Business Overview and History
PepGen Inc. is a clinical-stage biotechnology company at the forefront of developing innovative oligonucleotide therapies aimed at addressing severe neuromuscular and neurological diseases. Founded in 2018 and headquartered in Boston, Massachusetts, PepGen has quickly emerged as a trailblazer in the field, leveraging its proprietary Enhanced Delivery Oligonucleotide (EDO) platform to generate a robust pipeline of product candidates targeting rare and devastating conditions.
PepGen was initially formed as PepGen Limited in the United Kingdom in January 2018, founded on over a decade of research and development into cell-penetrating peptides. In November 2020, the company underwent a corporate reorganization, forming PepGen Inc. as a Delaware corporation and the parent company, transferring all operations and intellectual property from the U.K. subsidiary. This reorganization was deemed to be between entities under common control, and the historical financial statements of PepGen Limited became the historical financial statements of PepGen Inc.
The company’s EDO platform serves as the foundation for its pipeline, enabling the delivery of oligonucleotide therapeutics to target the root causes of serious diseases. PepGen’s lead programs focus on Duchenne muscular dystrophy (DMD) and myotonic dystrophy type 1 (DM1), two devastating neuromuscular disorders with high unmet medical needs.
From inception through September 2024, PepGen has funded its operations primarily through the private placement of convertible preferred stock and the proceeds raised from its initial public offering (IPO) in May 2022, as well as subsequent equity offerings in early 2024. Prior to the IPO, PepGen raised aggregate gross proceeds of $133.5 million from the private placement of convertible preferred stock. The IPO in May 2022 generated gross proceeds of $122.9 million, and the equity offerings in early 2024 resulted in additional net proceeds of $86.3 million.
PepGen has devoted substantially all of its financial resources and efforts to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, acquiring and developing product and technology rights, hiring personnel, leasing premises and associated capital expenditures, raising capital, and providing general and administrative support for these operations. To date, PepGen has only completed a Phase 1 clinical trial for its lead product candidate, PGN-EDO51, and initiated several additional clinical trials, including two Phase 2 trials for PGN-EDO51 and a Phase 1 and a Phase 2 trial for its second product candidate, PGN-EDODM1.
As of September 30, 2024, PepGen reported cash, cash equivalents, and marketable securities of $138.9 million, providing a runway into 2026. The company has incurred significant operating losses since its inception, with net losses of $67.7 million and $59.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. As of September 30, 2024, PepGen had an accumulated deficit of $249.2 million.
Financial Performance and Liquidity
PepGen’s financial statements reflect the company’s status as a clinical-stage biotechnology firm focused on research and development. The company has not yet generated any revenue from product sales, with its net losses totaling $67.7 million and $59.1 million for the nine-month periods ended September 30, 2024 and 2023, respectively.
The company’s research and development expenses, which encompass the costs associated with its preclinical studies and clinical trials, were $57.5 million and $51.8 million for the nine-month periods ended September 30, 2024 and 2023, respectively. General and administrative expenses, which include personnel-related costs and other overhead, were $15.9 million and $12.1 million for the same respective periods.
PepGen’s balance sheet remains strong, with $138.9 million in cash, cash equivalents, and marketable securities as of September 30, 2024. This provides the company with the financial resources necessary to continue advancing its pipeline and execute on its strategic initiatives.
For the most recent quarter (Q3 2024), PepGen reported a net loss of $21,384,000, with negative operating cash flow of $24,012,000 and negative free cash flow of $24,197,000. The company’s liquidity position remains solid, with a debt-to-equity ratio of 0, a current ratio of 8.47, and a quick ratio of 8.47. As of September 30, 2024, PepGen had $42.29 million in cash and cash equivalents.
Pipeline and Clinical Development
PepGen’s lead product candidate, PGN-EDO51, is currently being evaluated in two parallel Phase 2 clinical trials for the treatment of DMD. The CONNECT1 study is an ongoing open-label, multiple ascending dose trial in Canada, while the CONNECT2 study is a multinational, randomized, double-blind, placebo-controlled trial.
In July 2024, PepGen reported positive data from the 5 mg/kg cohort of the CONNECT1 study. PGN-EDO51 demonstrated a favorable safety profile, with no treatment-related serious adverse events, and achieved mean exon skipping levels of 2.15% and mean muscle-adjusted dystrophin levels of 1.49% after four doses over three months of treatment. These results represent significant improvements compared to publicly available data for other exon-skipping approaches.
The company’s second product candidate, PGN-EDODM1, is being developed for the treatment of DM1. PepGen initiated a Phase 1 clinical trial, FREEDOM, in December 2023 to assess the safety, tolerability, and efficacy of PGN-EDODM1. The company expects to report data from the 5 mg/kg and 10 mg/kg dose cohorts of this study in the first quarter of 2025.
In addition to its lead programs, PepGen is advancing a third product candidate, PGN-EDO53, for the treatment of DMD patients amenable to exon 53 skipping. The company is currently conducting preclinical studies to support the development of this asset.
Regulatory Designations and Upcoming Milestones
PepGen’s product candidates have received several regulatory designations that underscore their potential. The FDA has granted orphan drug designation and rare pediatric disease designation for PGN-EDO51 for the treatment of DMD, as well as orphan drug designation and Fast Track designation for PGN-EDODM1 for the treatment of DM1.
Looking ahead, PepGen anticipates several key milestones in the coming quarters. For the PGN-EDO51 program, the company expects to report data from the 10 mg/kg cohort of the CONNECT1 study by the end of 2025. Additionally, the company plans to initiate dosing in the CONNECT2 study, a multinational, randomized, double-blind, placebo-controlled trial of PGN-EDO51, in the second half of 2024.
For the PGN-EDODM1 program, PepGen expects to report data from the 5 mg/kg and 10 mg/kg dose cohorts of the FREEDOM study in the first quarter of 2025. The company has also received clearance from Health Canada and the U.K. Medicines and Healthcare products Regulatory Agency to initiate the FREEDOM2 study, a Phase 2 randomized, double-blind, placebo-controlled trial of PGN-EDODM1, with patient dosing expected to begin in the fourth quarter of 2024.
Risks and Challenges
As a clinical-stage biotechnology company, PepGen faces several risks and challenges inherent to the industry. The company’s success will depend on its ability to successfully complete ongoing and future clinical trials, obtain regulatory approvals, and ultimately commercialize its product candidates. Delays or failures in any of these areas could significantly impact the company’s financial performance and growth prospects.
Additionally, PepGen operates in a highly competitive landscape, with several other companies developing therapies for DMD, DM1, and other neuromuscular and neurological disorders. The company’s ability to differentiate its products and maintain a competitive edge will be crucial to its long-term success.
Securing additional financing to support its research and development efforts is another key risk factor for PepGen. While the company’s current cash position provides a runway into 2026, it will likely need to raise additional capital through equity or debt financing, or through strategic partnerships, to continue advancing its pipeline.
Conclusion
PepGen Inc. is a clinical-stage biotechnology company at the forefront of developing innovative oligonucleotide therapies to address severe neuromuscular and neurological diseases. With its proprietary EDO platform, the company has generated a robust pipeline of product candidates, led by PGN-EDO51 for the treatment of DMD and PGN-EDODM1 for the treatment of DM1.
The company’s recent clinical data and regulatory designations, coupled with its strong financial position, position PepGen for continued growth and development. As the company advances its pipeline and approaches key milestones, investors will closely monitor its progress in transforming the treatment landscape for patients suffering from these devastating conditions.
PepGen’s focus on rare diseases with high unmet medical needs provides a significant market opportunity. The company’s lead product candidate, PGN-EDO51, has shown promising results in early clinical trials, with mean exon skipping of 2.15% in the biceps tissue and a mean increase in dystrophin levels to 0.61% of normal in the 5 mg/kg dose cohort of the CONNECT1 trial. These results suggest potential efficacy in treating DMD patients amenable to exon 51 skipping.
The company’s second major product candidate, PGN-EDODM1, is advancing through clinical development for the treatment of DM1, a rare genetic disease with no currently approved therapies targeting the underlying cause. The initiation of the Phase 2 FREEDOM2 trial in Q4 2024 represents a significant milestone in the development of this promising therapy.
PepGen’s financial position appears stable, with $138.9 million in cash, cash equivalents, and marketable securities as of September 30, 2024, providing a runway into 2026. This financial stability allows the company to continue advancing its clinical programs and preclinical pipeline without immediate funding concerns.
As PepGen progresses its lead candidates through clinical trials and works towards potential regulatory approvals, the company’s ability to execute on its development plans and generate positive clinical data will be critical in determining its long-term success in the competitive landscape of rare disease therapeutics.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.