PepGen Inc. (NASDAQ:PEPG) experienced a sharp after-hours market reaction on Wednesday, with shares declining 26% following an announcement that the U.S. Food and Drug Administration has placed a partial clinical hold on the company’s FREEDOM2-DM1 Phase 2 study.
The regulatory action is focused specifically on questions raised by the FDA regarding preclinical pharmacology and toxicology studies previously submitted to the agency for PGN-EDODM1, PepGen’s investigational therapy for myotonic dystrophy type 1. The agency’s communication did not identify any issues with blinded clinical data from the Phase 1 FREEDOM study that PepGen had already submitted.
PepGen said it is preparing and submitting additional analyses to address the FDA’s questions. Those materials will include recently unblinded data from the FREEDOM study, and the company said it is actively engaging with the agency to resolve the matters cited by the hold.
According to the company, no U.S. patients have been enrolled in the FREEDOM2 trial to date. Separately, PepGen noted it has regulatory clearance to start FREEDOM2 in South Korea, Australia, and New Zealand, and that dosing of the 10 mg/kg cohort remains underway in the United Kingdom and Canada.
Following a recommendation from an independent Data Safety Monitoring Board to escalate dosing, the FREEDOM2 study has been administering 10 mg/kg to patients in Canada and the UK. PepGen also reported that participants from both the FREEDOM and FREEDOM2 trials in Canada are continuing into an Open Label Extension study, which has received regulatory clearance in the UK.
Despite the partial hold, the Boston-based biotechnology company reiterated its timeline for reporting FREEDOM2 results: data from the 5 mg/kg cohort is expected in the first quarter of 2026, and data from the 10 mg/kg cohort is expected in the second half of 2026.
Market context - The partial clinical hold and the FDA’s specific questions about preclinical pharmacology and toxicology studies prompted the immediate share-price reaction. PepGen has indicated it is compiling additional analyses and engaging with regulators while trials outside the U.S. continue at the stated dosing levels.
Next steps - The company’s submissions to the FDA, including the recently unblinded FREEDOM data, and subsequent regulatory feedback will determine the timeline for lifting the partial hold and any impact on the FREEDOM2 trial’s progression.