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PI

PepGen Inc. (PEPG)·Q3 2024 Earnings Summary

Executive Summary

  • PepGen reported Q3 2024 net loss of $21.4M (−$0.66 per share), improving sequentially from Q2 2024 net loss of $28.3M (−$0.87), with cash and marketable securities of $138.9M, supporting runway into 2026 .
  • Clinical timelines shifted: FREEDOM-DM1 cohort updates moved to Q1 2025 (from prior Q4 2024 expectation), and CONNECT1 10 mg/kg results moved to year-end 2025 (from prior early 2025) — a material delay that will push catalysts into 2025 .
  • Management emphasized protocol optimizations across CONNECT1/CONNECT2 based on encouraging 5 mg/kg DMD data (exon skipping 2.15%, muscle-adjusted dystrophin 1.49%, absolute dystrophin 0.61%), and highlighted leadership strengthening with EVP/Head of R&D Paul Streck .
  • No earnings call transcript was available; estimates from S&P Global were unavailable, limiting beat/miss analysis versus Wall Street consensus (SPGI daily limit error) [functions.GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • Early CONNECT1 5 mg/kg DMD data showed higher exon skipping vs other exon 51 PMO therapies at similar dose levels and increases in dystrophin; cohort well tolerated with all patients continuing into LTE .
  • FREEDOM-DM1 program progressed with 10 mg/kg cohort fully enrolled and emerging encouraging data; Phase 2 FREEDOM2 expected to begin dosing by year-end pending clearance .
  • Leadership strengthened: appointment of Paul Streck, MD, MBA, as EVP and Head of R&D, bringing >20 years of development and regulatory experience .
    • Quote: “Paul has already made a positive impact on our organization and our clinical development strategy in both myotonic dystrophy type 1 (DM1) and Duchenne muscular dystrophy (DMD)” — James McArthur, PhD .

What Went Wrong

  • Timelines slipped: FREEDOM-DM1 cohort data now in Q1 2025 (previously Q4 2024), and CONNECT1 10 mg/kg results pushed to year-end 2025 (previously early 2025), delaying key catalysts .
  • R&D spend remains elevated year-to-date with Q2 peak ($25.1M), though Q3 moderated to $17.7M; continued cash burn into 2026 runway requires milestone execution to support financing visibility .
  • No earnings call transcript available; lack of call Q&A limits visibility into regulatory feedback, operational risks, and trial operational nuances this quarter [functions.ListDocuments result for earnings-call-transcript].

Financial Results

Sequential and Year-to-Date Comparison

MetricQ1 2024Q2 2024Q3 2024
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$175.223 $161.306 $138.857
Research & Development Expense ($USD Millions)$14.732 $25.063 $17.722
General & Administrative Expense ($USD Millions)$5.066 $5.362 $5.449
Total Operating Expenses ($USD Millions)$19.798 $30.425 $23.171
Interest Income ($USD Millions)$1.735 $2.121 $1.826
Net Loss ($USD Millions)$18.020 $28.335 $21.384
Net Loss per Share ($)— $(0.87) $(0.66)
Weighted-Average Shares Outstanding— 32,469,187 32,581,542

Notes:

  • No revenue line items were reported in the quarter; statements present operating expenses and other income lines .

Year-over-Year (Q3 2023 vs Q3 2024)

MetricQ3 2023Q3 2024
Research & Development Expense ($USD Millions)$20.540 $17.722
General & Administrative Expense ($USD Millions)$4.240 $5.449
Total Operating Expenses ($USD Millions)$24.780 $23.171
Net Loss ($USD Millions)$23.290 $21.384
Net Loss per Share ($)$(0.98) $(0.66)

KPIs (Clinical Efficacy – CONNECT1 5 mg/kg)

KPIMeasurementValuePeriod
Exon 51 Skipping (%)Mean in biceps tissue at week 132.15% Jul 2024 (Q3)
Muscle-Adjusted Dystrophin (% of normal)Mean level at week 131.49% (+0.70% from baseline) Jul 2024 (Q3)
Absolute Dystrophin (% of normal)Mean level at week 130.61% (+0.26% from baseline) Jul 2024 (Q3)
Safety (5 mg/kg)Discontinuations/dose interruptions/reductionsNone; well tolerated Jul 2024 (Q3)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FREEDOM-DM1 data readout (5 & 10 mg/kg cohorts)Q1 2025Q4 2024 expected update By end of Q1 2025 Lowered (Delayed)
FREEDOM-DM1 15 mg/kg cohort resultsH2 2025Not previously specifiedH2 2025 New
FREEDOM2-DM1 dosing start2H 2024 / YE 2024Initial dosing 2H 2024 Initiate dosing by year-end (pending US clearance) Maintained (timing refined)
CONNECT1-EDO51 10 mg/kg initial resultsYE 2025Early 2025 By year-end 2025 Lowered (Delayed)
CONNECT1 protocolOngoingN/AFinal biopsy timing Day 28 (from Day 7), PUL entry score from 3→4, age 6–16 Optimized (Design changes)
CONNECT2-EDO51 trial opening2024 YEUK open; US by year-end UK open; US by year-end (pending clearance) Maintained
Cash runwayThrough 2026Into 2026 Into 2026 Maintained

Earnings Call Themes & Trends

Note: No Q3 earnings call transcript available in our document catalog; themes synthesized from company earnings press releases and program updates .

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2024)Trend
DMD efficacy signals (CONNECT1 5 mg/kg)Reported exon skipping (2.15%) and dystrophin increases; well tolerated Protocol optimizations based on encouraging early cohort results; expansion of 10 mg/kg cohort Positive momentum; design refined
DM1 program status (FREEDOM-DM1)Preliminary data expected 2H 2024 10 mg/kg fully enrolled; data from 5 & 10 mg/kg cohorts now Q1 2025 Timeline delayed; execution ongoing
Phase 2 FREEDOM2-DM1CTAs cleared in CA/UK; dosing 2H 2024 Dosing initiation by year-end; US subject to clearance On track; timing refined
CONNECT2-EDO51 (multinational)UK open; US by year-end UK open; US by year-end pending clearance Maintained
Safety/Tolerability (EDO platform)Favorable emerging safety at 5 mg/kg; no discontinuations Continued favorable profile cited; design optimization referenced Stable positive
Leadership/OrgFinancing extended runway; clinical progress EVP/Head of R&D appointment (Paul Streck) to drive R&D strategy Strengthened leadership

Management Commentary

  • “We are pleased with the progress we have made across our pipeline and organization during the third quarter… strengthened our leadership team with the addition of Paul Streck…” — James McArthur, PhD .
  • “In our DM1 program, the 10 mg/kg cohort of our FREEDOM-DM1 study is fully enrolled and we are encouraged by the emerging data… We look forward to presenting a fulsome update… by the end of the first quarter of 2025” — Paul Streck, MD, MBA .
  • “We leveraged the encouraging 5 mg/kg results from our CONNECT1-EDO51 study in DMD reported in July to further optimize the study designs… we expect to report data from the expanded CONNECT1 10 mg/kg cohort before year-end 2025” — James McArthur, PhD .
  • “In three months, the starting monthly dose of 5 mg/kg achieved high levels of exon skipping and all patients showed increases in dystrophin… indicating that our EDO technology is delivering higher levels of oligonucleotide to the nuclei” — James McArthur, PhD .

Q&A Highlights

  • No earnings call transcript available for Q3 2024 in our catalog; therefore, Q&A themes and guidance clarifications cannot be extracted for this period [functions.ListDocuments result for earnings-call-transcript].

Estimates Context

  • S&P Global consensus estimates for Q3 2024 (EPS and revenue) were unavailable due to SPGI daily request limit; as a result, we cannot assess beat/miss versus Wall Street consensus for this quarter [functions.GetEstimates error].
  • Future updates should incorporate S&P Global consensus once accessible to measure delivery against expectations.

Key Takeaways for Investors

  • Sequential burn moderated: net loss improved to $21.4M and R&D spend fell to $17.7M in Q3 from Q2 peak; runway remains into 2026, providing time to reach multiple 2025 readouts .
  • DMD program signals are promising at 5 mg/kg (exon skipping and dystrophin increases), supporting rationale for higher-dose cohorts and protocol optimizations; safety profile remains favorable .
  • Catalysts pushed to 2025: FREEDOM-DM1 5 & 10 mg/kg data in Q1 2025 and CONNECT1 10 mg/kg by YE 2025; investors should reset timing expectations and monitor interim scientific presentations .
  • Design changes in CONNECT1 (biopsy timing, PUL inclusion criteria, age range) may enhance signal detection at 10 mg/kg, but increase execution complexity; regulatory clearance remains a gating factor .
  • FREEDOM2-DM1 expected to initiate dosing by year-end, expanding clinical evidence base in DM1; combined with FREEDOM-DM1, this program represents a core value driver .
  • Lack of call transcript and unavailable consensus limits visibility on near-term sentiment and beat/miss framing; stock reaction likely to hinge on perceived magnitude of timeline delays versus strength of early efficacy signals .
  • Action: Stay positioned for Q1 2025 DM1 data; reassess risk/reward on delay-induced timeline while watching for additional CONNECT1/CONNECT2 operational updates and any regulatory feedback .