PepGen has some pep in its step once more after the oligonucleotide PGN-EDODM1 achieved splicing correction that analysts called a “best case scenario,” during a Phase 2 trial for myotonic dystrophy type 1. Patients also achieved functional improvements such as muscle control and strength—with a higher dose option still to be explored.
The company enjoyed a dramatic share increase on Tuesday, with the stock jumping 92% to end the day at $4.61. The shares continued to climb in pre-market trading on Wednesday, rising above $5 apiece.
Myotonic dystrophy type 1 (DM1), a rare and progressive genetic disease, is caused by repeats in the DMPK gene, which leads to abnormal splicing of RNA—the processing of transcripts before they are translated into proteins. Oligonucleotides like PepGen’s seek to correct splicing.
In the Phase 2 FREEDOM2-DM1 trial, PepGen’s PGN-EDODM1 dosed at 10 mg/kg resulted in the highest level of splicing ever reported in a multiple-dose study for DM1, the company claimed in a Tuesday press release. Mean splicing correction was 46.5% at week 13, with four out of six of the participants achieving splicing of 50% or more.
Oppenheimer analysts said the results set a new bar for the disease. Competitors, which include Dyne Therapeutics, Novartis and Ionis Pharmaceuticals, have achieved less than 30% correction.
While Novartis’ antibody-oligonucleotide conjugate failed to significantly improve hand function in patients with myotonic dystrophy type 1, the asset nevertheless showed signs of clinical activity in secondary and exploratory measures.
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And there could be more to come. PepGen executives, speaking to analysts on Tuesday, said the results come from the lowest dose group in the program. With few adverse events, they believe the dose can be increased to drive further splicing correction. The higher 12.5 mg/kg dose arm of FREEDOM2 is fully enrolled and patients have already received up to three doses, PepGen said. Results are expected in the first half of 2027.
Analysts, however, were more cautious on the potential for the 12.5 mg/kg dose to drive more splicing.
“Given this dose is modestly higher, it’s unclear how much additional efficacy will be attained, but as we see it, if PEPG can even replicate the splicing shown here, with favorable safety, it would be reaffirming overall since the only significant caveat to the result today is that it’s a small dataset,” Stifel wrote Tuesday morning.
Besides the “best in class” splicing, Stifel analysts heralded the safety results in the mid-stage study, which showed only mild kidney adverse events and no evidence of renal toxicity over the 16-week study period.
The results also hinted at clinical benefits. One of the Canadian investigators, Hanns Lochmüller, was impressed by the improvements in myotonia—when relaxation of the muscles is delayed—mobility and grip strength. These changes suggest that splicing correction may be driving improvements in myotonia, a hallmark of DM1, Lochmüller explained.
“The improvements observed across myotonia, mobility and grip strength are encouraging because they reflect functions that affect patients’ daily lives,” Lochmüller said in a statement provided by PepGen. “The relationship between splicing correction and improvements in myotonia is particularly interesting, and longer-term follow-up will be important to better understand the durability and clinical relevance of these findings.”
PepGen’s lead candidate for myotonic dystrophy type 1 barely beat the placebo in a Phase 2 trial in terms of fixing incorrect gene splicing, but the biotech attributed the poor result to an outlier.
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Taking advantage of the moment, PepGen launched a public offering of $125 million shares, with the proceeds going toward clinical development.
The new data are a major turnaround for the FREEDOM2 study. Previous results from FREEDOM2 for a 5 mg/kg dose disappointed on splicing, Stifel noted, though these results could have been confounded by an outlier patient who worsened significantly during the trial. Additionally, the FDA earlier this year slapped a partial clinical hold on the trial’s U.S. sites after preclinical data revealed a reduction in blood pressure in mice. In response, analysts called the timing of the freeze odd.
That hold is still in place but did not stop PepGen from continuing the test elsewhere, with sites in Canada, the U.K., New Zealand, Australia and South Korea. The company re-ran the mouse study and did not see blood pressure elevations. CEO James McArthur told analysts that PepGen is continuing discussions with the FDA but could not provide a timeline for when the hold might be resolved.