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Investing.com - Truist Securities maintained its buy rating and $45.00 price target on Scholar Rock (NASDAQ:SRRK) stock on Thursday, highlighting the potential of the company’s apitegromab therapy for spinal muscular atrophy (SMA). According to InvestingPro data, SRRK has delivered an impressive 356% return over the past year, with analyst targets ranging from $45 to $57.
The firm hosted a conference call with neurologist Dr. Dusan Roncevic, who noted that apitegromab addresses the unmet need of muscle decline seen across SMA patients. The key opinion leader (KOL) indicated that data from the SAPPHIRE clinical trial was clinically meaningful and supports apitegromab as a combination agent with different approved SMA therapies. With a strong current ratio of 10.25 and more cash than debt on its balance sheet, InvestingPro analysis suggests Scholar Rock is well-positioned to continue its development programs.
Dr. Roncevic believes the data supports a broad label across ages and ambulatory status, and expects to use the drug broadly regardless of label as long as there are no reimbursement challenges. This perspective suggests potential for wider adoption than Truist currently models in its estimates.
Truist analyst Srikripa Devarakonda currently models uptake only in non-ambulatory patients, meaning broader usage would represent upside to the firm’s current projections. The firm’s maintained price target of $45.00 implies significant upside potential from Scholar Rock’s current trading levels.
The positive outlook for apitegromab comes as Scholar Rock continues development of the therapy, which aims to improve muscle strength and motor function in SMA patients who experience progressive muscle weakness despite existing treatments. While the company currently shows negative EBITDA of $269M, InvestingPro subscribers can access detailed financial health scores and 8 additional ProTips to better understand the company’s potential.
In other recent news, Scholar Rock announced its first-quarter financial results, revealing a net loss of $74.7 million, or $0.67 per share, which was slightly worse than analysts’ estimates of $0.66 per share. The company did not report any revenue for the quarter, consistent with the previous year. Scholar Rock’s research and development expenses increased to $48.7 million, reflecting investments in the commercial manufacturing and launch readiness for apitegromab, a drug for spinal muscular atrophy. Additionally, general and administrative costs nearly doubled to $28.4 million as the company scales up operations in anticipation of a potential product launch.
In other developments, the company reported positive results from its Phase 2 EMBRAZE trial, where the combination of apitegromab with tirzepatide preserved 54.9% more lean mass compared to tirzepatide alone during weight loss treatment. H.C. Wainwright maintained its buy rating on Scholar Rock, citing the promising data from the EMBRAZE trial. Furthermore, Scholar Rock appointed Rebecca McLeod as Chief Brand Officer and U.S. General Manager to lead the U.S. commercial launch of apitegromab. The company continues to prepare for the potential launch of apitegromab in the U.S. market, pending FDA approval, with a target action date set for September 22, 2025.
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