PepGen Inc. (PEPG) Earnings Call Transcript

Good day, and welcome to the FREEDOM-DM1 5 and 10 mg per kg clinical data update call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Borah. Please go ahead.

Good morning. I'm David Borah, Head of Investor Relations at PepGen. Thank you for joining today's call to discuss results from our ongoing FREEDOM Phase I study of PGN-EDODM1 in patients with myotonic dystrophy type 1, or DM1. Today, we issued a press release reviewing data from the study, which you can find on our website. Before we begin, I'd like to remind everyone that we'll be making forward-looking statements today that are subject to the safe harbor provisions provided under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our Form 10-K, which was filed today. These statements represent our views as of today's date, and we disclaim any obligation to update these statements. On today's call will be Dr. James McArthur, President and CEO of PepGen; Dr. Paul Streck, Head of R&D at PepGen; and Dr. Michelle Mellion, Chief Medical Officer of PepGen. Dr. McArthur will lead off with key takeaways from the data, along with an overview of DM1 and our EDO platform. Dr. Streck will follow with a description of the FREEDOM clinical trial design and a review of the clinical data from the 5 and 10-milligram per kilogram cohorts. We will then hand the call back to Dr. McArthur for closing remarks. The operator will then open up the call for Q&A, where Dr. McArthur, Dr. Streck and Dr. Mellion will be available to answer questions. At this time, I'd like to hand the call over to James. James?

Thanks, Dave, and thanks to everyone dialing into the call. This morning, we reported encouraging initial results from our placebo-controlled single-dose FREEDOM study with PGN-EDODM1 in patients with myotonic dystrophy type 1. Before we review the results, though, I want to briefly mention we also issued Q4 results and filed our 2024 10-K this morning. If anyone has questions regarding the Q4 results, our CFO, Noel Donnelly, will be available during the question-and-answer portion of the call. We're very pleased to report that we saw a favorable emerging safety profile of PGN-EDODM1 at 5 and 10 mg per kg in DM1 patients, where the majority of treatment-related adverse events were either mild or moderate in severity and all treatment-emergent adverse events were reversible, strengthening our conviction of the potential of our technology to improve the lives of patients as we advance the higher and multiple doses. Notably, we saw an extremely robust level of mean splicing correction using the 22 gene panel in the 10 mg per kg arm of 29% following a single dose. This level of splicing correction is higher than those reported with other modalities following multiple treatment doses over longer treatment periods, up to 9 months in other DM1 clinical trials. Moreover, we were pleased to see clear dose-dependent responses across multiple measures between our 5 mg and 10 mg per kg dose cohorts. Mis-splicing is the underlying cause of DM1, and we believe that greater splicing correction has the potential to lead to significant patient benefits. We look forward to reporting the results from our ongoing FREEDOM2 clinical study, where patients are receiving multiple doses of PGN-EDODM1 over a longer treatment period. At PepGen, we are dedicated to developing therapies that may one day transform the lives of people living with devastating neuromuscular and neurological diseases, people like Jubal and his family who motivate us to come to work every single day. There is a great need for better treatments for DM1. There are estimated to be over 110,000 people living with DM1 in the U.S. and EU. DM1 is a devastating disease, driven by mis-splicing, which is caused by a mutation in the DMPK gene. Symptoms vary, but include myotonia, muscle weakness, cardiac arrhythmias, loss of lung function and fatigue. We are excited about today's results because we believe we have a real opportunity to improve the lives of Jubal, his family and other DM1 patients. Mis-splicing is the known cause of DM1. In the schematic on the left, in the healthy individual cell, you can see free MBNL1 proteins in the nucleus available to mediate the splicing of RNA exons together to create mature mRNA that can be read and translated into proteins. On the right, in DM1 patient cells, the MBNL1 proteins are trapped by toxic CUG repeat DMPK foci in the nucleus. This prevents normal splicing of mRNAs, and leads to abnormal protein production. Our blocking approach is different from some others in the DM1 space whose mechanism is focused on indiscriminately degrading DMPK. Approximately half of the DM1's patients, DMPK mRNA is normal and does not contribute to the disease and therefore, in an ideal world, would not be degraded. Our approach targets the other 50%, the pathogenic DMPK. We are not wasting drug on binding and degrading the healthy DMPK RNA. Specifically, we are focused only on the pathogenic CUG repeat expansion in the DMPK RNA. This is illustrated on the next slide. As I mentioned before, in DM1 patients, these expanded CUG repeats in the DMPK RNA form stem-loops trapping MBNL1 proteins, which are crucial for normal splicing. When proteins like MBNKL1 are trapped, this leads to mis-splicing. On the right, you get a sense of how PGN-EDODM1 may work to bind to the CUG repeat, opening stem-loops. This liberates MBNL1, which should lead to splicing correction. The results we're reporting today further strengthen our confidence in the potential of our EDO platform, as we believe they demonstrate our ability to deliver therapeutic oligonucleotides at meaningful levels into the nucleus of cells in patients with DM1. As you can see on this slide, there is a clear contrast between naked oligonucleotide on the left, unable to enter the blue stain nucleus of a DM1 patient cell, and PGN-EDODM1, an oligonucleotide conjugated to our EDO technology, which is able to efficiently deliver drug to the nucleus. We believe this ability to deliver therapeutic oligonucleotides to the nucleus at these levels is unique to PepGen, and has the potential to lead to fundamental improvements in the treatment of DM1 as well as other neuromuscular diseases. It's now my pleasure to hand the call over to Dr. Paul Streck, PepGen's Head of R&D, to review the FREEDOM clinical trial design and clinical data. Paul?

Thank you, James. It's a privilege to discuss this program and especially these highly promising clinical data. FREEDOM is a randomized, placebo-controlled, single ascending dose study. Today, we are reporting on the 5 and 10 milligram per kilogram dose cohorts, with the 15 milligram per kilogram dose cohort expected to read out in the second half of this year. This study is taking place in the U.S., Canada and the U.K. Baseline characteristics among the DM1 patients in the study are mostly similar across placebo and the 2 dose groups. There is a notable difference in the baseline vHOT in the placebo group, which is higher than either of the other 2 baseline vHOT numbers. It is also worth mentioning that the 10 milligram per kilogram baseline splicing index was lower than the placebo and the 5 milligram per kilogram cohorts, indicating that the 10 milligram per kilogram cohort had a slightly more moderate splicing index at baseline. There is no evidence that these baseline differences in splicing have an impact on splicing outcomes. Overall, we believe PGN-EDODM1 has a favorable emerging safety profile based on the results from the first 2 cohorts in the FREEDOM study. As you can see, most adverse events were mild or moderate in severity. And importantly, there were no adverse events related to electrolytes or renal biomarkers. There was one treatment-related serious adverse event. The patient received a prohibited medication in the morning with a known AE profile that includes abdominal pain and was later dosed that day and subsequently experienced severe abdominal pain. I should also point out that one of the patients had a biopsy that resulted in a pseudo-aneurysm, and as a result, inadequate tissue was obtained for use in the study analysis. This slide shows creatinine levels following dosing with PGN-EDODM1 in the FREEDOM study. As you can see, following treatment with PGN-EDODM1, creatinine levels for both dose cohorts were at normal levels. All patients in both cohorts remained below the upper limit of normal as well. The dose-dependent and substantial increase that you can see here in muscle tissue concentration parallels the dose-dependent increases we saw in splicing correction. Specifically, we saw a greater than twofold increase in muscle tissue concentration by doubling the dose of PGN-EDODM1. On Slide 17, we're showing our mean splicing correction numbers compared to placebo, 12% improvement in the 5 milligram per kilogram dose cohort and 29% improvement in the 10 milligram per kilogram dose cohort, while placebo increased, or in other words, worsened by about 7%. We're extremely pleased with these numbers. It's worth noting that 10 milligram per kilogram dose cohort, we believe this is the highest splicing correction level ever reported from a single dose study and greater than the highest reported figures from 9-month multiple dose studies based on published data of third parties. A few points I'd like to make about these splicing results. We use the gold standard 22-gene panel as the assay to measure splicing. Two patients had to be excluded from this splicing analysis. One that I previously mentioned had a biopsy, which resulted in a pseudoaneurysm and yielded no muscle sample for analysis. The second had a splicing index measured, both at baseline and at day 28, indicating mis-splicing below the lower limit of the assay, which was outside of the prespecified range and, therefore, excluded from the analysis. 5 of 6 patients in the 5 milligram per kilogram cohort showed splicing improvement, and 3 out of 4 did in the 10-milligram cohort. With respect to 16-week splicing numbers from our 5 milligram per kilogram cohort, overall, we did not see a meaningful change from baseline at 16 weeks. As we look at this slide, first, it is important to note that no one has reported a benefit in functional measures in DM1 after a single dose. Similarly, we didn't see a clear benefit in functional measures following a single dose of PGN-EDODM1 at 5 milligrams per kilogram and 10 milligram per kilogram. While directionally, we saw encouraging signs in the 10-meter walk run test, we think it will be important to look at these measures in studies with multiple doses over longer time periods, which we are dosing in FREEDOM2. We believe strongly that robust splicing correction, which addresses the underlying cause of disease pathology has the potential to result in functional improvements for patients. With that, I'll turn the call back over to James. James?

Thanks, Paul. I hope you can see why we're so excited by the results we're sharing today, showing a robust 29% mean splicing correction rate with a single 10 mg per kg dose of PGN-EDODM1. We believe these results validate PGN-EDODM1's potential to deliver a therapeutic oligo to the nucleus to liberate MBNL1 and improve slicing. As we move forward with FREEDOM2, our multiple ascending dose study currently underway, we are enthusiastic about the potential of PGN-EDODM1 to have a long-term positive impact on patients' lives. Before we finish and move to Q&A, I'd like to review our FREEDOM2 study. We'll be exploring 4 doses of PGN-EDODM1 over 12 weeks, starting with a 5 mg per kg cohort that has already been initiated. FREEDOM2 provides the opportunity to see where splicing correction levels can go with repeat dosing as well as to confirm that our investigational compound is safe and well tolerated. And finally, I wanted to take a minute to review our milestones for the coming year and let you know what you can expect from us. In DM1, we expect to have FREEDOM data from the 15 mg per kg single dose cohort in the second half of this year. We're advancing FREEDOM2, and expect to have clinical results from our 5 mg per kg cohort in the first quarter of 2026. Finally, our CONNECT1 10 mg per kg dose cohort in patients with DMD is fully enrolled, and we look forward to reporting these results from that trial by the end of the third quarter. With that, Dr. Streck, Dr. Mellion, Noel Donnelly, and I will be available to take your questions. Operator, I'll turn the call back over to you for the question-and-answer session. Thank you.

[Operator Instructions] Our first question is going to come from Paul Matteis from Stifel.

I have one on splicing and one on safety. As it relates to the splicing data, I was wondering, James, could you help to find for people how -- what a responder is on splicing, saying that 3 out of 4 benefited at the high dose? And maybe just give us some qualitative color, and quantitative, if you can, on whether there was an outlier effect in the high dose that could have driven this benefit. And then on safety, encouraging to see what you've seen from a single dose, certainly, we'll see more data as you go into the MAD. But at least from the SAD data, how does a single dose -- the single-dose safety profile here compare to what we saw from the DMD program?

Great. Thank you, Paul. It's James McArthur. I'll take the splicing question and then hand it over to Dr. Streck for the safety question. On splicing, a responder is anyone who showed a positive movement compared to baseline in terms of the splicing index. And I will say at the 10 mg per kg cohort, all individuals showed robust change of at least 10% change from baseline.

In terms of the safety, I mean certainly, as we reported out in our last press release, where we continue to feel very good about our DMD safety profile, we don't have any single ascending dose data for our DMD program. But if we compare single dose in healthy volunteers to single-dose DM1 patients, we see serum creatinine levels in normal range for the DM1 patients, which is slightly lower than we saw with the spike associated in healthy volunteers after a single dose.

And just one follow-up on the abdominal pain SAE, you seem to think that this is caused by another medication, but I guess it was codified by the investigator is treatment related. Can you expand upon that at all on why you don't believe it's driven by drug? And can you say what the medication was or any other context?

No, we're not going to discuss what the medication was. I think essentially, Paul, we feel as though that the SAE of abdominal pain is confounded by the fact that the individual did take a prohibited medication the morning before -- the day of receiving test medication. So it's very difficult to interpret. Was the abdominal pain related to EDODM1 or was it related to the fact that you had something in relatively close proximity? So again, we're not excluding the fact that it could be from a drug, but at the same time, it's obviously a hard interpretation. I think the main thing to take away is that the abdominal pain was self-limiting, treated with analgesics, and the patient has done well since.

Our next question is going to come from Joe Schwartz from Leerink Partners.

Great. Congrats on this great progress. I was wondering if you could talk a little bit more about the inclusion criteria and trial design for FREEDOM1? And are you thinking about making any changes to either FREEDOM1 or FREEDOM2 based on what you've seen to date in these patients, randomized to drug as well as the placebo because it seems like there's obviously that imbalance and very high baseline vHOT in the placebo arm, which led to that placebo effect. I'm just wondering if you could help us interpret that.

Michelle Mellion will address this question.

Thanks for the question, Joe. So in FREEDOM, we learned a lot about these different functional assessments that has informed the design of FREEDOM2, which is how the program was designed. And so based upon our learnings from the FREEDOM study, we have changed -- we have amended the inclusion criteria for the FREEDOM2 study to account for what we learned about vHOT as well as about the functional assessments, including repeatability of these assessments at baseline, specifically trying to reduce the variability in the vHOT assessment by doing a baseline assessment as well as an additional assessment prior to dosing to reduce that variability. And we do believe that, that will be helpful in understanding the potential impact of DM1 on this functional assessment.

Okay. That's very helpful. And then if I could just ask a follow-up on safety. I'm really struck by what you're seeing or maybe not seeing here and how that compares to what has been seen in the DMD setting with a similar technology at similar doses in a slightly different picture. So I'm just wondering if you can help us understand why the safety profile might be so remarkable here relative to DMD setting?

Paul will take this question.