Bears no relation in plot to Arthur Conan Doyle's original novel of the same name, as the producers purchased rights only to the title, not the storyline of Doyle's book.
Although the movie is credited as having been "suggested by the book by A. Conan Doyle," in fact the plot is very different from that of the novel itself, which first introduced the character of Sherlock Holmes to the general public. Even the characters other than Sherlock Holmes and Dr. Watson are not the original ones that appeared in the story.
Reginald Owen, having previously played Dr. Watson, hoped with this film to initiate a series of Sherlock Holmes films with himself as Holmes, but this turned out to be the only one he made as Holmes.
The reason "A Study in Scarlet" used only the title of Arthur Conan Doyle's first Sherlock Holmes story and not Doyle's actual plot is that the Conan Doyle estate quoted the producers a price for the rights to the title and a considerably higher price to use the original story. So the producers paid the lower price and hired "B" director Robert Florey to write a new story, though he and dialogue/continuity writer Reginald Owen peppered their script with allusions to other Holmes stories by Conan Doyle.
The plot to this movie is actually quite similar to that of Belgian writer Stanislas-André Steeman's 1931 detective novel "Six Hommes Morts", right down to its denouement.