PepGen Sees Fastest Weekly Retail Following Growth Among Biotech Stocks: What's Behind The Buzz?

The rally follows PepGen's release of early clinical data from its Phase 1 trial evaluating its therapy to treat a rare genetic disorder.

PepGen Inc. (PEPG) shares are on track for their best weekly performance since September 2022, surging 77% as retail interest skyrockets. 

The stock saw a 150% weekly spike in followers on Stocktwits, making it the fastest-growing biotech stock by retail engagement in this period.

The rally follows PepGen's release of early clinical data from its FREEDOM-DM1 Phase 1 trial, evaluating PGN-EDODM1 in myotonic dystrophy type 1 (DM1) – a genetic disorder that causes progressive muscle weakness and wasting.

The company reported dose-dependent splicing correction of 12.3% at 5 mg/kg and 29.1% at 10 mg/kg at 28 days post-dosing. While single-dose studies haven't shown functional improvements, PepGen sees early trends suggesting potential benefits with repeat dosing.

The biotech firm expects results from the 15 mg/kg cohort in the second half of 2025 and from the FREEDOM2 5 mg/kg cohort in Q1 2026.

H.C. Wainwright called the data "very encouraging," highlighting that the 29.1% splicing correction could have therapeutic significance, as all individuals in the study showed over 10% change in the splicing index.

The research firm has a 'Buy' rating and a $16 price target.

Stifel also noted a "highly promising signal on splicing" and saw an improved probability of success for PGN-EDODM1. The analyst called the results a "clear win" against low expectations, especially with PepGen trading below cash.

On the financial side, PepGen reported a fourth-quarter loss of $0.68, better than an anticipated $0.72 loss. The company ended 2024 with $120.2 million in cash and equivalents, which it expects to fund operations into 2026.

Some traders see PepGen as undervalued after its recent pullback, pointing to solid DM1 data and nearly $4 per share in cash. 

Another investor highlighted its strong cash position, no immediate financing risk, and promising trial results, arguing the selloff mid-week has made the stock's risk-reward profile more attractive.

Short interest on PepGen's stock has edged down from 2.5% at the start of the year to 2.1% at the end of last week, according to Koyfin data.

Shares of the company are down more than 84% in the past 12 months.

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