One-glance verdict
Overvalued
$11.79 our estimate vs market $45.50
Wall Street consensus: $70.44 (497.3% higher than our fair-value estimate)
286% above our estimate, beyond the bull case
Fundamentals snapshot
Scholar Rock Holding Corporation
SRRK · NMS · Healthcare · Biotechnology
Current price
$45.50
52-week range
$27.07 - $61.76
Market cap
$5.54B
Balance sheet
Healthy
-55.80x Concerning
Net cash $288.26M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 1/10 years.
- Risk Return on equity was -167.8% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 0.7% (peer median: 4.0%).
What this company does
Scholar Rock Holding Corporation
Scholar Rock Holding Corporation (SRRK) is a drug company trying to create new medicines for rare muscle diseases like spinal muscular atrophy. Their main money comes from developing these potential new drugs through research and clinical trials. This matters because if their drugs are successful, they could help many people with serious conditions.
How the company got here
Scholar Rock Holding Corporation was founded in 2012 by scientists from Harvard Medical School and Boston Children's Hospital, built on pioneering research into growth factors. The company's core idea is to selectively target these growth factors before they become active, which they believe leads to more precise and potentially safer treatments. Scholar Rock went public in 2018, and has since focused on developing its proprietary platform to create medicines for serious diseases, particularly rare neuromuscular conditions. A significant collaboration with Gilead in 2022 further validated their platform's potential in fibrotic diseases. The company has remained in the development phase, with no approved commercial products as of mid-2024, relying on collaborations for revenue while advancing its pipeline.
What it actually does
Scholar Rock is a biopharmaceutical company that focuses on discovering and developing new medicines. They use a special scientific approach that involves targeting specific proteins called growth factors. These growth factors play a role in many serious diseases. Scholar Rock's unique platform allows them to develop treatments that precisely target the inactive forms of these growth factors, aiming for more effective and safer therapies. Their work is primarily focused on rare and debilitating diseases, with a strong emphasis on neuromuscular conditions.
Apitegromab (for Spinal Muscular Atrophy and other neuromuscular diseases)
Apitegromab is Scholar Rock's leading drug candidate, primarily developed to treat spinal muscular atrophy (SMA), a rare genetic disease that affects nerve cells controlling muscles, leading to muscle weakness and wasting. It's also being explored for other rare neuromuscular diseases. Apitegromab works by inhibiting a protein called myostatin, which normally limits muscle growth. By blocking myostatin's activation, the drug aims to increase muscle mass and improve motor function. Scholar Rock has advanced apitegromab through clinical trials, and it has received designations from regulatory bodies like the FDA and EMA, indicating its potential for treating serious conditions with unmet needs. The company is also developing a subcutaneous (under-the-skin injection) version of apitegromab for patient convenience.
SRK-181 (for cancer)
SRK-181 is an investigational drug designed to treat certain types of cancer, specifically solid tumors that have become resistant to common immunotherapies like anti-PD-(L)1 antibodies. These therapies work by helping the immune system fight cancer, but they don't work for everyone. SRK-181 aims to overcome this resistance by targeting a specific growth factor, TGFβ1. By inhibiting TGFβ1, SRK-181 is intended to make these resistant tumors more susceptible to the effects of anti-PD-(L)1 therapies, potentially leading to tumor regression when used in combination. This program represents Scholar Rock's effort to apply its platform beyond neuromuscular diseases into the field of oncology.
SRK-439 (for rare neuromuscular diseases and cardiometabolic disorders)
SRK-439 is another drug candidate from Scholar Rock that targets myostatin, similar to apitegromab. It is being developed for rare neuromuscular diseases and also for cardiometabolic disorders, such as obesity. In preclinical studies, SRK-439 has shown potential in preserving lean muscle mass during weight loss and in improving body composition when used with other medications like metformin or GLP-1 receptor agonists. This indicates a potential role in weight management and related metabolic conditions, alongside its development for neuromuscular diseases.
SRK-373 (for fibrotic diseases)
SRK-373 is a drug candidate in the preclinical development stage, aimed at treating fibrotic diseases. Fibrosis is a condition where excessive scar tissue forms in organs, impairing their function. SRK-373 works by selectively inhibiting a specific form of the TGFβ1 growth factor that is associated with fibrosis in the body's tissues. The goal is to target the disease-causing aspects of TGFβ1 without interfering with its protective functions in the immune system, which could lead to a more targeted and safer treatment for conditions like liver or lung fibrosis.
SRK-256 (for iron-restricted anemias)
SRK-256 is in the preclinical development phase and is being investigated for the treatment of iron-restricted anemias. This condition occurs when there isn't enough iron available in the bloodstream for the body to use, even if iron is present in cells. It can be associated with chronic inflammatory conditions, kidney disease, and other serious illnesses. SRK-256 targets a specific pathway involved in regulating iron levels in the body, aiming to correct the imbalance and alleviate anemia.
What management is betting on now
Scholar Rock's main focus is on advancing its lead drug candidate, apitegromab, towards regulatory approval and commercialization for spinal muscular atrophy (SMA). They are also strategically expanding their pipeline by developing apitegromab for younger SMA patients and other rare neuromuscular diseases. Simultaneously, the company is investing in its other promising drug candidates, SRK-181 for cancer and SRK-439 for obesity and neuromuscular conditions, to diversify its therapeutic offerings and leverage its core scientific platform across multiple disease areas. Management is also exploring partnerships to maximize the potential of their innovative therapies.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-52.49M
FY2024 Q4
$-49.53M
FY2025 Q1
$-78.95M
FY2025 Q2
$-77.16M
FY2025 Q3
$-69.01M
FY2025 Q4
$-75.53M
FY2026 Q1
$-82.17M
FY2026 Q2
$-70.31M
Revenue
$0.00
Net income
$-109.90M
Diluted EPS
-0.84
Operating cash flow
$-70.31M
Free cash flow
$-70.31M
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Sources
Revenue
$0.00
Net income
$-105.51M
Diluted EPS
-0.83
Operating cash flow
$-82.10M
Free cash flow
$-82.17M
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Sources
Revenue
$0.00
Net income
$-90.97M
Diluted EPS
-0.74
Operating cash flow
$-75.50M
Free cash flow
$-75.53M
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Sources
Revenue
$0.00
Net income
$-102.22M
Diluted EPS
-0.90
Operating cash flow
$-68.92M
Free cash flow
$-69.01M
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Sources
Revenue
$0.00
Net income
$-110.03M
Diluted EPS
-0.98
Operating cash flow
$-76.94M
Free cash flow
$-77.16M
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Sources
Revenue
—
Net income
$-74.72M
Diluted EPS
-0.67
Operating cash flow
$-78.67M
Free cash flow
$-78.95M
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Sources
Revenue
—
Net income
$-66.45M
Diluted EPS
-0.62
Operating cash flow
$-49.51M
Free cash flow
$-49.53M
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Sources
Revenue
—
Net income
$-64.48M
Diluted EPS
-0.66
Operating cash flow
$-52.45M
Free cash flow
$-52.49M
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Sources
Is it cheap or expensive?
Fair value $11.79 vs current price $45.50
Wall Street consensus is the average analyst price target: $70.44 (497.3% higher than our fair-value estimate).
Our most-likely fair value is $11.79 a share — about 74.1% below today's price of $45.50, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $288.3M - more cash than debt. Interest coverage -55.8x.
Net debt
$-288.26M
Interest coverage
-55.80x
Scholar Rock Holding Corporation's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
SRRK
BASELINE
Scholar Rock Holding Corporation
Total debt $203.83M Interest coverage -55.80x This is the baseline the peer rows are being compared against.
Total debt $1.06B Interest coverage -17.25x Neither company has much profit cushion over interest right now.
Total debt $1.42B Interest coverage -5.89x Neither company has much profit cushion over interest right now.
Total debt $2.19B Interest coverage -4.53x Neither company has much profit cushion over interest right now.
What you should know
The case for and against SRRK
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 1/10 years.
Risks
-
Return on equity was -167.8% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 0.7% (peer median: 4.0%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-18.33x
P/B
21.80x
P/S
—
EV/EBITDA
-12.97x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
0.0%
Operating margin
0.0%
Net margin
0.0%
ROE
-167.8%
ROA
-58.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.80x
Current ratio
7.02x
Quick ratio
6.84x
Total debt
$203.83M
Total cash
$492.09M
Growth
How the business has been compounding
Revenue TTM
$0.00
Revenue 5Y CAGR
—
EPS TTM
-3.28
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-296.83M
Free CF TTM
$-300.64M
FCF margin
—
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
—
Last ex-div date
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