PepGen Class Action Lawsuit: Breaking: PepGen Faces Major Class Action Lawsuit from Panicked Investors After Massive Stock Meltdown [2025]

Investors filed the PepGen class action lawsuit against PepGen over alleged false and misleading statements about their drug candidate PGN-EDO51. PepGen announced “positive clinical data” from its CONNECT1 study on July 30, 2024, and claimed a mean absolute dystrophin level of 0.61% of normal. Analysts later found these results disappointing because they failed to reach PepGen’s target of 1% or greater dystrophin expression.

The news hit the market hard. PepGen’s stock price plunged $5.55 per share and closed at $11.43 per share on July 31, 2024.

If you suffered substantial losses and wish to serve as lead plaintiff of the PepGen class action lawsuit, or just have general 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].

Investors File PepGen Lawsuit Over Misleading Drug Claims

PepGen Inc. faces its most important legal challenge as several law firms have launched a major PepGen lawsuit against the biotech company. The PepGen lawsuit claims PepGen misled investors about its key drug candidate. This action could affect thousands of shareholders who bought securities during a specific period.

PepGen Lawsuit filed in Eastern District of New York

“Karam v. PepGen Inc.” with case number 25-cv-03221 has been filed in the United States District Court for the Eastern District of New York. PepGen must defend itself against serious allegations of federal securities laws violations in this court.

The PepGen class action lawsuit charges PepGen and its core team with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5 promulgated by the U.S. Securities and Exchange Commission. These laws protect investors from deceptive practices in securities markets.

The case shows what they describe as a pattern of misrepresentation about PepGen’s flagship drug candidate.

Class period spans March 7, 2024 to March 3, 2025

The PepGen class action lawsuit covers all but one group – the defendants themselves – who bought or acquired PepGen securities during the “Class Period” from March 7, 2024, to March 3, 2025. All legal filings reference this timeframe when investors allegedly received misleading information.

The PepGen lawsuit centers on PepGen’s false and misleading statements about PGN-EDO51, its leading drug candidate during this year-long period. The lawsuit specifically claims the company misrepresented the drug’s safety and effectiveness.

The plaintiffs also claim PepGen withheld critical information about the CONNECT2 study’s dangers and deficiencies for U.S. Food and Drug Administration approval. The complaint adds that these problems would likely force PepGen to halt the CONNECT2 study, despite overstating PGN-EDO51’s clinical, regulatory, and commercial prospects.

Investors suffered significant financial damage when “the true details entered the market.” Potential class members have until August 8, 2025, to join the action.

This case emphasizes growing concerns about transparency in biotech development, especially about clinical trial data and investor communications. The legal proceedings might set important precedents for pharmaceutical companies’ communication requirements about drug development and clinical trial results.

Investors Allege PGN-EDO51 Was Misrepresented

The PepGen class action lawsuit centers on claims about the company’s flagship drug candidate. Court documents show investors worry about what they call a pattern of misrepresentation about the drug’s capabilities and development path.

Drug found to be less safe and effective than claimed

PepGen’s portrayal of PGN-EDO51 didn’t match the actual clinical results, according to investors. The company reported “positive clinical data” that showed PGN-EDO51 reached a mean absolute dystrophin level of 0.61% of normal after four doses. Analysts from Stifel and Leerink Partners noted these results were nowhere near expectations. Stifel stated “the magnitude of dystrophin increase was below what [PepGen] predicted, which is disappointing”.

The complaint emphasizes a clear gap between PepGen’s public statements and clinical realities. The company boasted that “all patients dosed at 5 mg/kg demonstrated increased exon skipping and dystrophin production”. Yet investors claim these increases didn’t meet promised levels.

Safety issues surfaced in January 2025. A participant’s dosing in the 10 mg/kg group “was paused due to a reduction of his estimated glomerular filtration rate”. This showed potential kidney problems that contradicted earlier safety claims.

CONNECT2 study deemed dangerous and deficient

Investor allegations focused on the CONNECT2 clinical trial after regulators raised serious questions about its design and safety protocols. PepGen received an FDA clinical hold notice for its Investigational New Drug application on December 16, 2024.

Regulators identified potential dangers to participants and other major flaws in the study design. Health Canada asked for “additional information from the Company to address Health Canada’s safety concerns before any further dose escalation or enrollment”.

Things got worse on March 4, 2025. PepGen announced “its voluntary decision to temporarily pause the [CONNECT2] study“. While they claimed this pause would review CONNECT1 study results, investors believe it was a way to handle growing safety and efficacy concerns.

FDA approval prospects overstated

The PepGen class action lawsuit claims PepGen exaggerated PGN-EDO51’s chances for FDA approval. The company suggested “potentially higher levels of dystrophin production are expected with higher doses of PGN-EDO51 over longer treatment periods which will be assessed in CONNECT2”. This created optimistic expectations among investors.

The situation came to a head on May 28, 2025. PepGen revealed that “PGN-EDO51 did not achieve target dystrophin levels” in the CONNECT1 study and announced it had “chosen to discontinue development of its DMD programs”. This news invalidated years of positive statements about the drug’s regulatory future.

The PepGen lawsuit charges that PepGen broke Item 303 of SEC Regulation S-K. The company didn’t disclose “known or emerging negative trends regarding PGN-EDO51’s efficacy and safety, as well as safety or other issues with the CONNECT2 study for purposes of FDA approval”. This regulation requires companies to report any known trends or uncertainties that could affect their business.

Investors believe PepGen knew about these issues long before making them public. Instead, they continued to paint an unrealistic picture of the drug’s development and approval path.

Analyst Reactions and Stock Price Plunge Follow Disclosure

PepGen’s clinical data disclosures created ripples beyond legal challenges. The market reacted immediately as financial analysts examined the company’s claims about PGN-EDO51.

Stifel and Leerink Partners express disappointment

PepGen announced what it called “positive clinical data” from its CONNECT1 study on July 30, 2024. Wall Street analysts quickly challenged this optimistic view. A Stifel analyst noted that “the magnitude of dystrophin increase was below what [PepGen] predicted, which is disappointing”. This view contradicted the company’s upbeat message about reaching a mean absolute dystrophin level of 0.61% of normal after four doses.

Leerink Partners analysts highlighted that the reported low dose results had “missed PepGen’s expectations of 1% or greater dystrophin expression.” These critical reviews from respected financial institutions showed investors that the company’s claims might be overblown by a lot.

Concerns grew throughout 2024 and early 2025, and many more analysts lowered their outlook on PepGen:

• H.C. Wainwright cut its price target to $16.00 from $26.00 because of “concerns over safety signals in the CONNECT1-EDO51 Phase 2 clinical trial, especially when you have asymptomatic hypomagnesemia”
• Stifel dropped PepGen’s stock price target to $14.00 from $17.00
• BofA slashed its price target to just $1.00 from $3.00 and kept an “Underperform” rating after the company stopped its DMD programs

Stock drops 32.69% after clinical data release

Market reaction to PepGen’s announcements hit hard and fast. The company’s stock price fell by $5.55 per share right after the July 30, 2024 press release. This 32.69% single-day drop closed at $11.43 per share on July 31, 2024. Investors showed their alarm about the underwhelming clinical results through this dramatic selloff.

Later disclosures triggered more market slides. PepGen revealed safety concerns in the CONNECT1 study and FDA issues with CONNECT2 on January 29, 2025. The stock fell another 21.74% and closed at just $1.44 per share.

The company announced a temporary pause of the CONNECT2 study on March 4, 2025. This news caused an 18.86% stock price decline. PepGen’s market value collapsed to about $41.00 million by mid-2025, with shares hitting a 52-week low of just $1.14.

These repeated stock price drops after each disclosure are the foundations of PepGen’s class action lawsuit. Plaintiffs say these market reactions show how investors were misled about PGN-EDO51’s potential. This caused major financial losses to shareholders who bought securities during the class period.

Law Firms Invite Investors to Join Pepgen Lawsuit

Several law firms have stepped up to represent investors affected by the PepGen class action lawsuit. This has created a competitive environment for legal representation in this high-profile securities case. These firms are now actively seeking qualified shareholders who want to join the litigation process after PepGen’s stock collapse.

If you suffered substantial losses and wish to serve as lead plaintiff of the PepGen class action lawsuit, or just have general 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].

Lead plaintiff deadline set for August 8, 2025

The court has set August 8, 2025, as the final date for investors to file motions as lead plaintiff in the PepGen lawsuit. This significant deadline affects all potential class members who bought or acquired PepGen securities between March 7, 2024, and March 3, 2025.

Lead plaintiffs act as representative parties who guide the litigation for all other class members. Courts usually pick investors with the biggest financial stake who meet the typical requirements to represent the class. Being a lead plaintiff comes with specific duties, such as guiding attorneys and making important litigation decisions.

The Private Securities Litigation Reform Act of 1995 governs this process. Potential lead plaintiffs must submit formal motions to the United States District Court for the Eastern District of New York. In spite of that, investors should know they don’t need to be lead plaintiffs to participate. Those who take no action can still qualify for potential recovery as absent class members.

Investors can contact the Law Offices of Timothy L. Miles

PepGen investors who faced substantial losses and want to serve as lead plaintiff, or just have questions about their shareholder rights, can contact attorney Timothy L. Miles at the Law Offices of Timothy L. Miles. He offers free consultations at 855/846-6529 or via e-mail at [email protected].

Whatever firm investors choose, the process starts with a free consultation to check eligibility and recovery options. Most securities class action cases work on a contingency fee basis – investors only pay if they recover money. Each firm brings different expertise levels in handling securities litigation. Affected investors might want to talk to several attorneys before deciding.

What the PepGen Lawsuit Means for Shareholders and Biotech Oversight

The PepGen class action lawsuit extends beyond individual investor concerns and highlights systemic problems within the biotechnology industry’s regulatory framework and clinical trial practices. This case shows the ongoing tension between commercial interests and public health priorities that challenges the sector.

Potential for increased regulatory scrutiny

Biotech firms could face stronger oversight after cases like the PepGen lawsuit. The FDA’s clinical hold on the CONNECT2 study shows growing regulatory alertness about trial safety and data integrity. Similar industry cases have occurred before, like GlaxoSmithKline’s Paxil case, where hidden pediatric safety concerns led to legal action and required public disclosure of trial data.

These high-profile cases have led to regulatory reforms. The FDA Amendments Act (FDAAA 801) came partly as a response to transparency failures with drugs like Vioxx. The drug’s cardiovascular risks stayed unpublished for years despite FDA’s knowledge. The PepGen situation might speed up this move toward stricter oversight of how companies share clinical results with investors and regulators.

Implications from the PepGen Lawsuit for clinical trial transparency

The PepGen lawsuit reveals ongoing gaps in clinical trial transparency requirements. Current regulations allow certain information to stay hidden. Phase I drug trials, unapproved product results, and some device trials remain in regulatory “lockboxes” that block public disclosure.

Previous transparency failures show similar patterns, like in the Trasylol case. A company-commissioned study of 67,000 patients raised safety concerns but wasn’t released until after an FDA advisory committee meeting. Despite existing disclosure rules, companies can still time or limit unfavorable data releases strategically.

The ethical foundation of human trial participation assumes results will help “medical knowledge,” which needs public sharing. The PepGen lawsuit proves why this matters: without full disclosure, volunteers and institutional review boards cannot assess participation risks properly. Companies might face more pressure to publish complete results—even negative ones—or risk regulatory penalties and investor litigation.

Conclusion: Implications for Investors and the Biotech Industry

The PepGen class action lawsuit stands as a warning sign for biotech investors and companies. This case shows how misleading statements about clinical trial data can trigger devastating financial consequences for shareholders. The market punished PepGen severely when its stock collapsed from promising heights to just $1.14 after clinical reality failed to match corporate promises.

The legal battle reveals deep tensions between commercial pressures and scientific integrity in drug development. PepGen allegedly oversold PGN-EDO51’s capabilities while downplaying risks. The company ended up abandoning its DMD programs completely. Such actions damage investor portfolios and erode public trust in the biotech sector.

Regulatory effects reach way beyond this single case. Past pharmaceutical controversies like GlaxoSmithKline’s Paxil and Merck’s Vioxx exposed similar transparency gaps. These issues led to stricter oversight. The PepGen situation could speed up regulatory reforms about clinical data disclosure to investors and the public.

Affected investors can seek legal recourse through multiple channels. You might want to serve as lead plaintiff of the PepGen class action lawsuit or learn about your rights as a shareholder. Attorney Timothy L. Miles of the Law Offices of Timothy L. Miles offers free consultations at 855/846-6529 or via e-mail at [email protected]. The lead plaintiff deadline of August 8, 2025 approaches fast. Investors who take no action still qualify for potential recovery as class members.

This case reminds us that biotech investments carry unique risks tied to clinical trials and regulatory decisions. Companies must balance optimistic projections with scientific realities. Investors need careful research before committing capital. The PepGen lawsuit represents more than a securities case – it could reshape how biotech firms communicate with investors and regulators about drug development challenges in the future.

Frequently Asked Questions About the PepGen Lawsuit

Q1. What is the main allegation in the PepGen lawsuit? The lawsuit alleges that PepGen misled investors about the safety and effectiveness of its drug candidate PGN-EDO51, violating federal securities laws.

Q2. How did PepGen’s stock price react to the clinical data release? PepGen’s stock price plummeted by 32.69% in a single day, dropping $5.55 per share to close at $11.43 on July 31, 2024, following the release of disappointing clinical data.

Q3. What is the deadline for investors to join the PepGen lawsuit as lead plaintiff? The lead plaintiff deadline for the PepGen class action lawsuit is set for August 8, 2025.

Q4. Which law firms are representing investors in the PepGen lawsuit? Several law firms from around the country are representing investors in the PepGen Lawsuit.

Q5. What broader implications does this lawsuit have for the biotech industry? This case may lead to increased regulatory scrutiny and stricter requirements for clinical trial transparency in the biotech sector, potentially reshaping how companies communicate about drug development challenges.