SVB Securities starts PepGen at OP; PT $40


SVB Securities launched coverage of PepGen (NASDAQ:PEPG) with an “outperform” rating and $40 price target. The stock closed at $10.88 on May 27.

PepGen is a clinical-stage biotech advancing its enhanced delivery oligonucletoide (EDO) platform in the neuromuscular rare disease space.

“We believe the EDO platform has potential to support best-in-class oligonucleotide therapies through its enhanced intracellular delivery, wide therapeutic index and robust biodistribution capabilities, including to hard-to-reach cardiac tissue,” writes analyst Joseph Schwartz.

He said for lead candidate, PGN-EDO51, in Duchenne muscular dystrophy patients with Exon 51 mutations, “we see a de-risked path to commercialization based on precedent from Sarepta Therapeutics’ PMO (phosphorodiamidate morpholino oligomer) franchise and expect its exon skipping and dystrophin expression benefits to be superior to Sarepta’s next-generation PPMO SRP-5051, based on head-to-head preclinical studies.”

In addition, Mr. Schwartz said PepGen’s PGN-EDODM1 for myotonic dystrophy offers disease-modifying potential while mitigating the risk of haploinsufficiency associated with other oligonucleotide therapies in development.

“We view PepGen as an optimal name for investors looking for a small- and mid-cap company trading at near cash with a de-risked lead program, near-term catalyst and compelling platform potential,” he added.