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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Aug. 03, 2018
Document and Entity Information
Entity Registrant Name	Scholar Rock Holding Corp
Entity Central Index Key	0001727196
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		25,243,684
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 115,061	$ 56,461
Marketable securities		1,498
Prepaid expenses and other current assets	1,856	1,242
Total current assets	116,917	59,201
Property and equipment, net	1,856	2,181
Restricted cash	205	205
Other long‑term assets		50
Total assets	118,978	61,637
Current liabilities:
Accounts payable	2,598	1,359
Accrued expenses	3,356	2,796
Deferred rent		228
Loan payable	731	641
Total current liabilities	6,685	5,024
Long‑term portion of deferred rent	681	468
Long‑term portion of loan payable		398
Warrant to purchase redeemable security		37
Total liabilities	7,366	5,927
Commitments and contingencies (Note 9)
Convertible preferred stock (Series A-1, A-2, A-3, A-4, B and C), $0.001 par value; no shares authorized, issued or outstanding as of June 30, 2018; 43,157,651 shares authorized and 43,135,911 shares issued and outstanding as of December 31, 2017 (aggregate liquidation preference of $109,561 as of December 31, 2017)		109,232
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value; 10,000,000 and no shares authorized at June 30, 2018 and December 31, 2017, respectively; no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
Common stock, $0.001 par value; 150,000,000 shares authorized and 25,243,684 shares issued and outstanding as of June 30, 2018, respectively; 60,000,000 shares authorized and 3,970,586 shares issued and outstanding as of December 31, 2017, respectively	25	4
Additional paid-in capital	192,711	4,001
Accumulated other comprehensive loss		(2)
Accumulated deficit	(81,124)	(57,525)
Total stockholders’ equity (deficit)	111,612	(53,522)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$ 118,978	$ 61,637

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Convertible preferred stock, par value		$ 0.001
Convertible preferred stock, shares authorized	0	43,157,651
Convertible preferred stock, shares issued	0	43,135,911
Convertible preferred stock, shares outstanding	0	43,135,911
Aggregate liquidation preference		$ 109,561
Preferred stock, par value	$ 0.001
Preferred stock, shares authorized	10,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	60,000,000
Common stock, shares issued	25,243,684	3,970,586
Common stock, shares outstanding	25,243,684	3,970,586

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Revenue			$ 0
Operating expenses:
Research and development	$ 11,424	$ 4,711	18,125	$ 8,279
General and administrative	3,460	1,177	5,775	2,350
Total operating expenses	14,884	5,888	23,900	10,629
Loss from operations	(14,884)	(5,888)	(23,900)	(10,629)
Other income (expense):
Interest income, net	213	11	357	23
Other expense, net	(36)	(2)	(56)	(3)
Total other income	177	9	301	20
Net loss	$ (14,707)	$ (5,879)	$ (23,599)	$ (10,609)
Net loss per unit, basic and diluted		$ (3.67)		$ (6.62)
Net loss per share, basic and diluted	$ (1.39)		$ (3.51)
Weighted average common units outstanding, basic and diluted		1,603,088		1,603,088
Weighted average common shares outstanding, basic and diluted	10,593,987		6,716,283
Comprehensive loss:
Net loss	$ (14,707)	$ (5,879)	$ (23,599)	$ (10,609)
Other comprehensive income
Unrealized gain on marketable securities	2	4	2	1
Total other comprehensive income	2	4	2	1
Comprehensive loss	$ (14,705)	$ (5,875)	$ (23,597)	$ (10,608)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (23,599)	$ (10,609)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	359	330
Equity-based compensation	1,571	488
Amortization of deferred rent	(15)	(103)
Deferred payroll tax credit	190
Other	82	35
Change in operating assets and liabilities:
Prepaid expenses and other current assets	(753)	(456)
Accounts payable	464	638
Accrued expenses	191	(257)
Net cash used in operating activities	(21,510)	(9,934)
Cash flows from investing activities:
Purchase of property and equipment	(192)	(209)
Sales and maturities of marketable securities	1,498	3,001
Net cash provided by investing activities	1,306	2,792
Cash flows from financing activities:
Principal payments on loan payable	(333)	(333)
Proceeds from initial public offering of common stock, net of issuance costs	79,137
Proceeds from issuance of Series B convertible preferred units		4,285
Net cash provided by financing activities	78,804	3,952
Net increase (decrease) in cash and cash equivalents and restricted cash	58,600	(3,190)
Cash and cash equivalents and restricted cash, beginning of period	56,666	10,238
Cash and cash equivalents and restricted cash, end of period	115,266	7,048
Supplemental disclosure of non‑cash items:
Offering costs in accounts payable and accrued liabilities	1,302
Supplemental cash flow information:
Cash paid for interest	$ 19	$ 28

Nature of the Business	6 Months Ended
Nature of the Business	Jun. 30, 2018
Nature of the Business
Nature of the Business	1. Nature of the Business Scholar Rock Holding Corporation (the “Company”) is a biopharmaceutical company focused on the discovery and development of innovative medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. The Company’s lead product candidate, SRK-015, is a selective inhibitor of the activation of the growth factor myostatin in skeletal muscle that the Company has advanced into clinical development for the treatment of spinal muscular atrophy. The Company was originally formed as a Delaware limited liability company in May 2012. In December 2017, the Company converted into a Delaware corporation through a series of transactions (the “Reorganization”). Its principal offices are in Cambridge, Massachusetts. Since its inception, the Company’s operations have focused on organizing and staffing, business planning, raising capital, establishing the Company’s intellectual property portfolio and performing research and development activities, including research and development of monoclonal antibodies that selectively inhibit activation of growth factors for therapeutic effect. The Company has primarily financed its operations through various equity and debt financings, including the initial public offering of its common stock (the “IPO”) in May 2018. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company’s products. During the second quarter of 2018, the Company completed its IPO, in which the Company sold 6,164,000 shares of common stock, including all additional shares available to cover over-allotments, at a price of $14.00 per share. The Company received aggregate net proceeds of approximately $77.8 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Upon the closing of the IPO, all outstanding shares of convertible preferred stock converted into 15,109,950 shares of common stock and the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase 7,614 shares of common stock. The Company has determined that the receipt of the aggregate net proceeds from the IPO has alleviated the substantial doubt about the Company’s ability to continue as a going concern. The Company has incurred annual net operating losses in every year since its inception. The Company had an accumulated deficit of $81.1 million at June 30, 2018, and will require substantial additional capital to fund its operations. The Company has never generated any product revenue. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition.

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b)(4) on May 24, 2018 (the “Prospectus”). There have been no material changes to the significant accounting policies previously disclosed in the Prospectus. Unaudited Interim Financial Information The consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Prospectus. The unaudited consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany transactions and balances of the subsidiaries have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to accrued expenses, the valuation of equity-based compensation, including incentive units, common stock, restricted common stock and stock options, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its equity-based compensation, including incentive units, common stock, restricted common stock and stock options that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. Research and Development Expenses Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront license payments related to acquired technologies which have not yet reached technological feasibility and have no alternative future use are also included in research and development expense. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842), which supersedes all existing lease guidance. The new standard requires a company to recognize lease assets and liabilities for leases previously classified as operating leases. The new standard will be effective for the Company on January 1, 2019. The Company is currently evaluating the potential impact that this update may have on the Company’s financial position and results of operations.

Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017 (in thousands):


	Fair Value Measurements at June 30, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	112,699	$	112,699	$	—	$	—
Total assets	$	112,699	$	112,699	$	—	$	—


	Fair Value Measurements at December 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	55,291	$	55,291	$	—	$	—
Marketable securities:
U.S. Treasury obligations		1,498		1,498		—		—
Total assets	$	56,789	$	56,789	$	—	$	—
Liabilities:
Warrant to purchase redeemable security	$	37	$	—	$	—	$	37
Total liabilities	$	37	$	—	$	—	$	37

There were no transfers between fair value measurements levels during the three or six months ended June 30, 2018 or 2017.

Cash and cash equivalents and marketable securities include investments in money market funds that invest in U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1 as of June 30, 2018 and December 31, 2017.

The carrying amounts reflected in the balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at June 30, 2018 and December 31, 2017, due to their short-term nature. The Company believes the terms of the loan payable reflect current market conditions for an instrument with similar terms and maturity, therefore the carrying value of the Company’s debt approximates its fair value based on Level 3 of the fair value hierarchy.

Upon the completion of the IPO, the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase common stock and the Company reclassified the fair value of the warrant to additional paid-in capital. The following table presents activity in the preferred stock warrant during the six months ended June 30, 2018 (in thousands):


Balance at December 31, 2017	$	(37)
Change in fair value of warrant included in other income (expense), net		(56)
Reclassification to additional paid-in capital upon consummation of the IPO		93
Balance at June 30, 2018	$	—

The change in fair value of the warrant included in other income (expense), net for the three and six months ended June 30, 2018 was $(36) and $(56), respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Marketable Securities

6 Months Ended

Jun. 30, 2018

Marketable Securities

Marketable Securities

4. Marketable Securities

The Company did not have any investments as of June 30, 2018.

The following table summarizes the Company’s investments as of December 31, 2017 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	1,500	$	—	$	(2)	$	1,498
Total available-for-sale securities	$	1,500	$	—	$	(2)	$	1,498

Property and Equipment, Net

6 Months Ended

Jun. 30, 2018

Property and Equipment, Net

Property and Equipment, Net

5. Property and Equipment, Net

As of June 30, 2018 and December 31, 2017, property and equipment, net consists of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Laboratory equipment	$	2,100	$	2,074
Furniture & fixtures		159		151
Machinery & equipment		7		7
Leasehold improvements		1,498		1,498
		3,764		3,730
Less: Accumulated depreciation		(1,908)		(1,549)
	$	1,856	$	2,181

Accrued Expenses

6 Months Ended

Jun. 30, 2018

Accrued Expenses

Accrued Expenses

6. Accrued Expenses

As of June 30, 2018 and December 31, 2017, accrued expenses consist of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Accrued external research and development expense	$	1,411	$	1,225
Accrued payroll and related expenses		1,260		1,174
Accrued professional and consulting expense		631		382
Accrued other		54		15
	$	3,356	$	2,796

Common Stock and Preferred Stock	6 Months Ended
Common Stock and Preferred Stock	Jun. 30, 2018
Common Stock and Preferred Stock
Common Stock and Preferred Stock	7. Common Stock and Preferred Stock In connection with the consummation of the IPO, on May 29, 2018 the Company filed an amended and restated certificate of incorporation, which increased the number of common shares authorized for issuance thereunder by 90,000,000 shares to 150,000,000 shares and also authorized for issuance 10,000,000 shares of Preferred Stock, par value $0.001. As of June 30, 2018, no shares of the Preferred Stock were issued or outstanding.

Equity-Based Compensation

6 Months Ended

Jun. 30, 2018

Equity-Based Compensation

Equity-Based Compensation

8. Equity-Based Compensation

The Company recorded equity-based compensation expense related to all equity-based awards for employees and non-employees, which was allocated as follows in the consolidated statements of operations (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Research and development expense	$	542	$	118	$	786	$	225
General and administrative expense		548		114		785		263
	$	1,090	$	232	$	1,571	$	488

Restricted Stock

The following table summarizes restricted common stock activity as of June 30, 2018:


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted common stock as of December 31, 2017	1,220,085	$	5.77
Granted	—	$	—
Vested	(216,011)	$	5.77
Forfeited	(852)	$	5.77
Restricted common stock as of June 30, 2018	1,003,222	$	5.77

As of June 30, 2018, the Company had unrecognized equity-based compensation expense of $3.6 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 2.4 years.

Stock Options

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2018:


		Weighted		Weighted
	Number of	Average Exercise		Average Remaining	Aggregate Intrinsic
	Shares	Price		Contractual Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2017	—	$	—	—	$	—
Granted	1,484,105		9.51	—		—
Exercised	—		—	—		—
Forfeited	(784)		10.21	—		—
Outstanding as of June 30, 2018	1,483,321	$	9.51	9.77	$	9,984
Options exercisable as of June 30, 2018	53,217	$	6.77	9.67	$	490

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the six months ended June 30, 2018 was $6.72.

The following assumptions were used in determining the fair value of options granted to employees and non-employees:


	Six Months Ended June 30, 2018
	Employees		Non-Employees
Risk-free interest rate	2.76	%	2.85	%
Expected dividend yield	—	%	—	%
Expected term (years to liquidity)	6.12		9.64
Expected volatility	81.66	%	78.00	%

As of June 30, 2018, the Company has unrecognized equity-based compensation expense related to its employee stock options of $9.4 million which the Company expects to recognize over the remaining weighted average vesting period of 3.6 years.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and Contingencies The Company enters into agreements in the normal course of business with vendors for preclinical studies, preclinical and clinical supply and manufacturing services, professional consultants for expert advice and other vendors for other services for operating purposes. Operating Leases Facility Lease In March 2015, the Company entered into a 5‑year facility lease for approximately 11,600 square feet of space at 620 Memorial Drive, Cambridge, Massachusetts, as amended in February 2016 (the ‘‘lease’’). The lease was amended in February 2018, to add an additional 9,132 square feet (the ‘‘expansion space’’) at the current location and to extend the lease term (the ‘‘amended lease’’). The amended lease is set to expire 5 years from the date the landlord delivers the expansion space which occurred in July 2018. Rent for the facility lease, including the expansion space, increases from $1.4 million a year to $1.7 million a year over the term of the lease. Legal Proceedings The Company is not currently a party to any material legal proceedings.

Loan Payable	6 Months Ended
Loan Payable	Jun. 30, 2018
Loan Payable
Loan Payable	10. Loan Payable In August 2015, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (‘‘SVB’’), which provided the Company an equipment line of credit of up to $2.0 million to finance the purchase of eligible equipment. The loan balance at June 30, 2018 and December 31, 2017 was $731,000 and $1.0 million, respectively.

Option and License Agreement	6 Months Ended
Option and License Agreement	Jun. 30, 2018
Option and License Agreement
Option and License Agreement	11. Option and License Agreement Overview On December 17, 2013, the Company entered into an option and license agreement with Janssen. Janssen is obligated to pay the Company certain development milestones totaling up to $25.0 million and regulatory milestones totaling up to $97.0 million for the pharmacological profile licensed by Janssen during the development period and through successful regulatory approval, as further described in the option and license agreement. Development milestones are triggered upon the achievement of specified development criteria or dosing of a specified number of patients in phases of clinical trials. Regulatory milestones are triggered upon approval to market a product candidate by the U.S. Food and Drug Administration (‘‘FDA’’) or other global regulatory authorities. Additionally, commercial milestone payments totaling up to $130.0 million for the pharmacological profile are eligible to be earned as certain sales thresholds are achieved by Janssen and royalties are also required to be paid by Janssen to the Company based on annual net sales thresholds, based on Janssen’s sales of a product derived from the collaboration molecule(s). The next potential milestone the Company may be entitled to receive under the agreement is a milestone payment of $2.0 million upon achievement of a development milestone. The Company did not recognize any revenue from its option and license agreement with Janssen in the three or six-month periods ended June 30, 2018 or June 30, 2017, respectively.

Net Loss per Share

6 Months Ended

Jun. 30, 2018

Net Loss per Share

Net Loss per Share

12. Net Loss per Share

Prior to the Reorganization, the Company calculated basic net loss per unit by dividing net loss by the weighted average number of common units outstanding. Subsequent to Reorganization, the Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding, excluding restricted common stock. The Company calculates diluted net loss per unit and diluted net loss per share by dividing net loss by the weighted average number of common units outstanding or weighted average number of common shares outstanding, as applicable, after giving consideration to the dilutive effect of convertible preferred units, convertible preferred stock, incentive units, restricted common stock, warrants and stock options that are outstanding during the period. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per unit and net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive. The significant increase in shares outstanding in the second quarter of 2018 is expected to impact the year-over-year comparability of the Company’s net loss per share calculations for the next twelve months.

The following table sets forth the outstanding common unit or common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per unit or share for the periods indicated because their inclusion would have been anti-dilutive (in common unit or common stock equivalent shares, as applicable):


	Three and Six Months Ended June 30,
	2018	2017
Convertible preferred units	—	10,536,765
Incentive units	—	1,930,649
Restricted common stock	1,003,222	—
Warrant	7,614	7,614
Stock options	1,483,321	—
	2,494,157	12,475,028

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2018
Related Party Transactions
Related Party Transactions	13. Related Party Transactions Licensing Agreement Pursuant to a license agreement with Children’s Medical Center Corporation (‘‘CMCC’’), a holder of shares of the Company’s common stock, the Company paid CMCC an annual license maintenance fee of $10,000 in 2017. The Company did not make any payments for the CMCC license maintenance fees during three and six months ended June 30, 2017, respectively. The Company paid $0 and $10,000 during three and six months ended June 30, 2018, respectively. The obligation continues until the agreement is terminated. The Company will also be responsible for up to $1.3 million of development milestone payments through the first regulatory approval of a licensed product, tiered royalty payments of low single-digit percentages on net sales of licensed products in the event that the Company realizes sales from products covered by the license agreement, which are products developed using the Company’s proprietary platform that are covered by a valid claim contained in any patent under the license agreement, and between 10% to 20% of non-royalty income attributable to a sublicense of the CMCC rights. The Company recorded such payments as research and development expense in the statements of operations. There are no amounts due to CMCC under this license agreement at December 31, 2017 or June 30, 2018. Consulting Agreements The Company entered into consulting agreements on October 10, 2012 with its two scientific co-founders to provide services related to the advancement of the research and development platform of the company. The consulting arrangements are on a fixed-fee basis, paid quarterly. The initial contract terms were four years and terminated on October 10, 2016. The contracts were extended for an additional four year period. The Company incurred $40,000 and $80,000 for the three and six months ended June 30, 2018 and June 30, 2017, respectively. There are no amounts due under these consulting agreements at December 31, 2017 or June 30, 2018.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2018
Summary of Significant Accounting Policies
Unaudited Interim Financial Information	Unaudited Interim Financial Information The consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Prospectus. The unaudited consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany transactions and balances of the subsidiaries have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to accrued expenses, the valuation of equity-based compensation, including incentive units, common stock, restricted common stock and stock options, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its equity-based compensation, including incentive units, common stock, restricted common stock and stock options that it believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Research and Development Expenses	Research and Development Expenses Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront license payments related to acquired technologies which have not yet reached technological feasibility and have no alternative future use are also included in research and development expense.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842), which supersedes all existing lease guidance. The new standard requires a company to recognize lease assets and liabilities for leases previously classified as operating leases. The new standard will be effective for the Company on January 1, 2019. The Company is currently evaluating the potential impact that this update may have on the Company’s financial position and results of operations.

Fair Value of Financial Assets and Liabilities - (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Assets and Liabilities

Schedule of summary of the assets and liabilities measured at fair value on a recurring basis

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017 (in thousands):


	Fair Value Measurements at June 30, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	112,699	$	112,699	$	—	$	—
Total assets	$	112,699	$	112,699	$	—	$	—


	Fair Value Measurements at December 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	55,291	$	55,291	$	—	$	—
Marketable securities:
U.S. Treasury obligations		1,498		1,498		—		—
Total assets	$	56,789	$	56,789	$	—	$	—
Liabilities:
Warrant to purchase redeemable security	$	37	$	—	$	—	$	37
Total liabilities	$	37	$	—	$	—	$	37

Schedule of changes in the fair value of the warrant, which represented a recurring measurement classified within Level 3 of the fair value hierarchy,

The following table presents activity in the preferred stock warrant during the six months ended June 30, 2018 (in thousands):


Balance at December 31, 2017	$	(37)
Change in fair value of warrant included in other income (expense), net		(56)
Reclassification to additional paid-in capital upon consummation of the IPO		93
Balance at June 30, 2018	$	—

Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2018

Marketable Securities

Summary of investments

The Company did not have any investments as of June 30, 2018.

The following table summarizes the Company’s investments as of December 31, 2017 (in thousands):


			Gross
	Amortized		Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
Marketable securities available-for-sale:
U.S. Treasury obligations	$	1,500	$	—	$	(2)	$	1,498
Total available-for-sale securities	$	1,500	$	—	$	(2)	$	1,498

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2018

Property and Equipment, Net

Summary of property and equipment

As of June 30, 2018 and December 31, 2017, property and equipment, net consists of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Laboratory equipment	$	2,100	$	2,074
Furniture & fixtures		159		151
Machinery & equipment		7		7
Leasehold improvements		1,498		1,498
		3,764		3,730
Less: Accumulated depreciation		(1,908)		(1,549)
	$	1,856	$	2,181

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Accrued Expenses

Summary of accrued expenses

As of June 30, 2018 and December 31, 2017, accrued expenses consist of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Accrued external research and development expense	$	1,411	$	1,225
Accrued payroll and related expenses		1,260		1,174
Accrued professional and consulting expense		631		382
Accrued other		54		15
	$	3,356	$	2,796

Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Equity-Based Compensation

Schedule of allocation of equity-based compensation in the consolidated statements of operations


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Research and development expense	$	542	$	118	$	786	$	225
General and administrative expense		548		114		785		263
	$	1,090	$	232	$	1,571	$	488

Summary of restricted common stock activity


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted common stock as of December 31, 2017	1,220,085	$	5.77
Granted	—	$	—
Vested	(216,011)	$	5.77
Forfeited	(852)	$	5.77
Restricted common stock as of June 30, 2018	1,003,222	$	5.77

Summary of stock option activity


		Weighted		Weighted
	Number of	Average Exercise		Average Remaining	Aggregate Intrinsic
	Shares	Price		Contractual Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2017	—	$	—	—	$	—
Granted	1,484,105		9.51	—		—
Exercised	—		—	—		—
Forfeited	(784)		10.21	—		—
Outstanding as of June 30, 2018	1,483,321	$	9.51	9.77	$	9,984
Options exercisable as of June 30, 2018	53,217	$	6.77	9.67	$	490

Schedule of fair value assumptions


	Six Months Ended June 30, 2018
	Employees		Non-Employees
Risk-free interest rate	2.76	%	2.85	%
Expected dividend yield	—	%	—	%
Expected term (years to liquidity)	6.12		9.64
Expected volatility	81.66	%	78.00	%

Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2018

Net Loss per Share

Summary of anti-dilutive securities


	Three and Six Months Ended June 30,
	2018	2017
Convertible preferred units	—	10,536,765
Incentive units	—	1,930,649
Restricted common stock	1,003,222	—
Warrant	7,614	7,614
Stock options	1,483,321	—
	2,494,157	12,475,028

Nature of the Business (Details) - USD ($)	3 Months Ended	6 Months Ended
Nature of the Business (Details) - USD ($)	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Nature of the Business
Shares sold	$ 6,164,000
Sales price (in dollars per share)	$ 14.00	$ 14.00
Net proceeds	$ 77,800,000
Convertible preferred stock converted into shares	15,109,950
Shares that warrant can purchase	7,614	7,614
Accumulated deficit	$ (81,124,000)	$ (81,124,000)	$ (57,525,000)
Revenue		$ 0

Fair Value of Financial Assets and Liabilities - (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets:
Money market funds, included in cash and cash equivalents	$ 112,699	$ 55,291
Marketable securities:
US Treasury obligation		1,498
Total assets	112,699	56,789
Liabilities:
Warrant to purchase redeemable security		37
Total liabilities		37
Level 1
Assets:
Money market funds, included in cash and cash equivalents	112,699	55,291
Marketable securities:
US Treasury obligation		1,498
Total assets	$ 112,699	56,789
Level 3
Liabilities:
Warrant to purchase redeemable security		37
Total liabilities		$ 37

Fair Value of Financial Assets and Liabilities - Roll forward (Details) - Recurring - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Changes in the fair value of the warrant
Balance, beginning		$ (37)
Change in fair value of warrant included in other income (expense), net	$ (36)	(56)
Reclassification to additional paid-in capital upon consummation of the IPO		$ 93

Marketable Securities (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Marketable securities available-for-sale
Amortization Cost	$ 1,500
Gross Unrealized Losses	(2)
Estimated Fair Value	1,498
U.S. Treasury obligations
Marketable securities available-for-sale
Amortization Cost	1,500
Gross Unrealized Losses	(2)
Estimated Fair Value	$ 1,498

Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property and Equipment, Net
Property and Equipment, gross	$ 3,764	$ 3,730
Less: Accumulated depreciation	(1,908)	(1,549)
Total property and equipment, net	1,856	2,181
Laboratory equipment
Property and Equipment, Net
Property and Equipment, gross	2,100	2,074
Furniture & fixtures
Property and Equipment, Net
Property and Equipment, gross	159	151
Machinery & equipment
Property and Equipment, Net
Property and Equipment, gross	7	7
Leasehold improvements
Property and Equipment, Net
Property and Equipment, gross	$ 1,498	$ 1,498

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued Expenses
Accrued external research and development expense	$ 1,411	$ 1,225
Accrued payroll and related expenses	1,260	1,174
Accrued professional and consulting expense	631	382
Accrued other	54	15
Accrued expenses	$ 3,356	$ 2,796

Common Stock and Preferred Stock (Details) - $ / shares	3 Months Ended
Common Stock and Preferred Stock (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Common Stock and Preferred Stock
Common stock, increase in number of shares authorized	90,000,000
Common stock, shares authorized	150,000,000	60,000,000
Preferred stock, shares authorized	10,000,000	0
Preferred stock, par value	$ 0.001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Equity-based compensation
Equity-based compensation expense	$ 1,090	$ 232	$ 1,571	$ 488
Research and development expense
Equity-based compensation
Equity-based compensation expense	542	118	786	225
General and administrative expense
Equity-based compensation
Equity-based compensation expense	$ 548	$ 114	$ 785	$ 263

Equity-Based Compensation - Restricted stock (Details) - Restricted common stock $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Number of Shares
Restricted common stock, beginning (in shares) \| shares	1,220,085
Vested (in shares) \| shares	(216,011)
Forfeited (in shares) \| shares	(852)
Restricted common stock, ending (in shares) \| shares	1,003,222
Weighted Average Fair Value per Share at Issuance
Restricted common stock, beginning (in dollars per share) \| $ / shares	$ 5.77
Vested (in dollars per share) \| $ / shares	5.77
Forfeited (in dollars per share) \| $ / shares	5.77
Restricted common stock, ending (in dollars per share) \| $ / shares	$ 5.77
Unrecognized equity based compensation expense \| $	$ 3.6
Period for recognition	2 years 4 months 24 days

Equity-Based Compensation - Stock options (Details) - Stock options $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Number of Shares
Granted (in shares) \| shares	1,484,105
Forfeited (in shares) \| shares	(784)
Outstanding, end (in shares) \| shares	1,483,321
Outstanding exercisable, end (in shares) \| shares	53,217
Weighted Average Exercise Price
Granted (in dollars per share)	$ 9.51
Forfeited (in dollars per share)	10.21
Outstanding, end (in dollars per share)	9.51
Outstanding exercisable, end (in dollars per share)	$ 6.77
Stock options
Weighted average remaining contractual term	9 years 9 months 7 days
Aggregate intrinsic value \| $	$ 9,984
Weighted average remaining contractual term, exercisable	9 years 8 months 1 day
Aggregate intrinsic value, exercisable \| $	$ 490
Weighted average fair value of options granted	$ 6.72

Equity-Based Compensation - Assumptions (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($)
Employees
Assumptions used in determining the fair value of options
Risk-free interest rate	2.76%
Expected term (years to liquidity)	6 years 1 month 13 days
Expected volatility	81.66%
Unrecognized stock based compensation expense	$ 9.4
Period for recognition	3 years 7 months 6 days
Non-Employees
Assumptions used in determining the fair value of options
Risk-free interest rate	2.85%
Expected term (years to liquidity)	9 years 7 months 21 days
Expected volatility	78.00%

Commitments and Contingencies (Details) $ in Millions	1 Months Ended
Commitments and Contingencies (Details) $ in Millions	Feb. 28, 2018 USD ($) ft²	Mar. 31, 2015 ft²
Lease
Term of lease	5 years	5 years
Area of lease space \| ft²		11,600
Area of expansion space \| ft²	9,132
Minimum
Lease
Lease rent \| $	$ 1.4
Maximum
Lease
Lease rent \| $	$ 1.7

Loan Payable (Details) - SVB - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Aug. 31, 2015
Loan Payable
Line of credit maximum			$ 2,000,000
Amount borrowed	$ 731,000	$ 1,000,000

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Option and License Agreement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 17, 2013
Option and License Agreement
Revenue received	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Development milestones
Option and License Agreement
Potential milestone payments	$ 2.0		$ 2.0		$ 25.0
Regulatory milestones
Option and License Agreement
Potential milestone payments					97.0
Sales milestones
Option and License Agreement
Potential milestone payments					$ 130.0

Net Loss per Share (Details) - shares	6 Months Ended
Net Loss per Share (Details) - shares	Jun. 30, 2018	Jun. 30, 2017
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	2,494,157	12,475,028
Convertible preferred units
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share		10,536,765
Incentive units
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share		1,930,649
Restricted common stock
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	1,003,222
Warrant
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	7,614	7,614
Stock options
Antidilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	1,483,321

Related Party Transactions (Details)			3 Months Ended		6 Months Ended		12 Months Ended
Related Party Transactions (Details)	Oct. 10, 2016	Oct. 10, 2012 item	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
CMCC
Related Party Transactions
Related party transaction amount			$ 0		$ 10,000		$ 10,000
Potential milestone payable			1,300,000		1,300,000
Amounts due			0		$ 0		0
CMCC \| Minimum
Related Party Transactions
Non-royalty income attributable to sublicense (as a percent)					10.00%
CMCC \| Maximum
Related Party Transactions
Non-royalty income attributable to sublicense (as a percent)					20.00%
Co-founders
Related Party Transactions
Related party transaction amount			40,000	$ 40,000	$ 80,000	$ 80,000
Amounts due			$ 0		$ 0		$ 0
Number of scientific co-founders \| item		2
Term of agreement	4 years	4 years