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In a recent filing with the Securities and Exchange Commission, PepGen Inc. (NASDAQ:PEPG) reported that Chief Financial Officer Noel Donnelly executed a sale of company stock. On February 26, 2025, Donnelly sold 1,527 shares of common stock at a price of $1.68 per share, amounting to a total transaction value of $2,565. The transaction comes as PepGen’s stock has declined nearly 90% over the past year, with shares currently trading significantly below their 52-week high of $19.30. According to InvestingPro analysis, the company appears undervalued at current levels.
The sale was conducted to cover tax obligations arising from the vesting of performance-based stock units (PSUs) awarded to Donnelly. These PSUs were granted under PepGen’s 2022 Stock Option and Incentive Plan and were converted into shares upon meeting specific performance conditions as determined by the company’s Compensation Committee. While the company maintains a strong liquidity position with a current ratio of 7.41 and more cash than debt on its balance sheet, InvestingPro data reveals 12 additional key insights about PepGen’s financial health and market position.
The transaction was executed under a mandatory sell-to-cover provision, which is designed to handle statutory tax withholding obligations. This provision was part of the PSU agreement, ensuring compliance with Rule 10b5-1, and does not represent a discretionary trade by Donnelly. Following the sale, Donnelly retains ownership of 1,673 shares in the company, representing a small portion of PepGen’s $55.9 million market capitalization.
In other recent news, PepGen Inc. reported promising results from its FREEDOM-DM1 Phase 1 trial, highlighting a significant splicing correction in patients with myotonic dystrophy type 1 (DM1) after a single dose. The trial’s data showed a mean splicing correction of 29.1% at the 10 mg/kg dose, suggesting potential therapeutic benefits for a condition with no approved treatments. Meanwhile, Stifel analysts adjusted their price target for PepGen to $14 from $17, maintaining a Buy rating, following updates on the company’s DM1 treatment and fourth-quarter earnings for 2024. The analysts noted potential regulatory approval for the DM1 program, despite some functional data challenges.
In another development, H.C. Wainwright reduced its price target for PepGen to $16 from $26, citing safety data from the CONNECT1-EDO51 Phase 2 clinical trial in Canada, where two participants experienced reversible hypomagnesemia. Health Canada has allowed the trial to continue but requested further safety data before higher dose escalations. Additionally, BofA Securities downgraded PepGen to Underperform, reducing the price target to $3 from $6, due to the U.S. FDA’s clinical hold on the CONNECT2-EDO51 study for Duchenne muscular dystrophy (DMD). The firm expressed concerns over repeated clinical holds and adjusted the pipeline value to reflect anticipated delays.
PepGen is actively addressing regulatory inquiries and remains committed to advancing its clinical programs, including the ongoing CONNECT trials for DMD. The company is working closely with regulatory bodies to resolve safety concerns and anticipates sharing further data by the end of 2025.
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