PepGen Inc.

Previous wording

The safety data from the FREEDOM study 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. and other geographies. The FREEDOM2 study remains on partial clinical hold in the U.S. and we continue to work with the FDA to address questions raised by the FDA 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. We recently reported topline results from the 5 mg/kg cohort in the FREEDOM2 study where PGN-EDODM1 was generally well-tolerated, with no serious adverse events (SAEs), all related treatment emergent adverse events (TEAEs) reported as mild, all non-related TEAEs reported as mild or moderate, and no signs of cumulative toxicity. Such results also demonstrated a mean splicing correction of 7.3%, compared to 6.8% in placebo-treated patients. However, excluding one outlier patient, patients showed a mean splicing correction of 22.9% as the outlier patient exhibited a worsening in splicing correction (70.8%), reducing the overall group mean to 7.3%. Middle finger vHOT in the treatment group in this cohort showed a positive trend of improvement versus a worsening observed in the placebo group with both returning to baseline at the last assessment. The FREEDOM2 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.

Current wording

The safety data from the FREEDOM study informed the design of FREEDOM2, which has received regulatory clearance in Canada, the United Kingdom, South Korea, Australia, and New Zealand. The FREEDOM2 study remains on partial clinical hold in the U.S. and we continue to work with the FDA to address questions raised by the FDA 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. We reported topline results from the 5 mg/kg cohort in the FREEDOM2 study where PGN-EDODM1 was generally well-tolerated, with no serious adverse events (SAEs), all related treatment emergent adverse events (TEAEs) reported as mild, all non-related TEAEs reported as mild or moderate, and no signs of cumulative toxicity. Such results also demonstrated a mean splicing correction of 7.3%, compared to 6.8% in placebo-treated patients. However, excluding one outlier patient, patients showed a mean splicing correction of 22.9% as the outlier patient exhibited a worsening in splicing correction (70.8%), reducing the overall group mean to 7.3%. Middle finger vHOT in the treatment group in this cohort showed a positive trend of improvement versus a worsening observed in the placebo group with both returning to baseline at the last assessment. The FREEDOM2 study has completed enrollment of the 10 mg/kg dose cohort with seven of eight patients having completed dosing, and we expect to report data from this cohort in November, 2026. Furthermore, based on the review of available safety data from the 10 mg/kg dose cohort of the FREEEDOM2 study, an independent Data and Safety Monitoring Board, or DSMB, recommended advancing the FREEDOM2 trial into the third and highest dose cohort at 12.5 mg/kg; results from the 12.5 mg/kg cohort of FREEDOM2 are expected in the first half of 2027. The DSMB also approved dose escalation in the open-label extension study, or OLE, from 5 mg/kg to 10 mg/kg dosing.

Previous 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. During the three months ended March 31, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 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. During the six months ended June 30, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 million.

Previous wording

We have incurred operating losses in each year since our inception. Our net losses were $17.8 million and $30.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively. As of March 31, 2026, we had cash, cash equivalents, and marketable securities of $132.3 million. As of March 31, 2026, we had an accumulated deficit of $378.9 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.

Current wording

We have incurred operating losses in each year since our inception. Our net losses were $35.6 million and $53.3 million for the six months ended June 30, 2026 and June 30, 2025, respectively. As of June 30, 2026, we had cash, cash equivalents, and marketable securities of $117.2 million. As of June 30, 2026, we had an accumulated deficit of $396.7 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

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.

Current wording

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our currently planned operations into the fourth quarter 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

The following table (in thousands) summarizes our research and development expenses for the three months ended March 31, 2026 and March 31, 2025. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis.

Current wording

The following table (in thousands) summarizes our research and development expenses for the three and six months ended June 30, 2026 and June 30, 2025. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis.

Previous wording

The Phase 1 FREEDOM clinical trial of our investigational drug candidate, PGN-EDODM1 has completed and we continue to conduct the ongoing Phase 2 FREEDOM2 clinical trial. On May 28, 2025, we announced that we 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.

Current wording

The Phase 1 FREEDOM clinical trial of our investigational drug candidate, PGN-EDODM1, has completed and we continue to conduct the ongoing Phase 2 FREEDOM2 and Open Label Extension clinical trials. On May 28, 2025, we announced that we decided to voluntarily discontinue development of PGN-EDO51 and have recently substantially completed 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

Interest income consists of interest earned on our money market mutual funds and short-term U.S. treasury holdings.

Current wording

Interest income consists of interest earned on our cash equivalents and marketable securities.

Previous wording

Research and development expenses decreased by $12.4 million from $25.4 million for the three months ended March 31, 2025, to $13.0 million for the three months ended March 31, 2026. This was primarily attributable to a $9.7 million decrease in manufacturing costs related to the timing of manufacturing campaigns and a $2.4 million decrease in personnel-related costs, including a decrease of $0.6 million in stock-based compensation expense. This was additionally driven by a $0.3 million decrease in clinical costs as, prior to the discontinuation of our DMD program in late May 2025, we had two programs in clinical trials during the first quarter of the prior year.

Current wording

Research and development expenses decreased by $5.9 million from $18.4 million for the three months ended June 30, 2025, to $12.5 million for the three months ended June 30, 2026. This was primarily attributable to a $2.3 million decrease in clinical trial expense as, prior to the discontinuation of our DMD program in late May 2025, we had two programs in clinical trials during part of the second quarter of the prior year. Additionally, there was a $0.7 million charge taken during the second quarter in the prior year for estimated wind-down costs for the two clinical trials for PGN-EDO51. The decrease was additionally driven by a $2.2 million decrease in manufacturing costs related to the timing of manufacturing campaigns, a $1.1 million decrease in personnel-related costs, and a $0.7 million decrease related to a non-cash charge taken during the prior year associated with the impairment of unused lab equipment. These decreases are partially offset by a $0.4 million increase in consulting expense.

Previous wording

Other income (expense), net was $1.2 million for the three months ended March 31, 2026 and $1.1 million for the three months ended March 31, 2025. Interest is earned through our cash deposits and U.S. Treasury-backed money market funds.

Current wording

Other income (expense), net was $1.1 million for the three months ended June 30, 2026 and $0.8 million for the three months ended June 30, 2025. Interest income is earned on the Company's cash equivalents and marketable securities.

Previous wording

Income tax expense was $15,000 for the three months ended March 31, 2026 for state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax expense was nil for the three months ended March 31, 2025.

Current wording

Income tax expense was $16,000 for the three months ended June 30, 2026 for state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax expense was nil for the three months ended June 30, 2025.

Previous wording

On August 8, 2023, we filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM program. 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 the ATM program, resulting in net proceeds of $9.9 million. During the three months ended March 31, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 million.

Current wording

On August 8, 2023, we filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM program. 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 the ATM program, resulting in net proceeds of $9.9 million. During the six months ended June 30, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 million.

Previous wording

As of March 31, 2026, we had cash, cash equivalents, and marketable securities of $132.3 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 for 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 June 30, 2026, we had cash, cash equivalents, and marketable securities of $117.2 million. We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our currently planned operations into the fourth quarter of 2027. However, our forecast for 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 following table sets forth a summary of the net cash flow activity for the three months ended March 31, 2026 and March 31, 2025 (in thousands):

Current wording

The following table sets forth a summary of the net cash flow activity for the six months ended June 30, 2026 and June 30, 2025 (in thousands):

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $18.4 million resulting from our net loss of $17.8 million and changes in our operating assets and liabilities of $4.0 million, partially offset by non-cash adjustments of $3.3 million. The net changes in our operating assets and liabilities were primarily due to a decrease of $3.5 million in accrued expenses. The non-cash adjustments included $2.9 million of stock-based compensation, $0.3 million of depreciation expense, $0.9 million of amortization and interest accretion on our operating lease, and $0.8 million of amortization of discounts on our marketable securities.

Current wording

For the six months ended June 30, 2026, net cash used in operating activities was $34.2 million resulting from our net loss of $35.6 million and changes in our operating assets and liabilities of $5.6 million, partially offset by non-cash adjustments of $6.9 million. The net changes in our operating assets and liabilities were primarily due to a decrease of $4.0 million in accrued expenses. The change was further driven by a decrease in operating lease liabilities of $1.6 million. The non-cash adjustments included $6.2 million of stock-based compensation, $0.6 million of depreciation expense, $1.9 million of amortization and interest accretion on our operating lease, and $1.7 million of amortization of discounts on our marketable securities.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $22.9 million resulting from our net loss of $30.2 million, partially offset by changes in our operating assets and liabilities of $3.2 million and by non-cash adjustments of $4.1 million. The net changes in our operating assets and liabilities were primarily due to an increase in accrued expenses of $2.7 million, as a result of the timing of manufacturing campaigns, and an increase in accounts payable of $0.9 million. The change was further driven by a decrease in operating lease liabilities of $0.8 million and a decrease in prepaids and other current assets of $0.3 million. The non-cash adjustments included $3.4 million of stock-based compensation, $0.4 million of depreciation expense, $0.7 million of amortization of discounts on our marketable securities, and $0.9 million of amortization and interest accretion on our operating lease.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $46.5 million resulting from our net loss of $53.3 million and changes in our operating assets and liabilities of $1.2 million, partially offset by non-cash adjustments of $7.9 million. The net changes in our operating assets and liabilities were primarily due to a decrease in operating lease liabilities of $1.5 million. The change was further driven by a decrease in accounts payable of $0.9 million, an increase in accrued expenses of $0.5 million and a decrease in prepaids and other current assets of $0.7 million. The non-cash adjustments included $5.8 million of stock-based compensation, $0.7 million of depreciation expense, $1.2 million of amortization of discounts on our marketable securities, and $1.9 million of amortization and interest accretion on our operating lease. Additionally, there was a non-cash adjustment of $0.7 million related to the impairment of unused lab equipment.

Previous wording

For the three months ended March 31, 2026, net cash used in investing activities was $1.5 million resulting from $28.5 million in purchases of marketable securities partially offset by $27.0 million in maturities of marketable securities.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was $5.0 million resulting from $81.9 million in purchases of marketable securities partially offset by $77.0 million in maturities of marketable securities.

Previous wording

For the three months ended March 31, 2025, net cash provided by investing activities was $17.1 million resulting from $24.0 million in maturities of marketable securities partially offset by $6.7 million in purchases of marketable securities and $0.1 million in purchases of property and equipment.

Current wording

For the six months ended June 30, 2025, net cash provided by investing activities was $32.1 million resulting from $39.0 million in maturities of marketable securities partially offset by $6.7 million in purchases of marketable securities and $0.2 million in purchases of property and equipment.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was $1.5 million resulting from proceeds from the sale of shares of common stock under the Sales Agreement.

Current wording

For the six months ended June 30, 2026, net cash provided by financing activities was $1.5 million resulting primarily from proceeds from the sale of shares of common stock under the Sales Agreement.