PEPG

PepGen ($PEPG): After 90% Crash, 'Highest-Level' DM1 Results Draw $640K Oxford Venture Capital Bet

10/01/2025 17:12

PepGen ($PEPG) is a Boston-based clinical-stage biotechnology company developing treatments for rare neuromuscular diseases like Duchenne muscular dystrophy and myotonic dystrophy. The company's proprietary EDO peptide-conjugated oligonucleotide therapeutics platform represents its core technology. What investors need to know right now is this: while $PEPG has crashed over 90% in the past 18 months, a completely different game-changer has emerged recently. This isn't simply a 'near-bottom' stock—it's at a dramatic inflection point where the entire business model is being redefined. The stock chart reveals the magnitude of this shock. Starting at $18 in June 2024, shares have plummeted to $1.87 currently. Particularly notable was a single day in late July 2024 when the stock crashed 37% from $18 to $11, marking the beginning of the sustained decline. What's striking is that CEO Michelle Mellion was systematically selling during exactly this period, disposing of over $1 million worth of shares across 49 separate transactions during June-July 2024 at an average price around $18—nearly 10x higher than current levels. So what caused this catastrophic decline? The death blow came on May 28, 2025, when the company announced complete discontinuation of its Duchenne muscular dystrophy therapy (PGN-EDO51). Following a Phase 2 clinical failure to increase dystrophin production, PepGen halted all DMD-related research and development. Shares immediately dropped another 9.5%. For investors, it felt like the core value driver had vanished. But the story doesn't end there. In fact, the truly interesting part begins now. On September 24, 2025, $PEPG announced clinical results for PGN-EDODM1 in myotonic dystrophy type 1 (DM1) patients. A single 15 mg/kg dose achieved 53.7% mean splicing correction—what the company called 'the highest mean splicing correction reported in DM1 patients.' All patients showed splicing improvement, and drug-related adverse events were mild to moderate and manageable. Even more remarkable is the complete reversal in insider trading patterns. The same executives who were major sellers in 2024 are now aggressively buying. President James McArthur purchased 61,500 shares across two transactions in April 2025 at an average price around $1.25. EVP Paul Streck also bought 8,375 shares through the employee stock purchase plan (ESPP) in May. This represents a powerful signal of management's confidence in the company's future. But the real game-changer was separate. On September 30, 2025, Oxford Science Enterprises purchased 200,000 shares at $3.20, investing $640,000. This Oxford University-affiliated venture capital firm has substantial biotech expertise. Their decision to invest at 70% above the current stock price demonstrates how they value $PEPG's intrinsic worth. Financial stability is also more robust than expected. With $74.65 million in cash as of Q2 2025 and quarterly operating expenses around $24 million, the company can operate for at least three years without additional fundraising. The debt-to-equity ratio of 25.1% is also manageable. Investors should watch these specific criteria. Positive signals include DM1 therapy's Phase 2 entry timing, additional institutional investor inflows, and breaking above the $1.50 resistance level. Conversely, warning signs include accelerated cash burn, DM1 clinical safety issues, and further decline below $1.00. Particularly, if cash drops below $50 million, fundraising pressure will intensify significantly. Looking at future scenarios, in the optimistic case where the DM1 therapy shows continued positive clinical results and secures big pharma partnerships, shares could recover to $5-8. The most likely base scenario involves stable DM1 program progression with shares trading in a $2-3 box range. However, if DM1 results disappoint or cash burn accelerates beyond expectations, further decline below $1.00 remains possible. In conclusion, $PEPG represents a classic 'all or nothing' biotech bet. It died once from Duchenne failure but found a new lifeline in DM1. Sophisticated investors like Oxford Science Enterprises are betting at prices far above current levels, and management is aggressively buying. However, clinical and fundraising risks remain in this high-risk stock. It's advisable to approach with a small portfolio allocation and a long investment horizon of at least 2-3 years.