U.S. stocks edge higher; solid earnings season continues
On Friday, H.C. Wainwright analyst Andrew S. Fein adjusted the price target for PepGen Inc. (NASDAQ:PEPG) to $8.00, a decrease from the previous $14.00, while maintaining a Buy rating on the company’s shares. According to InvestingPro data, the stock has seen a significant decline of nearly 90% over the past year, though it recently showed signs of recovery with a 14% gain in the past week. The current market cap stands at approximately $55 million, with analysts’ price targets ranging from $1 to $14. The revision follows PepGen’s recent announcement on May 28 that it will halt its PGN-EDO51 program due to its failure to achieve significant dystrophin expression. Fein believes that discontinuing the program is a wise decision, considering both its efficacy and the safety concerns it faced during the study. InvestingPro analysis reveals that while the company holds more cash than debt on its balance sheet, it’s quickly burning through its resources - crucial factors for investors monitoring the company’s development programs.
Fein noted that while the discontinuation of the PGN-EDO51 program may raise questions about the effectiveness of PepGen’s EDO platform for other potential pipeline programs, the early data from the company’s DM1 program suggests a more positive outlook. The FREEDOM-DM1 trial showed a dose-dependent increase in splicing correction following a single dose, with 29.1% correction at 28 days, which is anticipated to have therapeutic significance. This data, according to Fein, could potentially translate into muscle strength gains in a Multiple Ascending Dose (MAD) study.
The analyst also pointed out that the safety data from the DM1 program could reinforce the EDO platform’s value proposition. Unlike the DMD program, the DM1 trial did not exhibit adverse effects on kidney biomarkers or electrolyte imbalances, with serum creatine levels remaining within normal limits. Fein suggests that these preliminary results are promising and justify PepGen’s decision to prioritize this program.
As a result of removing the PGN-EDO51 program from their valuation model, H.C. Wainwright has lowered their price target for PepGen stock. Fein’s report underlines the belief that despite the setback with the DMD program, the DM1 program data supports the continued development and potential of PepGen’s EDO platform in treating genetic diseases. The company maintains a current ratio of 4.95, indicating strong short-term liquidity, though InvestingPro data shows the company is not expected to be profitable this year, with an EPS forecast of -$3.08 for 2025.
In other recent news, PepGen Inc. announced the temporary suspension of its Phase 2 CONNECT2-EDO51 study for Duchenne muscular dystrophy (DMD) to focus on the ongoing CONNECT1-EDO51 study. The decision allows the company to review data from a lower-dose cohort, with results expected in the third quarter of 2025. No new safety concerns have been reported for PGN-EDO51, and PepGen is working with Health Canada and the FDA to address safety queries and dosing levels. Additionally, PepGen appointed Dr. Kasra Kasraian as the new Chief Technology Officer to advance its clinical programs. His extensive experience in product and process development is expected to guide the company’s technical operations effectively. Meanwhile, Chief Medical (TASE:BLWV) Officer Dr. Michelle L. Mellion has resigned, with the company noting no disagreements with her departure. Analyst firm H.C. Wainwright recently reduced its price target for PepGen from $16 to $14, maintaining a Buy rating, citing adjustments to the CONNECT study protocol that could enhance trial data. These developments mark significant shifts in PepGen’s strategic and operational focus as it continues to advance its therapeutic pipeline.
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