BOSTON - PepGen Inc. (NASDAQ: PEPG), a biotechnology firm with a market capitalization of $153 million focused on developing oligonucleotide therapies for neuromuscular and neurological diseases, has encountered a regulatory setback as the U.S. Food and Drug Administration (FDA) placed a clinical hold on its trial for a Duchenne muscular dystrophy (DMD) treatment. The FDA's notice pertains to the company's Investigational New Drug (IND) application for the CONNECT2-EDO51 clinical trial. The news has impacted the company's stock, which has declined nearly 73% over the past six months.InvestingPro data reveals several key insights about PepGen's financial position, with 12 additional ProTips available to subscribers.
Despite the clinical hold on CONNECT2-EDO51, PepGen's ongoing CONNECT1-EDO51 trial in Canada remains unaffected. This trial, which is an open-label, multiple ascending dose study of PGN-EDO51, has completed enrollment for the 10 mg/kg dose cohort, with all participants having received at least one dose. The company maintains a strong financial position with more cash than debt on its balance sheet, and its current ratio of 8.47 indicates robust short-term liquidity.
PGN-EDO51 is PepGen's therapeutic candidate aimed at treating DMD by skipping exon 51 of the dystrophin transcript, which could potentially restore the production of a functional dystrophin protein in patients. This approach targets approximately 13% of the DMD patient population. The FDA has previously granted Orphan Drug and Rare Pediatric Disease Designations to PGN-EDO51.
Paul Streck, MD, MBA, Head of R&D at PepGen, stated that the company plans to work closely with the FDA to address their questions regarding the IND for the CONNECT2 trial as swiftly as possible.
The CONNECT2 trial is designed as a Phase 2 multinational, double-blind, placebo-controlled study over a period of 25 weeks and is already underway in the United Kingdom (TADAWUL:4280).
PepGen's proprietary Enhanced Delivery Oligonucleotide (EDO) technology forms the core of its therapeutic strategy, which is intended to improve the delivery and efficacy of oligonucleotide treatments.
The company has cautioned that PGN-EDO51 is still under investigation and has not been approved for use in any country. The clinical hold by the FDA indicates that there are issues that need to be addressed before the CONNECT2 trial can proceed in the United States. PepGen has not disclosed the specific reasons for the FDA's decision but will receive an official clinical hold letter within 30 days. According to InvestingPro analysis, analysts maintain a bullish outlook with price targets ranging from $6 to $26, suggesting potential upside. The stock currently appears undervalued based on InvestingPro's Fair Value assessment.
This article is based on a press release statement from PepGen Inc.
In other recent news, PepGen Inc. has been the subject of an outlook adjustment by BofA Securities, which lowered its stock target due to trial delays and competition. The adjustment follows changes to the eligibility criteria in PepGen's phase 2 clinical trial, known as CONNECT1-EDO51, which evaluates PGN-EDO51, a potential treatment for Duchenne muscular dystrophy. PepGen also adjusted its timeline for releasing data on the 10mg/kg dose, now expected by the end of 2025. Despite these adjustments, BofA Securities maintains a neutral stance on the stock.
In corporate governance, PepGen announced the retirement of Board Director Christopher Ashton, effective September 2024. This will reduce the board's size from seven to six directors. Other changes include the approval of an Officer Exculpation Amendment, the election of two new Class II directors, and the ratification of KPMG LLP as the fiscal year-end independent registered public accounting firm.
On the executive front, PepGen appointed Dr. Michelle Mellion as Chief Medical (TASE:PMCN) Officer and Dr. Hayley Parker as Senior Vice President, Global Regulatory Affairs. The company also received orphan drug and rare pediatric disease designations from the U.S. Food and Drug Administration for PGN-EDO51. These are among the recent developments at PepGen.
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