With Sarepta in its sights, PepGen prices IPO to fund DMD trials

PepGen has refueled in the race to develop a next-generation rival to Sarepta’s Exondys. The biotech missed the bottom end of its IPO range but upped the share count, enabling it to reel in $108 million to challenge Sarepta for the Duchenne muscular dystrophy (DMD) market.

Boston-based PepGen is seeking to disrupt the DMD market by attaching a cell-penetrating peptide to a therapeutic oligonucleotide that targets exon 51. Sarepta’s DMD drug Exondys targets the same exon, but its efficacy is limited by the amount of the oligonucleotide that gets into the cell. Attaching the drug to a cell-penetrating peptide could boost efficacy by getting more of the oligonucleotide to its target, leading companies including PepGen and Sarepta to pursue the idea.

Sarepta’s candidate, SRP-5051, is already in phase 2. Armed with the IPO haul, PepGen plans to join its rival in midphase development, earmarking $70 million of its cash for the completion of an active phase 1 and a planned phase 2a of its prospect PGN-EDO51.

The studies will provide an early test of whether PepGen’s claims about PGN-EDO51 hold water. Based on studies that compared the therapy to a molecule designed to be structurally equivalent to SRP-5051, PepGen thinks its candidate has greater activity than Sarepta’s rival asset. The data come from studies in nonhuman primates. 

If all goes to plan, PepGen will have top-line data from the phase 1 by the end of the year. A potential red flag will be any cases of low blood pressure, which were seen in nonhuman primates at doses above those PepGen plans to test in the clinic. Ultimately, PepGen aims to seek accelerated approval, noting in its filing that “the FDA has approved at least four drugs based on their minimal dystrophin production” and expressing a belief it can get to market “on that same basis.”

PepGen has set aside another $45 million to take PGN-EDODM1 through a phase 1/2 clinical trial. The drug candidate is designed for use in DMD patients whose mutations are amenable to exon 53 skipping, a therapeutic approach used by Sarepta’s Vyondys. PepGen expects to post data in nonhuman primates in the second half of 2022 and file for trial authorization the following year. 

Enough investors have bought into the idea to enable PepGen’s plans. Having raised a $113 million round last year, PepGen ended 2021 with $133 million in the bank. Public investors are set to buy 9 million shares at $12 a pop.

PepGen had aimed to sell 7.2 million shares for between $13 and $15 apiece, meaning that, while it missed its range, the biotech has still raised more cash than if it had hit the midpoint of the original plan.