Scholar Rock Holding Corp (SRRK)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and the audited financial information and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods.

The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report, including those risks identified under Part II, Item 1A. Risk Factors.

We caution readers against placing undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

We are a global biopharmaceutical company dedicated to improving the lives of children and adults with spinal muscular atrophy (“SMA”) and additional rare, severe and debilitating neuromuscular diseases. As a leader in the biology of transforming growth factor beta (“TGFβ”) superfamily, our novel understanding of the molecular mechanisms of growth factor activation enabled the development of a proprietary platform for the discovery and development of monoclonal antibodies that locally and selectively target the precursor, or latent, forms of growth factors. Based on our innovative, proprietary, and scalable technology platform, we are building a world-leading anti-myostatin pipeline.

Our lead product candidates include apitegromab, a subcutaneous formulation of apitegromab, and SRK-439.

Apitegromab is a novel, investigational, fully human monoclonal antibody that inhibits myostatin activation by selectively binding the pro- and latent forms of myostatin in skeletal muscle. Myostatin is a catabolic agent that functions as a negative regulator of muscle mass, therefore inhibition of myostatin results in increased muscle mass and strength. Apitegromab is in development for the treatment of people with SMA and for the treatment of people with facioscapulohumeral muscular dystrophy (“FSHD”).

In October 2024, we announced positive top-line results in SAPPHIRE, a pivotal Phase 3 clinical trial to evaluate the efficacy and safety of apitegromab in patients with non-ambulatory 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). The study achieved its primary endpoint. At the March 2025 Muscular Dystrophy Association Clinical & Scientific Conference, we presented additional data from secondary endpoint analyses in which apitegromab demonstrated a clinically meaningful and consistent benefit in motor function across pre-specified patient subgroups. We submitted a BLA to the FDA in January 2025 and the BLA was granted priority review designation. Priority review designation conveys that the FDA has determined that if apitegromab is approved, it could offer significant improvement in the safety or effectiveness of treatment of the serious condition of SMA. In September 2025, we received a CRL from the FDA related to observations identified during an FDA site inspection of a third-party fill-finish facility. The facility was issued a Form 483 by the FDA in July 2025 and the inspection classification of this facility is official action indicated (“OAI”). The observations were related to the facility and were not specific to apitegromab. The CRL did not cite any other approvability concerns, including apitegromab’s efficacy and safety data or the third-party drug substance manufacturer. In November 2025, we completed an in-person Type A meeting with the FDA that included participation of representatives from the third-party fill-finish facility. Also in November 2025, the third-party fill-finish facility received a Warning Letter from the FDA. We resubmitted the apitegromab BLA in March 2026 with two third-party fill-finish facilities included, which was accepted by the FDA with a September 30, 2026 Prescription Drug User Fee Act (“PDUFA”) action date. In March 2025 we submitted to the European Medicines Agency (“EMA”) and received validation of our marketing authorisation application (“MAA”) for apitegromab for the treatment of SMA. If apitegromab is approved by the FDA and/or the EC, we expect to initiate a commercial product launch in the applicable jurisdictions upon approval.

A Phase 2 study evaluating apitegromab in patients with FSHD was initiated in the second quarter of 2026. We see potential for apitegromab broadly in additional rare, severe, and debilitating neuromuscular diseases where muscle atrophy is a key component of disease pathogenesis, and we are actively exploring indications beyond SMA and FSHD.

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In addition to the current intravenous (“IV”) formulation, we are developing a subcutaneous (“SC”) formulation of apitegromab. A Phase 1 study in healthy volunteers has been completed and demonstrated that SC apitegromab has favorable bioavailability and a comparable pharmacodynamic profile relative to IV apitegromab. Further development activities are ongoing, including planned FDA and EMA regulatory engagements.

Our clinical-stage pipeline also includes SRK-439, a novel, investigational, subcutaneously administered fully human anti-pro/latent myostatin antibody that has high inhibitory potency while maintaining selectivity towards myostatin. SRK-439 is being developed for the treatment of patients with rare, severe, and debilitating neuromuscular diseases. A Phase 1 study of SRK-439 in healthy volunteers is currently underway, with topline data anticipated in the second half of 2026.

Beyond these clinical-stage product candidates, our early-stage pipeline includes additional preclinical programs intended for the treatment of patients with rare, severe, and debilitating neuromuscular diseases.

As we focus our strategy on rare neuromuscular diseases, we are currently seeking partnerships for our additional programs. These programs include: SRK-181, a Phase 2-ready investigational inhibitor of latent TGFβ1 in development for the treatment of patients with solid tumors that are resistant to anti-PD-(L)1 antibody therapies; SRK-373, an investigational, highly selective inhibitor of the latent TGFβ1 isoform with selective activity in the fibrotic extracellular matrix, in preclinical development for the treatment of fibrotic diseases; and SRK-256, an investigational inhibitor of RGMc, or hemojuvelin, in preclinical development for the treatment of iron-restricted anemias. We are also seeking partners to further evaluate the potential for myostatin inhibition in combination with GLP-1 weight loss approaches following our positive Phase 2 EMBRAZE study, demonstrating proof-of-concept in the ability of apitegromab to drive statistically significant preservation of lean mass during tirzepatide-induced weight loss.

Using our innovative approach and proprietary platform, we are creating a pipeline of novel product candidates that selectively modulate growth factor activation implicated in rare, severe, and devastating neuromuscular diseases.

We have incurred significant operating losses since inception. Our net losses were $215.4 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $1.5 billion. We expect to continue to incur significant expenses and operating losses for the foreseeable future in performing our ongoing activities, as we:

•
develop our commercialization capabilities to support product sales, marketing and distribution activities;

•
continue development activities for apitegromab in SMA, including the ONYX study, our Phase 2 OPAL study for SMA patients under two years of age and the associated drug supply;

•
explore and continue development activities for apitegromab in other neuromuscular disorders, including our Phase 2 FORGE clinical trial for apitegromab in FSHD;

•
continue research and development activities for subcutaneous apitegromab and for our novel anti-myostatin program, including our Phase 1 clinical trial for SRK-439;

•
continue to discover, validate and develop additional product candidates through the use of our proprietary platform;

•
maintain, expand and protect our intellectual property portfolio;

•
hire additional research, development, commercial and other business personnel; and

•
continue to build the global infrastructure to support our operations as a global public company.

To date, we have not generated any revenue from product sales. If we successfully obtain regulatory approval for apitegromab we may generate revenue in the future from product sales. In addition, if we obtain regulatory approval for apitegromab we have and expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing and distribution activities.

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Financial Operations Overview

Operating Expenses

Research and Development

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts, preclinical studies, manufacturing, and clinical trials under our research programs, which include:

•
employee-related expenses, including salaries, benefits and equity-based compensation expense for our research and development personnel;

•
expenses incurred under agreements with third parties that conduct research and development and preclinical activities on our behalf;

•
expenses incurred under agreements related to our clinical trials, including the costs for investigative sites and contract research organizations (“CROs”), that conduct our clinical trials;

•
manufacturing process development, manufacturing of clinical supplies, commercial drug supply prior to FDA approval and technology transfer expenses;

•
consulting and professional fees related to research and development activities;

•
costs of purchasing laboratory supplies and non-capital equipment used in our internal research and development activities;

•
costs related to compliance with clinical regulatory requirements; and

•
facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks. Nonrefundable advance payments for research and development goods and services to be received in the future from third parties are deferred and capitalized. The capitalized amounts are expensed as the related services are p

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section has been derived from our consolidated financial statements and should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, the “Exchange Act” and are subject to the “safe harbor” created by those sections. In particular, statements contained in this Annual Report on Form 10-K that are not historical facts, including, but not limited to statements regarding our future expectations, plans and prospects, including without limitation, our expectations regarding the potential of the TGFβ program, the potential of apitegromab as a therapy in SMA and the timeline for and progress in developing apitegromab, the potential of SRK-181 as a cancer immunotherapy and the timeline for and progress in developing SRK-181, the potential for our anti-myostatin program as a therapy in cardiometabolic disorders, and liquidity, constitute forward-looking statements and are made under these safe harbor provisions. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "should," "could," "seek," "intends," "plans," "estimates," "anticipates," or other comparable terms. Forward-looking statements involve inherent risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We urge you to consider the risks and uncertainties discussed in greater detail under the heading "Risk Factors" elsewhere in this Annual Report on Form 10-K in evaluating our forward-looking statements. We have no plans to update our forward-looking statements to reflect events or circumstances after the date of this report. As a result of many factors, including those factors set forth under the heading "Risk Factors" elsewhere in this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a global biopharmaceutical company dedicated to improving the lives of children and adults with SMA and additional rare, severe and debilitating neuromuscular diseases. As a leader in the biology of TGFβ superfamily, our novel understanding of the molecular mechanisms of growth factor activation enabled the development of a proprietary platform for the discovery and development of monoclonal antibodies that locally and selectively target the precursor, or latent, forms of growth factors. Based on our innovative, proprietary, and scalable technology platform, we are building a world-leading anti-myostatin pipeline.

​

Our lead pipeline product candidates include apitegromab, a subcutaneous formulation of apitegromab, and SRK-439.

Apitegromab is a novel, investigational, fully human monoclonal antibody that inhibits myostatin activation by selectively binding the pro- and latent forms of myostatin in skeletal muscle. Myostatin is a catabolic agent that functions as a negative regulator of muscle mass, therefore inhibition of myostatin results in increased muscle mass and strength. Apitegromab is in development for the treatment of people with SMA and for the treatment of people with FSHD.

​

In October 2024, we announced positive top-line results in SAPPHIRE, a pivotal Phase 3 clinical trial to evaluate the efficacy and safety of apitegromab in patients with non-ambulatory 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). The study achieved its primary endpoint. At the March 2025 Muscular Dystrophy Association Clinical & Scientific Conference, we presented additional data from secondary endpoint analyses in which apitegromab demonstrated a clinically meaningful and consistent benefit in motor function across pre-specified patient subgroups. We submitted a BLA to the FDA in January 2025 and the BLA was granted priority review designation. Priority review designation conveys that the FDA has determined that if apitegromab is approved, it could offer significant improvement in the safety or effectiveness of treatment of the serious condition of SMA. In September 2025, we received a CRL from the FDA related to observations identified during an FDA site inspection of a third-party fill-finish facility. The facility was issued a Form 483 by the FDA in July 2025 and the inspection classification of this facility is OAI. The observations were related to the facility and were not specific to apitegromab. The CRL did not cite any other approvability concerns, including apitegromab’s efficacy and safety data or the third-party drug substance manufacturer. In November 2025, we completed an in-person

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Type A meeting with the FDA that included participation of representatives from the third-party fill-finish facility. Also in November 2025, the third-party fill-finish facility received a warning letter from the FDA and continues to work with the FDA to resolve the outstanding issues cited in the warning letter. We plan to resubmit the apitegromab BLA at such time after the facility resolves the cGMP deficiencies identified in the CRL, however, there can be no guarantee of the timing of the facility’s resolution of those deficiencies or that the FDA will approve apitegromab upon our resubmission of the BLA. In March 2025 we submitted to the EMA and received validation of our MAA for apitegromab for the treatment of SMA. Validation confirms that the application includes the essential regulatory elements required for scientific assessment of the MAA and the scientific evaluation process by the EMA’s Committee for Medicinal Products for Human Use can begin. If apitegromab is approved by the FDA or EMA, we expect to initiate a commercial product launch in the applicable jurisdictions upon approval.

​

A Phase 2 study evaluating apitegromab in patients with FSHD is expected to initiate in mid-2026. We see potential for apitegromab broadly in additional rare, severe, and debilitating neuromuscular diseases where muscle atrophy is a key component of disease pathogenesis, and we are actively exploring indications beyond SMA and FSHD.

​

In addition to the current IV formulation, we are developing a SC formulation of apitegromab. A Phase 1 study in healthy volunteers has been completed, demonstrating that SC apitegromab has favorable bioavailability and a comparable pharmacodynamic profile relative to IV apitegromab. Further development activities are ongoing, including planned FDA and EMA regulatory engagements.

​

Our clinical-stage pipeline also includes SRK-439, a novel, investigational, subcutaneously administered fully human anti-pro/latent myostatin antibody that has high inhibitory potency while maintaining selectivity towards myostatin. SRK-439 is being developed for the treatment of patients with rare, severe, and debilitating neuromuscular diseases. A Phase 1 study of SRK-439 in healthy volunteers is currently underway, with topline data anticipated in the second half of 2026.

Beyond our clinical-stage product candidates, our early-stage pipeline includes additional programs for the treatment of patients with rare, severe, and debilitating neuromuscular diseases.

As we focus our strategy on rare neuromuscular diseases, we are currently seeking partnerships for our additional programs. These programs include: SRK-181, a Phase 2-ready investigational inhibitor of latent TGFβ1 in development for the treatment of patients with solid tumors that are resistant to anti-PD-(L)1 antibody therapies; SRK-373, an investigational, highly selective inhibitor of the latent TGFβ1 isoform with selective activity in the fibrotic extracellular matrix, in preclinical development for the treatment of fibrotic diseases; and SRK-256, an investigational inhibitor of RGMc, or hemojuvelin, in preclinical development for the treatment of iron-restricted anemias. We are also seeking partners to further evaluate the potential for myostatin inhibition in combination with GLP-1 weight loss approaches following our positive Phase 2 EMBRAZE study, demonstrating proof-of-concept in the ability of apitegromab to drive statistically significant preservation of lean mass during tirzepatide-induced weight loss.

Using our innovative approach and proprietary platform, we are creating a pipeline of novel product candidates that selectively modulate growth factor activation implicated in rare, severe, and devastating neuromuscular diseases.

We have incurred significant operating losses since inception. Our net losses were $377.9 million for the year ended December 31, 2025. As of December 31, 2025, we had an accumulated deficit of $1.3 billion. We expect to continue to incur significant expenses and operating losses for the foreseeable future in performing our ongoing activities, as we:

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​

To date, we have not generated any revenue from product sales. If we successfully obtain regulatory approval for apitegromab we may generate revenue in the future from product sales. In addition, if we obtain regulatory approval for apitegromab we have and expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing and distribution activities.

​

Financial Operations Overview

Operating Expenses

Research and Development

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts, preclinical studies, manufacturing, and clinical trials under our research programs, which include:

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]