PepGen prices $100,000,000 public offering of 31,250,000 shares at $3.200

PepGen Inc. (Nasdaq Global Select Market: PEPG) priced an underwritten public offering of 31,250,000 shares of common stock at $3.200 per share, for gross proceeds of $100,000,000. The company announced the proposed offering on September 24, 2025 in a Business Wire release. Its final prospectus supplement gives the final terms, and delivery was expected on or about September 26, 2025.

Leerink Partners LLC and Stifel, Nicolaus & Company, Incorporated are the representatives of the underwriters and the joint book-running managers. The underwriting section allots 19,531,250 shares to Leerink Partners LLC and 11,718,750 to Stifel, Nicolaus & Company, Incorporated. Goodwin Procter LLP, Boston, is counsel to PepGen, and Covington & Burling LLP, New York, is counsel to the underwriters. KPMG LLP audits the company's financial statements. The shares are sold under a shelf registration on Form S-3 that the SEC declared effective on July 8, 2024.

Terms and price

The underwriters take $0.192 per share, or $6,000,000 in total, leaving proceeds before expenses of $3.008 per share, or $94,000,000. The underwriters also hold a 30-day option to buy up to 4,687,500 additional shares at the offering price.

The preliminary supplement also offered pre-funded warrants to certain investors in place of common stock. Each pre-funded warrant carries an exercise price of $0.0001 and can be exercised at any time. The final supplement covers common stock only, so the pricing comparison below applies to the common shares.

The price is $3.200 against a closing sale price of $1.95 on September 23, 2025 and $2.66 on September 24, 2025. The offering was therefore priced above the stock's latest close, after a rise from the September 23 close. The filings do not say what drove the move.

Dilution and what the company says it needs

The final supplement says outstanding shares would rise to 64,049,724 after the offering, from 32,799,724 as of June 30, 2025, or to 68,737,224 if the underwriters exercise their option in full. Existing holders are diluted before any option or warrant exercise. The dilution section puts net tangible book value at approximately $71.2 million, or $2.17 per share, as of June 30, 2025, and says investors in the offering face immediate dilution of $0.63 per share ($0.60 if the option is exercised in full).

The preliminary supplement lists 6,623,482 shares issuable on exercise of stock options outstanding as of June 30, 2025, at a weighted average exercise price of $9.70. That average exercise price is well above the $3.200 offering price. The supplement also lists 272,957 shares underlying restricted stock units as of that date.

The company says it expects to use the net proceeds for research and clinical development, including the FREEDOM-DM1 and FREEDOM2-DM1 clinical trials, and for working capital and other general corporate purposes. It also says it does not expect its existing cash, cash equivalents and marketable securities, together with the proceeds, to be enough to complete development of any of its product candidates. That is the company's own statement, and it signals that more financing may be needed after this offering. The supplement also notes that, under a sales agreement dated August 8, 2023 with Stifel, the company may issue additional shares at prices below the offering price. The company and its directors and executive officers have signed 60-day lock-up agreements.

The business

PepGen describes itself as a clinical-stage biotechnology company advancing oligonucleotide therapies for severe neuromuscular and neurological diseases. Its proprietary platform, called Enhanced Delivery Oligonucleotide, or EDO, uses cell-penetrating peptides to improve the uptake and activity of conjugated oligonucleotides. The company was formed in the United Kingdom in January 2018 and reorganized into a Delaware corporation in 2020. Its principal offices are in Boston.

The prospectus supplement names the FREEDOM-DM1 and FREEDOM2-DM1 trials only as a use of proceeds. It gives no enrollment, results or timeline for them, and it does not report the company's cash balance, so the offering documents do not let a reader judge how far $94,000,000 before expenses would carry the trials.

The offering was announced as subject to market and other conditions, and the company said there can be no assurance it would be completed. The filings show it was priced on those terms.

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