PepGen(PEPG) - 2025 Q4 - Annual Report

Financial Performance - The company reported net losses of $89.7 million and $90.0 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of $361.1 million as of December 31, 2025[211]. - The company currently generates no revenue from product sales and does not expect to generate product revenue for many years, if ever[230]. - The company anticipates that its operating expenses will increase substantially as it continues research and development activities and seeks marketing approvals[218]. - The company may need to raise substantial additional funding to support its operations and product development programs, with potential risks if funding is not secured[223]. - Any delays or inability to obtain marketing approvals could restrict the company's ability to generate revenue and achieve profitability[332]. Clinical Trials and Development - The company has initiated a Phase 1 and a Phase 2 clinical trial for its lead product candidate PGN-EDODM1, with ongoing clinical trials including FREEDOM and FREEDOM2[209]. - The company has invested in developing its EDO platform and currently has two product candidates in clinical trials: PGN-EDODM1 for DM1 and PGN-EDO51 for DMD[229]. - The company has initiated Phase 1 and Phase 2 clinical trials for PGN-EDODM1, but the outcomes of these trials remain uncertain[247]. - The FREEDOM2 trial has concluded enrollment of the 5 mg/kg cohort and has begun dosing the 10 mg/kg cohort in Canada and the U.K.[229]. - The company has reported that the success of its product candidates will depend on timely completion of preclinical studies and obtaining regulatory approvals[232]. Regulatory and Compliance Challenges - The company has not received marketing approval for any product candidates from regulatory authorities in any jurisdiction[323]. - The FDA may require additional costly clinical trials or impose limitations on the approved indications for product candidates, which could adversely impact commercial viability[329]. - The company may face delays or denials in obtaining marketing approvals from the FDA or foreign regulatory authorities due to various factors, including trial design and safety profiles[329]. - Regulatory authorities impose stringent restrictions on the marketing and promotion of medicines, which could lead to product recalls or withdrawal from the market[347]. - The company is subject to numerous environmental, health, and safety laws, and non-compliance could result in significant fines or operational disruptions[357]. Manufacturing and Supply Chain Risks - The company is focused on establishing manufacturing sources and securing supply chain capacity for its product candidates[214]. - The company relies on third parties for manufacturing and clinical testing, which may lead to delays and increased expenses if replacements are needed[283]. - The company is dependent on a limited number of third-party suppliers for the manufacture of product candidates, which poses risks of supply disruptions and delays in clinical trials[289]. - The company does not currently have plans to develop its own manufacturing capabilities and relies entirely on third-party manufacturers for compliance with regulatory requirements[290]. - The company faces challenges in finding alternative suppliers for critical components, which could lead to significant delays and increased costs if current suppliers fail to meet contractual obligations[301]. Competition and Market Dynamics - The company faces significant competition in securing collaborations, which may limit its ability to implement strategies and develop product candidates[307]. - Competitors could file Abbreviated New Drug Applications (ANDAs) for generic versions of the company's products once approved, potentially impacting market share[407]. - The FDA's determination of exclusivity could significantly influence the timing of generic product approvals and market entry[406]. - The marketing approval process is expensive and time-consuming, with a small percentage of products successfully completing the FDA and EMA approval processes[325]. - The company may face competition from generic manufacturers if its product candidates are approved with only New Clinical Investigation (NCI) exclusivity[405]. Risks Related to Clinical Trials - The company may encounter significant delays in patient enrollment for clinical trials, which could adversely affect the completion of these trials[237]. - Conducting clinical trials in foreign countries presents risks that may delay completion, including adherence to clinical protocols and managing regulatory burdens[256]. - The company may face significant risks related to clinical trial and product liability exposure, which could divert resources and limit commercialization of product candidates[276]. - The company has faced challenges in transitioning from a research-focused entity to one capable of conducting multiple clinical development activities and supporting commercialization[228]. - The company acknowledges that drug development is a lengthy and expensive process, with high risks of failure in demonstrating safety and efficacy[245]. Data Privacy and Cybersecurity - Data protection and privacy laws are evolving, and non-compliance could result in fines up to 4% of global revenues or €20 million, adversely affecting the company's financial results[381]. - The use of artificial intelligence (AI) presents cybersecurity and data privacy risks, potentially exposing the company to reputational harm and liability[396]. - The FTC and state Attorneys General are actively reviewing privacy and data security protections, with potential penalties for failing to secure consumer personal information[387]. - Compliance with GDPR and similar laws requires significant resources and may interrupt or delay development and commercialization activities, potentially leading to increased costs and government enforcement actions[385]. - The introduction of new comprehensive privacy laws may require additional investment in compliance programs and could increase compliance costs and legal risks[390].