab in Europe to follow.
Previous wording
In October 2023, we announced an expansion of our therapeutic focus into cardiometabolic disorders by advancing our anti-myostatin program with SRK-439, a novel, fully human anti-myostatin monoclonal antibody, for evaluation in cardiometabolic disorders, including obesity. We are developing SRK-439 towards a potential IND submission in 2025. In June 2024, new preclinical data that support the potential of SRK-439 to increase lean mass and contribute to a favorable body composition following withdrawal from GLP-1 RA treatment were presented at the American Diabetes Association’s 84th Scientific Sessions. To inform the development of SRK-439, in May 2024 we initiated the Phase 2 EMBRAZE proof-of-concept trial, designed to assess the safety and efficacy of apitegromab to preserve muscle mass in individuals living with obesity and on background therapy of a GLP-1 RA, with data expected in the second quarter of 2025.
Current wording
In October 2023, we announced an expansion of our therapeutic focus into cardiometabolic disorders by advancing our anti-myostatin program with SRK-439, a novel, fully human anti-myostatin monoclonal antibody, for evaluation in cardiometabolic disorders, including obesity. We are developing SRK-439 towards a potential IND submission in 2025. In 2024, we have presented preclinical data at scientific conferences which support the potential of SRK-439 to increase lean mass and contribute to a favorable body composition in conjunction with a GLP-1 RA treatment. To inform the development of SRK-439, in May 2024 we initiated the Phase 2 EMBRAZE proof-of-concept trial, designed to assess the safety and efficacy of apitegromab to preserve muscle mass in individuals living with obesity and on background therapy of a GLP-1 RA. In September 2024, we announced that we completed enrollment in the Phase 2 EMRAZE proof-of-concept trial. Top-line results from this trial are expected in the second quarter of 2025.
Previous wording
Our second product candidate, SRK-181, a highly selective inhibitor of the activation of latent TGFβ, is being developed for the treatment of cancers that are resistant to checkpoint inhibitor therapies, such as anti-PD-1 or anti-PD-L1 antibody therapies (referred to together as anti-PD-(L)1 antibody therapies). SRK-181 is being evaluated in our Phase 1 DRAGON proof-of-concept clinical trial in patients with locally advanced or metastatic solid tumors that exhibit resistance to anti-PD-(L)1 antibody therapies. We completed enrollment of the DRAGON trial in December 2023 and continue to treat patients who remain on study. This two-part clinical trial consists of a dose escalation portion (Part A) and a dose expansion portion evaluating SRK-181 in combination with an approved anti-PD-(L)1 antibody therapy (Part B). Part B commenced in 2021 and includes the following active cohorts: urothelial carcinoma, cutaneous melanoma, non-small cell lung cancer, clear cell renal cell carcinoma (“ccRCC”), and head and neck squamous cell carcinoma. Safety, efficacy and biomarker data were presented in November 2023 at the Society for Immunotherapy of Cancer (“SITC”) 38 th Annual Meeting and in June 2024 at the ASCO annual meeting. The data showed encouraging responses in heavily pretreated and anti-PD-(L)1 resistant patients across multiple tumor types. We believe that the DRAGON trial achieved its study objectives by showing objective, durable clinical responses in patients with ccRCC resistant to PD-1 therapy above what is expected from continuing PD-1 alone. We anticipate that emerging data from the DRAGON trial will be presented at medical meetings in the future.
Current wording
Our second product candidate, SRK-181, a highly selective inhibitor of the activation of latent TGFβ, is being developed for the treatment of cancers that are resistant to checkpoint inhibitor therapies, such as anti-PD-1 or anti-PD-L1 antibody therapies (referred to together as anti-PD-(L)1 antibody therapies). SRK-181 is being evaluated in our Phase 1 DRAGON proof-of-concept clinical trial in patients with locally advanced or metastatic solid tumors that exhibit resistance to anti-PD-(L)1 antibody therapies. We completed enrollment of the DRAGON trial in December 2023 and continue to treat patients who remain on study. This two-part clinical trial consists of a dose escalation portion (Part A) and a dose expansion portion evaluating SRK-181 in combination with an approved anti-PD-(L)1 antibody therapy (Part B). Part B commenced in 2021 and includes the following active cohorts: urothelial carcinoma, cutaneous melanoma, non-small cell lung cancer, clear cell renal cell carcinoma (“ccRCC”), and head and neck squamous cell carcinoma. Safety, efficacy and biomarker data were presented in June 2024 at the ASCO annual meeting and in November 2024 at the Society for Immunotherapy of Cancer (“SITC”) 39 th Annual Meeting. The data showed encouraging responses in heavily pretreated and anti-PD-(L)1 resistant patients across multiple tumor types. We believe that the DRAGON trial achieved its study objectives by showing objective, durable clinical responses in patients with ccRCC resistant to PD-1
Previous wording
Since inception, we have incurred significant operating losses. Our net losses were $115.4 million for the six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $791.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future in performing our ongoing activities, as we:
Current wording
Since inception, we have incurred significant operating losses. Our net losses were $179.8 million for the nine months ended September 30, 2024. As of September 30, 2024, we had an accumulated deficit of $856.3 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future in performing our ongoing activities, as we:
Previous wording
To date, we have not generated any revenue from product sales. If we successfully complete clinical development and obtain regulatory approval for apitegromab, SRK-181, SRK-439 or any of our future product candidates, we may generate revenue in the future from product sales. In addition, if we obtain regulatory approval for apitegromab, SRK-181, SRK-439 or any of our future product candidates, we expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing and distribution activities. Based on current operating plans and excluding any contribution from revenues or external financing, we may not have sufficient cash, cash equivalents and marketable securities to fund our operating expenses and capital requirements beyond one year from the issuance date of the interim consolidated financial statements in this Quarterly Report on Form 10-Q, and therefore, we have concluded that there is substantial doubt about our ability to continue as a going concern. See the section entitled “Liquidity and Capital Resources” for more information.
Current wording
To date, we have not generated any revenue from product sales. If we successfully complete clinical development and obtain regulatory approval for apitegromab, SRK-181, SRK-439 or any of our future product candidates, we may generate revenue in the future from product sales. In addition, if we obtain regulatory approval for apitegromab, SRK-181, SRK-439 or any of our future product candidates, we expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing and distribution activities.
Previous wording
On October 11, 2023, we entered into an underwriting agreement with J.P. Morgan Securities LLC and Piper Sandler & Co., as representatives of the several underwriters named therein, relating to the issuance and sale of an aggregate of 12,408,760 shares of our common stock at $6.85 per share. Pursuant to the underwriting agreement, we also granted the underwriters a 30-day option to purchase up to 1,861,314 additional shares in an amount equal to 15% of the securities offered in the public offering (the “Option Shares”) of common stock. The underwriters exercised in full their option to purchase the Option Shares on October 12, 2023. Total proceeds of the transaction, including the Option Shares were approximately $92.4 million, net of underwriting discounts and estimated offering expenses. The offering closed on October 16, 2023.
Current wording
On October 8, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, Jefferies LLC and Piper Sandler & Co., as representatives of the several underwriters named therein (the “Underwriters”), relating to the issuance and sale of an aggregate of 10,265,488 shares of our common stock at $28.25 per share and pre-funded warrants to purchase 353,983 shares of our common stock. The offering price per pre-funded warrant was $28.2499, which equals the per share public offering price for the common shares less the $0.0001 exercise price for each such pre-funded warrant. The pre-funded warrants are exercisable at any time and only expire when exercised in full. The offering closed on October 10, 2024. Pursuant to the Underwriting Agreement, we also granted the Underwriters a 30-day option to purchase up to 1,592,920 additional shares (the “Option Shares”) of common stock, which was exercised in full on October 16, 2024. Total proceeds of the transaction, including the Option Shares were approximately $324.4 million, net of underwriting discounts and estimated offering expenses.
Previous wording
A significant portion of our research and development costs have been external costs, which we track on a program-by-program basis after a clinical product candidate has been identified. However, we do not allocate our internal research and development expenses, consisting primarily of employee-related costs, depreciation and other indirect costs, on a program-by-program basis as they are deployed across multiple projects.
Current wording
A significant portion of our research and development costs have been external costs, which we track on a program-by-program basis after a clinical product candidate has been identified. However, we do not allocate our internal research
Previous wording
General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and equity-based compensation expenses for personnel in executive, finance, business development, investor relations, legal, information technology, human resources and commercial functions. Other significant general and administrative expenses include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting, consulting services, and corporate expenses.
Current wording
General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and equity-based compensation expenses for personnel in executive, finance, business development, investor relations, legal, information technology, human resources and commercial functions. Other significant general and administrative expenses include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting, consulting services, and corporate expenses. We expect general and administrative expense to increase as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Previous wording
Research and development expense was $42.4 million and $26.9 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $15.5 million or 57.7%. The following table summarizes our research and development expense for the three months ended June 30, 2024 and 2023 (in thousands, except percentages):
Current wording
Research and development expense was $48.7 million and $30.3 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $18.4 million or 60.6%. The following table summarizes our research and development expense for the three months ended September 30, 2024 and 2023 (in thousands, except percentages):
Previous wording
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our clinical stage programs as we continue to advance our product candidates, including apitegromab through our Phase 3 SAPPHIRE clinical trial in SMA and ONYX, our long-term extension study for patients from both the TOPAZ and SAPPHIRE studies and costs associated with supporting our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will continue to invest in our pipeline. We expect costs of our SRK-181 program to decrease, as we completed enrollment of the Phase 1 DRAGON clinical trial in December 2023.
Current wording
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our clinical stage programs as we continue development activities for apitegromab in SMA, including the conduct and completion of our Phase 3 SAPPHIRE pivotal clinical trial in SMA, the conduct of ONYX, our long-term extension study for patients from both the TOPAZ and SAPPHIRE studies and the associated drug supply, as well as costs associated with supporting our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will continue to invest in our pipeline. We expect costs of our SRK-181 program to continue to decrease, as we completed enrollment of the Phase 1 DRAGON clinical trial in December 2023.
Previous wording
General and administrative expense was $17.1 million and $12.2 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $4.9 million or 40.2%. The increase was primarily associated with employee-related costs including salaries, benefits and non-cash equity-based compensation expense related to increased headcount, in addition to an increase in consulting and professional services. We expect general and administrative expense to increase as we continue to invest in commercial readiness activities.
Current wording
General and administrative expense was $16.1 million and $13.3 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $2.7 million or 20.4%. The increase was primarily associated with employee-related costs including salaries, benefits and non-cash equity-based compensation expense related to increased headcount, in addition to an increase in consulting and professional services. We expect general and administrative expense to increase as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Previous wording
The change in other income (expense), net was primarily attributable to an increase in interest income earned due to higher interest rates, partially offset by an increase in interest expense related to the Loan and Security Agreement, also due to higher interest rates.
Current wording
The change in other income (expense), net was primarily attributable to a decrease in interest income earned due to lower balances in our cash, cash equivalents and marketable securities.
Previous wording
The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands, except percentages):
Current wording
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands, except percentages):
Previous wording
Research and development expense was $85.5 million and $56.6 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $28.9 million or 51.0%. The following table summarizes our research and development expense for the six months ended June 30, 2024 and 2023 (in thousands, except percentages):
Current wording
Research and development expense was $134.2 million and $86.9 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $47.2 million or 54.3%. The following table summarizes our research and development expense for the nine months ended September 30, 2024 and 2023 (in thousands, except percentages):
Previous wording
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our clinical stage programs as we continue to advance our product candidates, including apitegromab through our Phase 3 SAPPHIRE clinical trial in SMA and ONYX, our long-term extension study for patients from both the TOPAZ and SAPPHIRE studies and costs associated with supporting our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will continue to invest in our pipeline. We expect costs of our SRK-181 program to decrease, as we completed enrollment of the Phase 1 DRAGON clinical trial in December 2023.
Current wording
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our clinical stage programs as we continue development activities for apitegromab in SMA, including the conduct and completion of our Phase 3 SAPPHIRE pivotal clinical trial in SMA, the conduct of ONYX, our long-term extension study for patients from both the TOPAZ and SAPPHIRE studies and the associated drug supply, as well as costs associated with supporting our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will continue to invest in our pipeline. We expect costs of our SRK-181 program to continue to decrease, as we completed enrollment of the Phase 1 DRAGON clinical trial in December 2023.
Previous wording
General and administrative expense was $32.5 million and $23.0 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $9.5 million or 41.2%. The increase was primarily associated with employee-related costs including salaries, benefits and non-cash equity-based compensation expense related to increased headcount, in addition to an increase in consulting and professional services. We expect general and administrative expense to increase as we continue to invest in commercial readiness activities.
Current wording
General and administrative expense was $48.5 million and $36.3 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $12.2 million or 33.6%. The increase was primarily associated with employee-related costs including salaries, benefits and non-cash equity-based compensation expense related to increased
Previous wording
Since our inception, we have not generated any product revenue and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations to date primarily with proceeds from the sale of our convertible preferred stock and units in private placements before our initial public offering (“IPO”), and sale of our common stock through our IPO in 2018, to Gilead in an exempt private placement, through multiple secondary public offerings and through ATM sales, as well as payments from our research collaborations and the Loan and Security Agreement entered into in October 2020 and subsequently amended (see Note 10).
Current wording
Since our inception, we have not generated any product revenue and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations to date primarily with proceeds from the sale of our convertible preferred stock and units in private placements before our initial public offering (“IPO”), and issuance of our common stock through our IPO in 2018, to Gilead in an exempt private placement, through multiple secondary public offerings, including our recent follow-on offering in October 2024 (see Note 12) and through ATM sales, as well as payments from our research collaborations and the Loan and Security Agreement entered into in October 2020 and subsequently amended (see Note 10).
Previous wording
During the six months ended June 30, 2024, our cash, cash equivalents and marketable securities balance decreased by $89.4 million. The change was primarily due to cash used to operate our business, including payments related to, among other things, research and development and general and administrative expenses as we continued to invest in our product candidates and supported our internal research and development efforts and made interest payments on our debt, partially offset by proceeds from the exercises of warrants and stock options.
Current wording
During the nine months ended September 30, 2024, our cash, cash equivalents and marketable securities balance decreased by $140.9 million. The change was primarily due to cash used to operate our business, including payments related to, among other things, research and development and general and administrative expenses as we continued to invest in our product candidates and supported our internal research and development efforts and made interest payments on our debt, partially offset by proceeds from the exercises of warrants and stock options.
Previous wording
Our current ATM program, established in November 2022, allows for the sale of shares of our common stock having an aggregate offering price of up to $100 million. As of June 30, 2024, the Company has sold 619,290 shares, generating net proceeds of $5.2 million, under the ATM program. No sales were made under the ATM program during the six months ended June 30, 2024. In October 2021, we sold 500,000 shares of our common stock through a sale in our prior ATM program (in place between March 2021 and June 2022) and received $13.1 million in net proceeds, after deducting commissions and fees.
Current wording
Our current ATM program, established in November 2022, allows for the sale of shares of our common stock having an aggregate offering price of up to $100 million. As of September 30, 2024, the Company has sold 619,290 shares, generating net proceeds of $5.2 million, under the ATM program. No sales were made under the ATM program during the nine months ended September 30, 2024. In October 2021, we sold 500,000 shares of our common stock through a sale in our prior ATM program (in place between March 2021 and June 2022) and received $13.1 million in net proceeds, after deducting commissions and fees.
Previous wording
During the six months ended June 30, 2024, 2,526,833 of the Company’s pre-funded warrants were exercised. As of June 30, 2024, the Company had 17,008,164 pre-funded warrants outstanding.
Current wording
During the nine months ended September 30, 2024, 2,526,833 of the Company’s pre-funded warrants were exercised. As of September 30, 2024, the Company had 17,008,164 pre-funded warrants outstanding.
Previous wording
During the six months ended June 30, 2024, 830,660 of the Company’s common warrants were exercised. As of June 30, 2024, the Company had 9,157,496 common warrants outstanding.
Current wording
During the nine months ended September 30, 2024, 830,660 of the Company’s common warrants were exercised. As of September 30, 2024, the Company had 9,157,496 common warrants outstanding.
Previous wording
The following table provides information regarding our cash flows for the six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following table provides information regarding our cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):
Previous wording
Net cash used in operating activities was $99.0 million for the six months ended June 30, 2024, and consisted of our net loss of $115.4 million and changes in our assets and liabilities of $2.0 million, partially offset by non-cash adjustments of $18.4 million. The non-cash adjustments are primarily from equity-based compensation.
Current wording
Net cash used in operating activities was $151.4 million for the nine months ended September 30, 2024, and consisted of our net loss of $179.8 million and changes in our assets and liabilities of $0.6 million, partially offset by non-cash adjustments of $29.0 million. The non-cash adjustments are primarily from equity-based compensation.
Previous wording
Net cash used in operating activities was $75.6 million for the six months ended June 30, 2023, and consisted of our net loss of $77.3 million, changes in our assets and liabilities of $14.0 million, partially offset by non-cash adjustments of $15.7 million. The changes in our assets and liabilities includes a $10.5 million change in accrued expenses, mostly related to external research and development expenses. The non-cash adjustments are primarily from equity-based compensation.
Current wording
Net cash used in operating activities was $107.9 million for the nine months ended September 30, 2023, and consisted of our net loss of $119.7 million, changes in our assets and liabilities of $11.9 million, partially offset by non-cash adjustments of $23.7 million. The changes in our assets and liabilities includes a $6.9 million change in accrued expenses, mostly related to external research and development expenses. The non-cash adjustments are primarily from equity-based compensation.
Previous wording
Net cash provided by investing activities was $84.0 million for the six months ended June 30, 2024 compared to net cash provided by investing activities of $74.7 million for the six months ended June 30, 2023. Net cash provided by investing activities for both periods was primarily associated with transactions involving our marketable securities.
Current wording
Net cash provided by investing activities was $119.3 million for the nine months ended September 30, 2024 compared to net cash provided by investing activities of $66.3 million for the nine months ended September 30, 2023. Net cash provided by investing activities for both periods was primarily associated with transactions involving our marketable securities.
Previous wording
Net cash provided by financing activities was $6.5 million for the six months ended June 30, 2024 compared to $5.8 million for the six months ended June 30, 2023. Net cash provided by financing activities for the six months ended June 30, 2024 was primarily attributable to proceeds from the exercise of warrants. Net cash provided by financing activities for the six months ended June 30, 2023 was primarily attributable to proceeds from the sale of common stock through our ATM.
Current wording
Net cash provided by financing activities was $6.7 million for the nine months ended September 30, 2024 compared to $6.0 million for the nine months ended September 30, 2023. Net cash provided by financing activities for the nine months ended September 30, 2024 was primarily attributable to proceeds from the exercise of warrants. Net cash provided by financing activities for the nine months ended September 30, 2023 was primarily attributable to proceeds from the sale of common stock through our ATM.
Previous wording
We expect our expenses to be substantial as we continue the research and development of apitegromab in SMA. In addition, if we seek marketing approval for apitegromab, or any of our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We expect to continue to incur costs related to SRK-181 as we continue to treat patients who remain on the Phase 1 DRAGON clinical trial. We expect to incur costs to support our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will support the development of our pipeline and any other preclinical programs. Furthermore, we expect to continue to incur costs associated with operating as a public company.
Current wording
We expect our expenses to be substantial as we continue the research and development of apitegromab in SMA. In addition, we will seek marketing approval for apitegromab, and if we seek marketing approval for any of our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We expect to continue to incur costs related to SRK-181 as we continue to treat patients who remain on the Phase 1 DRAGON clinical trial. We expect to incur costs to support our cardiometabolic program, including EMBRAZE, our Phase 2 proof-of-concept trial of apitegromab and our preclinical program, SRK-439. Additionally, we will support the development of our pipeline and any other preclinical programs. Furthermore, we expect to continue to incur costs associated with operating as a public company.
Previous wording
We expect that our existing cash, cash equivalents marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2025. However, we will require additional capital in order to complete clinical development and commercialization for each of our current programs. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:
Current wording
We expect that our existing cash, cash equivalents, marketable securities, cash available to us, together with the approximately $324.4 million in net proceeds from the follow-on offering completed in October 2024 will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2026. However, we will require additional capital in order to complete clinical development and commercialization for each of our current programs. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:
Previous wording
This management’s discussion and analysis is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates. Our actual results may differ from these estimates under different assumptions or conditions.
Current wording
This management’s discussion and analysis is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
therapy above what is expected from continuing PD-1 alone. We anticipate that emerging data from the DRAGON trial will be presented at medical meetings in the future.
Current report — wording carried from elsewhere
and development expenses, consisting primarily of employee-related costs, depreciation and other indirect costs, on a program-by-program basis as they are deployed across multiple projects.
Current report — wording carried from elsewhere
headcount, in addition to an increase in consulting and professional services. We expect general and administrative expense to increase as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Current report — wording carried from elsewhere
The change in other income (expense), net was primarily attributable to a decrease in interest income earned due to lower average balances in our cash, cash equivalents and marketable securities.
Current report — wording carried from elsewhere
consolidated financial statements prospectively from the date of change in estimates. Our actual results may differ from these estimates under different assumptions or conditions.