Scholar Rock, After a Year on Pause, Snags $47M to Take New Tack Against SMA

Spinal muscular atrophy is one of the ongoing success stories in biotech. But that doesn’t mean the story’s over.

Cambridge, Mass.-based Biogen won a first-of-its-kind FDA approval a year ago with a new antisense oligonucleotide, licensed from Ionis Pharmaceuticals. The drug, nusinersen (Spinraza), allows kids with a crippling disease to produce greater amounts of the SMN protein they need to keep their motor neurons working. A pivotal study showed that 40% of patients treated with that drug achieved improvement in motor milestones. None of the control patients did that well.

Right behind, Chicago-based AveXis has reported exciting Phase I results with an AAV-viral vector gene therapy to deliver a functional copy of the human spinal motor neuron (SMN) gene into cells of patients with SMA Type 1, the most severe form. Market valuation for that development stage biotech company: $3.5 billion.

Yet as is often the case, success often begs new questions, and creates new opportunities. Cambridge, Mass.-based Scholar Rock has just pulled down a new $47 million Series C financing to see if it can take a different tack against SMA – with an antibody designed to prevent activation of myostatin. The idea attracted a new investor, Invus, to lead the Series C deal. New investor Redmile Group joined the syndicate, along with all of the existing investors. They are Polaris Partners, Timothy Springer, ARCH Venture Partners, EcoR1 Capital, The Kraft Group, Fidelity Management and Research Company, and Cormorant Asset Management. The company has now raised $109 million in total since getting started in 2013.

While the groundbreaking genetic therapies are focused on the motor neurons, that might not always be enough. Surrounding muscles may not have enough strength to act on the neural instructions, at least in a meaningful way.

Think of the basic muscle power needed to sit up in a chair, or roll out of bed.

Nagesh Mahanthappa, CEO, Scholar Rock

“You have to remember that myostatin is a molecule that drives breakdown of muscle,” says Nagesh Mahanthappa, CEO of Scholar Rock. “If you inhibit the molecule that breaks it down, that should allow muscle to build up. But the missing part is you have to have the capability to build muscle up in the first place.”

Myostatin has long tantalized, and eluded, drugmakers over the past 20 years looking at various muscle-wasting conditions. There’s also been plenty of hype about drugs making “mighty mice.” Novartis, Regeneron, and Atara Biotherapeutics all came up short in clinical trials with myostatin inhibitors in 2015. That “formed a dark cloud” over Scholar Rock’s lead drug candidate, as Mahanthappa described in an insightful guest post for Timmerman Report in July.

Rather than plunge ahead into the clinic, Scholar Rock stopped to re-assess what it thought it knew about the biology. This put the clinical development plan on pause for about a year. One observation: Trials often failed in older patients, who naturally have less capacity to build up muscle once it’s been lost (sorry, readers over 40).

What if you could make a myostatin-directed antibody for younger patients, who have more natural muscle-building capacity? Sounds good, but as a member of the TGF-beta superfamily, there are a number of quite similar structures important to growth that you definitely don’t want your drug to interfere with, including GDF-11 and activin, he said. “If you’re going to try to treat a young developing organism, you need a molecule to be incredibly safe,” Mahanthappa said.

SRK-015 seemed clear on this count, as it specifically binds with a precursor form of myostatin that hangs out primarily in the extracellular matrix of skeletal muscle cells, waiting to be activated when needed (like when you have a broken arm in a cast and need to rebuild muscle when it’s removed).

This form of myostatin is structurally distinct from antibodies made to bind with mature myostatin or the myostatin receptor.

Exploring this new potential indication for a myostatin inhibitor, Scholar Rock had talks with the Spinal Muscular Atrophy Foundation. Even after a couple big successes from Biogen and AveXis, patient advocates saw a need. The company was encouraged by the newfound clarification that comes when anyone blazes a new regulatory trail at the FDA.

But to be sure it was on good footing, it made sense to spend another year on preclinical work in non-human primates. Non-human primates tended to be a more predictive of clinical trials than other animal models. That meant it was time to swallow hard and invest serious time and money (one year and an undisclosed amount of money) on the non-human primate work. When the data came back, researchers were happy to see Scholar Rock’s drug appeared to have a bigger effect on “fast twitch” muscle fibers associated with strength and power than on “slow twitch” muscles associated with endurance activities. The “fast twitch” muscle fibers that are important to muscle strength are often greatly affected in patients with SMA.

After a year of sorting through data, crafting a new plan, and executing on it, the company closed its Series C financing. It is now in position to start its first clinical trial in the first half of 2018, Mahanthappa said. Other indications for its myostatin antibody are still very much alive, and the company has other programs in preclinical development for cancer, fibrosis, and iron-restricted anemias.

It’s a harrowing thing for any company to see a “dark cloud” hang over its field. It can be the end. But Scholar Rock’s repositioning – or pivoting, whatever you prefer to call it – is the sort of nimbleness and resilience that investors love to see.

Oleg Nodelman of EcoR1 capital said his firm re-upped because “the management team at Scholar Rock is awesome. The company has a deep scientific basis coming out of Tim Springer’s lab (who is a ninja in my opinion) and with the recent addition of David Hallal [former Alexion CEO] to the Board we have the makings of a super hero movie!”

More specifically, Nodelman said SRK-015 doesn’t look like it would be pigeonholed into a tiny subset of SMA patients. It could be given in combination with the Biogen or AveXis treatments because of the complementary mechanism, or could be given as monotherapy.

“015 certainly has monotherapy potential as well as potential in combination with Biogen and Avexis as it goes after muscle strength and functionality directly. We view the other players in the space more as collaborators than competition,” Nodelman wrote.


Finding a Path in Biotech VC: The Long Run Podcast With Bob More

Today’s guest on The Long Run is Bob More.

He’s a managing director with Alta Partners, a healthcare-focused venture capital firm. More got started as a young pup in biotech in the 1980s. He moved around between big companies and small companies. He advanced to a couple well-known healthcare VC firms – Domain Associates and Frazier Healthcare Partners. Before joining Alta, he worked with the Bill & Melinda Gates Foundation on its equity investing strategy, and continues to advise the foundation part-time.

We talked here about some of his formative experiences in biotech, lessons learned, and about some timely areas of investment as we enter a New Year. More has an unusual perspective shaped by this smorgasbord of experiences. He’s a keen observer of people and trends. You may have gotten a glimpse of his thinking on Twitter @Bobmorevc. If you missed it, check his TR guest post from June on “Do’s and Don’ts for Startup Boards.”

Bob More, managing director, Alta Partners

Before we get started, thanks to the sponsors of the show. The Biotech Showcase, co-organized by EBD Group, is coming up Jan. 8-10 in San Francisco. Listeners of this podcast can get a $200 discount when registering. Just type in “longrun” – all one word – as the registration code when you sign up for Biotech Showcase.

Also, have you heard of Presage Biosciences? This company has a microinjector device that enables intratumoral microdosing of experimental cancer drugs. It enables researchers to evaluate several drugs at once against a single tumor. It’s being tested now in a clinical trial. To learn more, go to presagebio.com.

Lastly, are you resolving to get in shape in the New Year?

I’m torturing myself to get in the best shape of my life before climbing Mt. Everest this spring. The folks at Elite Fitness Training on Eastlake Avenue in Seattle are helping with personal training. Listeners of this show are invited to take a 10 percent discount at Elite Fitness on a custom plan to help you reach whatever your fitness goals might be. Email owner Dave Johnson at dave@elitefitnessnw.com to set up an initial consult. These guys aren’t cheap, but their training is worth every penny to me. Tell Dave I said so!

Now, join me and Bob More for The Long Run.


How Did BioMarin Make It? The Long Run Podcast With Daniel Levine & Dan Maher

Today on The Long Run, we’re talking about the history of BioMarin Pharmaceutical, one of biotech’s most successful rare disease drug developers.

The guests on the show are Daniel Levine and Dan Maher.

They are the co-authors of “A Rare Breed: How people and perseverance built BioMarin into one of the world’s most innovative companies.”

These two made for a good tag-team. Levine, the gravelly-voiced guy you’ll hear from, is a veteran biotech journalist. He knows the ingredients of a good story, and knows how to write clean and clear. Maher, or I should say MAH-er if I get my Irish pronunciation right, spent more than a decade of his career at BioMarin. He knew where a lot of the bodies were buried at BioMarin, and conducted more than 100 interviews with former and current employees to uncover much more of the company history than he knew. The legwork shows. This is a deeply researched book, but also a fast-moving, briskly paced story that doesn’t get bogged down in too much unnecessary detail.

I reviewed the book on Timmerman Report in October. Even though was a corporate sponsored book, and these efforts tend to be lackluster and airbrushed at best, I believe “A Rare Breed” is worth reading and thinking about. It provides revealing perspective on the rare disease drug development business, especially some of the subtler, underappreciated aspects of what makes biotech companies succeed or fail. It’s worth checking out on Amazon as a gift for the biotech bibliophile in your circle.

Thanks to the sponsors of The Long Run. The Biotech Showcase, co-organized by EBD Group, is coming up Jan. 8-10 in San Francisco. Listeners of this podcast can get a $200 discount when registering. Just type in “longrun” – all one word – as the registration code when you get your pass for Biotech Showcase. Thanks, EBD Group.

Now, I want to thank the newest sponsor of the show, Presage Biosciences. This company has a microinjector device that enables intratumoral microdosing of experimental cancer drugs. It enables researchers to evaluate several drugs at once against a single tumor. To learn more, go to presagebio.com.

Special thanks this week to David Shaywitz at Forbes, who included “The Long Run” as one of his recommended podcasts for health entrepreneurs.

Last thing. Bob More, a veteran biotech venture capitalist at Alta Partners, joined me for the next episode of The Long Run. We talk about how the industry has evolved since he started in the 1980s, how he approaches the job of being a biotech VC, and what areas he thinks are ripe for future investment.

Now, join me Daniel Levine and Dan Maher for The Long Run.


Walk & Talk With Me on Powell Street at #JPM18

JPM is right around the corner. You are probably packing your calendar with one-on-one meetings, programmed events, and evening receptions. So am I.

But this year, I’m adding a fun new wrinkle.  I’d like you to join me.

Let’s start with the basics:

  1. I need to train for the Everest Climb to Fight Cancer at Fred Hutch.
  2. San Francisco has steep hills.


  1. I will be bringing my heavy training backpack to San Francisco, filling it with jugs of water, and carrying it up Powell Street alongside the cable cars Jan. 7-10.

Donors to the Fred Hutch “Climb to Fight Cancer” campaign can join me for a brief “walk and talk” at JPM. We’ll take our picture so I can recognize you on social media for your support of cancer research. And you won’t even need to break a sweat. (I don’t expect you to walk all the way up the hill in your business attire … unless you want to.)

Walking & Talking in Seattle with Nancy Simonian, CEO, Syros Pharmaceuticals.

Every day, I’ll be starting these “walk and talk” workouts at the corner of Powell & Geary, in the middle of the biotech financing frenzy.

Here’s when to meet:

  • 2 pm, Sunday Jan. 7
  • 11 am, Monday Jan. 8
  • 11 am, Tuesday Jan. 9
  • 12:30 pm, Wednesday Jan. 10

There’s no need to RSVP. Just show up.

This is going to be fun. Take a break at for the “Walk and Talk” at JPM. Get a little fresh air, get the blood flowing, have a photo taken, and support the quest for cancer cures.

Make your tax-deductible donation to Fred Hutch HERE!

See you in San Francisco.



Biotech’s Test: Root for a Tax Windfall Or Support the Next Generation of Scientists?

Grad students are underpaid and underappreciated. Many barely scrape by. Stagnant grant funding for science and uncertain career prospects are the norm.

Yet we all know grad students are the mitochrondria of the scientific enterprise. Without them, PIs wouldn’t be looking like geniuses in Nature and Science. Biotech companies wouldn’t have enough of the worker bees they need.

Now we have a tax bill moving through Congress at breakneck speed that would slash corporate income taxes, the estate tax, and allow for a sweet deal on repatriating overseas cash. Surely, there’s a lot here that corporate boards like.

To achieve those objectives, the bill under consideration bashes graduate students over the head.

Dumb ideas flow like a river through my news feed every day. But this provision in the tax bill, to eliminate the tuition waiver on taxes for grad students, would kneecap one of the great competitive advantages of American industry. The way it works now, graduate students’ tuition waivers — which they get for doing the real work of teaching or conducting research — are deductible. Under the bill that passed the House last month, tuition waivers would be eliminated. That would subject students to higher taxes.

Biotech leaders concerned with long-term industry self-preservation ought to stop and think.

Check out this side-by-side analysis that I came across from a grad student at MIT. This spreadsheet was developed by Kathy Shield and Vetri Velan, a second-year nuclear engineering PhD student, and a third-year physics PhD student, respectively, at UC Berkeley. This spells it out for lowly grad students in the trenches at UC Berkeley and MIT – a couple of our best public and private research institutions.

Ask yourself, do you think you could live on $35,000 or $40,000 in a high-rent district like the San Francisco Bay Area or Greater Boston, as things are today? How about if someone raised your tax bill by $1,385, or maybe $9,584?

Students around the country are scrambling to run the numbers for themselves, and thinking about their Plan B. Many are protesting around the country, no surprise. The bill is in conference committee now, where differences get hashed out between the House and Senate versions.

The rubber hits the road here.

Why should you, a biotech leader, care? I spoke last week with leading faculty, staff, and grad students at MIT, UC Berkeley and Harvard. None of these people were left-wing bomb-throwers, but all were concerned about the financial hardship about to be imposed on grad students.

Here’s Phil Sharp, the Institute Professor at MIT and Nobel laureate:

Phil Sharp, Institute Professor, MIT.

MIT like other universities is at the forefront of job creation and training the next generation of leaders and workers. Taxing the tuition provided by MIT to graduate students is total nonsense and mis-directed. This will, even at MIT, reduce the number of students being trained, no matter what the leaders say. At many other universities, in addition, it will shift the demographics of graduate students to those with more family resources. There are several good aspects of what I understand are part of the tax bill, but this is certainly negative for the country and society.

Ashvin Bashyam, the president of the MIT Biotech Group and a fourth-year PhD candidate in Electrical Engineering & Computer Science at MIT advised by professor Michael Cima, said a lot of students are worried, but he has confidence that the MIT administration will find a way to soften the blow.

Ashvin Bashyam, fourth-year PhD student, MIT

Bashyam said:

In the short-term, it may cause us to pay higher taxes. But long-term, MIT administration is 100 percent on our side. They’ll do what they can to mitigate the effect…We at MIT are fortunate. We’re a private institution, very well-funded, and our administration is awesome. They’ll do what they have to do to make sure it’s not overly burdensome on us. But I don’t think that’s the case everywhere around the country…If you look at UT Austin, where I’m from, it’s a state institution where tuition is set by the state. I think [the tax change] could have a pretty big effect.

One Harvard graduate student in biology sounded nervous, but somewhat sanguine that things will work out in the end, much like Bashyam. “If it does come to it, universities could change administrative things on their ends,” this student wrote. “Right now, graduate students have a large ‘tuition’ each year but they don’t actually pay it as it is waived. So universities could theoretically just stop charging graduate students this tuition.”

Maybe some universities, especially the well-endowed ones, could shuffle some paper around to soften the blow on grad students. But ultimately, someone needs to pay to keep the enterprise healthy and vibrant. And if universities can’t or won’t cut tuition, how will this affect students that come from less-privileged family backgrounds?

Kathy Shield of UC Berkeley said she’s hearing about students having vastly different reactions to the tax bill, largely depending on their family situation.

Shield said:

We’ve heard from graduate students who say they’d go back to industry to pay for grad school, who wouldn’t have even started if they’d known this was going to happen, and who intend to move out of the US as soon as they graduate because of cheaper costs of living for them and their families. I’ve also heard from students who don’t expect this will change their living situation at all.

Science isn’t supposed to be just a playground for children of the wealthy. We like to think it’s supposed to function more like a meritocracy.

This tax bill represents a test of biotech industry values. How does the industry balance short-term objectives with long-term goals? Is it OK to pocket windfall tax benefits in the short-term, if that means forcing thousands of budding scientists into some other line of work?

If anything, we should be investing more in grad students. If institutions were willing to chip in a pittance — maybe $15,000 to $20,000 a year — for real support of graduate student associations, they’d get much more connectivity among students, and between students and their future employers. That’s one low-cost/high-benefit way that any great research institution could foster more entrepreneurship, and save companies money in on-the-job training.

Formal representatives of the biotech industry, as usual, have little to say about the plight of the human capital pipeline. BIO’s official statement from Nov. 2 applauded the work of House Republicans, saying “This reform is vital to maintaining American leadership in biotechnology innovation.” (Full statement here).

BIO president Jim Greenwood didn’t respond when I asked him Friday about BIO’s position on the tax increase for grad students.

Standing with students is the right thing to do. Decades of federal investment in basic science are bearing fruit. All you need to do is read the biotech headlines of the past week. Who are the people who will keep the wheels turning, the ones who will execute on the great ideas and come up with new ones? Why would anyone want to poison this wellspring of productivity, in exchange for a quick payday?

The paydays for everyone, for decades to come, could be so much larger.

You can contact your member of Congress by clicking here.


The Long Run Podcast: Steve Graham on Racism in Corporate America

Steve Graham is today’s guest on The Long Run podcast.

Chances are you don’t know his name, but Graham is a major behind-the-scenes player in biotech. Graham is the co-chair of the life sciences practice at the law firm Fenwick & West, and managing partner of the firm’s Seattle office. He has been working with biotech boards, handling corporate law, securities offerings, and mergers and acquisitions all the way back to the industry’s founding in the early 1980s. Immunex, the company that created one of the world’s best-selling drugs, Enbrel, was the client that compelled him to specialize in biotech.

Steve Graham, co-chair, Fenwick & West Life Science Practice

Six years ago, Graham was appointed co-chair of the Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies. He continues to hold that position. He’s been on a bunch of ‘Best Lawyers’ lists. In 2015, he was named “one of the 19 most influential people in D.C. who can affect your small business” by The Washington Post, specifically for his role with the SEC.

Graham also happens to be black.

Last spring, Graham wrote a revealing memoir, chronicling his rise to the top of corporate law. It’s called “Invisible Ink: Navigating Racism in Corporate America”.

I’ve known Graham for 15 years, going all the way back to when I profiled him for The Seattle Times. Looking back, I’m proud of the article. But I realize after reading his book that I only knew the barest outlines of the challenges he faced.

How did he make it? What advice does he have for young people of color? How can all of us create a more inclusive biotech industry? This is a hard conversation to have. This issue goes way beyond biotech, to every part of our society. But it’s an important conversation we need to have.

Thanks to the sponsors of The Long Run: EBD Group, co-organizer of the Biotech Showcase in San Francisco, and to Presage Biosciences.

Now, join me and Steve Graham for The Long Run.


The Long Run Podcast: Steve Holtzman on Becoming a Biotech Political Activist

Steve Holtzman is the latest guest on The Long Run podcast.

He’s the president and CEO of Boston-based Decibel Therapeutics, a venture-backed startup developing treatments for hearing loss.

Steve Holtzman, CEO, Decibel Therapeutics

Holtzman has been a familiar figure around biotech for more than 30 years. He has had leadership roles at Millennium Pharmaceuticals, Infinity Pharmaceuticals, and Biogen.

Little known fact: He was a founder and president of a startup called DNX Corp in the mid-80s. That company attempted to become the first transgenic animal company to make organs for transplant into humans. Since that experience, Holtzman has been steeped in many of the big bioethical debates.

Over the past year, Holtzman has become more outspoken about a wide range of political issues. We’re talking women’s health, racism, immigration, and the need for government funding of basic science. He has mobilized other biotech CEOs to speak out on these issues they have historically avoided.

I asked him why he’s felt compelled to step up his activism. This is a fascinating conversation.

Before you stick in those earbuds or turn up your car speaker volume, listen to this deal! The Biotech Showcase, co-organized by EBD Group, is coming up Jan. 8-10 in San Francisco. Listeners of The Long Run podcast can get a $200 discount if you type in “longrun” – all one word – as the registration code when you register for Biotech Showcase.

Click on the banner below to register, and take advantage of your $200 discount. Please also feel free to share this super-duper promo code with your friends on social media. By sharing this discount, you’ll give other people a great deal and help sustain the podcast.

Now, join me and Steve Holtzman for the next episode of The Long Run.


Female Contraception, Health and Liberty

[Note: This article was first published on the Leadership and Biotechnology Blog.]

Against the backdrop of tax reform, ongoing dialogue around sexual harassment, deepening investigations into the role of Russia in our elections, the crisis in Korea, attempts to dismantle the Affordable Care Act, and continued attempts to restrict immigration and remove Dreamers from the USA, President Trump’s assault on women’s reproductive rights may be seen as a minor sideshow.

Steve Holtzman, CEO, Decibel Therapeutics

But it isn’t.

Indeed, it is an assault on women through an attempt to control fundamental matters that affect their health and the exercise of their liberty.

The matter first drew attention during the campaign when he said that, were abortion to be made illegal, women receiving one “should be subject to some form of punishment.” His appointment of Tom Price as the (now departed) Secretary of Health and Human Services was the harbinger of the relentless attack, via executive rule and agency regulation, on women’s health rights that has characterized his first 10 months in office.

We hope with the appointment of Alex Azar as the new Secretary of HHS will be a sign of more thoughtful, human and rational policies. However, the President’s latest salvo against women’s rights is in place and his executive order rescinding the provision of the Affordable Care Act that requires health insurance plans to provide coverage of female contraception is unjust, ill conceived, unwise, and uneconomic.

Jeremy Levin, CEO, Ovid Therapeutics

Why should this latest action draw the attention and active opposition of we as biotechnology executives?  After all, aren’t views of sexual activity and, hence, contraception exclusively the purview of one’s personal moral perspective, not mandated by one’s professional position?

We humbly put forth a contrary perspective.

The US biotechnology industry leads the world in the discovery and development of innovative, transformative medicines to address major unmet medical and human needs. We are, therefore, dedicated to creating a country, and world, of healthier people. This is the raison d’etre of our industry and why we do what we do. The people for whom we to seek to provide better, healthier lives are not defined by economic class, ethnicity, nationality, sexual orientation, or gender.

While human health is a good in and of itself, it is also a primary precondition of enjoying our broader liberties; and, a healthy populace is key to the prosperity of a nation. National policies that promote health embody our nation’s commitment to a democracy in which liberty is maximized for all while also making plain good economic sense.

Unwanted pregnancies often create significant health risks. They also limit the ability of a woman to exercise her liberty to make choices that are best for her health, her work, and her family. Increases in the number of unwanted pregnancies directly result in an increased number of abortions, which no one—regardless of political or moral beliefs—desires.

The availability of contraception for all women who wish to use it is, therefore, essential to women’s health and the rights and liberty interests of women, as well as to decreasing the number of abortions and providing the basic conditions necessary to enable our country to grow and economically prosper. To achieve these interrelated goals, health insurance must include the provision of contraception as a mandatory component of coverage. This coverage enables women to choose the method that meets their needs and have consistent, uninterrupted access to it.

No matter where they work, regardless of economic status, women need and deserve access to birth control through health insurance. An employer’s beliefs have no place in a woman’s private decision to obtain birth control, just as they have no place in any other conversation about a patient’s healthcare or exercise of her rights and liberty.

Furthermore, the executive order reflects a profound bias against women and an inequality in the rights of men and women to engage in sexual activity without procreative intent, and of living with the potential consequences thereof. While, under the new rule, mandatory coverage of female birth control will cease, coverage of male erectile dysfunction drugs will continue.

Millions of women have gained access to birth control through the Affordable Care Act. The executive order puts all of them at risk of losing this vital aspect of their healthcare and basis of exercising a broad array of their rights. We believe that leaders of the biotechnology industry have an obligation to raise their voices in opposition to social policies that contravene the foundational bases of the existence of our industry as well as those that are inimical to the rights and interests of our employees.

As leaders of an industry committed to better health as critical to the prosperity of our nation and our liberty as a people, and of an industry whose world-leading position is completely attributable to our committed employees—over 60% of whom are women—we urge other biotechnology executives to raise their voices in opposition to the executive order rescinding the categorization of female contraception as a mandatory component of health insurance coverage.