In a report released yesterday, Tazeen Ahmad from Bank of America Securities reiterated a Sell rating on PepGen Inc. (PEPG – Research Report), with a price target of $1.00.
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Tazeen Ahmad’s rating is based on PepGen Inc.’s decision to discontinue its Duchenne muscular dystrophy (DMD) programs due to unsatisfactory results from their PGN-EDO51 trials. The data revealed that the drug’s exposure levels in DMD patients were significantly lower than in healthy volunteers, which led to suboptimal outcomes in exon skipping and dystrophin production. Despite the company’s assurance that the decision was not due to safety concerns, the shift in focus to the DM1 program indicates a strategic pivot.
The DM1 program, while showing promising splicing correction data, still requires significant de-risking. The company aims to achieve higher splicing correction levels with increased dosing, but the small sample size and the need for further clinical data present challenges. Additionally, PepGen faces competition from other companies like RNA and DYN, which are further along in their development. These factors contribute to the Sell rating, with a price objective of $1, reflecting the uncertainties and challenges ahead.
PEPG’s price has also changed dramatically for the past six months – from $5.100 to $1.580, which is a -69.02% drop .