Scholar Rock Holding - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 focused on regulatory path and launch readiness following the September 22 CRL; management held an in-person Type A meeting with FDA (including Novo Nordisk/Catalent Bloomington) and now anticipates BLA resubmission and a U.S. launch following approval in 2026; EMA decision remains targeted for mid‑2026.
• OpEx rose sharply y/y, driven by pre‑launch investments; G&A jumped to $53.1M (from $16.1M y/y) on headcount, professional services, and one-time severance; R&D was $50.5M; no revenue was recognized; net loss was $102.2M (EPS -$0.90).
• Cash, cash equivalents, and marketable securities were $369.6M at 9/30; with ATM proceeds, debt draw, and potential ~$60M warrant exercises, runway extends into 2027; CFO outlined preference for expanding credit over equity to bridge to approval.
• Key catalysts: FDA reinspection and minutes from Type A meeting; clarity on BLA resubmission class/timeline; second U.S.-based fill‑finish site tech transfer with commercial capacity reserved from Q1 2026; EMA review progress; OPAL dosing in <2 yrs SMA; SRK‑439 first‑in‑human start in Q4 2025.

What Went Well and What Went Wrong

• What Went Well

  • Constructive in-person Type A meeting with FDA (Neurology and Office of Compliance present); Novo detailed remediation progress for Bloomington and affirmed reinspection readiness by year-end; company now guides to U.S. launch post‑approval in 2026.
  • Supply chain redundancy accelerated: a second U.S. fill‑finish facility selected with commercial capacity reserved beginning Q1 2026; tech transfer underway to de‑risk and support seamless commercial distribution.
  • Continued scientific/clinical momentum: dosing initiated in OPAL (SMA infants/toddlers <2 years), EMA MAA review ongoing (decision mid‑2026), and FDA cleared IND for SRK‑439 with Phase 1 dosing to start in Q4 2025.
  • Quote: “We know that it is not a matter of if, but when apitegromab will be approved in the U.S.” – CEO David Hallal.

• What Went Wrong

  • Regulatory delay: CRL tied to Catalent/Novo Bloomington CGMP status pushed U.S. approval/launch expectations from 2025 to 2026 (material timeline impact).
  • Operating leverage pressure: G&A rose to $53.1M (+$37.0M y/y) with pre‑launch infrastructure, headcount, professional services, and severance; R&D also up y/y on commercial manufacturing and people costs; net loss widened to $102.2M.
  • Revenue/EPS vs S&P consensus: pre‑revenue status resulted in a small revenue miss; EPS slightly below consensus; the company remains non‑commercial and dependent on financing and regulatory milestones.

Transcript

Operator (participant)

Good morning, ladies and gentlemen, and welcome to Scholar Rock's third quarter 2025 conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. This call is being recorded on Friday, November 14th, 2025. I would now like to turn the conference over to Scholar Rock. Please go ahead.

Laura Ekas (VP of Investor Relations)

Good morning. I'm Laura Ekas, Vice President of Investor Relations at Scholar Rock. With me today are David Hallal, Chairman and Chief Executive Officer, Akshay Vaishnaw, President of R&D, Keith Woods, Chief Operating Officer, and Vikas Sinha, Chief Financial Officer. For those of you participating via conference call, the accompanying slides can be accessed in the events section on the investors' page of our website. During today's call, as outlined on slide two, David will provide introductory remarks and a business update. Akshay will review our R&D progress. Keith will provide an update on our commercial readiness activities, and Vikas will provide a financial update. We will then open the call for questions.

Before we begin, I'd like to remind you that during this call, we will be making various statements about Scholar Rock's expectations, plans, and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any future date. I encourage you to go to the investors' and media section of our website for our most up-to-date SEC statements and filings. With that, I'd like to turn the call over to David. David?

David Hallal (Chairman and CEO)

Thank you, Laura, and good morning. Thanks to everyone for joining our third quarter earnings call today. In April, when I was appointed CEO after eight years in the board chairman role, and on the same day we brought in Akshay, Keith, and Vikas, we were confident that Scholar Rock was positioned to be the next great global biotech powerhouse. We base this on several factors. First, our conviction that the global opportunity with apitegromab in SMA alone offers the potential for many years of sustainable growth that will power our company through the end of this decade and into the next. Second, as world leaders in myostatin biology, our ability to deliver transformative therapies to patients suffering with additional rare, severe, and debilitating neuromuscular disorders. Third, leveraging our innovative platform to advance our novel subcutaneously administered myostatin inhibitor, SRK-439.

When we joined Scholar Rock, the most significant milestone ahead was the September 22nd PDUFA date for apitegromab in SMA, which had been granted priority review. Our BLA was supported by robust data demonstrating apitegromab's efficacy and safety for children and adults living with SMA, based upon our 188-patient prospective randomized double-blind placebo-controlled multinational phase 3 trial. This trial showed a statistically significant and clinically meaningful benefit in motor function, as measured by the gold standard Hammersmith Functional Motor Scale Expanded for SMA. While we were disappointed to receive a complete response letter on September 22nd, we were pleased that the strength of our phase III data was reflected in the FDA's review of our BLA and that the sole approvability issue referenced in the CRL was the status of our third-party fill-finish facility in Bloomington, Indiana, which is owned by Novo Nordisk.

We know that it is not a matter of if, but when apitegromab will be approved in the U.S. for patients living with SMA. We are emboldened by the commitment we have made to the more than 35,000 patients globally living with SMA who have received an SMN-targeted therapy. We are working expeditiously to deliver on our ambition that globally any patient with SMA who can benefit from apitegromab should have access to apitegromab. Now more than ever, we are confident in the significant opportunity that we have ahead of us to serve the SMA community as we work with determination to bring this important medicine to children and adults with SMA. This is indeed what we know well and what we do well. I would like to now provide a regulatory update on apitegromab.

We had our Type A meeting with the FDA on Wednesday. We are grateful to the agency for their full participation, particularly in the context of a government shutdown. The meeting was in person and included the relevant leaders and decision-makers from the agency, including the neurology division and the Office of Compliance. Our team was joined by Kenneth Hobby, President of Cure SMA, and representatives from Novo Nordisk. We were encouraged by the meeting. It was constructive and collaborative. It was clear that there is a shared understanding of the high unmet need for the SMA community and a shared sense of urgency to bring apitegromab to children and adults with this disease. Novo Nordisk detailed the progress they have made in implementing their remediation plan at the Bloomington facility and affirmed that they expect the facility to be ready for reinspection by the end of this year.

We discussed the path forward and await the final minutes of the meeting. We will continue to work closely with the FDA and anticipate resubmitting the BLA and U.S. launch following approval of apitegromab for children and adults with SMA in 2026. I'd like to now turn to adding redundancy to our supply chain. When Novo Nordisk purchased the Bloomington site in December of 2024, they planned to internalize the plant for their own products. In light of that, Scholar Rock implemented a plan to add an additional U.S.-based fill-finish facility. Now with the OAI classification, Scholar Rock has accelerated our timelines for an additional vialer. We have selected a world-class commercial facility that has a proven track record and has successfully completed recent site inspections, including with the FDA and EMA.

As you know, one of the bottlenecks to rapidly adding a new vialer is securing commercial capacity. This can be a lengthy process. Importantly, we have secured commercial capacity commencing in the first quarter of 2026, and tech transfer is now underway. We anticipate submitting an SBLA for this facility later in 2026. In summary, we will continue to work with urgency to bring this important medicine to the SMA community. We look forward to providing clarity on resubmission timelines as soon as we are able. In addition to the large opportunity we have to serve children and adults with SMA, we continue to strategically advance our pipeline. This includes the phase two OPAL study, progressing apitegromab in a second rare, debilitating neuromuscular disorder, as well as advancing SRK-439 into the clinic. Akshay will provide additional detail on these activities shortly.

Importantly, to reach our ambitions, I am pleased we opportunistically strengthened our balance sheet during the third quarter, and we continue to operate with a tight financial plan, which Vikas will discuss later in the call. This plan is aligned to thoughtful, strategic investments to drive long-term value creation. We remain confident in the strength of our strategy, the grit of our team, and the transformative potential of apitegromab and our pipeline. The regulatory challenges we face today are temporary, but the opportunities ahead to serve patients are extraordinary. With that, I'll turn the call over to Akshay to provide a more detailed update on our R&D progress. Akshay?

Akshay Vaishnaw (President of R&D)

Thank you, David, and good morning, everybody. As David noted, we continue to work with urgency to bring apitegromab to children and adults with SMA as quickly as possible. SMA is a rare, severe neuromuscular disease resulting in irreversible loss of motor neurons and progressive muscle wasting that diminishes the independence of both children and adults. Apitegromab has the potential to reverse the trajectory of SMA from a loss of motor function to a gain of motor function, as demonstrated in the phase III SAPPHIRE study, underscoring the importance of the potential benefit of this therapeutic. I'd now like to turn to Wednesday's Type A meeting. I was pleased to lead our team at that meeting on Thursday. As David said, the meeting was in person and included the relevant leaders and decision-makers from the agency, including the neurology division and the office of compliance.

Our team was joined by Kenneth Hobby, President of Cure SMA, and representatives from Novo Nordisk. The meeting was constructive and collaborative. We reviewed the comprehensive data from the apitegromab development program, including the phase II TOPAZ study, which demonstrated that delayed treatment results in suboptimal motor function outcomes. These data underscore the impact of delayed treatment and the urgency to make apitegromab available to the SMA community. At the Type A meeting, it was clear that the CRL we received on September 22nd was based solely on the need for the Bloomington facility to be in compliance with CGMP or current good manufacturing practice regulations. During the meeting, Novo Nordisk detailed the progress they've made in implementing a robust remediation plan at the Bloomington facility.

Novo Nordisk also shared with the FDA that it expects the facility to be ready for inspection by the end of the year. We remain in close coordination with Novo Nordisk as we await the minutes from the Type A meeting. After Novo's completion of remediation of the Bloomington facility and a site inspection by the FDA, we anticipate resubmission of the BLA and U.S. launch following approval of apitegromab in 2026. As part of our long-term growth plans to serve patients around the world with apitegromab, we're also accelerating timelines to bring a second fill-finish facility online. This process requires rigorous validation and regulatory approval to ensure the same quality, safety, and efficacy of the drug product. Importantly, we've secured commercial capacity commencing in the first quarter of 2026 and anticipate submitting an SBLA for the second facility later in 2026.

Outside of the U.S., we continue to expect a decision from the EMA on our apitegromab marketing authorization application, or MAA, near the middle of next year. Further to our commitment to the broad SMA community, we announced today that we've initiated dosing in our phase two OPAL trial evaluating apitegromab in infants and toddlers under the age of two. The trial is enrolling participants who have been treated with an SMN1 targeted gene therapy or who are receiving treatment with an approved SMN2 targeted therapy. It is designed to investigate two different doses of apitegromab for a duration of 48 weeks and will assess PK, PD, efficacy, and safety. In the OPAL study, early intervention with apitegromab could support muscle during a critical early development phase, complementing SMN targeted therapies that aim to preserve motor neurons.

By promoting muscle growth when motor neurons and muscles are still forming, apitegromab has a unique opportunity to improve motor outcomes in young children with SMA. Beyond SMA, we're on track to initiate clinical development activities for apitegromab in a second neuromuscular disorder by year-end. We plan to provide additional information on the disease and the clinical development strategy in early 2026. Finally, we continue to advance our world-leading anti-myostatin platform beyond apitegromab. The FDA has cleared the IND for SRK-439, and we're on track to initiate a phase one study in healthy volunteers before the end of this year. This program builds on the validated approach that delivered apitegromab. Specifically, 439 was designed to be an innovative subcutaneously administered myostatin inhibitor binding to both pro and latent myostatin with high affinity and selectivity.

Based on preclinical data, 439 has the potential to potently inhibit myostatin and increase muscle mass. We expect to have data from the SAP portion of the phase one study in 2026. In summary, our focus remains on bringing apitegromab to patients and investing with financial discipline to deliver on the promise of our broader pipeline. The strength of our data and the momentum across our programs gives us confidence in the impact we can deliver. Now, at this point, I'll turn the call over to Keith to discuss our commercial launch strategy and planning. Keith?

Keith Woods (COO)

Thanks, Akshay. The SMA community is demanding more. Even with currently available treatments, they need a treatment that directly addresses progressive muscle wasting. Apitegromab demonstrated that ability in our phase III SAPPHIRE study, and we will be ready to deliver apitegromab to the SMA community upon approval. This is not a matter of if, but when. Our understanding for the demand of apitegromab and our confidence in its potential to address the unmet need for children and adults with SMA continues to strengthen. As we look at SMA globally, nearly a decade following the launch of the first SMN-targeted therapy, the demand for treatment continues to grow. After the first three quarters of 2025, annual revenue for current SMA treatments are trending to approximately $5 billion globally.

With the continued growth of SMN-targeted therapies, the need for the world's first muscle-targeted therapy is greater than it has ever been before. Our small, lean, and highly experienced U.S. customer-facing team is active in the field, and we are using this additional time to enhance our engagement activities and to strengthen our performance against key pre-launch readiness metrics. As a reminder, we're just under four months into our pre-commercial field deployment, whereas most biotech companies typically benefit from a longer runway prior to approval. Nationwide, there are approximately 140 SMA treatment centers and more than 2,600 SMA prescribing physicians. With this additional time, we are working to both broaden and deepen our engagement with these potential prescribing physicians. However, an SMA patient is not just treated by one of these physicians, but by a broader cross-specialty SMA treatment team.

This team can include physical therapy, pulmonology, orthopedics, and more. This additional time is enabling us to better understand the patient journey and the roles of the SMA treatment team in each of these 140 treatment centers and how they influence patient care. Additionally, our market access team is expanding their focus beyond that of national payers to also include top regional payers. This builds on our ambition that any patient with SMA who can benefit from apitegromab should have access to apitegromab. Furthermore, our unwavering commitment to the SMA patient community continues by a partnership at local and national events and to educate on the importance of targeting muscle. We are deepening our collaboration with the advocacy groups, and we are also building lasting relationships, one patient, one caregiver, one family at a time.

In Europe, our efforts continue to drive SMA education and awareness, laying the groundwork to ensure we reach patients efficiently across key markets. Our opportunity to serve patients around the world in SMA is significant. There are an estimated 35,000 people with SMA who have received an SMN-targeted therapy and who could be eligible for treatment with apitegromab. We are making strategic, disciplined investments in our launch infrastructure, and we will be ready to execute rapidly once apitegromab is approved. In short, we are ready. The strategy is clear. The team is in place, and our commitment to the SMA community has never been stronger. Now, I will turn the call over to Vikas. Vikas?

Vikas Sinha (CFO)

Thank you, Keith. Our overarching objectives are to fund our R&D activities to expand our leadership in the myostatin and muscle space, to support a strong commercial launch, and to extend our runway to meet our eventual timelines for apitegromab approval. In line with these objectives, I'm pleased to provide our third quarter financial results and to discuss our approach to managing our cash runway and investment prioritization moving forward. Turning first to our third quarter results, we ended the third quarter with $369.6 million in cash and cash equivalents. For the quarter, we reported $103 million in operating expenses, which includes $18.3 million in non-cash stock-based compensation. Excluding stock-based compensation, operating expenses were $85.3 million, which reflects ongoing investments in infrastructure to support apitegromab regulatory approval, commercial readiness, and our clinical pipeline. During the third quarter, we strengthened our balance sheet, adding $141.7 million.

This cash came from two sources. First, we executed our ATM and sold approximately 2.8 million shares, which resulted in net proceeds of $91.7 million. Second, we drew down $50 million from our existing debt facility. As we await apitegromab approval, we continue to operate with a tight financial plan focused on thoughtful capital allocation to advance our clinical pipeline and strategic investments to support commercial readiness. Accordingly, we have adjusted our go-forward operating plan. We have deferred investments across a number of areas, including new hiring, launch expenses that are gated to approval, certain R&D activities, including a third indication for apitegromab, and other discretionary spend.

Now, I'll turn to the six prioritized investments we are making: the acceleration of a second fill-finish facility for apitegromab, SMA commercial launch readiness, ONYX, the apitegromab extension study, the phase II OPAL study, the second indication for apitegromab, and the commencement of SRK-439's clinical development. Turning to our balance sheet, our current cash balance is $369.6 million, which we expect to be augmented by approximately $60 million in cash from the exercise of outstanding common warrants by year-end. With this, we expect our cash to be sufficient to fund operations into 2027. This cash runway has conservative assumptions and does not reflect any upside from potential sale of apitegromab or a priority review voucher. To further strengthen our balance sheet, we intend to expand our credit facility while preserving our non-diluted financing options.

We will provide further clarity on this, as well as our anticipated operating expenses for 2026 during our fourth quarter earnings call. Scholar Rock continues to operate from a position of financial strength, with a disciplined approach to capital allocation and a clear focus on supporting our strategic priorities. With that, I'll turn the call back to David. David?

David Hallal (Chairman and CEO)

Thanks, Vikas. In closing, Scholar Rock remains focused on near-term execution while building with financial discipline for the future. Our conviction in apitegromab and in our broader strategy is stronger than ever, and we are moving with urgency and purpose to deliver meaningful impact for patients. Our priorities are clear: execute with urgency to bring apitegromab, the world's first and only muscle-targeted treatment that improves motor function to children and adults living with SMA, as rapidly as possible, advance apitegromab development activities in a second rare debilitating neuromuscular disease, and that will be followed by additional indications where we can have a transformative impact for patients. We want to progress SRK-439 into the clinic and continue to invest in our future with discipline to support these high-value initiatives.

Before I close, I want to share my sincere appreciation for Cure SMA and the SMA patient community. Over these past weeks, I have had the opportunity to meet with many individuals and families living with SMA, and the words of support that have been shared with us and with me directly have been tremendously meaningful as we work harder, better, and faster to bring this impactful medicine to those who can benefit. With that, we'll now open the line for questions. Operator?

Operator (participant)

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourselves to one question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mani Foroohar from Leerink Partners.

Mani Foroohar (Senior Managing Director)

Hey, guys. Thanks for taking the question. Congrats on the progress through what's been obviously a choppy period for everyone in the government. I think a couple of quick questions. I know I'm violating the one-question rule. One, in terms of thinking about further financing opportunities to top up the tank as necessary, how do you think about debt versus royalty/equity? How do you think about relative cost of capital and what's the most appropriate use once you get to a launch? Another commercial question. In the early days of launch, it is probable that you will be transitioning from one facility to another. To what extent does that introduce any operational risk going from product from one facility to another, and how can that be addressed ahead of time by you guys now?

David Hallal (Chairman and CEO)

Thanks, Mani. Why do not we take the first question first with Vikas on the financing options, and then I will come back on the redundancy of supply chain with fill-finish. Vikas?

Vikas Sinha (CFO)

Yeah. Thank you, David. Hey, Mani. Our first objective here is to bridge the financing till the approval, and the first path to go from the lowest cash to capital is to extend our loan facility a little bit more. We're in discussions with that. That'll be our first opportunity. Royalty probably comes next, and if it goes too long and then we have to take a little bit of equity, that'll be the last and the most expensive one, which we are trying to avoid at any cost. It's trying to get it as more non-diluted first. Does that answer your question?

Mani Foroohar (Senior Managing Director)

Yeah. So a follow-up. That would imply that, relatively speaking, we should expect you guys to wind down/use the ATM much less going forward. How does that fit into the strategy?

Vikas Sinha (CFO)

Yeah. Obviously, our first objective is to work with the loan facility and expand upon that. ATMs are put in place just to take some small augmentation of the capital at an opportunistic view. We did take it down in the last quarter because we had only $50 million loan facility available. We are expanding that loan facility as we discuss, and as soon as we have the new facility in place, we will share it with all of you.

David Hallal (Chairman and CEO)

Mani, regarding the second vial, a couple of bottlenecks I've shared with you and others in the past. One of the big ones I highlighted in the call is obviously finding a commercial line that is available, that has got the ideal configuration for our vial. Our team, under the leadership of Lisa Wyman, our Chief Technical and Quality Officer, just did an extraordinary job in accelerating our second vial progress to secure commercial capacity in Q1 and commence tech transfer in lightning speed since that middle of October timeline when the OAI hit. We thought that that was really important. Now, to get there and to get there quickly, you want to change as little as possible in your second vial as in your primary vial, whether or not it's vial configuration, analytical testing. That actually helps you with speed as well.

Those are the things that we'll be focused on. The impact in the marketplace really should be almost seamless. Whether or not we are distributing apitegromab from the Bloomington facility or the new second vial, it should really be quite seamless operationally to the marketplace, and we would expect it to be that way. Thank you.

Mani Foroohar (Senior Managing Director)

All right. Thanks, guys. I know I squeezed three questions in there. Sorry.

David Hallal (Chairman and CEO)

No, that's okay.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Eric Schmidt from Cantor.

Eric Schmidt (Biotechnology Analyst)

Thanks for taking my question and congrats on the progress as well. David and team, for those of us who've kind of been reading the gory play-by-play around the Catalent facility in Bloomington and know some of the prior history and all the past issues, how do you kind of provide confidence that this remediation effort is on good footing and that the inspection will prove positive? Maybe secondarily, do you expect that to be a class one or a class two acceptance for the resubmission? Thank you.

David Hallal (Chairman and CEO)

Thanks, Eric. No doubt there is a history in the facility. We think the history is really anchored around the quality system, the quality culture in the facility. I think importantly, it largely links back to ownership that did not include sort of the steady hand of Novo Nordisk and their commitment to quality and compliance. One of the things that I've been saying often, and certainly the gory details are gory, right? We got the observations, and we notified you all of those observations back on August 6, our last earnings call, which feels like a lifetime away now. We have kind of been riding through the CRL and the OAI.

What we have had a front row seat to is the collaboration with Novo, the commitment from the top of the organization, the changes in the staff that they are making, the integration of the Novo quality system into that facility, and then the substantial progress that they've been making on a robust remediation plan, which, as they noted to the FDA on Wednesday, they feel like the facility is going to be reinspection ready by the end of this year. We do not think that Novo takes that lightly. We think that they are going through a series of internal exercises to make sure that they are reinspection ready. We would imagine that they'll continue to communicate with the FDA and gather feedback on what might be missing from their remediation plan that they would then need to tweak before any reinspection would take place.

We are surely been pleased with the seriousness and the urgency that from the top of that organization right through that facility, they are taking the remediation plan. Regarding class one or class two, I'll turn that over to Akshay for his thoughts as he was presiding over our team in person in Bethesda on Wednesday, and the team just did a fantastic job. Akshay?

Akshay Vaishnaw (President of R&D)

Yeah. Thanks, David. Eric, I just want to reiterate that it was a very constructive and collaborative meeting, and I think the agency, as you might expect, shares the need for urgency as we all work together to try and get apitegromab to patients. It is not for us, obviously, to second guess and say, "Will it be class one or class two?" We were very heartened by the comments they made and the approach they committed to help effecting by getting this drug to patients. We need to work with Novo to get their work done. Let's wish them the best, get the site reinspected, resubmit the BLA, and I am confident the agency is going to act with urgency and commitment to this community of patients, which they have always shown when it comes to SMA.

Eric Schmidt (Biotechnology Analyst)

Thank you very much.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Tessa Romero from JPMorgan.

Tessa Romero (Biotechnology Equity Analyst)

Hey, David and team. Thanks so much for the question here. To be clear, the BLA that you plan to submit in 2026 for apitegromab will include Catalent as your primary fill-finish, and you plan to file the SBLA for the additional fill-finish facility later in 2026 following the potential approval of the BLA. Why is that the right path versus using an additional fill-finish only? The follow-up is just on the EMA review. How is that going with respect to manufacturing-related items? Thanks.

David Hallal (Chairman and CEO)

Thanks, Tess. Yeah. I mean, I think given where we are, given the tone and tenor of the meeting that Akshay presided over this week, and again, the progress that Novo has been making, which really enabled them to communicate to the FDA that they are on track to be reinspection ready by the end of this year, we just think that that is the absolute right path for us. We would expect that our BLA would be resubmitted with Catalent as our primary filler, and we would expect a second filler to be added to our file, which was, frankly, always going to be our plan anyway, given the fact that Novo wants that facility for internal purposes. That is the path that we are following.

Obviously, everything that we are doing to accelerate our second vial is a great insurance policy for us no matter what would happen. I was really gratified by our team's efforts over the course of just the past month with the major progress that they have made to secure commercial capacity at a second vial and already have tech transfer underway. Of course, we will be expecting the commencement of our commercial capacity to be leveraged beginning in Q1 of 2026. Regarding the EMA, I would love to have Akshay comment on that. Obviously, quality and compliance is important to all regulators, including them.

Akshay Vaishnaw (President of R&D)

Indeed. Just to review the status of the MAA, the question and answers, they go back and forth, have proceeded well. The review continues in exactly the timeframes you'd expect. As we guided on the formal comments, we expect a decision by the middle of next year. Now, vis-à-vis the Catalent manufacturing status and the EMA, there is a mutual recognition procedure, and there is an interdependency, and I think we obviously agree with that. I would point out that everything we're doing for the 2026 resubmission, we, Novo, and all our collaborators for the 2026 resubmission of our BLA here in the U.S. launch following approval by the FDA is in line with supporting our MAA. There's not much more I can say right now, and obviously, we'll keep you updated.

Let's stay on track, and as we proceed with the BLA, we hope that supports the EU approval as well.

Tessa Romero (Biotechnology Equity Analyst)

Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Tazeen Ahmad from Bank of America.

Tazeen Ahmad (Managing Director of Equity Research)

Hi, guys. Good morning. Thanks for the detailed update. Can I ask, when is the latest that you can have this reinspection for Catalent be completed and given the green light in order to meet your expectations for a 2026 launch? Just to play the scenarios for a second, if for whatever reason the second inspection for Catalent doesn't resolve all issues, how quickly could you pivot to making the application with your second fill-finish, and how would that impact your timelines for 2026? Would you be able to switch that SBLA filing to a BLA filing and keep the timelines the same as you just mentioned? Thanks.

David Hallal (Chairman and CEO)

Yeah. Thanks, Tazeen. It's, again, a good question. Dating back to what or harkening back to Eric's point, there's a history at the facility. It was under prior ownership. They've had a few difficult inspections that have led to Form 483s and, in this case, some repeat observations. I understand and we understand that everybody could share some level of concern and/or skepticism that just getting a reinspection is not the objective. It's a successful reinspection. We share with Novo Nordisk that that is the objective. To really put their own team through not only the remediation plan but rigorous exercises to be reinspection ready, and we know that they are doing that. Related to your point about what if it doesn't resolve all issues, I think there's two ways to look at this, Tazeen.

Are there still observations in the facility, but yet do those observations warrant or not sort of a reclassification of this facility? Because that's really what we're playing for, a reclassification from OAI to either VAI or NAI. For that, certainly, that is what the objective is. I think regarding your timeline, I think a reinspection could technically go pretty well into 2026, and we would still be within a frame of our guidance of resubmitting our BLA and then the US launch upon approval. We're obviously pleased that the tone and tenor of our Type A meeting led by Akshay with the FDA, with all the key decision-makers, all the key groups, I think was constructive. It was collaborative. There really was a shared understanding of the unmet need and a shared understanding that urgency is necessary to serve a very important patient population.

We're hoping that all of the steps that would be required that get us to a reinspection would be done in an expeditious way within the regulatory framework that exists, and that Novo will do their part. We don't think that they take lightly indicating to the FDA that they will be reinspection ready by the end of this year. We don't think that that's a low bar. We think they're holding themselves, given the commitment to quality and compliance in the culture of Novo Nordisk. We think they say that with a pretty high hurdle in mind. Back to your question about should a meteorite hit that facility? In other words, should the inspection not go well, then what role would the second vial play?

Everything that we've done to accelerate that second vial would be obviously extremely important for us in terms of should we need to pivot, and it's not an addition of this vial on an SBLA, but it's actually our primary resubmission strategy. There are a number of ways that the FDA, and we expect they've done this in the past and, given the shared urgency, would understand some level of potential pathways to expedite adding a second vial as your first vial in the form of a BLA. Everything that we're doing to expedite this process, we think, will aid us in case the impact of the inspection is not what we all expect it to be, which is a successful reinspection.

As we continue to work with that second vial, we can provide further guidance to you as we progress from tech transfer, which is now underway, directly into the filling lines that we will be executing in Q1 and Q2, and we will provide those updates over time. Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Kripa Devarakonda from Truist Securities.

Kripa Devarakonda (VP and Biotechnology Equity Research)

Hey, guys. Thank you so much for taking my question, and congratulations on all the progress. Thanks for all the details. In terms of timelines for resubmission of BLA, I feel like we're all asking the same question, but is the plan to wait for the reinspection and for the OAI to be resolved before you submit the BLA? I understand that Novo has said that they're going to be inspection ready by year-end, but could Novo request an inspection? Finally, would you be able to address whether Novo hired any outside consultant to help with this process? Thank you.

David Hallal (Chairman and CEO)

Yeah. Maybe related to the timelines on resubmission, I think that Akshay can comment on our thinking and recognizing that with the collaboration with the FDA and the shared urgency, it's a little dynamic. We don't have our Type A meeting minutes yet, but Akshay can share at least our go-forward plan with respect to that.

Akshay Vaishnaw (President of R&D)

Yeah. I mean, I think base case, Kripa, it's safe to say that the reinspection would have to occur and we'd submit after that. As David said, it is a dynamic situation, and we'll do everything possible to resubmit in a fashion to just expedite the approval of this drug, which patients need so badly. We were heartened by the degree of support from the agency during our Type A meeting. A lot's going to happen in the coming weeks and early part of next year, and we look forward to resubmitting this BLA.

David Hallal (Chairman and CEO)

Kripa, given that, again, it's reiterated our sole and primary issue is the classification of this facility and their state of compliance. I think it's a safe assumption that we'd like to see that cleared and be ready to go immediately with a resubmission. That's sort of our go-forward plan at this point.

Akshay Vaishnaw (President of R&D)

I think it's worth adding, David, that that resubmission is really compared to the initial BLA resubmission, it's a very different effort. It's a much more contained effort around just the safety update and the CMC aspects of the file. It's very, we're ready to file that resubmission at very short notice.

David Hallal (Chairman and CEO)

Kripa, related to the, could Novo request a reinspection? I think in a way they're signaling that they're ready. We would imagine that Novo and the agency still has some wood to chop. Just how do we feel about the remediation plan? Is there anything left before a reinspection needs to be done? I would expect that to be happening, okay? That would be an expectation. In a way, they've put themselves on notice with the FDA that they stand ready to be reinspected toward the end of this year. We think that that is really, really important. As you know, this reinspection will not be announced. It would be like your typical unannounced inspection.

So that you can put yourself on notice and communicate with the Office of Compliance that you're reinspection ready as they notified at our Type A meeting at the end of this year. We would expect the FDA to, when they do reinspect the facility, it would likely be an unannounced inspection. Your final question about third parties, I think Novo is really looking very broadly, and they have been working with outside experts and helping them through all of these things, including the remediation plan and the progress with the remediation plan. We have been pleased with the level of quality and urgency that they are applying to this remediation plan, and we're thankful to them for that.

Tessa Romero (Biotechnology Equity Analyst)

Thank you so much.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Edsur Dara from Barclays.

Thanks, for taking the question. Just because investors have sort of been circling this September 2026 date in terms of sort of timing for a potential approval, David, maybe if you could help us understand what could maybe the FDA minutes unveil to you on the type of resubmission that you'd have to make, maybe their timelines around the decision once you have refiled the BLA. Thank you.

David Hallal (Chairman and CEO)

Yeah. Thanks, Edsur. It's a great question. Again, something that I think Akshay wanted to have some robust conversation with the agency on at our Type A meeting. We're obviously not, we don't have meeting minutes in hand, and we certainly want to allow the agency to do their work. Akshay can comment on how we're thinking about the resubmission timing and, again, whether or not it would be Class 1 or Class 2.

Akshay Vaishnaw (President of R&D)

Yeah. As far as the minutes are concerned, I think it's always good to get the minutes in hand and reconfirm the impressions that we're conveying to you this morning that they're documented in the minutes of the progress that Novo has made of commitment that everyone is showing to the agency of the matter, Novo's comment about being ready for reinspection, and everything we've discussed so far. We await those minutes, and we're confident that they'll reflect what we're conveying this morning. Now, as far as the resubmission is concerned, we just discussed that with the last question. Of course, we'll resubmit as soon as the inspection is done or earlier if possible. We'll be guided by the agency through all of that, and we'll also be guided on the review timelines.

Now, the minutes we get will not spell out the nature of the review timelines for the resubmission. That is not their practice. They await resubmission of the BLA before that is done. One thing I can tell you is, as David emphasized, the tone and tenor of the meeting was that there was support to act with the agency on all parties, including the agency, to get this drug to patients as soon as possible.

Great. Thank you. Thank you for all the updates today.

David Hallal (Chairman and CEO)

Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Marc Frahm from TD Cowen.

Marc Frahm (Biotechnology Equity Research Analyst)

Thanks for taking my questions and all the detailed disclosures around this meeting. Maybe in that light, just as you moved forward and Novo hopefully is, in fact, in position to be reinspected, just what do you expect to be able to disclose and kind of on what timeline, particularly given that it isn't even your facility directly, but it is a partner? Will you be able to disclose right when it gets inspected, not until maybe some 483s are received? Just what are the disclosure plans there?

David Hallal (Chairman and CEO)

Thanks, Mark. I think our disclosure plans will really kind of look in the mirror and focus on us and the things that are material to us that we think are important to share. Obviously, the reinspection timeline, when it happens, the outcome of it is really important. I think we want to be open to sharing the important information with you. Obviously, the way this would work is an inspection takes a week to a couple of weeks. There's generally a closeout meeting. At that closeout meeting, there's generally some kind of preliminary assessment when a Form 483, as we've noted in the past, I think, again, it's hard to believe when we first disclosed these Form 483 observations was only last quarter because it feels like for me it's been a long time.

As you know, a Form 483 usually travels 75% of the time with any inspection. Of course, we would not expect a Form 483 to result in an OAI most of the times. I think that is what startled all of us. I think that all along, Novo has been approaching this very aggressively. I think we will just maintain as we have open lines of communication with you all. When we have important information to share, we will certainly do that. I think what we have done in the past is, even if it was not something for us, but we did learn of, let us just say, the classification of the facility as we did just last month in October, we tried to get out in front of that and disclose that and have some dialogue with you all on what that meant.

We will continue to make a commitment to do the same here as we continue on this journey to an eventual resubmission and U.S. launch upon approval.

Marc Frahm (Biotechnology Equity Research Analyst)

Okay. That's helpful. Maybe just on the idea of waiting for the reinspection to kind of happen and the reclassification before filing. Also, in your prior answers, you noted this would be kind of like an unannounced reinspection once they've communicated that they really are in position to be ready. Kind of a forcing mechanism to that, at some level, it could be a submission of a BLA from anyone using this facility. Maybe is there some value of maybe filing ahead to kind of try to force the timeline on the inspection? Or is your expectation that there are just so many other products flowing through this facility that that's kind of going to happen on its own without you guys being the forcing?

David Hallal (Chairman and CEO)

Mark, a couple of the things you said are really important. One is that we've heard this too, right? I mean, the thing that creates urgency are pending applications. Right now, we do not have a pending application. We have a pending resubmission. At the same time, I would note that we were generally pleased with how constructive and collaborative the in-person Type A meeting was and that there was this shared understanding of the unmet need and shared urgency. While we are not on file, I would say, of a lot of the things, and you are absolutely right on your last point, that there are other pending applications at that site, and that can serve us well.

We do think our Type A meeting serves as a really good central point of highlighting while we're not on file, there is real urgency here for a community that is desperately wanting to benefit from the world's first and only muscle-directed therapy. We have to continue to work with the agency, be collaborative with them, find everyone's right footing on what the right thing to do is, and that is really our go-forward plan. We think we've built sort of a foundation and framework with the agency, frankly, all the way through the initial priority review period up till September 22 and even through Wednesday, a really strong foundation for collaboration for us to work together to resolve this issue.

Akshay Vaishnaw (President of R&D)

Yeah. Thanks, David. I just want to reiterate the importance of that collaborative approach. You mentioned a forcing function, so to speak, by resubmitting ahead of the reinspection. I do not know that that is wise. We want to be working closely with the FDA and be guided by them. Now, as we said, it is a dynamic situation. If they invite us or they support any kind of resubmission in a particular timeframe in and around the reinspection, we will, of course, we are ready, and we can resubmit very efficiently. This is not about a forcing function. We have to collaborate with the FDA.

Marc Frahm (Biotechnology Equity Research Analyst)

Okay. Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Evan Siegerman from BMO Capital Markets.

Evan Seigerman (Managing Director, Head of Healthcare Research, and Senior Biotechnology and BioPharmaceutical Analyst)

Hi. I'm on for Evan. Thanks for taking our question. With the delays for apitegromab, can you talk more about what your sales or market research team's efforts are to identify patients ahead of the launch? You had mentioned efforts to work with Centers of Excellence to understand the patient journey better. Do you feel you are developing a more robust number of patients which you could target for therapy following approval, potentially leading to a little bit of a faster uptake than people were probably initially expecting? Thanks.

David Hallal (Chairman and CEO)

Yeah. It's a great question. Keith was highlighting it earlier in the call, and I'll turn it over to him for further comments on launch prep.

Keith Woods (COO)

Yeah. No. Thanks for the question. I guess I'd say, first of all, when the September 22nd date occurred, that was not after two months of the team being able to spend time out in the field. Now with the extended time, we're getting to not just visit with the physicians, but we're also getting to meet the SMA treatment teams and getting that full feel. What is that additionally, not just the SMA treatment teams, we're spending more time with patient advocacy events and getting to speak with patients and their families. I can tell you what we're hearing is that there's a clear understanding of the unmet medical need and the approach of attacking this disease from a dual modality, no longer just the motor neuron, but also directly targeting the muscle.

This is being well accepted as we get the opportunity to meet with more people in the community. You add to the fact of the safety profile that apitegromab has demonstrated in, quite frankly, all of our studies, not just our SMA studies, but if you take a look at Embrace, that was also all adults, all treated with 10 mg per kg, and exceptional safety results. I guess I would end with the fact that at the end of the day, we're offering the world's first muscle-targeted therapy. In the event, if you have a choice to either be in a situation of having experienced muscle loss or the potential for muscle gain, why wouldn't you want to use apitegromab?

Evan Seigerman (Managing Director, Head of Healthcare Research, and Senior Biotechnology and BioPharmaceutical Analyst)

Appreciate it. Thanks, guys.

Operator (participant)

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.