PepGen raises $113M to challenge Sarepta in DMD, build neuromuscular and neurologic pipeline

Great Duchenne muscular dystrophy (DMD) therapies are just not getting enough medicine into the cells, and PepGen hopes to change that thanks to a $112.5 million raise that will advance a new candidate into the clinic early next year.

The crossover round positions PepGen to start showing whether its technique for getting more oligonucleotides into cells can improve on the efficacy of Sarepta’s approved therapy Exondys 51.

Boston-based PepGen’s lead candidate is a therapeutic oligonucleotide that targets exon 51 to treat a subset of DMD patients, putting the biotech squarely on the turf of Sarepta. Like Exondys 51, the drug is designed to mask exon 51 and thereby enable patients to produce the functional dystrophin needed to strengthen muscle fibers.

PepGen has raised the money on the strength of its therapy's potential to address a challenge faced by existing oligonucleotide therapies.

“One of the fundamental challenges is that you've got these great therapies, but they're not getting into the cells in sufficiently high concentrations to mediate a meaningful therapeutic benefit,” PepGen CEO James McArthur, Ph.D., said. "What we can do I think is really fundamentally different from anyone else in terms of that ability to go and deliver therapeutic oligonucleotides into cells."

RELATED: Sarepta thinks it may have a more effective DMD drug, but new side effects could be a problem

PepGen, building on the research of oligonucleotide experts Michael Gait and Matthew Wood in the U.K., has developed a cell-penetrating peptide that is designed to get higher levels of oligonucleotides into cells. Others in the field, including Sarepta, have their own cell-penetrating peptides, but McArthur thinks PepGen’s approach sets them apart.

McArthur quotes the results of a PepGen study in non-human primates to back up the claim. The study compared a polyarginine cell-penetrating peptide that is “essentially identical to Sarepta’s lead program” to PepGen’s clinical lead EDO51, McArthur said. According to McArthur, the study linked EDO51 to levels of exon-skipping that ranged from four-fold better in the bicep to 12-fold better in the diaphragm.  

The hope is that those improvements will translate into better outcomes for DMD patients. Earlier this year, Sarepta linked its cell-penetrating peptide asset SRP-5051 to mean dystrophin production of 6.55% of normal, compared to 0.82% for Exondys 51, in DMD patients. McArthur has his sights set higher still.

“In Becker [muscular dystrophy] patients, you want to be somewhere in the neighborhood of 10%, 11%, 12% wild-type dystrophin levels to have the difference between wheelchair and ambulation, between dying in your 20s and dying in your 40s or 50s. And that's really the objective we have,” McArthur said. 

The process of finding out whether PepGen can meet that objective will enter a new phase early next year, when EDO51 is set to enter a clinical trial in healthy volunteers. By the end of 2022, PepGen may have muscle biopsy data to show if the drug works and could be in a position to predict if EDO51 can be the difference between a DMD patient being in a wheelchair or walking.

RELATED: Sarepta shares rally on early DMD data that also reveal 2 serious, 79 mild side effects

Existing backers RA Capital Management—where McArthur came from—Oxford Sciences Innovation and CureDuchenne Ventures joined with new investors including Viking Global Investors, Deerfield Management and Qatar Investment Authority to give PepGen the money it needs to fund the trial.

PepGen will use another chunk of the funding to take a treatment for myotonic dystrophy type 1 into the clinic in early 2023. The candidate is the first in a series of other prospects PepGen wants to take into the clinic to realize the potential of the cell-penetrating peptide in diseases of the peripheral and central nerves. 

“We can basically take the same peptide and attach it to this oligo, and that oligo, and that oligo, and one after the other rapidly translate these from animal pharmacology, toxicology, into clinical studies and go and see whether or not we really help patients,” McArthur said. 

Using the $112.5 million, PepGen is putting together a team to match that ambition. PepGen is now finalizing terms on a permanent home in Boston and plans to grow the team from around 20 today to 40 or so by the end of the year. In doing so, PepGen will put together the drug development team it needs to take the assets forward, and the finance team to help raise “quite a bit of capital” that McArthur thinks is needed to realize the biotech’s goals.