A clinical-stage biotech working to treat severe neuromuscular diseases, PepGen builds "oligonucleotide" medicines designed to fix faulty genetic instructions, using its EDO platform of cell-penetrating peptides to ferry drugs into muscle and other hard-to-reach tissues. Its lead candidate, PGN-EDODM1, targets myotonic dystrophy type 1 and has earned Orphan Drug and Fast Track designations. Founded in 2018, the company's name combines "Pep" for its peptide delivery technology and "Gen" for the genetic diseases it tackles.
FDA partial clinical hold on sole candidate PGN-EDODM1 persists as cash falls to $117.2M and runway extends only into Q4 2027.
PepGen's sole remaining candidate remains under a partial FDA clinical hold, and the company has no approved products. Net loss narrowed to $17.8 million from $23.1 million a year ago as R&D spending fell 32% following the DMD program wind-down, while cash and marketable securities declined to $117.2 million. The company's future depends entirely on PGN-EDODM1 data expected in November 2026 and its ability to raise additional capital.
Key takeaways
The FDA's on the Phase 2 FREEDOM2 study of PGN-EDODM1, imposed in March 2026 based on preclinical data, remained in place as of June 30, 2026, delaying U.S. site activation.
Net loss narrowed to $17.8 million from $23.1 million in the same quarter last year, as total operating expenses fell to $18.9 million.
Research and development expenses fell 32% to $12.5 million, driven by the May 2025 discontinuation of the DMD program PGN-EDO51, lower manufacturing campaign costs, and reduced personnel expenses.
Section summaries
Management's Discussion and Analysis
Net loss narrowed to $17.8M in Q2 2026 as R&D spend fell 32% YoY following the DMD program discontinuation.
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Research and development expenses decreased $5.9M to $12.5M in Q2 2026, driven by the May 2025 discontinuation of the DMD program PGN-EDO51, lower manufacturing campaign costs, and reduced personnel expenses.
External spending on PGN-EDODM1 rose to $5.8 million from $4.7 million a year ago, while PGN-EDO51 external costs fell to near zero as the program wound down.
Cash, cash equivalents, and marketable securities totaled $117.2 million as of June 30, 2026, down from $132.3 million at the end of the prior quarter, and management expects this will fund operations into the fourth quarter of 2027.
The Phase 2 FREEDOM2 trial completed enrollment of the 10 mg/kg cohort, with data expected in November 2026, and a recommended advancing to a 12.5 mg/kg cohort.
What changed
The Q1 2026 filing flagged whether the FDA would lift the on FREEDOM2; as of this filing, the hold remains in place with no resolution reported.
Data from the 5 mg/kg cohort of the FREEDOM-DM1 Phase 2 trial, expected in Q1 2026, was not reported in this filing and remains outstanding.
The quarterly free cash outflow fell to $15.8 million from $18.4 million in the prior quarter, suggesting the DMD wind-down continues to reduce the burn rate.
The company raised $1.5 million in net proceeds from at-the-market stock sales during Q1 2026, but no additional financing was reported in Q2, and the cash balance declined 11% sequentially to $117.2 million.
What to watch
Data from the 10 mg/kg cohort of the FREEDOM2 Phase 2 trial, expected in November 2026, as the sole near-term catalyst for the company's only clinical asset.
Whether the FDA lifts the on FREEDOM2, which would allow U.S. site activation and could accelerate enrollment.
The quarterly free cash outflow rate, to confirm whether the Q2 2026 level of $15.8 million represents a stable baseline burn rate following the DMD wind-down.
Any financing transaction, given the $117.2 million cash balance and a runway that extends only into Q4 2027, before a registrational program could be completed.
PGN-EDODM1 external expenses rose to $5.8M in Q2 2026 from $4.7M a year ago, while PGN-EDO51 external costs fell to near zero as the program wound down.
General and administrative expenses increased $0.9M to $6.4M in Q2 2026, primarily due to a $0.7M rise in personnel-related costs including .
Cash, cash equivalents, and marketable securities totaled $117.2M as of June 30, 2026, which management expects will fund operations into the fourth quarter of 2027.
The Phase 2 FREEDOM2 trial for PGN-EDODM1 completed enrollment of the 10 mg/kg cohort, with data expected in November 2026, and a DSMB recommended advancing to a 12.5 mg/kg cohort.
Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk As of June 30, 2026, we had $117.2 million in cash, cash equivalents, and marketable securities, consisting of cash in a readily available checking account and U.S. treasury-backed money market funds. Our primary exposure to market risk is interest income sens…
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Interest Rate Risk
As of June 30, 2026, we had $117.2 million in cash, cash equivalents, and marketable securities, consisting of cash in a readily available checking account and U.S. treasury-backed money market funds. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the short-term maturities of our investments, we believe a hypothetical 100 basis point increase or decrease in interest rates during any of the periods presented would not have had a material impact on our financial results.
Concentration of Credit Risk
Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and money market accounts. As of June 30, 2026, our cash and money market accounts were held by three financial institutions in the U.S. At times, our deposits held in the U.S. may exceed the respective insured limits of the Federal Depository Insurance Corporation and Financial Services Compensation Scheme.
From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters wil…
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From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. As of June 30, 2026, we were not a party to any material legal proceedings.
The company is substantially dependent on its sole clinical candidate PGN-EDODM1, faces a partial FDA clinical hold, and will need significant additional funding to continue operations.
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The company's lead candidate PGN-EDODM1 is under a partial FDA , which may delay the ongoing FREEDOM2 trial and U.S. site activation.
The company has no approved products, has never generated product , and expects to incur significant losses for the foreseeable future.
As of June 30, 2026, cash and marketable securities were $117.2 million, and substantial additional funding will be required to advance PGN-EDODM1 beyond initial 2026 data readouts.
The company voluntarily discontinued development of its only other clinical candidate, PGN-EDO51, after it failed to meet target dystrophin levels in a Phase 2 trial.
The company relies on single-source suppliers, including WuXi AppTec for its active pharmaceutical ingredient, which faces potential U.S. government restrictions under the BIOSECURE Act.
Competitors including Avidity (acquired by Novartis) and Dyne have more advanced clinical programs targeting the same DM1 disease.