Scholar Rock, the US-based spinal muscular atrophy (SMA) treatment developer that counts conglomerate Kraft Group as an investor, has raised approximately $75m in its initial public offering.
The company issued almost 5.4 million shares on the Nasdaq Global Select Market priced at $14.00, the midpoint of the IPO’s $13 to $15 range. It floated last week and its shares are currently at $16.12 at time of publication.
Scholar Rock is working on therapies for conditions in which signalling by protein growth factors is a factor. It will use $35m of the proceeds to advance SRK-015, a drug candidate intended to treat SMA by inhibiting a growth factor in skeletal muscle called myostatin, through phase 2 clinical trials.
A further $18m will support additional research and development, including work on the TGFb1 growth factor and BMP2 protein. The company expects the money from the offering to fund its work through to the second half of 2020.
The offering followed $103m in funding, with Kraft investing as part of Scholar Rock’s $20m series A round in 2014, which was led by Arch Venture Partners with contributions from EcoR1 Capital, Polaris Venture Partners and Scholar Rock founder Timothy Springer.
Scholar Rock added $36m in a 2016 series B round led by Fidelity Management and Research (FMR) and backed by Cormorant Asset Management and its existing investors. Redmile Group subsequently led a $47m round for the company in January 2018.
Timothy Springer is Scholar Rock’s largest shareholder, with a 14.2% stake diluted from 18% in the IPO, followed by FMR (11.7%), Polaris Venture Partners (11%), Arch Venture Partners (10.8%), Artal International, which is likely a Redmile vehicle (8%), and EcoR1 (4.1%).
Joint book-running managers Jefferies, BMO Capital Markets and Cowen and Company, and co-manager Wedbush Securities have a 30-day option to buy another 804,000 shares, which would increase the IPO’s size to $86.3m.