PepGen Class Action Lawsuit: Stock Drops a Mind-blowing and Massive 45%, Extremely Enraged Shareholders Demand Damages [2025]

The PepGen class action lawsuit quickly followed the company’s dramatic stock crash of 32.69% in a single day and a close at $11.43 on July 31, 2024. The company’s shares plummeted after releasing disappointing clinical data about its drug candidate PGN-EDO51. Analysts from Stifel and Leerink Partners pointed out that PepGen’s mean absolute dystrophin level of 0.61% fell substantially below their target of 1% or greater.

The company’s market value plunged to about $41 million by mid-2025, and shares hit a 52-week low of just $1.14. A class action lawsuit now represents investors who bought securities between March 7, 2024, and March 3, 2025. The PepGen class action lawsuit claims that PepGen made false and misleading statements about PGN-EDO51 during this period. The situation took another hit on March 4, 2025, as safety concerns forced a temporary pause of the CONNECT2 study, which caused the stock to drop another 18.86%. Investors who want to recover their losses should note that the lead plaintiff deadline is August 8, 2025.

PepGen stock drops 45% after clinical trial data disappoints

PepGen’s shares plunged after the company announced its decision to stop developing its experimental Duchenne muscular dystrophy (DMD) therapy on May 28, 2025. This news came as another blow in a string of setbacks that had already shaken investor confidence.

PGN-EDO51 fails to meet efficacy targets

The biggest problem with PepGen’s therapy came from PGN-EDO51’s poor performance in producing dystrophin—a vital protein that prevents muscle weakening in DMD patients. The CONNECT1 study’s 10 mg/kg cohort showed the therapy increased exon 51 skipped transcripts to 4.26% (a mean increase of 3.5%). The total dystrophin only rose to 0.59% of normal levels (a mean increase of 0.36%). These results were nowhere near the company’s target dystrophin levels needed to help patients.

“Unfortunately, we believe that the amount of dystrophin produced by people in the trial is not enough to provide meaningful benefit to people with DMD,” PepGen stated. The company realized it couldn’t use high enough doses to create sufficient dystrophin while keeping risks at acceptable levels.

CONNECT1 and CONNECT2 studies raise safety concerns

Both clinical trials faced regulatory challenges before the efficacy disappointment. The U.S. Food and Drug Administration (FDA) halted PepGen’s Investigational New Drug application for the CONNECT2 trial in December 2024. The company kept specific reasons private, yet the FDA wanted answers about “supportive data for the dosing levels planned for the patient population”.

Health Canada also voiced safety concerns about the CONNECT1 study. PepGen revealed on January 29, 2025, that they “paused dosing of one of the participants in the 10 mg/kg cohort due to a reduction of his estimated glomerular filtration rate”. Health Canada demanded “additional information from the Company to address Health Canada’s safety concerns before any further dose escalation or enrollment”.

Timeline of disclosures and market reactions

PepGen’s stock value took several hits as worries grew:

• The stock price dropped $0.40 per share (21.74%) to $1.44 on January 30, 2025, after news about Health Canada’s safety concerns and FDA’s questions about CONNECT2
• Shares fell $0.53 (18.86%) to $2.28 on March 4, 2025, when PepGen announced its “voluntary decision to temporarily pause the CONNECT2 study”
• The stock reached $1.43 by March 5, 2025, showing a total drop of about 45% from previous highs
• PepGen announced its decision to “discontinue development of its Duchenne muscular dystrophy programs following disappointing results” and “wind down all DMD-related research and development activities” on May 28, 2025

Early trials showed the therapy was well-tolerated, but regulatory issues and poor efficacy results forced the program’s end. PepGen has now turned its attention to its myotonic dystrophy type 1 (DM1) program with PGN-EDODM1.

These developments are the foundations of allegations that PepGen had “failed to disclose that PGN-EDO51 was less effective and safe than defendants had led investors to believe“, which sparked the class action lawsuit.

Investors file PepGen lawsuit over misleading drug claims

Leading law firms have filed class action lawsuits against PepGen Inc. The company allegedly violated federal securities laws by making misleading statements about its lead drug candidate. PepGen’s stock price crashed after their clinical trials failed and they faced regulatory problems.

Allegations of false statements about PGN-EDO51

The PepGen class action lawsuit mainly focuses on how PepGen presented information about PGN-EDO51, their experimental therapy for Duchenne muscular dystrophy (DMD). Legal documents show PepGen and some executives allegedly violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Between March 7, 2024, and March 3, 2025, defendants made statements about company operations that were materially false and misleading.

The PepGen lawsuit claims PepGen didn’t reveal that “PGN-EDO51 was less effective and safe than defendants had led investors to believe”. The company overstated the drug’s clinical, regulatory, and commercial potential. The legal action also states PepGen broke Item 303 of SEC Regulation S-K by not “describing any known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net sales or revenues”.

CONNECT2 study deemed dangerous and deficient

Legal documents highlight issues with the CONNECT2 clinical trial. The study was “dangerous or otherwise deficient for purposes of U.S. Food and Drug Administration approval”. PepGen should have known about these major problems that would block FDA approval, but they kept telling investors everything was fine.

March 4, 2025 became a crucial date when PepGen announced “its voluntary decision to temporarily pause the CONNECT2 study”. The company called it a routine review of CONNECT1 results, but plaintiffs say they actually paused because of safety and effectiveness concerns they had downplayed earlier.

FDA and Health Canada raise red flags

U.S. and Canadian regulators raised serious concerns about the drug. The FDA sent PepGen a clinical hold notice on December 16, 2024, about their Investigational New Drug application “to initiate the CONNECT2 clinical trial in patients with DMD”. This hold showed “the FDA had concerns regarding risks posed to patients in the CONNECT2 study and/or there were other deficiencies associated with the study”.

Health Canada asked for “additional information from the Company to address Health Canada’s safety concerns before any further dose escalation or enrollment of any additional participants at the current dose levels”. This wasn’t PepGen’s first regulatory problem. The FDA had previously stopped another PepGen trial for myotonic dystrophy, possibly because of questions about the ‘therapeutic index’ or safe dosing range.

Investors lost money when “the true details entered the market”. The PepGen class action lawsuit covers everyone who bought PepGen securities during this period, except the defendants. Multiple law firms now represent shareholders, and this legal fight about PepGen’s disclosures will likely cause big problems for the struggling biotech company.

Analysts downgrade PepGen amid growing skepticism

Wall Street analysts have done a complete turnaround on their PepGen outlook. Clinical setbacks triggered multiple downgrades that put more pressure on the struggling biotech stock.

Stifel and Leerink Partners express disappointment

PepGen’s clinical data for PGN-EDO51 made prominent analysts raise red flags. Stifel started with an optimistic view but dropped its price target to $14.00 from $17.00. They still kept a Buy rating. The firm liked the biomarker data from the DM1 trial but worried about renal safety signals in the DMD program. Leerink Partners, another big name in the biotech sector, stuck to its Buy rating but wasn’t happy with how the clinical trials turned out.

Price targets slashed by major firms

Analysts showed their growing pessimism through repeated cuts to price targets:

• BofA Securities started the downgrade wave by cutting PepGen from Buy to Neutral with a $12.00 price target in July 2024
• BofA dropped the company to Underperform in December 2024 and cut its target to just $3.00
• After the program was discontinued, BofA dropped its target again to $1.00 from $3.00
• H.C. Wainwright started with a bullish $26.00 target but had to lower it several times—first to $16.00, $14.00, and finally to $8.00

The analysts’ view changed drastically. Target prices now range from $1.00 to $20.00. Five analysts still cover the stock, and their average target of $11.20 shows lower expectations.

Investor confidence erodes faster

PepGen’s market value dropped to about $55 million. The stock lost nearly 90% of its value in just one year. A brief 14% gain over a week in late May 2025 didn’t help long-term investors much.

H.C. Wainwright’s Andrew S. Fein said stopping the PGN-EDO51 program was “a wise decision” because of both effectiveness and safety issues. Fein explained that removing the DMD program from their valuation model led to their lower price target.

The company still has some supporters among analysts. Five brokerage firms give PepGen an average “Outperform” rating of 1.8 (where 1 means Strong Buy). Investors involved in the PepGen class action lawsuit wonder if analysts’ positive outlook created unrealistic hopes.

Law firms invite shareholders to join PepGen Lawsuit

Law firms are actively reaching out to PepGen investors about joining class action lawsuits. These legal actions come after the biotech company faced clinical setbacks that caused its stock to plummet. Shareholders now have several ways to recover their losses.

Class period defined: March 7, 2024 – March 3, 2025

The PepGen class action lawsuit specifically targets investors who bought or acquired PepGen securities during a set timeframe. Legal documents point to March 7, 2024, through March 3, 2025, as the “Class Period”. This timeline matches when PepGen allegedly made false and misleading statements about its drug candidate.

The class welcomes “all persons and entities other than Defendants” who purchased PepGen securities during this period. Individual shareholders, institutional investors, and organizations that bought PEPG stock within these dates might qualify as class members.

Lead plaintiff deadline set for August 8, 2025  in PepGen Lawsuit

The court set August 8, 2025, as the final date for lead plaintiff motion submissions. This vital deadline affects investors who want to take a leadership role in the litigation.

Courts usually pick investors with the biggest financial stake who meet representation requirements, according to the Private Securities Litigation Reform Act of 1995. A lead plaintiff acts as a “representative party acting on behalf of other class members in directing the litigation”.

Shareholders who experienced substantial losses and want to become lead plaintiffs should reach out to Timothy L. Miles at the Law Offices of Timothy L. Miles. Contact is free through phone at 855/846-6529 or email at [email protected].

How to participate in the PepGen lawsuit

Investors who purchased shares during the class period are automatically included in the class and do not have to do anything at this point unless they want to move for lead plaintiff status.  If you have further questions about you rights as a shareholder, please contact attorney Timothy L. Miles of the Law Offices of Timothy L. Miles, at no cost, by calling 855/846-6529 or via e-mail at [email protected].

PepGen lawsuit raises questions about biotech transparency

The PepGen class action lawsuit has exposed transparency problems within the biotech industry. This case raises important questions about how companies share their clinical trial results and communicate with investors.

Regulatory scrutiny of clinical trial disclosures

Recent years have seen regulatory bodies take a tougher stance on clinical trial disclosure compliance. The FDA started taking action by issuing its first “Notice of Noncompliance” in April 2021. Three more companies received similar notices for failing to report their clinical trial results. Companies now face penalties up to $10,000 per day after receiving these notices. The Danish Medicine Agency took an even stronger position in 2020. They reminded sponsors that failing to publish trial results could lead to fines or up to four months in jail. The UK Health Research Authority also revealed a new strategy that would punish those who don’t take transparency seriously.

Historical parallels with Vioxx and Paxil cases

PepGen’s situation reminds us of major pharmaceutical cases where disclosure was a big problem. Merck pulled Vioxx from the market in 2004 when studies showed their patients had five times more cardiovascular problems than those on placebos. Scientific experts later revealed that Merck knew about Vioxx’s heart risks by 2000 but didn’t properly investigate this worrying connection. This led to roughly 27,000 lawsuits that Merck settled for $4.85 billion. GlaxoSmithKline faced similar issues and lost a $3 million verdict in 2017 over Paxil. Evidence showed the company had misrepresented suicide data from clinical trials by inflating the number of suicides in their placebo group.

Calls for reform in investor communication standards

The biotech industry faces growing pressure to improve how it shares information. The European Medicines Agency’s Policy 0070 emphasized that better transparency would bring regulatory decisions closer to EU citizens. All the same, not everyone follows these rules equally. Commercial sponsors posted their trial results 68.1% of the time, while non-commercial sponsors only did so 11.0% of the time. Poor disclosure practices can delay approvals, attract unwanted scrutiny, and hurt partnership opportunities. PepGen’s case shows how transparency failures can damage patient trust, regulatory standing, and shareholder value at the same time.

Conclusion

The PepGen class action lawsuit serves as a warning for biotech investors. The company’s stock dropped 45% after several clinical setbacks with its DMD drug candidate PGN-EDO51. The therapy showed early promise but ended up failing to produce enough dystrophin. It reached only 0.59% of normal levels instead of the targeted 1%, which led to the program’s shutdown.

Safety issues played a major role in PepGen’s collapse. The FDA and Health Canada’s regulatory authorities raised critical questions about the CONNECT1 and CONNECT2 studies. Their concerns focused on kidney function and proper dosing levels. These problems, combined with poor efficacy results, pushed Wall Street analysts to change their predictions drastically. Major firms cut their price targets, and BofA Securities downgraded from a Buy rating to a $1.00 target.

PepGen’s shareholders filed class action lawsuits because they felt deceived about PGN-EDO51’s potential. The The PepGen class action lawsuit protect investors who bought securities between March 7, 2024, and March 3, 2025. During this time, PepGen allegedly made false and misleading statements about its lead drug candidate. Note that affected investors must submit lead plaintiff applications by August 8, 2025.

The  reveals deeper issues about transparency in the biotech industry. Past cases like Vioxx and Paxil show how poor disclosure practices can ruin companies financially and destroy patient trust. The pharmaceutical sector doesn’t deal very well with consistent clinical trial reporting, even with regulatory fines of $10,000 per day for non-compliance.

PepGen’s experience shows how biotech companies must balance optimistic projections with realistic expectations. This case proves that complete disclosure practices help both regulatory compliance and long-term shareholder value.

Frequently Asked Questions About the PepGen Lawsuit

Q1. What caused PepGen’s stock to drop by 45%? PepGen’s stock plummeted after disappointing clinical trial results for its drug candidate PGN-EDO51. The therapy failed to meet efficacy targets for treating Duchenne muscular dystrophy, producing insufficient levels of dystrophin protein. Additionally, safety concerns raised by regulatory authorities contributed to the stock’s decline.

Q2. What are the main allegations in the PepGen lawsuit? The PepGen lawsuit alleges that PepGen made false and misleading statements about PGN-EDO51’s effectiveness and safety. Plaintiffs claim the company exaggerated the drug’s clinical, regulatory, and commercial prospects, and failed to disclose known risks and uncertainties that could impact its business.

Q3. How did analysts respond to PepGen’s clinical setbacks? Analysts significantly downgraded their outlook on PepGen following the clinical setbacks. Major firms like BofA Securities and H.C. Wainwright drastically reduced their price targets. The company’s market capitalization collapsed to approximately $55 million, with its stock plummeting nearly 90% over a one-year period.

Q4. Who is eligible to participate in the PepGen class action lawsuit? The PepGen lawsuit  covers all persons and entities, except the defendants, who purchased or acquired PepGen securities between March 7, 2024, and March 3, 2025. Eligible investors can choose to actively participate by contacting law firms handling the case or remain passive class members.

Q5. What broader issues does the PepGen case raise for the biotech industry? The PepGen case highlights concerns about transparency in clinical trial disclosures and investor communications within the biotech industry. It underscores the need for improved disclosure practices to maintain regulatory compliance, preserve patient trust, and protect shareholder value. The case serves as a reminder of the delicate balance between optimistic projections and realistic expectations in biotechnology.