PepGen Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this 10-K, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Previous wording

PepGen is a clinical-stage biotechnology company advancing the next-generation of oligonucleotide therapies with the goal of transforming the treatment of severe neuromuscular and neurological diseases. Our proprietary EDO platform is founded on over a decade of research and development and leverages CPPs to improve the uptake and activity of conjugated oligonucleotide therapeutics. Using these EDO peptides, we are generating a pipeline of oligonucleotide therapeutic candidates that are designed to target the root cause of serious diseases.

Current wording

PepGen Inc., also referred to as “PepGen,” “we,” “our” or “us”, is a clinical-stage biotechnology company advancing the next-generation of oligonucleotide therapies with the goal of transforming the treatment of severe neuromuscular and neurological diseases. Our proprietary Enhanced Delivery Oligonucleotide, or EDO, platform is founded on over a decade of research and development and leverages cell-penetrating peptides, or CPPs, to improve the uptake and activity of conjugated oligonucleotide therapeutics. Using these EDO peptides, our goal is to develop a research and development pipeline of oligonucleotide therapeutic candidates that are designed to target the root cause of serious diseases.

Previous wording

We are also developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. We have conducted extensive preclinical studies of our product candidate, and these preclinical data form the basis of our clinical development plan for PGN-EDODM1. Our clinical development program for PGN-EDODM1 includes two studies, FREEDOM, a multinational, randomized, double-blind, placebo-controlled Phase 1 SAD study, and FREEDOM2, a multinational, randomized, double blind, placebo-controlled Phase 2 MAD study. In the FREEDOM study, we are enrolling adult participants with DM1 in multiple geographies including the U.S., U.K. and Canada, to evaluate the safety and tolerability of PGN-EDODM1, as well as oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. On February 24, 2025, we reported initial data from the 5 mg/kg and 10 mg/kg dose cohorts in this study. PGN-EDODM1 was observed to have a favorable emerging safety profile and robust splicing correction in a dose-dependent manner in the 5 and 10 mg/kg dose cohorts. We expect to report data from the 15 mg/kg cohort of the FREEDOM study in the second half of 2025.

Current wording

Our clinical development program for PGN-EDODM1 includes three studies, FREEDOM-DM1, or FREEDOM, a multinational, randomized, double-blind, placebo-controlled Phase 1 single ascending dose, or SAD, study, FREEDOM2-DM1, or FREEDOM2, a multinational, randomized, double blind, placebo-controlled Phase 2 MAD study and FREEDOM-OLE, which is an open label extension study open to participants who meet its eligibility criteria and have completed either the FREEDOM or FREEDOM2 studies. In the FREEDOM study, we are enrolling adult participants with DM1 in multiple geographies including the U.S., U.K. and Canada, to evaluate the safety and tolerability of PGN-EDODM1, as well as oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. On February 24, 2025, we reported initial data from the 5 mg/kg and 10 mg/kg dose cohorts in this study where PGN-EDODM1 was observed to have a favorable emerging safety profile and robust splicing correction in a dose-dependent manner in the 5 and 10 mg/kg dose cohorts. Additionally, on September 24, 2025, we reported topline results from the 15 mg/kg cohort in the FREEDOM study of PGN-EDODM1, demonstrating a mean splicing correction of 53.7% following a single 15 mg/kg dose, noting that PGN-EDOM1 was generally well tolerated at this dose, with all drug-related adverse events mild or moderate in severity. Based on the positive splicing correction observed in the FREEDOM trial and the totality of the blinded safety data to date, we have decided to conclude dose escalation in the FREEDOM trial with the 15 mg/kg cohort.

Previous wording

The safety data from the ongoing FREEDOM study has informed the design of FREEDOM2, which is currently open in Canada and U.K. We also plan to open the FREEDOM2 study other geographies, including the U.S., subject to regulatory authorizations. FREEDOM2 is a Phase 2 randomized, double-blind, placebo-controlled MAD study of PGN-EDODM1 in DM1 patients. FREEDOM2 is designed to assess PGN-EDODM1’s safety and tolerability, splicing correction and functional outcome measures in DM1 patients. We expect to report data from the 5 mg/kg cohort of the FREEDOM2 study in the first quarter of 2026.

Current wording

The safety data from the FREEDOM study has informed the design of FREEDOM2, which has received regulatory clearance in Canada, the United Kingdom, South Korea, Australia, and New Zealand and we are currently enrolling patients in Canada and the U.K. We recently received notice that the FDA has placed a partial clinical hold on the FREEDOM2 study based on previously submitted preclinical pharmacology and toxicology studies. The partial clinical hold did not cite any questions regarding the blinded clinical data from the FREEDOM Phase 1 study previously submitted to the FDA in order to initiate the FREEDOM2 study in the U.S. As part of our ongoing dialogue with the FDA, we are submitting additional analyses, including the recently unblinded FREEDOM data, and are preparing to work with the FDA to answer the questions as quickly as possible. FREEDOM2 is a Phase 2 randomized, double-blind, placebo-controlled MAD study of PGN-EDODM1 in DM1 patients. FREEDOM2 is designed to assess PGN-EDODM1’s safety and tolerability, splicing correction and functional outcome measures in DM1 patients. This study has concluded enrollment of the 5 mg/kg dose cohort and all participants have completed dosing. We expect to report data from this cohort at the end of the first quarter of 2026. The study is currently dosing the 10 mg/kg dose cohort and we expect to report data from this cohort in the second half of 2026.

Previous wording

The FDA has granted both orphan drug designation and Fast Track designation for PGN-EDODM1 for the treatment of DM1.

Current wording

The FDA has granted both orphan drug designation and Fast Track designation for PGN-EDODM1 for the treatment of DM1 and the EMA has also granted orphan medicinal product designation to PGN-EDODM1.

Previous wording

In May 2022, we closed our IPO, in which we sold an aggregate of 9,000,000 shares of common stock at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the underwriters a 30-day option to purchase 1,350,000 additional shares of common stock, which they exercised in part to purchase 1,238,951 additional shares of common stock for gross proceeds of $14.9 million. We received approximately $122.9 million in gross proceeds and $110.2 million in net proceeds in the IPO, after deducting underwriters’ fees and offering expenses.

Current wording

In May 2022, we closed our initial public offering, or IPO, in which we sold an aggregate of 9,000,000 shares of common stock at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the underwriters a 30-day option to purchase 1,350,000 additional shares of common stock, which they exercised in part to purchase 1,238,951 additional shares of common stock for gross proceeds of $14.9 million. We received approximately $122.9 million in gross proceeds and $110.2 million in net proceeds in the IPO, after deducting underwriters’ fees and offering expenses.

Previous wording

On February 5, 2024, we issued and sold 1,000,000 of common stock shares at a purchase price of $10.00 per share under our ATM program, pursuant to the Sales Agreement with Stifel, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024, in the Follow-on Offering. The Follow-on Offering resulted in net proceeds of $76.4 million after deducting underwriters' fees of $3.7 million. Net proceeds from the ATM program and Follow-on Offering, after deducting underwriters’ fees and costs of the offerings, were $86.3 million.

Current wording

On February 5, 2024, we issued and sold 1,000,000 shares of common stock at a purchase price of $10.00 per share under our at-the-market offering program, or ATM program, pursuant to an At-the-Market Equity Offering Sales Agreement, or Sales Agreement, with Stifel, Nicolaus & Company, Incorporated, or Stifel, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024, in an underwritten follow-on offering, or the 2024 Offering. The 2024 Offering resulted in net proceeds of $76.4 million after deducting underwriters' fees of $3.7 million. Net proceeds from the ATM program and 2024 Offering, after deducting underwriters’ fees and costs of the offerings, were $86.3 million.

Previous wording

Since our inception, we have not generated any revenue from product sales or other sources and have incurred significant operating losses and negative cash flows from our operations. Our primary uses of cash to date have been to fund our research and development activities, business planning, establishing and maintaining our 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, we have funded our operations primarily through private placements of our convertible preferred stock and proceeds from our IPO, the ATM program and the Follow-on Offering.

Current wording

Since our inception, we have not generated any revenue from product sales or other sources and have incurred significant operating losses and negative cash flows from our operations. Our primary uses of cash to date have been to fund our research and development activities, business planning, establishing and maintaining our 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, we have funded our operations primarily through private placements of our convertible preferred stock and proceeds from our IPO, the ATM program, the 2024 Offering, and the 2025 Offering.

Previous wording

We have incurred operating losses in each year since our inception. Our net losses were $90.0 million and $78.6 million for the years ended December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $120.2 million. As of December 31, 2024, we had an accumulated deficit of $271.5 million. We expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, current and planned clinical trials, manufacturing campaigns and our expenditures on other research and development activities.

Current wording

We have incurred operating losses in each year since our inception. Our net losses were $89.7 million and $90.0 million for the years ended December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $148.5 million. As of December 31, 2025, we had an accumulated deficit of $361.1 million. Notwithstanding our decision to cease our research and development efforts in DMD, which we announced on May 28, 2025, we expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials of PGN-EDODM1, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, current and planned clinical trials, manufacturing campaigns and our expenditures on other research and development activities.

Previous wording

Based on our currently planned operations, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this 10-K. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our currently planned operations into the second half of 2027. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

external expenses, including expenses incurred under arrangements with third parties, such as CROs, CDMOs, consultants and our scientific advisors;

Current wording

external expenses, including expenses incurred under arrangements with third parties, such as clinical research organizations, or CROs, contract development manufacturing organizations, or CDMOs, consultants and our scientific advisors;

Previous wording

We expect that our research and development expenses will increase in 2025, as compared to 2024, as we conduct our ongoing Phase 2 clinical trials for PGN-EDO51 and our ongoing Phase 1 and Phase 2 clinical trials of PGN-EDODM1. We also continue to increase our research and development headcount to support these programs. Research and development expenses for our lead programs can be variable quarter-over-quarter due to the timing of manufacturing campaigns, which are accounted for under the percentage of completion method. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates.

Current wording

We continue to conduct our ongoing Phase 2 clinical trial of our investigational drug candidate, PGN-EDODM1. We have decided to conclude dose escalation in the FREEDOM trial with the 15 mg/kg cohort, based on the positive splicing correction observed and the totality of the blinded safety data to date. As stated above, on May 28, 2025, we announced that we have decided to voluntarily discontinue development of PGN-EDO51 and are working to complete the wind-down of DMD-related research and development activities. Research and development expenses for our lead program can be variable quarter-over-quarter due to the timing of manufacturing campaigns, which are accounted for under the percentage of completion method. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our remaining clinical stage product candidate or any new product candidates we develop.

Previous wording

The timelines and costs associated with research and development activities are uncertain and can vary significantly for each product candidate and development program due to the inherently unpredictable nature of preclinical and clinical development. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to preclinical and clinical results, regulatory developments, and ongoing assessments as to each program’s commercial potential. We will need to raise substantial additional capital in the future.

Current wording

The timelines and costs associated with research and development activities are uncertain and can vary significantly for our product candidate and development program due to the inherently unpredictable nature of preclinical and clinical development. We previously announced our decision to focus our development efforts on PGN-EDODM1, and to cease development of our DMD-related programs, and may make further determinations as to which programs in our research and development pipeline to pursue and how much funding to direct to each program. We will need to raise substantial additional capital in the future.

Previous wording

the status of clinical trials, the timing and costs, if any, associated with resolving a clinical hold, animal and other preclinical studies and IND- or CTA-enabling studies;

Current wording

the status of clinical trials, the timing and costs, if any, associated with resolving clinical or partial clinical holds, animal and other preclinical studies and IND- or clinical trial application, or CTA-enabling studies;

Previous wording

We anticipate that our general and administrative expenses will increase in 2025 as compared to 2024 primarily due to personnel costs, including stock-based compensation expense. Other general and administrative expenses will remain consistent to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations.

Current wording

Other general and administrative expenses will remain consistent to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations.

Previous wording

We recognized a tax benefit for the year ended December 31, 2024 due to the derecognition of an unrecognized tax benefit of $0.7 million upon the dissolution of our U.K.-based entity, PepGen Limited on December 10, 2024. Additionally, we recorded $0.1 million in state taxes on interest income generated from the Company's cash equivalents and marketable securities. We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception.

Current wording

We record tax expense for state taxes on interest income generated from the Company's cash equivalents and marketable securities. We recognized a tax benefit for the year ended December 31, 2024 due to the derecognition of an unrecognized tax benefit of $0.7 million upon the dissolution of our U.K.-based entity, PepGen Limited on December 10, 2024. We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception.

Previous wording

Research and development expenses increased by $8.4 million from $68.1 million for the year ended December 31, 2023, to $76.5 million for the year ended December 31, 2024. This increase was attributable to expenses related to the advancement of clinical trials for our two lead programs, including a $7.6 million increase in clinical trial costs, a $0.7 million increase in manufacturing costs, and a $7.3 million increase in personnel-related costs, inclusive of an increase of $2.0 million in stock-based compensation expense. Additionally, there was an increase of $0.7 million in facility and other office related expenses, including depreciation, a $1.0 million increase in consulting expense, and a $0.3 million increase in other R&D expenses, primarily related to insurance expense. These increases were partially offset by a $9.3 million decrease in preclinical costs as our two lead programs are now in clinical trials.

Current wording

Research and development expenses decreased by $5.4 million from $76.5 million for the year ended December 31, 2024, to $71.0 million for the year ended December 31, 2025. This was attributable to a $4.5 million decrease in preclinical costs as our two lead programs had both advanced into clinical trials, prior to the discontinuation of our DMD program in late May 2025. Additionally, there was a $4.0 million decrease in manufacturing costs due to the timing of manufacturing campaigns. The decrease was further driven by a $0.9 million decrease in facility and office related expenses, including depreciation, a $0.9 million decrease in consulting expense, and a $0.3 million decrease in employee expenses. These decreases were partially offset by increased clinical trial costs of $4.5 million associated with the advancement of clinical development programs and charges taken during the second quarter of 2025 for wind-down costs for the two clinical trials for PGN-EDO51. There was also a $0.8 million increase in other research and development expenses related primarily to the non-cash charge taken during the current year associated with the impairment of unused lab equipment.

Previous wording

General and administrative expenses increased by $4.6 million from $16.6 million for the year ended December 31, 2023, to $21.3 million for the year ended December 31, 2024. The increase was driven primarily by an increase of $4.3 million in personnel-related costs due to increased headcount, inclusive of $2.4 million in stock-based compensation expense, and an increase of $0.6 million in facility and office related expenses related to rent expense for our operating lease and depreciation on office furniture. These increases were partially offset by a $0.3 million decrease in insurance expense.

Current wording

General and administrative expenses increased by $1.3 million from $21.3 million for the year ended December 31, 2024, to $22.6 million for the year ended December 31, 2025. The increase was driven primarily by an increase in consulting expenses, legal expenses and personnel-related costs.

Previous wording

Other income (expense), net was income of $7.1 million for the year ended December 31, 2024, compared to income of $6.2 million for the year ended December 31, 2023. The increase was primarily driven by interest earned from our money market fund and U.S. treasury holdings.

Current wording

Other income (expense), net was income of $4.0 million for the year ended December 31, 2025, compared to income of $7.1 million for the year ended December 31, 2024. The decrease was primarily driven by lower cash balances in our money market fund accounts and U.S. treasury holdings prior to the 2025 Financing.

Previous wording

Income tax benefit was a net benefit of $0.6 million for the year ended December 31, 2024 related the derecognition of an unrecognized tax benefit of $0.7 million upon the dissolution of our U.K.-based entity, PepGen Limited in December 2024. This is partially offset by $0.1 million in state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax expense was $0.1 million for the year ended December 31, 2023.

Current wording

Income tax expense was $0.1 million for the year ended December 31, 2025 for state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax benefit was a net benefit of $0.6 million for the year ended December 31, 2024 related the derecognition of an unrecognized tax benefit of $0.7 million upon the dissolution of our U.K.-based entity, PepGen Limited in December 2024. This is partially offset by $0.1 million in state taxes on interest income generated from the Company's cash equivalents and marketable securities.

Previous wording

From our inception in January 2018 through December 31, 2024, we have funded our operations primarily through the sale of our common stock and convertible preferred stock. We received aggregate gross proceeds of $163.9 million from these sales prior to our IPO. Additionally, in May 2022, we received gross proceeds from our IPO of $122.9 million.

Current wording

Since our inception in January 2018, we have funded our operations primarily through the sale of our common stock and convertible preferred stock. We received aggregate gross proceeds of $163.9 million from these sales prior to our IPO. Additionally, in May 2022, we received gross proceeds from our IPO of $122.9 million.

Previous wording

On February 9, 2024, we issued and sold 7,530,000 shares of common stock in the Follow-on Offering at a purchase price of $10.635 per share, resulting in net proceeds of $76.4 million after deducting underwriters’ fees and offering costs of $3.7 million.

Current wording

On February 9, 2024, we issued and sold 7,530,000 shares of common stock in the 2024 Offering at a purchase price of $10.635 per share, resulting in net proceeds of $76.4 million after deducting underwriters’ fees and offering costs of $3.7 million.

Previous wording

As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $120.2 million. Based on our currently planned operations, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this 10-K. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Current wording

As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $148.5 million. We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our currently planned operations into the second half of 2027. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Previous wording

the scope, progress, costs and results of preclinical and clinical development for our product candidates, any additional product candidates we may develop and any new indications we may pursue;

Current wording

the scope, progress, costs and results of preclinical and clinical development for PGN-EDODM1, any additional product candidates we may develop and any new indications we may pursue;

Previous wording

the scope, costs, timing and outcome of regulatory review of our product candidates, any additional product candidates we may develop and any new indications we may pursue;

Current wording

the scope, costs, timing and outcome of regulatory review of PGN-EDODM1, any additional product candidates we may develop and any new indications we may pursue;

Previous wording

the costs of operating as a public company.

Current wording

the ongoing costs of operating as a public company.

Previous wording

For the year ended December 31, 2023, net cash used in operating activities was $69.0 million resulting from our net loss of $78.6 million partially offset by cash provided by changes in our operating assets and liabilities of $2.0 million and non-cash charges of $7.7 million. The net changes in our operating assets and liabilities were primarily due to an increase in accrued expenses of $1.4 million and an increase in prepaids and other current assets of $2.0 million. These increases were partially offset by a $1.2 million decrease in operating lease liabilities related to cash paid towards tenant improvements on our new office and lab lease. Non-cash charges included $7.0 million in stock-based compensation expense and $1.2 million in depreciation expense.

Current wording

For the year ended December 31, 2025, net cash used in operating activities was $81.6 million resulting from our net loss of $89.7 million and by cash provided by changes in our operating assets and liabilities of $6.2 million partially offset by non-cash charges of $14.2 million. The net changes in our operating assets and liabilities were primarily due to a decrease in prepaids and other current assets of $1.1 million, a decrease in accrued expenses of $3.3 million, a $3.1 million decrease in operating lease liabilities, and a $0.9 million decrease in accounts payable. Non-cash charges included $10.6 million in stock-based compensation expense, $2.2 million of accretion of discounts on our marketable securities, net, $3.7 million of amortization and interest accretion on our operating lease, and $1.4 million in depreciation expense. Additionally, there was a non-cash adjustment of $0.7 million related to the impairment of unused lab equipment.

Previous wording

For the year ended December 31, 2024, net cash used in operating activities was $82.4 million resulting from our net loss of $90.0 million and by cash provided by changes in our operating assets and liabilities of $5.3 million partially offset by non-cash charges of $12.9 million. The net changes in our operating assets and liabilities were primarily due to an increase in prepaids and other current assets of $1.3 million, a decrease in accrued expenses of $1.7 million, and a $3.0 million decrease in operating lease liabilities. These changes were partially offset by a $0.7 million increase in accounts payable. Non-cash charges included $11.5 million in stock-based compensation expense, $3.9 million of accretion of discounts on our marketable securities, $3.7 million of amortization and interest accretion on our operating lease, and $1.5 million in depreciation expense.

Current wording

For the year ended December 31, 2024, net cash used in operating activities was $82.4 million resulting from our net loss of $90.0 million and by cash provided by changes in our operating assets and liabilities of $5.2 million partially offset by non-cash charges of $12.9 million. The net changes in our operating assets and liabilities were primarily due to an increase in prepaids and other current assets of $1.3 million, a decrease in accrued expenses of $1.7 million, and a $3.0 million decrease in operating lease liabilities. These changes were partially offset by a $0.7 million increase in accounts payable. Non-cash charges included $11.5 million in stock-based compensation expense, $3.9 million of accretion of discounts on our marketable securities, net, $3.7 million of amortization and interest accretion on our operating lease, and $1.5 million in depreciation expense.

Previous wording

Net cash used in investing activities was $32.0 million during the year ended December 31, 2023. Cash used in investing activities was related to $29.4 million in purchases of marketable securities and $2.6 million in purchases of property and equipment.

Current wording

Net cash used in investing activities was $15.2 million during the year ended December 31, 2025. Cash used in investing activities resulted from $94.0 million in purchases of marketable securities and $0.3 million in purchases of property and equipment. This was partially offset by $79.0 million in maturities of marketable securities.

Previous wording

Net cash used in financing activities was $0.2 million for the year ended December 31, 2023, which was primarily the result of $0.4 million in payments towards offering costs related to our Form S-3 and Sales Agreement filings in May and August 2023, respectively. These payments were partially offset by $0.3 million of proceeds from the purchase of shares under employee equity plans.

Current wording

Net cash provided by financing activities was $108.0 million for the year ended December 31, 2025, resulting from $108.1 million in proceeds from the 2025 Offering and $0.3 million of proceeds from the purchase of shares under employee equity plans, partially offset by $0.4 million in the payment of offering costs.

Previous wording

Net cash provided by financing activities was $88.7 million for the year ended December 31, 2024, resulting from $76.9 million in proceeds from the Follow-on Offering, $9.9 million in proceeds from sales under the Sales Agreement, and $2.5 million from proceeds from the purchase of shares under employee equity plans, partially offset by $0.5 million in the payment of deferred offering costs.

Current wording

Net cash provided by financing activities was $88.7 million for the year ended December 31, 2024, resulting from $76.9 million in proceeds from the 2024 Offering, $9.9 million in proceeds from sales under the Sales Agreement, and $2.5 million from proceeds from the purchase of shares under employee equity plans, partially offset by $0.5 million in the payment of deferred offering costs.

Previous wording

While our significant accounting policies are more fully described in Note 2,“Summary of Significant Accounting Policies” to our consolidated financial statements appearing elsewhere in this 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.

Current wording

While our significant accounting policies are more fully described in Note 2,“Summary of Significant Accounting Policies” to our consolidated financial statements appearing elsewhere in this Form 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.

Previous wording

The Black-Scholes option pricing model requires the use of subjective assumptions, including the risk-free interest rate, the expected stock price volatility, the expected term of stock options, the expected dividend yield, and the fair value of the underlying common stock on the date of grant. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. Prior to our IPO, there was no public market for our common stock, and consequently, the estimated fair value of our common stock was determined by our board of directors as of the date of each stock option grant, with input from management, considering third-party valuations of our common stock as well as our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or Practice Aid. The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of our common stock at each valuation date. Since our IPO, we have determined the fair market value of our common stock using the closing price of our common stock as reported on the Nasdaq Global Select Market.

Current wording

Prior to our IPO, there was no public market for our common stock, and consequently, the estimated fair value of our common stock was determined by our board of directors as of the date of each stock option grant, with input from management, considering third-party valuations of our common stock as well as our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or Practice Aid. The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of our common stock at each valuation date. Since our IPO, we have determined the fair market value of our common stock using the closing price of our common stock as reported on the Nasdaq Global Select Market.