BMO Capital Markets has adjusted its view on Scholar Rock Holding (NASDAQ:SRRK) Corporation (NASDAQ: SRRK) following the release of promising clinical trial results.
The firm increased the stock's price target to $38.00, up from the previous $34.00, while keeping an Outperform rating on the shares.
The change in valuation comes after Scholar Rock reported encouraging outcomes from the Phase 3 SAPPHIRE trial of its drug apitegromab for treating spinal muscular atrophy (SMA).
The analyst at BMO Capital cited the positive data as the reason for enhancing the probability of the drug's approval to 95% from the former estimate of 85%. This adjustment was also reflected in the firm's updated financial model to account for a recent capital raise by Scholar Rock.
The analyst noted the drug's consistent benefits observed in an exploratory group of patients aged 13 to 21, suggesting that this could represent an upside to the initial approval assumptions. The anticipation of further positive developments from the upcoming OPAL trial, which targets patients under two years of age and is set to begin in mid-2025, also contributed to the more optimistic price target.
In other recent news, Scholar Rock has been making significant strides in its drug development programs. The biopharmaceutical company recently announced positive results from its Phase 3 SAPPHIRE clinical trial, evaluating apitegromab in patients with spinal muscular atrophy (SMA). The study met its primary endpoint, demonstrating a statistically significant improvement in motor function in patients treated with apitegromab compared to those receiving a placebo.
In terms of corporate news, Scholar Rock has appointed Beth Shafer, Ph.D., as Chief Business Officer, responsible for steering the company's long-term corporate and business development strategy.
The company also expects to submit applications to the FDA and EMA in the first quarter of 2025, seeking priority review and accelerated assessment, respectively.
InvestingPro Insights
Scholar Rock Holding Corporation (NASDAQ:SRRK) has experienced significant market momentum recently, aligning with the positive clinical trial results highlighted in the article. InvestingPro data shows a remarkable 252.29% price return over the past week and a 200.81% return over the last month, reflecting strong investor enthusiasm for the company's prospects.
The stock's current price of $26.14 is approaching 73.88% of its 52-week high, indicating substantial recovery and positive sentiment. This upward trajectory is further supported by an InvestingPro Tip suggesting that SRRK has delivered a high return over the last year, with data showing a 281.61% price total return over the past 12 months.
Another relevant InvestingPro Tip notes that two analysts have revised their earnings upwards for the upcoming period, which corroborates BMO Capital Markets' optimistic stance on the company's future. This positive outlook is reflected in the fair value estimate of $32 based on analyst targets, suggesting potential upside from current levels.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for SRRK, providing a deeper understanding of the company's financial health and market position.
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