Scholar Rock (NASDAQ: SRRK) today announced that the Company has earned a $25 million milestone payment from Gilead Sciences, Inc. (NASDAQ: GILD) for the successful demonstration of efficacy in preclinical in vivo proof-of-concept studies. This is the most advanced program of the collaboration focused on the discovery and development of potent and selective inhibitors of latent transforming growth factor beta (TGFβ) activation for the treatment of fibrotic diseases.

“Achieving this important first milestone at the one year mark of the collaboration is indicative of the progress we are making together towards unlocking the potential of this novel approach to TGFβ inhibition in the treatment of patients suffering from fibrotic diseases,” said Nagesh Mahanthappa, Ph.D., President and CEO of Scholar Rock. “This accomplishment further validates the broad applicability of our platform by targeting the activation of latent growth factors to overcome historic challenges with selectivity and to discover and develop safe and effective therapeutics to address a wide range of serious diseases, including neuromuscular disorders, cancers, fibrosis, and anemia.”

The collaboration between Gilead and Scholar Rock was established in December 2018 to discover and develop therapeutics that target TGFβ-driven signaling, a central regulator of fibrosis. Scholar Rock retains exclusive worldwide rights to discover, develop, and commercialize certain TGFβ inhibitors for oncology and cancer immunotherapy.

Scholar Rock received $80 million in upfront payments in connection with the collaboration, comprised of $50 million cash and $30 million purchase of Scholar Rock Holding Corporation common stock. In addition to this one-time $25 million preclinical milestone, Scholar Rock is eligible to receive up to an additional $1,425 million in potential payments from Gilead aggregated across all three programs based on the successful achievement of certain research, development, regulatory and commercialization milestones. Scholar Rock would also receive high single-digit to low double-digit tiered royalties on sales of potential future products originating from the collaboration.

Under the collaboration, Gilead has exclusive options to license worldwide rights to product candidates that emerge from three Scholar Rock TGFβ programs: inhibitors that target activation of latent TGFβ1 with high affinity and specificity, inhibitors that selectively target activation of latent TGFβ1 localized to extracellular matrix, and a third TGFβ discovery program. Scholar Rock is responsible for antibody discovery and preclinical research through product candidate nomination, after which, upon exercising the option for a program, Gilead will be responsible for the program’s preclinical and clinical development and commercialization.