← Back to SRRK filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Scholar Rock Holding Corp · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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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 performed.
A significant portion of our research and development costs have been external costs, which we track on a program-by-program basis after a clinical product candidate has been identified. However, we do not allocate our internal research and development expenses, consisting primarily of employee-related costs, depreciation and other indirect costs, on a program-by-program basis as they are deployed across multiple projects.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, as well as the associated clinical trial material requirements. We expect research and development costs for our product candidates to continue to be substantial for the foreseeable future as the development programs progress. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.
The successful development of apitegromab, SRK-181, SRK-439, SRK-373, SRK-256 and any future product candidates is uncertain. Accordingly, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development of apitegromab, SRK-181, SRK-439, SRK-373, SRK-256 and any future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:
•the scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development activities;
•Developing product candidates, whether alone or in collaboration with others;
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•establishing an appropriate safety profile;
•successful enrollment in and completion of clinical trials;
•whether our product candidates show safety and efficacy in our clinical trials;
•receipt of marketing approvals, if any, from applicable regulatory authorities;
•establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
•obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;
•significant and changing government regulation; and
•continued acceptable safety profile of the products following any regulatory approval.
Any of these variables, or other factors, with respect to the development of apitegromab, SRK-181, SRK-439, SRK-373, SRK-256 or any of our future product candidates could significantly change the costs and timing associated with the development of that product candidate.
General and Administrative
General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and equity-based compensation expenses for personnel in executive, finance, business development, investor relations, legal, information technology, human resources and commercial functions. Other significant general and administrative expenses include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting, consulting services, professional services and corporate expenses. We expect general and administrative expense to continue to be substantial as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income earned on our cash, cash equivalents and marketable securities, offset by interest expense incurred on our debt facility, including amortization of debt discount and debt issuance costs.
Results of Operations
Comparison of the Three Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands, except percentages):
Three Months Ended June 30, Change
2026 2025 $ %
Operating expenses:
Research and development $ 58,234 $ 62,401 $ (4,167 ) (6.7 )%
General and administrative 50,667 49,708 959 1.9 %
Total operating expenses 108,901 112,109 (3,208 ) (2.9 )%
Loss from operations (108,901 ) (112,109 ) 3,208 (2.9 )%
Other income (expense), net (995 ) 2,078 (3,073 ) (147.9 )%
Net loss $ (109,896 ) $ (110,031 ) $ 135 (0.1 )%
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Operating Expenses
Research and Development
Research and development expense was $58.2 million and $62.4 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $4.2 million or 6.7%. The following table summarizes our research and development expense for the three months ended June 30, 2026 and 2025 (in thousands, except percentages):
Three Months Ended June 30, Change
2026 2025 $ %
External costs by program
apitegromab $ 22,948 $ 27,956 $ (5,008 ) (17.9 )%
SRK-181 9 792 (783 ) (98.9 )%
SRK-439 3,760 2,575 1,185 46.0 %
Other early programs and unallocated costs 1,610 2,227 (617 ) (27.7 )%
Total external costs 28,327 33,550 (5,223 ) (15.6 )%
Internal costs:
Employee compensation and benefits 24,868 23,601 1,267 5.4 %
Facility and other 5,039 5,250 (211 ) (4.0 )%
Total internal costs 29,907 28,851 1,056 3.7 %
Total research and development expense $ 58,234 $ 62,401 $ (4,167 ) (6.7 )%
The decrease in research and development expense was primarily attributable to the following:
•A decrease in our external research and development costs of $5.2 million, which primarily consisted of:
o$5.0 million decrease in costs associated with apitegromab primarily due to a decrease in drug supply manufacturing and a decrease in clinical trial costs as our Phase 3 SAPPHIRE and our Phase 2 EMBRAZE trials are completed, partially offset by an increase in costs related to our Phase 2 OPAL trial in SMA patients under two years of age and our Phase 2 FORGE trial in FSHD patients, which was initiated during the second quarter of 2026;
o$0.8 million decrease in costs associated with SRK-181, as our Phase 1 DRAGON trial is completed; and
o$1.2 million increase in costs associated with SRK-439 including costs associated with our Phase 1 study in healthy volunteers, partially offset by decreases in preclinical costs and manufacturing development.
•A $1.1 million increase in internal research and development costs, which was primarily driven by an increase of $1.4 million in employee related costs, including salaries, bonus, benefits and payroll taxes related to increased headcount, an increase in non-cash equity-based compensation expense of $1.6 million related to increased headcount and severance related costs of $0.2 million, partially offset by a decrease in costs associated with our leadership transition in 2025, including $2.0 million in bonuses.
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our manufacture of drug supply, as well as development of our clinical stage programs as we continue development activities for apitegromab in SMA, the conduct of ONYX, the conduct of our Phase 2 OPAL trial in SMA patients under the age of two, the conduct of our Phase 2 FORGE trial in FSHD patients, as well as costs associated with supporting our anti-myostatin program, including SRK-439. Additionally, we will continue to invest in our pipeline.
General and Administrative
General and administrative expense was $50.7 million and $49.7 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $1.0 million or 1.9%. The total increase was primarily driven by investments in infrastructure to support commercial launch readiness for apitegromab, including an increase of approximately $9.3 million in employee-related costs including salaries, bonus, benefits and payroll taxes related to increased headcount, an increase of $2.2 million in non-cash equity based compensation expense, an increase of approximately $1.7 million in professional service fees and an increase of approximately $0.3 million in facility and other costs. The increase in headcount is partially associated with the hiring of our commercial and field-facing teams. These increases were partially offset by a decrease in costs associated with our leadership transition in 2025, including $8.6 million in non-cash equity-based compensation expense and $2.0 million in bonuses, as well as an overall decrease of $1.9
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million in severance related costs. We expect general and administrative expenses to continue to be substantial as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Other Income (Expense), Net
The change in other income (expense), net was primarily attributable to interest expense incurred on our debt facility, including amortization of debt discount and debt issuance costs, partially offset by an increase in interest income earned due to higher average balances in our cash, cash equivalents and marketable securities.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands, except percentages):
Six Months Ended June 30, Change
2026 2025 $ %
Operating expenses:
Research and development $ 110,048 $ 111,079 $ (1,031 ) (0.9 )%
General and administrative 100,869 78,120 22,749 29.1 %
Total operating expenses 210,917 189,199 21,718 11.5 %
Loss from operations (210,917 ) (189,199 ) (21,718 ) 11.5 %
Other income (expense), net (4,489 ) 4,445 (8,934 ) (201.0 )%
Net loss $ (215,406 ) $ (184,754 ) $ (30,652 ) 16.6 %
Operating Expenses
Research and Development
Research and development expense was $110.0 million and $111.1 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $1.1 million or 0.9%. The following table summarizes our research and development expense for the six months ended June 30, 2026 and 2025 (in thousands, except percentages):
Six Months Ended June 30, Change
2026 2025 $ %
External costs by program:
apitegromab $ 43,209 $ 47,257 $ (4,048 ) (8.6 )%
SRK-181 45 1,902 (1,857 ) (97.6 )%
SRK-439 5,519 6,854 (1,335 ) (19.5 )%
Other early programs and unallocated costs 2,820 3,682 (862 ) (23.4 )%
Total external costs 51,593 59,695 (8,102 ) (13.6 )%
Internal costs:
Employee compensation and benefits 48,550 41,711 6,839 16.4 %
Facility and other 9,905 9,673 232 2.4 %
Total internal costs 58,455 51,384 7,071 13.8 %
Total research and development expense $ 110,048 $ 111,079 $ (1,031 ) (0.9 )%
The decrease in research and development expense was primarily attributable to the following:
•A decrease in our external research and development costs of $8.1 million, which primarily consisted of:
o$4.0 million decrease in costs associated with apitegromab primarily due to a decrease in drug supply manufacturing and a decrease in clinical trial costs as our Phase 3 SAPPHIRE and our Phase 2 EMBRAZE trials are completed, partially offset by costs associated with our Phase 2 OPAL trial in SMA patients under two years of age and our Phase 2 FORGE trial in FSHD patients, which was initiated during the second quarter of 2026;
o$1.9 million decrease in costs associated with SRK-181, as our Phase 1 DRAGON trial is completed; and
o$1.3 million decrease in preclinical costs and manufacturing development for SRK-439, partially offset by increases in clinical trial costs as we conduct our Phase 1 study in healthy volunteers.
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•A $7.1 million increase in internal research and development costs, which was primarily driven by an increase of $3.7 million in employee related costs, including salaries, bonus, benefits and payroll taxes, an increase of $4.2 million in non-cash equity-based compensation expense related to increased headcount and an increase in severance costs of $1.0 million, partially offset by a decrease in costs associated with our leadership transition in 2025, including $2.0 million in bonuses.
Total research and development expenses are expected to continue to be substantial, driven by employee compensation costs and development costs associated with our manufacture of drug supply, as well as development of our clinical stage programs as we continue development activities for apitegromab in SMA, the conduct of ONYX, the conduct of our Phase 2 OPAL trial in SMA patients under the age of two, the conduct of our Phase 2 FORGE trial in FSHD patients, as well as costs associated with supporting our anti-myostatin program, including SRK-439. Additionally, we will continue to invest in our pipeline. We expect costs of our SRK-181 program to continue to decrease, as we completed the Phase 1 DRAGON clinical trial in June 2025.
General and Administrative
General and administrative expense was $100.9 million and $78.1 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $22.8 million or 29.1%. The total increase was primarily driven by investments in infrastructure to support commercial launch readiness for apitegromab, including an increase of approximately $20.9 million in employee-related costs including salaries, bonus, benefits and payroll taxes related to increased headcount, an increase of $8.5 million in equity-based compensation expense, an increase of approximately $8.9 million in professional service fees and an increase of approximately $1.1 million in facility and other costs. The increase in headcount is partially associated with the hiring of our commercial and field-facing teams. These increases were partially offset by a decrease in costs associated with our leadership transition in 2025, including $12.6 million in non-cash equity-based compensation expense, a decrease of $2.0 million in bonuses, as well as an overall decrease of $2.1 million in severance related costs. We expect general and administrative expenses to continue to be substantial as we continue to invest in building the infrastructure to support the commercialization of apitegromab.
Other Income (Expense), Net
The change in other income (expense), net was primarily attributable to our loss on extinguishment of debt and interest expense incurred on our debt facility, including amortization of debt discount and debt issuance costs.
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have not generated any product revenue and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations to date primarily with proceeds from the sale of our convertible preferred stock and units in private placements before our initial public offering (“IPO”), and issuance of our common stock through our IPO in 2018, to Gilead in an exempt private placement, through multiple secondary public offerings and through “at-the-market offerings” (“ATM”) sales, as well as payments from our prior research collaborations, prior issuances of debt and the 2026 Loan Agreement (as defined below) entered into in February 2026 (see Note 11).
The following table provides information regarding our total cash, cash equivalents and marketable securities at June 30, 2026 and December 31, 2025 (in thousands):
June 30, December 31,
2026 2025
Cash and cash equivalents $ 437,091 $ 323,527
Marketable securities 54,997 44,036
Total cash, cash equivalents and marketable securities $ 492,088 $ 367,563
During the six months ended June 30, 2026, our cash, cash equivalents and marketable securities balance increased by $124.5 million. The change was primarily due to proceeds from our debt facility, sales under our ATM program and the exercises of stock options and warrants, partially offset by cash used to operate our business, including payments related to, among other things, research and development and general and administrative expenses as we continued to invest in our product candidates and supported our internal research and development efforts, invested in building the infrastructure to support the commercialization of apitegromab and made interest payments on our debt.
Our current sales agreement with Jefferies, entered into in November 2022, allows for the sale of shares of our common stock from time to time in ATM offerings through Jefferies as the Company’s sales agent. During the six months ended June 30, 2026, we sold 3,543,692 shares of our common stock under the ATM program, generating net proceeds of $160.8 million.
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In February 2025, we entered into an Amended and Restated Loan and Security Agreement with Oxford Finance LLC (“Oxford”) and Silicon Valley Bank (“SVB”) (such agreement, as amended, the “Oxford Loan Agreement”) for up to $200 million of which $25.0 million from Tranche 1 was received in October 2020, $25.0 million from Tranche 2 was received in December 2021 and $50.0 million from Tranche 3 was received in September 2025, bringing the total outstanding balance under the Term Loans to $100.0 million. This debt facility was paid off in February 2026 (see Note 11).
In February 2026, we entered into a Financing Agreement (the “Financing Agreement”) and a Pledge and Security Agreement (the “Security Agreement,” together with the Financing Agreement, the “2026 Loan Agreement”) with certain funds managed by Blue Owl Capital Corporation (“Blue Owl”) for up to $350.0 million, of which $100.0 million of the initial term loan (the “Initial Term Loan”) was received in February 2026. In addition, the Financing Agreement includes an uncommitted incremental term loan facility that requires the consent of Blue Owl in an aggregate principal amount not to exceed $200.0 million. We used the proceeds of the Initial Term Loan upon the closing under the 2026 Loan Agreement to repay all outstanding obligations, totaling $103.7 million, under the Oxford Loan Agreement with Oxford and upon such repayment, terminated the Oxford Loan Agreement. The amount repaid by the Company included $100.0 million of outstanding indebtedness plus accrued and unpaid interest as of February 27, 2026 and fees. We recognized a loss on extinguishment of debt of $3.3 million in connection with the termination of the Oxford Loan Agreement. As a result of the termination, all credit commitments under the Oxford Loan Agreement were terminated and all security interests and guarantees executed in connection with the Oxford Loan Agreement were released. On March 31, 2026, the Company received $100.0 million from the next available tranche under the 2026 Loan Agreement, bringing the outstanding balance to $200.0 million (see Note 11).
During the six months ended June 30, 2026, 6,804,082 of the Company’s pre-funded warrants were exercised. As of June 30, 2026, the Company had 10,558,065 pre-funded warrants outstanding.
During the six months ended June 30, 2026, 250,000 of the Company’s common warrants were exercised. As of June 30, 2026, the Company did not have any common warrants outstanding.
Cash Flows
The following table provides information regarding our cash flows for the six months ended June 30, 2026 and 2025 (in thousands):
Six Months Ended June 30,
2026 2025
Net cash used in operating activities $ (152,408 ) $ (155,616 )
Net cash provided by (used in) investing activities (10,835 ) 120,020
Net cash provided by financing activities 276,904 10,643
Net increase (decrease) in cash, cash equivalents and restricted cash $ 113,661 $ (24,953 )
Net Cash Used in Operating Activities
Net cash used in operating activities was $152.4 million for the six months ended June 30, 2026, and consisted of our net loss of $215.4 million, partially offset by changes in our assets and liabilities of $17.0 million and non-cash adjustments of $46.0 million. The non-cash adjustments are primarily from equity-based compensation.
Net cash used in operating activities was $155.6 million for the six months ended June 30, 2025, and consisted of our net loss of $184.8 million and changes in our assets and liabilities of $9.2 million, partially offset by non-cash adjustments of $38.4 million. The non-cash adjustments are primarily from equity-based compensation.
Net Cash Provided by Investing Activities
Net cash used in investing activities was $10.8 million for the six months ended June 30, 2026 compared to net cash provided by investing activities of $120.0 million for the six months ended June 30, 2025.
Net cash provided by and used in investing activities for both periods was primarily associated with transactions involving our marketable securities.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $276.9 million for the six months ended June 30, 2026 compared to $10.6 million for the six months ended June 30, 2025. Net cash provided by financing activities for the six months ended June 30, 2026 was primarily attributable to $160.8 million in proceeds from the sale of common shares under our ATM program, $197.7 million in proceeds from
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our debt facility and $16.8 million from the exercise of stock options, partially offset by $103.1 million from the repayment of our Oxford Loan Agreement with Oxford and $2.5 million of debt issuance costs related to our Financing Agreement with Blue Owl.
Net cash provided by financing activities for the six months ended June 30, 2025 was primarily attributable to proceeds from the exercise of common warrants and stock options, partially offset by the net impact of our debt refinancing.
Funding Requirements
We expect our expenses to be substantial as we continue the research and development of apitegromab in SMA. In addition, we are seeking marketing approval for apitegromab, and we expect to incur significant commercialization expenses related to product sales, marketing, global manufacturing and distribution. We expect to continue to incur apitegromab development costs as we invest in trials to support other SMA patient populations, such as our Phase 2 OPAL clinical trial, and for programs in multiple other diseases beyond SMA where selective inhibition of myostatin activation may offer therapeutic benefit, such as our Phase 2 FORGE trial. We expect to incur costs to support our anti-myostatin program, including the close out activities for our Phase 2 EMBRAZE proof-of-concept trial of apitegromab and our Phase 1 trial for SRK-439. Additionally, we will support the development of our pipeline and any other preclinical programs. Furthermore, we expect to continue to incur costs associated with operating as a public company.
Based on our current operating model, we expect that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027. However, we will require additional capital in order to complete clinical development and commercialization for each of our current programs. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:
•the costs and timing of developing our product candidates and future product candidates, including costs associated with apitegromab in ONYX, our long-term extension study in SMA for patients from both the TOPAZ and SAPPHIRE studies, our Phase 2 OPAL trial in SMA patients under the age of two, our Phase 2 FORGE trial in FSHD patients, our Phase 1 trial of SRK-439 in healthy volunteers and the costs and timing of conducting future preclinical studies and clinical trials for SRK-373, SRK-256 or any other product candidates;
•the costs of future manufacturing of apitegromab, SRK-181, SRK-439, SRK-373, SRK-256 and any other future product candidates;
•the scope, progress, results and costs of discovery, preclinical development, laboratory testing and clinical trials for other potential product candidates we may develop, if any;
•the costs of identifying and developing, or in-licensing or acquiring, additional product candidates and technologies;
•the costs, timing and outcome of regulatory review of our product candidates;
•our ability to establish and maintain collaborations on favorable terms, if at all;
•the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements, license agreements, or other agreements we might have at such time;
•the costs of seeking marketing approvals for apitegromab;
•the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution for apitegromab, if approved;
•the amount of revenue, if any, received from commercial sales of apitegromab, if approved;
•the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•our headcount growth and associated costs as we expand our global business operations and research and development activities;
•the costs of supporting our global infrastructure and facilities, including equipment and physical infrastructure to support our research and development;
•the costs of operating as a global public company; and
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•the impact of adverse global economic conditions on our business, including increased costs associated with global tariff policies, which may exacerbate the magnitude of the factors discussed above.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, common stockholder ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of a common stockholder. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. Market volatility or other factors could also adversely impact our ability to access capital as and when needed. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Critical Accounting Estimates
This management’s discussion and analysis is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed consolidated financial statements prospectively from the date of change in estimates. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes to our critical accounting estimates from those described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.
Recent Accounting Pronouncements
We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report, they will not have a material impact on our financial statements or do not otherwise apply to our operations.
Smaller Reporting Company and Non-Accelerated Filer Status
Based on the market value of our common stock held by our non-affiliates as of June 30, 2025, we are no longer a smaller reporting company. Accordingly, we ceased to be eligible to use the requirements for a smaller reporting company beginning with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and are thus subject to additional disclosure and compliance requirements. Because we remained eligible to use the requirements for smaller reporting companies through December 31, 2025, we will remain a “non-accelerated filer” through December 31, 2026.
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