PI
PepGen Inc. (PEPG)·Q1 2024 Earnings Summary
Executive Summary
- PepGen reported Q1 2024 net loss of $18.0M and ended the quarter with $175.2M in cash, cash equivalents, and marketable securities, extending cash runway into 2026 following $86.3M net proceeds from equity offerings .
- Clinical execution progressed: CONNECT1-EDO51 5 mg/kg cohort fully enrolled with preliminary safety, exon 51 skipping, and dystrophin data expected mid-2024; FREEDOM-DM1 preliminary data (≥5 mg/kg) expected in H2 2024 .
- Regulatory momentum accelerated: MHRA authorized CONNECT2-EDO51 initiation in the U.K.; FDA granted Orphan Drug and Rare Pediatric Disease designations for PGN-EDO51 and Fast Track designation for PGN-EDODM1 .
- No Q1 2024 earnings call transcript was available; comparisons to Wall Street consensus were not possible due to S&P Global data unavailability (attempted query returned error). Estimates context is noted as unavailable.
What Went Well and What Went Wrong
What Went Well
- CONNECT1-EDO51 advanced with the 5 mg/kg cohort fully enrolled; preliminary safety, exon skipping, and dystrophin production readout remains on track for mid-2024 . “We are on track to achieve several significant milestones during the remainder of 2024, including sharing preliminary data from both the CONNECT1-EDO51 and FREEDOM-DM1 clinical trials” – James McArthur, Ph.D., President & CEO .
- Regulatory tailwinds: MHRA authorized CONNECT2-EDO51 initiation (designed to support potential accelerated approval with CONNECT1 data), and FDA granted Orphan Drug and Rare Pediatric Disease designations for PGN-EDO51 and Fast Track for PGN-EDODM1 .
- Strengthened balance sheet: $86.3M net proceeds in February and ATM activity lifted cash to $175.2M, extending runway into 2026, mitigating near-term financing risk .
What Went Wrong
- Continued losses with no product revenue; net loss widened vs Q4 2023 context remains substantial at $18.0M, consistent with clinical-stage investment cycle (Q4 2023 net loss was $19.5M; Q3 2023 net loss was $23.3M) .
- Operating expenses remain elevated to support clinical programs: R&D $14.7M (up slightly YoY); G&A $5.1M (higher YoY, consistent with prior commentary on personnel costs) . Prior management cited personnel-related costs as G&A drivers in FY23 .
- Visibility remains event-driven; key efficacy readouts (dystrophin for EDO51, splicing/functional measures for EDODM1) are not yet reported, leaving execution and regulatory pathway assumptions to be validated later in 2024 .
Financial Results
Notes:
- PepGen did not disclose EPS for Q1 2024 in the press release; Q3 2023 net loss per share was $(0.98) .
- No revenue was disclosed in these press releases; company is clinical-stage with expense-driven P&L .
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “Our team has made exceptional progress in the first quarter advancing multiple clinical trials for Duchenne muscular dystrophy (DMD) and myotonic dystrophy type 1 (DM1). We are on track to achieve several significant milestones during the remainder of 2024...” – James McArthur, Ph.D., President & CEO .
- On EDO51 expectations: “At the 5 mg/kg dose level, we expect to see greater than 1% of normal levels of dystrophin protein above background... For our 10 mg/kg dose cohort... potentially achieve greater than 9% of normal levels of dystrophin protein” .
- On EDODM1 mechanism and specificity: approach targets pathogenic CUG repeats to liberate MBNL1, correct splicing, and improve myotonia, aiming for disease-modifying effects .
- On DM1 functional endpoints: vHoT myotonia assessments, strength tests, and mobility measures to correlate with splicing correction; single-dose may show splicing/myotonia changes with multiple doses needed for broader function .
Q&A Highlights
- Dystrophin quantification approach: PepGen plans to report dystrophin above background; ≥1% net gain at 5 mg/kg would support confidence in achieving ≥9% at 10 mg/kg based on NHP and modeling .
- Timeline and enrollment for 10 mg/kg: Investigator enthusiasm suggests timely recruitment; company will update when ready; cautious on committing exact timing .
- DM1 endpoints and correlation: vHoT myotonia metric viewed as central; higher splicing correction (≥25–60%) correlates with meaningful myotonia and functional improvements in models .
- Mechanism specificity for EDODM1: blocking pathogenic CUG repeats aims for specific correction with potential safety advantages vs indiscriminate DMPK knockdown .
Estimates Context
- S&P Global consensus estimates for Q1 2024 (EPS, revenue) were unavailable at time of query due to a data access error, so comparison to Wall Street consensus could not be performed. As a clinical-stage company, PepGen did not disclose revenue and did not provide EPS in the Q1 2024 press release; net loss and operating expense details are provided above .
Key Takeaways for Investors
- Near-term catalysts: CONNECT1-EDO51 5 mg/kg preliminary data mid-2024; FREEDOM-DM1 preliminary data in H2 2024 – both are potential stock-movers given management’s dystrophin (>1% at 5 mg/kg; potentially >9% at 10 mg/kg) and splicing/functional targets .
- Regulatory positioning strengthened: MHRA authorization for CONNECT2-EDO51, FDA Orphan and Rare Pediatric Disease for EDO51, and Fast Track for EDODM1 enhance optionality for accelerated pathways and expedited interactions .
- Liquidity de-risks execution: Cash $175.2M with runway into 2026 supports multiple readouts and trial initiation without near-term financing pressure; monitor disciplined OpEx as programs scale .
- Watch dystrophin methodology and thresholds: Reporting “above background” is key; a ≥1% net gain at 5 mg/kg would support model assumptions for higher-dose cohorts; any deviation would impact the accelerated approval case .
- For DM1, splicing and functional correlation is critical: vHoT and strength tests alongside splicing correction will frame clinical meaningfulness; >25–60% splicing correction aligns with robust myotonia improvement in models .
- Absence of Q1 call transcript and unavailable Street estimates limits near-term “beat/miss” framing; focus shifts to clinical execution, regulatory milestones, and cash discipline .
- Risk framework: Event-driven binary outcomes; enrollment, safety/tolerability, and regulatory feedback remain key variables as described in forward-looking statements and risk disclosures .