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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-41374

PEPGEN INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-3819886
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
321 Harrison Ave. 8th Floor Boston, Massachusetts	02118
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (781) 797-0979

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common stock, par value $0.0001 per share

     PEPG

     Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 5, 2025, the registrant had 68,748,224 of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	5

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	6
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION	28

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	91
Item 3.	Defaults Upon Senior Securities	92
Item 4.	Mine Safety Disclosures	92
Item 5.	Other Information	92
Item 6.	Exhibits	93
Signatures		94

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Form 10-Q, contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management and which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

•

the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, and the period during which the results of our clinical trials will become available;

•

our ability to efficiently develop our existing product candidate and discover new product candidates;

•

our ability to successfully manufacture our investigational drug substances and drug product for preclinical use, for clinical trials and on a larger scale for commercial use, if our investigational drug candidate or any new product candidates are approved;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our ability to commercialize our product candidates, if approved;

•

the pricing and reimbursement of our product candidates, if approved;

•

the implementation of our business model, and strategic plans for our business and product candidates;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our technology platform;

•

estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

•

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

•

our financial performance;

•

the rate and degree of market acceptance of our product candidates;

•

regulatory developments in the United States, or U.S., and foreign countries;

•

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately, and our ability to identify and contract with alternative third-party suppliers and manufacturers in a timely manner and on reasonable terms, if needed;

•

our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;

•

the success of competing therapies that are or may become available;

•

our ability to attract and retain key research and development or management personnel;

•

the impact of laws and regulations;

•

the impact of current or future litigation;

•

developments relating to our competitors and our industry;

•

the effects of any epidemics or pandemics, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and clinical trials and any future studies or trials; and

•

other risks and uncertainties, including those listed under the caption “Risk Factors.”

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions, and are subject to change due to known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed with the U.S. Securities and Exchange Commission, or the SEC, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain.

This Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for our programs and product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we are not aware of any misstatements regarding any third-party information presented in this Form 10-Q, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Form 10-Q.

TRADEMARKS

This Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

SUMMARY OF MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. These risks include, but are not limited to, the following:

•

We have incurred significant losses since our inception, have no products approved for sale and we expect to incur losses for the foreseeable future.

•

We will need to raise substantial additional funding. If we are unable to raise substantial additional funding when needed, we could be forced to delay, scale back, or discontinue our product development programs or future commercialization efforts.

•

We are early in our development efforts having conducted only two Phase 1 and three Phase 2 clinical trials since our inception and as a result it will be years before we commercialize a product candidate, if ever. In May 2025, we announced that we are voluntarily discontinuing development activities on one of our product candidates. If we are unable to advance our remaining clinical stage product candidate through clinical trials, obtain marketing approval and ultimately commercialize it, or experience significant delays in doing so, our business will be materially harmed.

•

Our business is highly dependent on the clinical advancement of our programs and modalities and, following cessation of our program for PGN-EDO51, is especially dependent on the success of our remaining clinical stage product candidate in clinical development, PGN-EDODM1. Delay or failure to advance programs or modalities, in particular PGN-EDODM1, including as a result of a clinical hold or other regulatory action, or a voluntary pause or program termination, could adversely impact our business.

•

Preclinical and clinical development involves a lengthy and expensive process with an uncertain outcome, and the results of preclinical and clinical studies, including studies of PGN-EDO51, PGN-EDODM1 and other research candidates, are not necessarily predictive of the results of later preclinical studies and any clinical trials of our product candidates. PGN-EDO51 results in clinical trials in patients did not support further development by PepGen and our remaining product candidate, PGN-EDODM1, and research candidates may not have favorable results in clinical trials, if any, or receive regulatory approval on a timely basis, if at all.

•

Substantial delays in the commencement, enrollment or completion of our clinical trials and advancement of our clinical trials, including as a result of clinical hold or other regulatory action, or a voluntary pause or program termination, or failure to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, could prevent us from commercializing product candidates we determine to develop on a timely basis, if at all.

•

We rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research, preclinical and clinical testing, and these third parties may not perform satisfactorily. If we have to replace one or more of these third parties, we may be unable to enter into new agreements in a timely manner or on reasonable terms, if at all.

•

We face significant competition, and if our competitors develop technologies or product candidates more rapidly than we do or their technologies or product candidates are more effective or have more favorable safety or tolerability profiles, our business and our ability to develop and successfully commercialize products may be adversely affected.

•

If we are unable to obtain and maintain patent protection for our Enhanced Delivery Oligonucleotide platform, therapeutic development candidates or programs and/or other proprietary technologies we develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our therapeutic product candidates or programs and other proprietary technologies we may develop may be adversely affected.

•

We expect to expand our headcount over time to support our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

•

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

•

The price of our common stock is volatile and fluctuates substantially, which could result in substantial losses for holders of our common stock.

The summary risk factors described above should be read together with the text of the full risk factors below in the section titled “Risk Factors” in Part II, Item 1.A. and the other information set forth in this Form 10-Q, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and

uncertainties not precisely known to us, or that we currently deem to be immaterial, may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PEPGEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)


	September 30, 2025 (unaudited)			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	142,775		$	49,421
Marketable securities		20,890			70,770
Prepaid expenses and other current assets		2,541			3,570
Total current assets	$	166,206		$	123,761
Property and equipment, net	$	2,220			3,716
Operating lease right-of-use asset		19,711			21,432
Restricted cash		1,548			1,548
Other assets		372			426
Total assets	$	190,057		$	150,883
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	766		$	1,752
Accrued expenses		8,713			11,850
Operating lease liability		3,163			3,094
Total current liabilities	$	12,642		$	16,696
Operating lease liability, net of current portion		14,275			15,567
Total liabilities	$	26,917		$	32,263
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock	$	—		$	—
Common stock		7			3
Additional paid-in capital		505,936			390,057
Accumulated other comprehensive (loss) income		(25	)		23
Accumulated deficit		(342,778	)		(271,463	)
Total stockholders’ equity	$	163,140		$	118,620
Total liabilities and stockholders’ equity	$	190,057		$	150,883

See accompanying notes to unaudited condensed consolidated financial statements.

PEPGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating expenses:
Research and development	$	13,423		$	17,722		$	57,192		$	57,517
General and administrative		5,231			5,449			16,715			15,877
Total operating expenses	$	18,654		$	23,171		$	73,907		$	73,394
Operating loss	$	(18,654	)	$	(23,171	)	$	(73,907	)	$	(73,394	)
Other income (expense):
Interest income		634			1,826			2,598			5,682
Other income (expense), net		(6	)		(39	)		(6	)		(27	)
Total other income, net		628			1,787			2,592			5,655
Net loss before income tax	$	(18,026	)	$	(21,384	)	$	(71,315	)	$	(67,739	)
Income tax expense		—			—			—			—
Net loss	$	(18,026	)	$	(21,384	)	$	(71,315	)	$	(67,739	)
Net loss per share, basic and diluted	$	(0.52	)	$	(0.66	)	$	(2.14	)	$	(2.17	)
Weighted-average common shares outstanding, basic and diluted		34,362,876			32,581,542			33,268,264			31,240,622
Other comprehensive loss:
Cumulative translation adjustment arising during the period	$	—		$	(20	)	$	(1	)	$	(72	)
Unrealized gain (loss) on marketable securities		18			186			(47	)		129
Comprehensive loss	$	(18,008	)	$	(21,218	)	$	(71,363	)	$	(67,682	)

See accompanying notes to unaudited condensed consolidated financial statements.

PEPGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(UNAUDITED)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		(Loss) Income			Deficit			Equity
Balance as of December 31, 2024		32,619,663	$	3	$	390,057	$	23		$	(271,463	)	$	118,620
Vesting of restricted stock units		101,280		—		—		—			—			—
Stock-based compensation expense		—		—		3,432		—			—			3,432
Unrealized loss on marketable securities		—		—		—		(44	)		—			(44	)
Cumulative translation adjustment arising during the period		—		—		—		(1	)		—			(1	)
Net loss		—		—		—		—			(30,202	)		(30,202	)
Balance as of March 31, 2025		32,720,943	$	3	$	393,489	$	(22	)	$	(301,665	)	$	91,805
Issuance of stock under the employee stock purchase plan		78,781		—		98		—			—			98
Stock-based compensation expense		—		—		2,363		—			—			2,363
Unrealized loss on marketable securities		—		—		—		(21	)		—			(21	)
Net loss		—		—		—		—			(23,087	)		(23,087	)
Balance as of June 30, 2025		32,799,724	$	3	$	395,950	$	(43	)	$	(324,752	)	$	71,158
Issuance of stock in public offering, net of underwriters' fees and issuance costs		35,937,500		4		107,582		—			—			107,586
Exercise of stock options		10,000		—		27		—			—			27
Stock-based compensation expense		—		—		2,377		—			—			2,377
Unrealized gain on marketable securities		—		—		—		18			—			18
Net loss		—		—		—		—			(18,026	)		(18,026	)
Balance as of September 30, 2025		68,747,224	$	7	$	505,936	$	(25	)	$	(342,778	)	$	163,140

Balance as of December 31, 2023		23,823,241	$	2	$	289,867	$	34		$	(181,482	)	$	108,421
Issuance of stock in public offering, net of underwriters' fees and issuance costs		7,530,000		1		76,351		—			—			76,352
Issuance of common stock from ATM Sales Agreement, net of underwriters' fees		1,000,000		—		9,900		—			—			9,900
Exercise of stock options		36,194		—		395		—			—			395
Stock-based compensation expense		—		—		2,022		—			—			2,022
Unrealized loss on marketable securities		—		—		—		(20	)		—			(20	)
Cumulative translation adjustment arising during the period		—		—		—		(51	)		—			(51	)
Net loss		—		—		—		—			(18,020	)		(18,020	)
Balance as of March 31, 2024		32,389,435	$	3	$	378,535	$	(37	)	$	(199,502	)	$	178,999
Exercise of stock options		128,354		—		1,403		—			—			1,403
Issuance of stock under the employee stock purchase plan		32,614		—		149		—			—			149
Stock-based compensation expense		—		—		2,862		—			—			2,862
Unrealized loss on marketable securities		—		—		—		(37	)		—			(37	)
Cumulative translation adjustment arising during the period		—		—		—		(1	)		—			(1	)
Net loss		—		—		—		—			(28,335	)		(28,335	)
Balance as of June 30, 2024		32,550,403	$	3	$	382,949	$	(75	)	$	(227,837	)	$	155,040
Exercise of stock options		39,299		—		407		—			—			407
Stock-based compensation expense		—		—		3,226		—			—			3,226
Unrealized gain on marketable securities		—		—		—		186			—			186
Cumulative translation adjustment during the period		—		—		—		(20	)		—			(20	)
Net Loss		—		—		—		—			(21,384	)		(21,384	)
Balance as of September 30, 2024		32,589,702	$	3	$	386,582	$	91		$	(249,221	)	$	137,455

See accompanying notes to unaudited condensed consolidated financial statements.

PEPGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)


	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(71,315	)	$	(67,739	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		1,061			1,125
Stock-based compensation expense		8,172			8,110
Amortization and interest accretion related to operating lease		2,811			2,811
Accretion of discounts on marketable securities, net		(1,441	)		(2,905	)
Impairment of long-lived assets		701			—
Other non-cash adjustments		—			20
Changes in operating assets and liabilities:
Prepaids and other current and non-current assets		1,028			(1,239	)
Accounts payable		(971	)		4,916
Accrued expenses and other non-current liabilities		(3,523	)		(5,750	)
Operating lease liabilities, current and non-current		(2,313	)		(2,246	)
Net cash used in operating activities	$	(65,790	)	$	(62,897	)
Cash flows from investing activities:
Purchases of property and equipment		(265	)		(269	)
Purchases of marketable securities		(6,726	)		(123,900	)
Maturities of marketable securities		58,000			60,000
Net cash provided by (used in) investing activities		51,009			(64,169	)
Cash flows from financing activities:
Issuance of common stock in public offering, net of underwriters' fees		108,100			76,878
Payment of offering costs		(75	)		(511	)
Issuance of common stock from ATM Sales Agreement, net of underwriters' fees		—			9,900
Proceeds from employee equity plans		125			2,354
Net cash provided by financing activities	$	108,150		$	88,621
Effect of exchange rate changes on cash		(15	)		(40	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	93,354		$	(38,485	)
Cash, cash equivalents and restricted cash at beginning of period		50,969			82,322
Cash, cash equivalents and restricted cash at end of period	$	144,323		$	43,837
Components of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	142,775		$	42,289
Restricted cash		1,548			1,548
Total cash, cash equivalents and restricted cash at end of period	$	144,323		$	43,837
Supplemental noncash investing and financing activities
Property and equipment included in accounts payable and accrued expenses	$	—		$	14
Deferred offering costs in accounts payable and accrued expenses		386			—
Cash paid for taxes		86			71

See accompanying notes to unaudited condensed consolidated financial statements.

PEPGEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Nature of Business and Basis of Presentation

PepGen Inc., hereinafter referred to as PepGen or the Company, is a clinical-stage biotechnology company advancing the next generation of oligonucleotide therapeutics with the goal of transforming the treatment of severe neuromuscular and neurologic diseases. The Company's principal offices are located in Boston, Massachusetts.

The Company was initially formed as PepGen Limited on January 25, 2018, in the United Kingdom, or the U.K. On November 9, 2020, PepGen Limited completed a corporate reorganization, or the Reorganization. As part of the Reorganization, PepGen Limited formed PepGen, a Delaware corporation with nominal assets and liabilities, for the purpose of consummating the Reorganization. In connection with the Reorganization, the existing stockholders of PepGen Limited exchanged each of its classes of shares of PepGen Limited for the same number and class of common stock of PepGen on a one-to-one basis. The newly issued stock of PepGen had substantially identical rights to the exchanged shares of PepGen Limited. As a result of the exchange, PepGen became the sole stockholder of PepGen Limited. Upon the completion of the Reorganization on November 23, 2020, the historical financial statements of PepGen Limited became the historical financial statements of PepGen as the Reorganization was deemed to be between entities under common control. PepGen Limited was dissolved on December 10, 2024.

Liquidity and Capital Resources

Since inception, the Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and negative cash flows from operations. The Company’s primary uses of cash, cash equivalents, and marketable securities to date have been funding research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, leasing premises and associated capital expenditures, raising capital, and providing general and administrative support for these operations. As of September 30, 2025, the Company had an accumulated deficit of $342.8 million. To date, the Company has funded operations primarily through private placements of convertible preferred stock, the sale of shares of common stock in its initial public offering, or IPO, the sale of shares of common stock under its At-the-Market Equity Offering Sales Agreement, or Sales Agreement, with Stifel, Nicolaus & Company, Incorporated, or Stifel, and through the sale of shares of common stock in follow-on public offerings in February 2024, referred to as the 2024 Offering, and in September 2025, referred to as the 2025 Offering. As of September 30, 2025, the Company had cash, cash equivalents, and marketable securities of $163.7 million.

The Company filed a shelf registration statement on Form S-3 with the United States Securities and Exchange Commission, or SEC, which covers the offering, issuance and sale of an amount up to $300.0 million in the aggregate of shares of common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on June 16, 2023. On August 8, 2023, the Company filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by the Company of up to $100.0 million of shares of common stock from time to time in “at-the-market” offerings. Stifel is entitled to receive a commission of up to 3.0% of gross proceeds from sales under the Sales Agreement. On February 5, 2024, the Company sold 1,000,000 shares of common stock at a price of $10.00 per share under the Sales Agreement, resulting in net proceeds of $9.9 million. On February 9, 2024, the Company sold 7,530,000 shares of common stock in the 2024 Offering, pursuant to an underwriting agreement with Leerink Partners LLC dated as of February 6, 2024, at a price of $10.635 per share, resulting in net proceeds of $76.4 million after deducting underwriting fees and offering costs of $3.7 million. Net proceeds from sales in 2024 under the Sales Agreement and 2024 Offering, after deducting underwriters' fees and costs, were $86.3 million.

On June 28, 2024, the Company filed a second shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $250.0 million in the aggregate of shares of common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on July 8, 2024. On September 26, 2025, the Company issued and sold 31,250,000 shares of common stock at a purchase price of $3.20 per share in the 2025 Offering. Pursuant to the underwriting agreement, the Company granted underwriters a 30-day option to purchase up to an additional 4,687,500 shares of common stock at a price of $3.20 per share, which was exercised in full on September 25, 2025. The 2025 Offering resulted in net proceeds of $107.6 million after deducting underwriters' fees of $6.9 million and estimated offering expenses of $0.5 million.

The Company had previously disclosed in the financial statements as of June 30, 2025 that substantial doubt existed regarding the Company’s ability to continue as a going concern. Based on the improvement in its cash position due to the 2025 Offering, the Company believes that its cash, cash equivalents, and marketable securities as of September 30, 2025, will be sufficient to fund its currently planned operations for at least the next 12 months from the issuance of these condensed consolidated financial statements. Therefore, the Company has concluded that the conditions and events raising substantial doubt no longer exist.

As the Company continues to pursue its business plan to successfully develop and obtain regulatory approval for its product candidates, it expects to finance its operations through the sale of equity, debt financings or other capital resources, which could include income from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. However, there can be no assurance that any additional financing or strategic transactions will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it may need to delay, reduce or eliminate its product development or future commercialization efforts, which could have a material adverse effect on the Company’s business, results of operations or financial condition.

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with generally accepted accounting principles in the United States of America, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board, or FASB.

The condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2025, and results of operations for the interim periods ended September 30, 2025 and September 30, 2024.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2024 and 2023, and the notes thereto, included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2025, or Form 10-K.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2024 included in the Form 10-K. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non-public companies, the Company can adopt the new or revised standard at the time non-public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements and disclosures.

In November 2023, the FASB issued Accounting Standards Update, or ASU No. 2023-07, Segment Reporting (Topic 280), or ASU 2023-07. This update expands segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for the Company in the consolidated financial statements for the year ending December 31, 2024, and interim periods beginning on January 1, 2025. The Company adopted this standard for the year ended December 31, 2024 which resulted in expanded disclosure requirements (See Note 11 - Segment Reporting).

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, or ASU 2023-09, to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective application is permitted. The Company adopted ASU 2023-09 on January 1, 2025 which did not have a material effect on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), or ASU 2024-03. ASU 2024-03 requires companies to disaggregate certain expenses presented on the face of the financial statements to enhance transparency and help investors better understand an entity's performance within the notes to the financial statements. The amendments in ASU 2024-03 are effective for fiscal years beginning after December

15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will not be required to adopt ASU 2024-03 until January 1, 2027. The Company is currently evaluating the potential impact of the adoption of ASU 2024-03 on its consolidated financial statements and related disclosures.

3. Fair Value Measurements

The following tables present information about the Company’s financial assets that have been measured at fair value as of September 30, 2025 and December 31, 2024, and indicate the fair value of the hierarchy of the valuation inputs utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair value determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted market prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

The following tables set forth marketable securities as of September 30, 2025 and December 31, 2024 (in thousands):


	As of September 30, 2025
	Amortized Cost		Unrealized Gains		Unrealized Losses		Total
U.S. Treasury notes		20,887		3		—		20,890
Total	$	20,887	$	3	$	—	$	20,890


	As of December 31, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses			Total
U.S. Treasury notes		70,731		61		(22	)		70,770
Total	$	70,731	$	61	$	(22	)	$	70,770

The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis and indicate the level within the fair value hierarchy utilized to determine such values as of September 30, 2025 and December 31, 2024 (in thousands):


	As of September 30, 2025
	Total		Level 1		Level 2		Level 3
Cash Equivalents:
U.S. Treasury-backed money market funds	$	31,188	$	31,188	$	—	$	—
Marketable Securities:
U.S. Treasury notes		20,890		20,890		—		—
Total	$	52,078	$	52,078	$	—	$	—


	As of December 31, 2024
	Total		Level 1		Level 2		Level 3
Cash Equivalents:
U.S. Treasury-backed money market funds	$	45,570	$	45,570	$	—	$	—
Marketable Securities:
U.S. Treasury notes		70,770		70,770		—		—
Total	$	116,340	$	116,340	$	—	$	—

Money market funds are highly liquid investments that are valued based on quoted market prices in active markets, which represent a Level 1 measurement within the fair value hierarchy. These money market funds are classified on the unaudited condensed consolidated balance sheet under cash and cash equivalents.

The following table summarizes the scheduled maturity for the Company's marketable securities for the period presented (in thousands):


	September 30, 2025
Maturing in one year or less	$	20,890
Total	$	20,890

4. Property and Equipment, Net

The cost and accumulated depreciation of property and equipment were as follows (in thousands):


	September 30, 2025			December 31, 2024
Lab equipment	$	4,021		$	5,110
Computer and office equipment		1,759			1,556
Construction in process	15				96
Total property and equipment		5,795			6,762
Less: accumulated depreciation		(3,575	)		(3,046	)
Total property and equipment, net	$	2,220		$	3,716

Depreciation expense was $0.3 million and $0.4 million for the three months ended September 30, 2025 and September 30, 2024, respectively. Depreciation expense was $1.1 million for both the nine months ended September 30, 2025 and September 30, 2024.

During the second quarter of 2025, the Company also took $0.7 million in non-cash charges to research and development and general and administrative expense, associated with the impairment of unused lab equipment and computer and office equipment.

5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Research and development expenses	$	4,209	$	6,903
Employee-related expenses		3,093		3,617
Professional services		935		1,138
Other		476		192
Total accrued expenses	$	8,713	$	11,850

6. Related Party Transactions

Technology License Agreement with Oxford University Innovation Limited

In March 2018, the Company, Oxford University Innovation Limited, or OUI, and the Medical Research Council of United Kingdom Research and Innovation, or MRC, or collectively with OUI, the Licensors, entered into a license of technology agreement, which was subsequently amended in December 2018, further amended and restated in November 2020, and further amended in February 2022, referred to, as so amended, as the License Agreement. The Licensors and affiliates held shares of Series A-1 and Series A-2 preferred stock, Series B preferred stock and Class A common stock. The License Agreement provides the Company with an exclusive worldwide license to licensed data and technology owned by OUI and MRC in respect of cell-penetrating peptides for the treatment of Duchenne muscular dystrophy, spinal muscular atrophy, and other conditions. The License Agreement provides the Company with the rights to grant and authorize sublicenses to make, use, sell, and import products and otherwise exploit the patent rights.

As consideration for the license, the Company made an initial upfront payment in 2018, as well as a Restatement Completion Fee and a License Data Fee (each as defined in the License Agreement) in 2020 totaling $0.1 million.

The Company could be required to make milestone payments to the Licensors upon achievement of certain patent and commercial milestones related to the patents and commercialization of certain of the Company’s product candidates. The aggregate potential milestone payments are $0.1 million. In 2024, the Company paid OUI the patent procurement milestone of £10,000, adjusted

per the retail price index under the terms of the License Agreement. The Company also agreed to pay the Licensors low single digit royalties on net sales of any licensed products that are commercialized by the Company in excess of a threshold amount between £20 million and £30 million ($26.9 million and $40.3 million as of September 30, 2025), subject to certain adjustments. The term of the License Agreement continues until the later of (i) the date on which all the patents and patent applications covered thereunder have been abandoned or allowed to lapse or expired or been rejected or revoked or (ii) 20 years from the date of the original license agreement.

Upon completion of the IPO, the Company became obligated to pay OUI an exit fee between 0.5% to 2% of the value determined in an acquisition or initial public offering, not to exceed £5 million ($6.2 million as of the IPO date). The exit fee due to OUI, based on the proceeds of the IPO, was $1.4 million, which was paid during the second quarter of 2022 and included in research and development expense on the condensed consolidated statement of operations.

In 2024, one member of the Company’s board of directors, Dr. Christopher Ashton, was employed by Oxford Science Enterprises, or OSE, which is an affiliate of OUI. Dr. Ashton resigned from the board of directors, effective as of September 30, 2024.

Pursuant to the terms of Dr. Ashton's employment agreement with OSE, he was obligated to transfer any cash compensation from the Company to OSE. Fees paid in cash for Dr. Ashton's service on the Company's board of directors were paid directly to OSE and were included within general and administrative expense on the unaudited condensed consolidated statement of operations. The Company paid $13,125 for the three months ended September 30, 2024 and $36,875 for the nine months ended September 30, 2024 to OSE as compensation for Dr. Ashton's service on the board of directors prior to his resignation from the Board on September 30, 2024. No cash compensation was paid to OSE in the three or nine months ended September 30, 2025.

As of September 30, 2025, OSE owned 7.2% of the Company’s outstanding common stock.

RA Capital Management, L.P.

Entities affiliated with RA Capital Management, L.P., or RA Capital, purchased common stock in the Company’s IPO in May 2022, the Company’s 2024 Offering in February 2024, and the Company's 2025 Offering in September 2025. As of September 30, 2025, entities affiliated with RA Capital owned 29.2% of the Company’s outstanding common stock.

Two members of the Company’s board of directors, Dr. Joshua Resnick and Habib Dable, are affiliated with RA Capital. Pursuant to the governing legal documents of RA Capital, Dr. Resnick is obligated to transfer any cash compensation from the Company to RA Capital. Fees paid in cash for Dr. Resnick's service on the Company's board of directors were paid directly to RA Capital and are included within general and administrative expense on the unaudited condensed consolidated statement of operations. The Company paid $11,000 and $12,000 for the three months ended September 30, 2025 and 2024, respectively, and $35,000 and $33,500 for the nine months ended September 30, 2025 and 2024, respectively to RA Capital for Dr. Resnick’s service on the board of directors.

7. Commitments and Contingencies

Legal proceedings

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated.

On June 9, 2025, a putative shareholder class action captioned Johnny Karam v. PepGen Inc., et al. (the "Karam Litigation") was filed in the United States District Court for the Eastern District of New York, naming the Company and the Company’s Chief Executive Officer and Chief Financial Officer as defendants. The lawsuit was filed by a stockholder who claims to be suing on behalf of anyone who purchased or otherwise acquired the Company’s securities between March 7, 2024 and March 3, 2025. The lawsuit alleges that material misrepresentations and/or omissions of material fact were made in the Company’s public disclosures in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The alleged improper disclosures relate primarily to statements regarding PGN-EDO51. The plaintiff seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney’s fees. On July 15, 2025, the action was transferred to the United States District Court for the District of Massachusetts. The Company believes that the allegations contained in the complaint are without merit and intends to defend the case vigorously. Regardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense costs, diversion of management resources and other factors. The Company has not recorded an estimate of the possible loss associated with this legal proceeding due to the uncertainties related to both the likelihood and the amount of any possible loss or range of loss. Separately, by a letter received by the Company on September 29,

2025, a putative shareholder of the Company made a purported shareholder demand based on substantially the same allegations as those set forth in the Karam Litigation.

The Company is not party to any other litigation and does not have contingency reserves established for any litigation liabilities.

Other

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, including in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of September 30, 2025. The Company does not anticipate recognizing any significant losses relating to these arrangements. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements may be unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

8. Stockholders’ Equity

Under the Third Amended and Restated Certificate of Incorporation, dated May 10, 2022, as amended on June 20, 2024, as currently in effect, the Company has the authority to issue a total of 500,000,000 shares of common stock (par value of $0.0001 per share) and 10,000,000 shares of undesignated preferred stock (par value of $0.0001 per share). Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No cash dividends were declared by the board of directors during the nine months ended September 30, 2025.

The Company has reserved shares of common stock for issuance, on an as-converted basis, as follows:


	September 30, 2025		December 31, 2024
Stock options		6,197,317		5,845,039
Restricted stock and performance stock units		256,957		101,280
Authorized for future stock awards or option grants under the 2022 Plan		1,573,915		657,167
Authorized for future stock awards or option grants under the Inducement Plan		797,184		702,184
Authorized for future issuance under the ESPP		645,413		397,998
Total		9,470,786		7,703,668

9. Stock-Based Compensation

Equity Plans

The Company maintains four equity compensation plans; the 2020 Stock Plan, or the 2020 Plan, the 2022 Stock Option and Incentive Plan, or the 2022 Plan, the 2022 Employee Stock Purchase Plan, or the ESPP, and the 2024 Inducement Plan, or the Inducement Plan. As of the Company's IPO in May 2022, the Company's board of directors determined that no further awards would be made under the 2020 Plan. The number of shares of common stock that may be issued under the 2022 Plan is subject to increase by the number of shares under any outstanding stock options forfeited and not exercised under the 2020 Plan. Additionally, the number of shares reserved for issuance under the 2022 Plan automatically increases on the first day of each fiscal year in an amount equal to the lower of (1) 5% of the shares of common stock outstanding on such date and (2) an amount determined by the Company’s board of directors. The 2022 Plan allows the board of directors to grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, and dividend equivalent rights to the Company’s officers, employees, directors and other key persons. The number of shares reserved for issuance under the ESPP automatically increases on the first day of each fiscal year in an amount equal to the lower of (1) 1% of the shares of common stock outstanding on such date and (2) an amount determined by the Company’s board of directors.

In August 2024, the Company's board of directors adopted the Inducement Plan. The Inducement Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units unrestricted stock awards, dividend equivalent rights and other stock-based awards with respect to an aggregate of 1,000,000 shares of common stock (subject to

adjustment as provided in the Inducement Plan). Awards under the Inducement Plan may only be granted to new employees who were not previously employed by the Company or its affiliates in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4).

As of September 30, 2025, 1,573,915 shares remained available for grant under the 2022 Plan, 797,184 shares remained available for issuance under the Inducement Plan, and 645,413 shares remained available for issuance under the ESPP.

Stock Option Activity

Stock option activity for the nine months ended September 30, 2025, was as follows:


	Stock Options			Weighted-Average Exercise Price
Outstanding as of December 31, 2024		5,845,039		$	11.92
Granted		1,752,874		$	2.37
Exercised		(10,000	)	$	2.71
Canceled/Forfeited		(1,390,596	)	$	10.14
Outstanding as of September 30, 2025		6,197,317		$	9.64

The weighted-average grant date fair value of options granted during the nine months ended September 30, 2025 was $1.82 per share. As of September 30, 2025, total unrecognized compensation cost related to stock options was $14.5 million. This amount is expected to be recognized over a weighted average period of approximately 2.29 years.

Restricted Stock Units

A restricted stock unit, or RSU, represents the right to receive one share of common stock upon vesting of the RSU. In February 2024, the Company granted employees a one-time RSU award that vested in full on the one-year anniversary of the grant date, provided that the employee remained employed with the Company through the date of vesting. Certain employees, including employees who are executive officers of the Company, received a one-time RSU award that vests upon the achievement of certain performance-based clinical development milestones, or PSUs, provided that the employee remains employed with the Company through the date of vesting. Such awards could not vest in less than one year, regardless of when the performance milestone was achieved. This milestone was achieved and all PSUs vested on February 24, 2025. During the nine months ended September 30, 2025 the Company recognized $0.3 million in expense associated with the achievement of the performance milestone.

Beginning in 2025, the Company introduced RSU grants with service conditions that vest 25% on the first anniversary of the grant date, and the remainder ratably in equal annual installments over the remaining three years, provided the employee remains employed by the Company through the vesting dates. No PSUs remain outstanding as of September 30, 2025. As of September 30, 2025, there are no RSUs with performance-based vesting conditions outstanding. A summary of the Company’s RSU and PSU activity and related information for the nine months ended September 30, 2025 is as follows:


	Time-based RSUs			PSUs			Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2024		72,725			28,555		$	10.64
Granted		333,690			—			2.73
Vested		(72,725	)		(28,555	)		10.64
Forfeited		(76,733	)		—			2.81
Outstanding as of September 30, 2025		256,957			—		$	2.70

The weighted average grant date fair value of the time-based RSUs granted during the nine months ended September 30, 2025 was $2.73. As of September 30, 2025, there was $0.6 million of unrecognized compensation costs related to unvested time-based RSUs, which are expected to be recognized over a weighted-average period of 3.44 years.

Stock-Based Compensation Expense

Stock-based compensation expense associated with stock options, RSUs, PSUs, and the Company’s ESPP included in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development	$	930	$	1,419	$	3,449	$	3,433
General and administrative		1,447		1,807		4,723		4,677
Total stock-based compensation expense	$	2,377	$	3,226	$	8,172	$	8,110

10. Income Taxes

The Company recorded income tax expense of nil for the three and nine months ended September 30, 2025 and 2024.

On January 1, 2022, or the Transfer Date, the Company’s wholly owned subsidiary, PepGen Limited, transferred all intellectual property, or IP, assets to the parent company, PepGen, in an arm’s length transaction at fair value pursuant to an asset transfer agreement. The fair value of the IP assets is a non-recurring fair value measurement. The Company engaged valuation specialists to calculate the IP value, and the IP value was measured using the historical cost method. The historical cost method estimated the fair value of the IP assets using the historical cost base of the IP assets and the expected market return as of the Transfer Date. The significant assumption inherent in estimating the fair value using the historical cost method was the expected market return. The Company utilized a 40% expected market return, which a third-party investor may expect as a return on their investment, and which is based on studies of venture capital investment returns. The Company calculated the fair value of the IP assets by computing the present value of the historical cost base using the 40% expected market return. The assumptions used in the estimation of the IP assets represent level 3 inputs of the fair value hierarchy.

The transfer of the IP assets resulted in an estimated tax charge during 2022 to His Majesty’s Revenue & Customs, or HMRC, after considering net operating loss carryforwards, of $4.4 million, inclusive of the $0.7 million uncertain tax position. The Company paid amounts owed to HMRC in September 2023.

The Company recognizes the impact of an uncertain income tax position taken on its income tax returns at the amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed at least quarterly, and adjustments are made as events occur that warrant adjustments for those positions. The Company released approximately $0.7 million in unrecognized tax benefits due to the liquidation of its U.K. subsidiary, PepGen Limited, in December 2024.

11. Segment Reporting

ASU 2023-07 establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements.

Segment reporting is prepared on the same basis that the chief executive officer, who is the Company’s chief operating decision maker and manages the business, makes business decisions and assesses performance. The Company has one reportable segment and regularly reviews operating expenses and net loss on a consolidated basis. The Company operates in one location in Boston, Massachusetts focused on advancing oligonucleotide therapeutics with the goal of transforming the treatment of severe neuromuscular and neurologic diseases. The Company tracks external operating expenses on a program-by-program basis. Net loss is comprised of expenses related to our two product candidates, one of which was discontinued in May 2025, and other personnel, facility, and general and administrative costs. Operating expenses and net loss are the basis the chief operating decision maker uses for the purpose of deciding how to allocate resources, specifically on a program basis as presented below.

The chief operating decision maker uses operating expenses and net loss to evaluate progress on research and development activities on the Company's two product candidates, one of which was discontinued in May 2025, as well as when making strategic decisions regarding the Company's research and development efforts. Operating expenses and loss are also used to monitor budget versus actual results.

The following table outlines the Company’s functional operating expenses (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Research and Development Expenses
PGN-EDODM1 direct research and development expenses	$	5,375		$	5,131		$	21,771		$	15,979
PGN-EDO51 direct research and development expenses		840			2,826			8,838			15,270
Platform and external research and development expenses		105			854			539			1,772
Personnel-related (including stock-based compensation)		4,955			6,332			18,267			17,126
Facility and related costs		1,271			1,426			3,853			4,374
Other research and development expenses		877			1,153			3,924			2,996
Total research and development expense		13,423			17,722			57,192			57,517
General and Administrative Expenses
Personnel-related (including stock-based compensation)		2,685			3,311			9,367			9,245
Facility and related costs		519			517			1,511			1,501
Other general and administrative expenses		2,027			1,621			5,837			5,131
Total general and administrative expense		5,231			5,449			16,715			15,877
Operating loss		(18,654	)		(23,171	)		(73,907	)		(73,394	)
Other income (expense):
Interest income		634			1,826			2,598			5,682
Other income (expense), net		(6	)		(39	)		(6	)		(27	)
Total other income (expense), net		628			1,787			2,592			5,655
Income tax expense		—			—			—			—
Net loss	$	(18,026	)	$	(21,384	)	$	(71,315	)	$	(67,739	)

12. Subsequent Events

On November 4, 2025 (the “Effective Date”), the Company’s Board of Directors approved an option repricing. A total of 3,557,903 eligible stock options were repriced to an exercise price of $4.53, the closing price of the Company’s common stock on the Effective Date. These options previously had exercise prices ranging from $8.89 to $17.91 per share. In order to exercise these repriced options at the reduced exercise price, eligible participants are required to remain in service with the Company through the retention period, which begins on the Effective Date and ends on the earliest of the following: (i) March 31, 2027; (ii) with respect to options granted under the 2020 Plan, the occurrence of a Sale of the Company (as defined therein), or (iii) with respect to options granted under the 2022 Plan and the 2024 Plan, the occurrence of a Sale Event (as defined therein). The Company is in the process of determining the incremental compensation expense associated with this repricing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-Q, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

PepGen Inc., also referred to as “PepGen,” “we,” “our” or “us”, is a clinical-stage biotechnology company advancing the next-generation of oligonucleotide therapies with the goal of transforming the treatment of severe neuromuscular and neurological diseases. Our proprietary Enhanced Delivery Oligonucleotide, or EDO, platform is founded on over a decade of research and development and leverages cell-penetrating peptides, or CPPs, to improve the uptake and activity of conjugated oligonucleotide therapeutics. Using these EDO peptides, our goal is to develop a research and development pipeline of oligonucleotide therapeutic candidates that are designed to target the root cause of serious diseases.

Business Update

We are developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. We have conducted extensive preclinical studies of our product candidate, and these preclinical data form the basis of our clinical development plan for PGN-EDODM1.

Our clinical development program for PGN-EDODM1 includes two studies, FREEDOM-DM1, or FREEDOM, a multinational, randomized, double-blind, placebo-controlled Phase 1 single ascending dose, or SAD, study, and FREEDOM2-DM1, or FREEDOM2, a multinational, randomized, double blind, placebo-controlled Phase 2 MAD study. In the FREEDOM study, we are enrolling adult participants with DM1 in multiple geographies including the U.S., U.K. and Canada, to evaluate the safety and tolerability of PGN-EDODM1, as well as oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. On September 24, 2025, we reported topline results from the 15 mg/kg cohort in the FREEDOM study of PGN-EDODM1, demonstrating a mean splicing correction of 53.7% following a single 15 mg/kg dose, noting that PGN-EDOM1 was generally well tolerated at this dose, with all drug-related adverse events mild or moderate in severity. Additionally, on February 24, 2025, we reported initial data from the 5 mg/kg and 10 mg/kg dose cohorts in this study where PGN-EDODM1 was observed to have a favorable emerging safety profile and robust splicing correction in a dose-dependent manner in the 5 and 10 mg/kg dose cohorts. Based on the positive splicing correction observed in the FREEDOM trial including the totality of the blinded safety data to date, we have decided to conclude dose escalation in the FREEDOM trial with the 15 mg/kg cohort.

The safety data from the ongoing FREEDOM study has informed the design of FREEDOM2, which is currently open in Canada and U.K. We also plan to open the FREEDOM2 study other geographies, including the U.S., subject to regulatory authorizations. FREEDOM2 is a Phase 2 randomized, double-blind, placebo-controlled MAD study of PGN-EDODM1 in DM1 patients. FREEDOM2 is designed to assess PGN-EDODM1’s safety and tolerability, splicing correction and functional outcome measures in DM1 patients. All participants in the 5 mg/kg dose cohort have been enrolled and received at least one dose and we expect to report data from this cohort in the first quarter of 2026.

The FDA has granted both orphan drug designation and Fast Track designation for PGN-EDODM1 for the treatment of DM1.

We have also initiated research efforts for additional potential investigational drugs addressing other neuromuscular diseases and neurologic disorders. On May 28, 2025, we announced that based on the levels of dystrophin protein measured in the 10 mg/kg cohort of the CONNECT1-EDO51 study investigating our candidate, PGN-EDO51, in Duchenne muscular dystrophy, or DMD, for patients amenable to exon 51 skipping, we have decided to voluntarily discontinue development of PGN-EDO51. Additionally, all DMD-related research and development activities, including our research efforts relating to exons 44, 45 and 53, are being wound down.

Initial Public Offering, ATM Program, Follow-on Offerings and Liquidity

In May 2022, we closed our initial public offering, or IPO, in which we sold an aggregate of 9,000,000 shares of common stock at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the underwriters a 30-day option to purchase 1,350,000 additional shares of common stock, which they exercised in part to purchase 1,238,951 additional shares of common stock for gross proceeds of $14.9 million. We received approximately $122.9 million in gross proceeds and $110.2 million in net proceeds in the IPO, after deducting underwriters’ fees and offering expenses.

Immediately prior to consummation of the IPO, all 12,546,805 outstanding shares of our redeemable convertible preferred stock, and 35,529 preferred stock warrants that were exercised on May 4, 2022, converted into 12,359,856 shares of our common stock.

On February 5, 2024, we issued and sold 1,000,000 of common stock shares at a purchase price of $10.00 per share under our at-the-market offering program, or ATM program, pursuant to an At-the-Market Equity Offering Sales Agreement, or Sales Agreement, with Stifel, Nicolaus & Company, Incorporated, or Stifel, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024, in an underwritten follow-on offering, or the 2024 Offering. The 2024 Offering resulted in net proceeds of $76.4 million after deducting underwriters' fees of $3.7 million. Net proceeds from the ATM program and 2024 Offering, after deducting underwriters’ fees and costs of the offerings, were $86.3 million.

On September 26, 2025, we issued and sold 31,250,000 shares of common stock shares at a purchase price of $3.20 per share in an underwritten public offering, or the 2025 Offering. Pursuant to the underwriting agreement, we granted underwriters a 30-day option to purchase up to an additional 4,687,500 shares of common stock at a price of $3.20 per share which was exercised in full on September 25, 2025. The 2025 Offering resulted in net proceeds of $107.6 million after deducting underwriters' fees of $6.9 million and estimated offering expenses of $0.5 million.

Since our inception, we have not generated any revenue from product sales or other sources and have incurred significant operating losses and negative cash flows from our operations. Our primary uses of cash to date have been to fund our research and development activities, business planning, establishing and maintaining our intellectual property portfolio, acquiring and developing product and technology rights, hiring personnel, leasing premises and associated capital expenditures, raising capital, and providing general and administrative support for these operations. To date, we have funded our operations primarily through private placements of our convertible preferred stock and proceeds from our IPO, the ATM program, the 2024 Offering, and the 2025 Offering.

We have incurred operating losses in each year since our inception. Our net losses were $71.3 million and $67.7 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. As of September 30, 2025, we had cash, cash equivalents, and marketable securities of $163.7 million. As of September 30, 2025, we had an accumulated deficit of $342.8 million. Notwithstanding our decision to cease our research and development efforts in DMD, which we announced on May 28, 2025, we expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials of PGN-EDODM1, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, current and planned clinical trials, manufacturing campaigns and our expenditures on other research and development activities.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our currently planned operations into the second half of 2027. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Corporate Reorganization

We were initially formed as PepGen Limited on January 25, 2018, in the U.K. On November 9, 2020, PepGen Limited initiated a corporate reorganization, or the Reorganization. As part of the Reorganization, PepGen Limited formed PepGen, a Delaware corporation with nominal assets and liabilities, for the purpose of consummating the Reorganization. In connection with the Reorganization, the existing shareholders of PepGen Limited exchanged each of their classes of shares of PepGen Limited for the same number and class of common stock of PepGen on a one-to-one basis. The newly issued stock of PepGen had substantially identical rights to the exchanged shares of PepGen Limited. As a result of the exchange, PepGen became the sole shareholder of PepGen Limited. Upon the completion of the Reorganization on November 23, 2020, the historical financial statements of PepGen Limited became the historical financial statements of PepGen, as the Reorganization was deemed to be between entities under common control.

After the Reorganization was completed, PepGen Limited began the process of transferring certain operations, including financial management functions, to PepGen pursuant to an intercompany services agreement, effective as of April 2021, and certain assets, including a novation of all intellectual property assets, pursuant to an asset transfer agreement, effective as of January 1, 2022. After the transfer of intellectual property and other assets from PepGen Limited to PepGen, there were limited operations through the end of 2022 at PepGen Limited. PepGen Limited was dissolved on December 10, 2024.

Components of Results of Operations

Operating Expenses

Research and Development

To date, our research and development expenses have primarily consisted of external and internal costs associated with our research and development activities, including our discovery and research efforts, the development of our proprietary EDO platform, and the preclinical and clinical development of our product candidates. Our research and development expenses include:

•

external expenses, including expenses incurred under arrangements with third parties, such as clinical research organizations, or CROs, contract development manufacturing organizations, or CDMOs, consultants and our scientific advisors;

•

personnel-related costs, including salaries, cash incentive compensation, payroll taxes, employee benefits, and stock-based compensation;

•

costs for laboratory supplies and materials and reagents for chemical synthesis of product candidates; and

•

facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development activities are recorded as prepaid expenses until the goods or services are received.

The following table (in thousands) summarizes our research and development expenses for the three and nine months ended September 30, 2025 and September 30, 2024. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
External expenses:
PGN-EDODM1	$	5,375	$	5,131	$	21,771	$	15,979
PGN-EDO51		840		2,826		8,838		15,270
Other programs and unallocated expenses		105		854		539		1,772
Total external expense		6,320		8,811		31,148		33,021
Internal expenses:
Personnel-related (including stock-based compensation)		4,955		6,332		18,267		17,126
Facilities and related costs		1,271		1,426		3,853		4,374
Other		877		1,153		3,924		2,996
Total research and development expenses	$	13,423	$	17,722	$	57,192	$	57,517

We continue to conduct our ongoing Phase 2 clinical trial of our investigational drug candidate, PGN-EDODM1. We have decided to conclude dose escalation in the FREEDOM trial with the 15 mg/kg cohort, based on the positive splicing correction observed and the totality of the blinded safety data to date. As stated above, on May 28, 2025, we announced that we have decided to voluntarily discontinue development of PGN-EDO51 and will be winding down all DMD-related research and development activities. Research and development expenses for our lead program can be variable quarter-over-quarter due to the timing of manufacturing campaigns, which are accounted for under the percentage of completion method. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our remaining clinical stage product candidate or any new product candidates we develop.

The timelines and costs associated with research and development activities are uncertain and can vary significantly for our product candidate and development program due to the inherently unpredictable nature of preclinical and clinical development. We previously announced our decision to focus our development efforts on PGN-EDODM1, and to cease development of our DMD-related programs, and may make further determinations as to which programs in our research and development pipeline to pursue and how much funding to direct to each program. We will need to raise substantial additional capital in the future.

Our future development costs may vary significantly based on factors such as:

•

the status of clinical trials, the timing and costs, if any, associated with resolving a clinical hold, animal and other preclinical studies and IND- or clinical trial application, or CTA-enabling studies;

•

per patient trial costs;

•

the number of trials required for approval;

•

the number of sites included in the trials;

•

the countries in which the trials are conducted;

•

the length of time required to enroll eligible patients;

•

the number of patients that participate in the trials;

•

the number of doses that patients receive;

•

the drop-out or discontinuation rates of patients;

•

the duration of patient participation in the trials and follow-up;

•

the cost and timing of manufacturing our product candidates and the cost and timing of our manufacturing campaigns;

•

the efficacy and safety profile of our product candidates; and

•

maintaining a continued acceptable safety profile of our products if any receive regulatory approval.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, including salaries, cash incentive compensation, payroll taxes, employee benefits, and stock-based compensation charges for those individuals in executive, finance, facility operations, and other administrative functions. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for audit, accounting and consulting services, and insurance costs.

Other general and administrative expenses will remain consistent to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations.

Other Income (Expense), Net

Interest income

Interest income consists of interest earned on our money market mutual funds and short-term U.S. treasury holdings.

Other income (expense)

Components of other income (expense) relate to realized and unrealized gains and losses on currency revaluation.

Income Taxes

We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception. We did not record any tax liability as of September 30, 2025 or September 30, 2024.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and September 30, 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and September 30, 2024 (in thousands):


	Three Months Ended September 30,						Period-to-
	2025			2024			Period Change
Operating expenses:
Research and development	$	13,423		$	17,722		$	(4,299	)
General and administrative		5,231			5,449			(218	)
Total operating expenses	$	18,654		$	23,171		$	(4,517	)
Operating loss	$	(18,654	)	$	(23,171	)	$	4,517
Other income (expense), net:
Interest income		634			1,826			(1,192	)
Other income (expense), net		(6	)		(39	)		33
Total other income (expense), net		628			1,787		$	(1,159	)
Net loss before income tax	$	(18,026	)	$	(21,384	)	$	3,358
Income tax expense		—			—			—
Net loss	$	(18,026	)	$	(21,384	)	$	3,358

Research and Development Expenses

Research and development expenses decreased by $4.3 million from $17.7 million for the three months ended September 30, 2024, to $13.4 million for the three months ended September 30, 2025. This was attributable to a $1.4 million decrease in personnel-related costs, including a decrease of $0.5 million in stock-based compensation expense, a $1.2 million decrease in manufacturing costs related to the timing of manufacturing campaigns, and a $1.3 million decrease in preclinical costs as our two lead programs had advanced into clinical trials, prior to the discontinuation of our DMD program in late May 2025. This was additionally driven by a $0.5 million decrease in consulting-related costs and a $0.3 million decrease in facility and office related costs, including depreciation. These decreases are partially offset by a $0.4 million increase in clinical trial expense driven by costs related to our Phase 1 and Phase 2 clinical trials for PGN-EDODM1.

General and Administrative Expenses

General and administrative expenses decreased by $0.2 million from $5.4 million for the three months ended September 30, 2024, to $5.2 million for the three months ended September 30, 2025. The decrease was primarily driven by an decrease of $0.6 million in personnel-related costs, including a decrease of $0.4 million in stock-based compensation expense. That decrease is partially offset by a $0.4 million increase in consulting and legal expenses.

Other Income (Expense), Net

Other income (expense), net was income of $0.6 million for the three months ended September 30, 2025 and $1.8 million for the three months ended September 30, 2024. Interest is earned through our cash deposits and U.S. Treasury-backed money market funds.

Income Tax Expense

Income tax expense was nil for the three months ended September 30, 2025 and September 30, 2024.

Comparison of the Nine Months Ended September 30, 2025 and September 30, 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and September 30, 2024 (in thousands):


	Nine Months Ended September 30,						Period-to-
	2025			2024			Period Change
Operating expenses:
Research and development	$	57,192		$	57,517		$	(325	)
General and administrative		16,715			15,877			838
Total operating expenses	$	73,907		$	73,394		$	513
Operating loss	$	(73,907	)	$	(73,394	)	$	(513	)
Other income (expense), net:
Interest income		2,598			5,682			(3,084	)
Other expense (income), net		(6	)		(27	)		21
Total other income (expense), net	$	2,592		$

PepGen Inc. 10-Q