Stock Analysis & Valuation PepGen Inc. (PEPG)

• Previous Close: $5.14
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

PepGen Inc. (NASDAQ: PEPG) is a clinical-stage biotechnology company pioneering oligonucleotide therapeutics for severe neuromuscular and neurologic diseases. Headquartered in Cambridge, Massachusetts, PepGen is advancing its lead candidate, PGN-EDO51, a Phase I therapy targeting Duchenne muscular dystrophy (DMD), alongside a pipeline including PGN-EDODM1 for myotonic dystrophy type 1 and other EDO candidates for DMD. Founded in 2018, the company leverages peptide-conjugated phosphorodiamidate morpholino oligomers (PMOs) to enhance drug delivery and efficacy. Operating in the high-growth $50B+ neuromuscular disease therapeutics market, PepGen aims to address unmet needs in rare genetic disorders. With no commercial revenue yet, its valuation hinges on clinical milestones and partnerships in the competitive biotech sector.

Investment Summary

PepGen presents high-risk, high-reward potential for investors focused on innovative neuromuscular therapies. Its lead candidate, PGN-EDO51, targets DMD—a market with limited treatments and ~$1B+ annual opportunity. However, the company’s pre-revenue status (-$89.98M net income in FY2023) and heavy R&D burn (-$82.37M operating cash flow) necessitate further capital raises, diluting equity. Positive Phase I data could catalyze partnerships or buyout interest from larger biopharma players, but clinical failure risks are material. The 1.386 beta reflects volatility typical of developmental biotech stocks. Investors should monitor trial progress and cash runway (~18 months at current burn).

Competitive Analysis

PepGen’s competitive edge lies in its EDO platform, which enhances cellular uptake of PMO therapeutics—a differentiation from traditional exon-skipping therapies like Sarepta’s (SRPT) PMO-based drugs. However, it faces intense competition in DMD from approved therapies (e.g., SRPT’s Elevidys) and gene-editing approaches (e.g., CRISPR/CRSP). In myotonic dystrophy, competitors like Dyne Therapeutics (DYN) and Avidity Biosciences (RNA) are advancing RNA-targeting platforms. PepGen’s asset specificity (e.g., PGN-EDO51 targets exon 51) limits addressable patient subsets unless expanded. The company’s preclinical pipeline lacks diversification compared to peers with broader neurology portfolios. Capital efficiency is a concern given its small market cap ($47.7M) versus competitors’ deeper resources. Success hinges on demonstrating superior efficacy/safety in ongoing trials to attract partnership deals.

Major Competitors

• Sarepta Therapeutics (SRPT): Market leader in DMD with FDA-approved exon-skipping therapies (Exondys 51, Vyondys 53) and gene therapy Elevidys. Strengths include commercial infrastructure and robust pipeline. Weaknesses include high drug pricing scrutiny and competition from next-gen therapies. PepGen’s EDO platform could challenge SRPT’s PMO dominance if clinical data supports superior delivery.
• Dyne Therapeutics (DYN): Developing FORCE platform for muscle-targeted delivery in myotonic dystrophy and DMD. Strengths include modular technology and Phase I/II assets. Weaknesses include unproven clinical efficacy vs. PepGen’s EDO candidates. Both target overlapping indications but with different delivery chemistries.
• Avidity Biosciences (RNA): Focuses on antibody-oligonucleotide conjugates for myotonic dystrophy (Phase I/II). Strengths include proprietary AOC platform and Roche partnership. Weaknesses include narrower neuromuscular focus than PepGen. Direct competitor in DM1 with alternative delivery approach.
• CRISPR Therapeutics (CRSP): Gene-editing leader with preclinical DMD programs. Strengths include disruptive technology and Vertex collaboration. Weaknesses include longer development timelines vs. PepGen’s oligonucleotide approach. Competitive threat if gene editing achieves functional cure.