PepGen pauses phase 2 DMD study to review earlier trial data

BOSTON - PepGen Inc. (NASDAQ:PEPG), a biotechnology company with a market capitalization of $91.87 million focused on developing oligonucleotide therapies for severe neuromuscular and neurological diseases, has announced the temporary suspension of its Phase 2 CONNECT2-EDO51 study for Duchenne muscular dystrophy (DMD). According to InvestingPro analysis, the company’s stock has shown significant volatility, with a notable 64% return over the last week despite falling 83% over the past year. The company has taken this step to await results from a lower-dose cohort of its ongoing CONNECT1-EDO51 study, which are expected in the third quarter of 2025.

The CONNECT1-EDO51 study, which is evaluating the safety and efficacy of the 10 mg/kg dose of PGN-EDO51 in DMD patients, is fully enrolled. PepGen reported that no new safety concerns have arisen with PGN-EDO51 as of the last update on January 23, 2025. The CONNECT2 study, which is now on hold, was designed as a double-blind trial to assess PGN-EDO51 in DMD patients amenable to exon 51-skipping therapy.

PepGen’s President and CEO, James McArthur, PhD, explained that the pause in CONNECT2 is to allow the company to focus on completing CONNECT1 and to potentially refine the CONNECT2 study design based on the forthcoming data. The decision also aims to conserve resources for advancing their FREEDOM studies of PGN-EDODM1 in myotonic dystrophy type 1, which has shown promising initial data. InvestingPro data reveals the company maintains a strong liquidity position with a current ratio of 7.41, though it’s currently burning through cash rapidly. The company holds more cash than debt on its balance sheet, providing some financial flexibility during this clinical development phase.

PGN-EDO51 utilizes PepGen’s proprietary Enhanced Delivery Oligonucleotide (EDO) technology to target the cause of DMD, a genetic disorder characterized by progressive muscle degeneration. The treatment is intended to skip exon 51 of the dystrophin transcript, which could benefit approximately 13% of DMD patients by producing a truncated, yet functional, dystrophin protein. The FDA has granted PGN-EDO51 Orphan Drug and Rare Pediatric Disease Designations.

The CONNECT1 trial, conducted in Canada, is progressing with the 5 mg/kg cohort participants continuing in the long-term extension phase. PepGen is working with Health Canada to address safety queries before any further dose escalation or additional participant enrollment at the current levels.

The company is also in discussions with the FDA regarding a clinical hold notice for the CONNECT2 trial in the U.S., seeking to resolve questions about dosing levels for the planned patient population.

This article is based on a press release statement from PepGen Inc. and does not suggest efficacy or safety conclusions for PGN-EDO51 or PGN-EDODM1, as these investigational therapies have not yet been approved for use. For investors seeking deeper insights into PepGen’s financial health and growth potential, InvestingPro offers 11 additional exclusive tips and comprehensive financial metrics to help inform investment decisions.

In other recent news, PepGen Inc. has reported promising results from its FREEDOM-DM1 Phase 1 trial for the treatment of myotonic dystrophy type 1 (DM1). The trial demonstrated a significant 29.1% mean splicing correction at a 10 mg/kg dose, with dose-dependent increases in muscle tissue concentrations. Despite the positive results, Stifel analysts have adjusted their price target for PepGen to $14, maintaining a Buy rating, due to concerns about the interpretability of functional data and regulatory uncertainties surrounding their Duchenne muscular dystrophy (DMD) program.

Meanwhile, H.C. Wainwright also revised its price target for PepGen, lowering it to $16 from $26, while continuing to support the stock with a Buy rating. This adjustment follows safety data from the CONNECT1-EDO51 Phase 2 trial, where asymptomatic hypomagnesemia was observed in participants. The trial continues under Health Canada’s oversight, with additional safety clarifications required before higher dosing.

BofA Securities downgraded PepGen to Underperform, reducing the price target to $3 from $6, after the FDA placed a clinical hold on the CONNECT2-EDO51 study in the U.S. This decision has led to a reassessment of the company’s EDO platform value, reflecting the challenges posed by the clinical hold. Despite these developments, PepGen remains committed to advancing its clinical programs and addressing regulatory concerns.

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