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Scholar Rock Rolls Up $36M To Move Muscle Drug To Clinical Trials

Xconomy Boston — 

In recent years, a number of drug companies have zeroed in on a protein called myostatin, which can limit muscle growth and even cause them to waste away in certain diseases. A startup called Scholar Rock is now part of that group, and the Cambridge, MA-based company said today it has raised the cash needed to advance its own muscle-protecting drug into clinical trials.

Scholar Rock has closed a $36 million Series B round, meaning the startup has now raised some $56 million in funding since its inception in 2014. Fidelity Management and Research and Cormorant Asset Management, so-called “crossover investors” that back both private and public companies, have joined Scholar Rock’s existing syndicate in the new funding, meaning the startup has amassed investors that might support an initial public offering in the future.

CEO Nagesh Mahanthappa (pictured above) says Scholar Rock will consider “a range of plans” for further financing once the time comes—an IPO isn’t necessarily “in or out”—but it all depends on the progress Scholar Rock makes. Its lead drug, known as SRK-015, should begin its first clinical trial in early 2017. That trial will test SRK-015 in healthy volunteers, not patients with a disease. But Mahanthappa hopes to see “proof of concept”—that the drug does, in people, what Scholar Rock expects it to do.

Specifically, Scholar Rock wants to see that SRK-015 enhances muscle growth by keeping the dormant forms of myostatin asleep. If the protein isn’t switched on, it can’t waste away muscle. In theory, this could help preserve or restore muscle function in certain diseases or prevent muscle atrophy in others. In September at a scientific meeting in Switzerland, Scholar Rock presented preclinical data that SRK-015 could spur muscle growth in animals.

If it reaches the clinic on time, SRK-015 would be the first big test of Scholar Rock’s attempt to create a variety of drugs by tweaking important proteins called growth factors in an unusual way.

Growth factors are involved in a number of crucial physiological processes, like cell growth. Aberrant levels of growth factors are implicated in many diseases. But unlike others who have developed, say, inhibitors of vascular endothelial growth factor, or VEGF—a target of cancers and age-related blindness—Scholar Rock doesn’t want to create drugs that latch onto the factors directly.

Rather, depending on the disease, it’s trying either to open tiny biological cages called “extracellular depots” that keep growth factors dormant and locked up, or keep those cages locked so the factors remain dormant and don’t escape to do damage.

Scholar Rock’s monoclonal antibody drugs target molecules in these depots and cause them either release the trapped, dormant growth factor, or keep it locked up.

Scholar Rock has a novel approach to tackling growth factors in disease, but it could have plenty of competition for SRK-015. Several large companies including Pfizer (NYSE: PFE), Regeneron Pharmaceuticals (NASDAQ: REGN), Novartis (NYSE: NVS), and Bristol-Myers Squibb (NYSE: BMY), are already developing myostatin-blocking drugs to treat Duchenne muscular dystrophy, cancer, and a form of age-related muscle loss called sarcopenia. No myostatin-blocking drug has been approved yet. One from Atara Biotherapeutics (NASDAQ: ATRA) of Brisbane, CA, recently failed a Phase 2 trial to treat muscle wasting in patients with failed kidneys.

Mahanthappa says the other drugs in development aim to boost muscle growth by either binding to myostatin directly  or targeting its receptor. The problem, he says, is that there are “multiple” growth factors with similar structures to myostatin, and its receptor is also a receptor for several other growth factors. That makes it hard to design a drug that only blocks myostatin, and doesn’t cause unintended effects. Mahanthappa contends Scholar Rock can avoid this problem and have a “more profound and durable effect” on muscles by keeping the latent form of myostatin inactive—locked in its extracellular cage.

He also says Atara’s experience was instructive: “That drug previously showed a pretty robust effect in cancer patients, so this really speaks to the fact that you have to think about clinical indication selection very carefully.”

Mahanthappa says Scholar Rock will focus for now on “primary myopathies”—muscle wasting caused by injury or disuse, rather than a disease like Duchenne or cancer. But Mahanthappa he declined to say which myopathy it will target first.

In addition to SRK-015, Scholar Rock is working with Johnson & Johnson on drugs for autoimmune disease and cancer. Targeting extracellular depots to either bottle up or free growth factors might help boost checkpoint inhibitor cancer drugs, Mahanthappa says.

The company is also looking into possible fibrosis treatments. In addition to its new funding, Scholar Rock announced today that fibrosis expert Scott Friedman of the Icahn School of Medicine at Mount Sinai in New York has joined its scientific advisory board.

“There’s a lot cooking within the company right now,” Mahanthappa says.

Scholar Rock was seeded by Polaris Partners and Harvard Medical School immunologist Timothy Springer. Arch Venture Partners, EcoR1 Capital, and The Kraft Group joined up for the company’s Series A round in September 2014.