0001193125-26-336754 | 10-Q | XBRL Viewer

Fair Value Measurements

6 Months Ended

Jun. 30, 2026

3. Fair Value Measurements

The following tables present information about the Company’s financial assets that have been measured at fair value as of June 30, 2026 and December 31, 2025, and indicate the fair value of the hierarchy of the valuation inputs utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. All instruments held by the Company are Level 1. The following tables set forth marketable securities as of June 30, 2026 and December 31, 2025 (in thousands):


	As of June 30, 2026
	Amortized Cost		Unrealized Gains		Unrealized Losses			Total
U.S. Treasury notes		94,562		—		(88	)		94,474
Total	$	94,562	$	—	$	(88	)	$	94,474


	As of December 31, 2025
	Amortized Cost		Unrealized Gains		Unrealized Losses		Total
U.S. Treasury notes		87,903		39		—		87,942
Total	$	87,903	$	39	$	—	$	87,942

The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis and indicate the level within the fair value hierarchy utilized to determine such values as of June 30, 2026 and December 31, 2025 (in thousands):


	As of June 30, 2026
	Total		Level 1
Cash Equivalents:
U.S. Treasury-backed money market funds	$	20,984	$	20,984
Marketable Securities:
U.S. Treasury notes		94,474		94,474
Total	$	115,458	$	115,458


	As of December 31, 2025
	Total		Level 1
Cash Equivalents:
U.S. Treasury-backed money market funds	$	58,147	$	58,147
Marketable Securities:
U.S. Treasury notes	$	87,942	$	87,942
Total	$	146,089	$	146,089

Money market funds are highly liquid investments that are valued based on quoted market prices in active markets, which represent a Level 1 measurement within the fair value hierarchy. These money market funds are classified on the consolidated balance sheets under cash and cash equivalents.

The following table summarizes the scheduled maturity for the Company's marketable securities for the period presented (in thousands):


	June 30, 2026
Maturing in one year or less	$	94,474
Total	$	94,474

Fair Value Measurements - Summary of Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Fair Value, Option, Quantitative Disclosures [Line Items]
Amortized Cost	$ 94,562	$ 87,903
Unrealized Gains	0	39
Unrealized Losses	(88)	0
Total	94,474	87,942
U.S. Treasury Notes
Fair Value, Option, Quantitative Disclosures [Line Items]
Amortized Cost	94,562	87,903
Unrealized Gains	0	39
Unrealized Losses	(88)	0
Total	$ 94,474	$ 87,942

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Accrued Liabilities, Current [Abstract]
Research and development expenses	$ 1,599	$ 2,993
Employee-related expenses	2,034	4,663
Professional services	880	779
Other	163	202
Total accrued expenses	$ 4,676	$ 8,637

Stock-Based Compensation - Summary of Stock Options Activity (Details)	6 Months Ended
	Jun. 30, 2026 $ / shares shares
Share-Based Payment Arrangement [Abstract]
Stock Options Outstanding as of December 31, 2025 \| shares	5,970,707
Stock Options, Granted \| shares	2,676,776
Stock Options, Exercised \| shares	(2,848)
Stock Options, Canceled/Forfeited \| shares	(505,553)
Stock Options, Outstanding as of June 30, 2026 \| shares	8,139,082
Weighted Average Exercise Price, Outstanding as of December 31, 2025 \| $ / shares	$ 4.48
Weighted Average Exercise Price, Granted \| $ / shares	5.73
Weighted Average Exercise Price, Exercised \| $ / shares	2.71
Weighted Average Exercise Price, Canceled/Forfeited \| $ / shares	4.43
Weighted Average Exercise Price, Outstanding as of June 30, 2026 \| $ / shares	$ 4.89

Segment Reporting - Schedule of Functional Operating Expenses (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2026	Mar. 31, 2026	Jun. 30, 2025	Mar. 31, 2025	Jun. 30, 2026	Jun. 30, 2025
Research and Development Expenses
Research and development expenses	$ 12,522		$ 18,391		$ 25,527	$ 43,769
General and Administrative Expenses
General and administrative expenses	6,417		5,541		12,355	11,484
Operating loss	(18,939)		(23,932)		(37,882)	(55,253)
Other income (expense):
Interest income	1,093		842		2,343	1,964
Other (expense) income, net	50		3		(5)	0
Total other income, net	1,143		845		2,338	1,964
Income tax expense	(16)		0		(31)	0
Net loss	(17,812)	$ (17,763)	(23,087)	$ (30,202)	(35,575)	(53,289)
Location, Statement of Income, Balance [Axis]: us-gaap:GeneralAndAdministrativeExpense \| Personnel-related (Including Stock-based Compensation)
General and Administrative Expenses
General and administrative expenses	3,733		3,087		7,189	6,682
Location, Statement of Income, Balance [Axis]: us-gaap:GeneralAndAdministrativeExpense \| Facility Related and Other
General and Administrative Expenses
General and administrative expenses	494		536		1,007	992
Location, Statement of Income, Balance [Axis]: us-gaap:GeneralAndAdministrativeExpense \| Other General and Administrative
General and Administrative Expenses
General and administrative expenses	2,190		1,918		4,159	3,810
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| PGN-EDODM1
Research and Development Expenses
Research and development expenses	5,783		4,688		11,779	16,396
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| PGN-EDO51
Research and Development Expenses
Research and development expenses	12		4,582		32	7,998
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| Platform and External
Research and Development Expenses
Research and development expenses	136		65		222	435
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| Personnel-related (Including Stock-based Compensation)
Research and Development Expenses
Research and development expenses	4,735		5,841		9,850	13,312
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| Facility Related and Other
Research and Development Expenses
Research and development expenses	1,207		1,318		2,417	2,581
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense \| Other Research and Development Expenses
Research and Development Expenses
Research and development expenses	$ 649		$ 1,897		$ 1,227	$ 3,047

Stock-Based Compensation - Summary of Restricted Stock Units (Details)	6 Months Ended
	Jun. 30, 2026 $ / shares shares
Service-based RSUs
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding as of December 31, 2025 \| shares	288,533
Number of Shares, Granted \| shares	955,203
Number of Shares, Vested \| shares	(58,111)
Number of Shares, Forfeited \| shares	(84,515)
Issued and unvested as of June 30, 2026 \| shares	1,101,110
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	$ 6.08
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Vested \| shares	(58,111)
Weighted Average Grant Date Fair Value, Issued and unvested \| $ / shares	$ 3.08
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	6.08
Weighted-Average Grant Date Fair Value, Vested \| $ / shares	2.69
Weighted-Average Grant Date Fair Value, Forfeited \| $ / shares	5.12
Weighted-Average Grant Date Fair Value, Issued and unvested \| $ / shares	$ 5.55

Stockholders' Equity - Additional Information (Details)	6 Months Ended
Stockholders' Equity - Additional Information (Details)	Jun. 30, 2026 USD ($) Vote $ / shares shares
Class of Stock [Line Items]
Common stock, shares authorized \| shares	500,000,000
Common stock, par value \| $ / shares	$ 0.0001
Cash dividend \| $	$ 0
Number of common stock vote \| Vote	1
Undesignated Preferred Stock
Class of Stock [Line Items]
Preferred stock authorized \| shares	10,000,000
Preferred stock par value \| $ / shares	$ 0.0001

Subsequent Event - Additional Information (Details) - $ / shares	Nov. 03, 2025	Jun. 30, 2026	Dec. 31, 2025	Nov. 04, 2025
Subsequent Event [Line Items]
Stock options repriced		8,139,082	5,970,707
Exercise price of options repriced		$ 4.89	$ 4.48
Options exercise price, lower limit	$ 8.89
Options exercise price, upper limit	$ 17.91
Stock Option Repricing
Subsequent Event [Line Items]
Stock options repriced				3,557,903
Exercise price of options repriced				$ 4.53

Nature of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Dec. 31, 2025
Subsidiary, Sale of Stock [Line Items]
Cash, cash equivalents and marketable securities	$ 117,200
Accumulated deficit	396,693		$ 361,118
Issuance and sale of shares of common stock	$ 1,511	$ 0

Segment Reporting - Additional Information (Details)	6 Months Ended
Segment Reporting - Additional Information (Details)	Jun. 30, 2026 Segment
Segment Reporting [Abstract]
Number of reportable segment	1
Segment Reporting, Expense Information Used by CODM, Description	The chief operating decision maker uses operating expenses and net loss to evaluate progress on research and development activities on the Company's two product candidates, one of which was discontinued in May 2025, as well as when making strategic decisions regarding the Company's research and development efforts. Operating expenses and loss are also used to monitor budget versus actual results.
Segment Reporting, CODM, Individual Title and Position or Group Name [Extensible Enumeration]	srt:ChiefExecutiveOfficerMember

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2026	Aug. 02, 2026
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2026
Document Fiscal Year Focus	2026
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001835597
Entity Registrant Name	PEPGEN INC.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		69,259,517
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	PEPG
Security Exchange Name	NASDAQ
Entity File Number	001-41374
Entity Tax Identification Number	85-3819886
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	321 Harrison Ave. 8th Floor
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02118
City Area Code	781
Local Phone Number	797-0979
Document Quarterly Report	true
Document Transition Report	false

Related Party Transactions - Additional Information (Details) $ in Thousands			3 Months Ended			6 Months Ended
	May 31, 2022 GBP (£)	May 31, 2022 USD ($)	Jun. 30, 2026 USD ($)	Jun. 30, 2025 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2026 GBP (£)	Jun. 30, 2026 USD ($)	Jun. 30, 2025 USD ($)
Technology License Agreement
Related Party Transaction [Line Items]
Additional payments of restatement completion fee and license data fee							$ 100
Aggregate potential milestone payments							$ 100
Patent procurement milestone payments \| £						£ 10,000
Term of license agreement						20 years	20 years
Technology License Agreement \| Minimum
Related Party Transaction [Line Items]
Sublicensees threshold amount						£ 20,000,000	$ 26,500
Technology License Agreement \| Maximum
Related Party Transaction [Line Items]
Sublicensees threshold amount						£ 30,000,000	$ 39,700
Oxford University Innovation Limited
Related Party Transaction [Line Items]
Percentage of holding in outstanding common stock			7.20%			7.20%	7.20%
Oxford University Innovation Limited \| Technology License Agreement \| IPO
Related Party Transaction [Line Items]
Required to pay exit fee amount					$ 1,400
Oxford University Innovation Limited \| Technology License Agreement \| Minimum \| IPO
Related Party Transaction [Line Items]
Percentage of exit fee	0.50%	0.50%
Oxford University Innovation Limited \| Technology License Agreement \| Maximum \| IPO
Related Party Transaction [Line Items]
Percentage of exit fee	2.00%	2.00%
Required to pay exit fee amount	£ 5,000,000	$ 6,200
RA Capital Management, L.P
Related Party Transaction [Line Items]
Percentage of holding in outstanding common stock			29.00%			29.00%	29.00%
Rent expense			$ 11	$ 12			$ 22	$ 24

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Current assets:
Cash and cash equivalents	$ 22,764	$ 60,514
Marketable securities	94,474	87,942
Prepaid expenses and other current assets	3,091	2,507
Total current assets	120,329	150,963
Property and equipment, net	1,341	1,903
Operating lease right-of-use asset	17,914	19,121
Restricted cash	1,548	1,548
Other assets	265	372
Total assets	141,397	173,907
Current liabilities:
Accounts payable	1,095	822
Accrued expenses	4,676	8,637
Operating lease liability	3,234	3,187
Total current liabilities	9,005	12,646
Operating lease liability, net of current portion	12,859	13,817
Total liabilities	21,864	26,463
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock
Common stock	7	7
Additional paid-in capital	516,336	508,544
Accumulated other comprehensive (loss) income	(117)	11
Accumulated deficit	(396,693)	(361,118)
Total stockholders' equity	119,533	147,444
Total liabilities and stockholders' equity	$ 141,397	$ 173,907

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	ATM	Common Stock	Common Stock ATM	Additional Paid-in Capital	Additional Paid-in Capital ATM	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Beginning Balance at Dec. 31, 2024	$ 118,620		$ 3		$ 390,057		$ 23	$ (271,463)
Beginning Balance, shares at Dec. 31, 2024			32,619,663
Vesting of restricted stock units, Shares			101,280
Stock-based compensation expense	3,432				3,432
Unrealized loss on marketable securities	(44)						(44)
Cumulative translation adjustment arising during the period	(1)						(1)
Net loss	(30,202)							(30,202)
Ending Balance at Mar. 31, 2025	91,805		$ 3		393,489		(22)	(301,665)
Ending Balance, shares at Mar. 31, 2025			32,720,943
Beginning Balance at Dec. 31, 2024	118,620		$ 3		390,057		23	(271,463)
Beginning Balance, shares at Dec. 31, 2024			32,619,663
Net loss	(53,289)
Ending Balance at Jun. 30, 2025	71,158		$ 3		395,950		(43)	(324,752)
Ending Balance, shares at Jun. 30, 2025			32,799,724
Beginning Balance at Mar. 31, 2025	91,805		$ 3		393,489		(22)	(301,665)
Beginning Balance, shares at Mar. 31, 2025			32,720,943
Issuance of stock under the employee stock purchase plan	98				98
Issuance of stock under the employee stock purchase plan, shares			78,781
Stock-based compensation expense	2,363				2,363
Unrealized loss on marketable securities	(21)						(21)
Net loss	(23,087)							(23,087)
Ending Balance at Jun. 30, 2025	71,158		$ 3		395,950		(43)	(324,752)
Ending Balance, shares at Jun. 30, 2025			32,799,724
Beginning Balance at Dec. 31, 2025	147,444		$ 7		508,544		11	(361,118)
Beginning Balance, shares at Dec. 31, 2025			68,874,944
Issuance of common stock		$ 1,507				$ 1,507
Issuance of common stock, Shares				237,500
Exercise of stock options	7				7
Exercise of stock options, Shares			2,848
Vesting of restricted stock units, Shares			52,666
Stock-based compensation expense	2,855				2,855
Unrealized loss on marketable securities	(70)						(70)
Net loss	(17,763)							(17,763)
Ending Balance at Mar. 31, 2026	133,980		$ 7		512,913		(59)	(378,881)
Ending Balance, shares at Mar. 31, 2026			69,167,958
Beginning Balance at Dec. 31, 2025	$ 147,444		$ 7		508,544		11	(361,118)
Beginning Balance, shares at Dec. 31, 2025			68,874,944
Exercise of stock options, Shares	2,848
Net loss	$ (35,575)
Ending Balance at Jun. 30, 2026	119,533		$ 7		516,336		(117)	(396,693)
Ending Balance, shares at Jun. 30, 2026			69,259,517
Beginning Balance at Mar. 31, 2026	133,980		$ 7		512,913		(59)	(378,881)
Beginning Balance, shares at Mar. 31, 2026			69,167,958
Issuance of stock under the employee stock purchase plan	110				110
Issuance of stock under the employee stock purchase plan, shares			86,114
Vesting of restricted stock units, Shares			5,445
Stock-based compensation expense	3,313				3,313
Unrealized loss on marketable securities	(58)						(58)
Net loss	(17,812)							(17,812)
Ending Balance at Jun. 30, 2026	$ 119,533		$ 7		$ 516,336		$ (117)	$ (396,693)
Ending Balance, shares at Jun. 30, 2026			69,259,517

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2026
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Property and Equipment, Net - Summary of Cost and Accumulated Depreciation of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Property, Plant, and Equipment [Line Items]
Total property and equipment	$ 5,824	$ 5,814
Less: accumulated depreciation	(4,483)	(3,911)
Total property and equipment, net	1,341	1,903
Lab Equipment
Property, Plant, and Equipment [Line Items]
Total property and equipment	4,035	4,035
Computer and Office Equipment
Property, Plant, and Equipment [Line Items]
Total property and equipment	$ 1,789	1,759
Construction in Process
Property, Plant, and Equipment [Line Items]
Total property and equipment		$ 20

Fair Value Measurements - Summary of Fair Value of Financial Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 115,458	$ 146,089
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	115,458	146,089
US Treasury-Backed Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	20,984	58,147
US Treasury-Backed Money Market Funds \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	20,984	58,147
U.S. Treasury Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	94,474	87,942
U.S. Treasury Notes \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable Securities	$ 94,474	$ 87,942

Fair Value Measurements - Summary of Maturity of Company's Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Fair Value Disclosures [Abstract]
Maturing in one year or less	$ 94,474
Total	$ 94,474	$ 87,942

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash flows from operating activities:
Net loss	$ (35,575)	$ (53,289)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	572	722
Stock-based compensation expense	6,168	5,795
Amortization and interest accretion related to operating lease	1,874	1,874
Amortization of premiums and accretion of discounts on marketable securities, net	(1,714)	(1,150)
Impairment of long-lived assets	0	701
Changes in operating assets and liabilities:
Prepaids and other current and non-current assets	(217)	737
Accounts payable	229	(885)
Accrued expenses and other non-current liabilities	(3,991)	496
Operating lease liabilities, current and non-current	(1,578)	(1,532)
Net cash used in operating activities	(34,232)	(46,531)
Cash flows from investing activities:
Purchases of property and equipment	(30)	(168)
Purchases of marketable securities	(81,945)	(6,726)
Maturities of marketable securities	77,000	39,000
Net cash (used in) provided by investing activities	(4,975)	32,106
Cash flows from financing activities:
Issuance of common stock from At-the-Market Sales Agreement, net of underwriters' fees	1,511	0
Payment of offering costs	(175)	0
Proceeds from employee equity plans	117	98
Net cash provided by financing activities	1,453	98
Effect of exchange rate changes on cash	4	(22)
Net decrease in cash, cash equivalents and restricted cash	(37,750)	(14,349)
Cash, cash equivalents and restricted cash at beginning of period	62,062	50,969
Cash, cash equivalents and restricted cash at end of period	24,312	36,620
Components of cash, cash equivalents and restricted cash
Cash and cash equivalents	22,764	35,072
Restricted Cash	1,548	1,548
Total cash, cash equivalents and restricted cash at end of period	24,312	36,620
Supplemental noncash investing and financing activities
Cash paid for taxes	49	86
Property and equipment included in accounts payable and accrued expenses	$ 0	$ 27

Stockholders' Equity - Schedule of Reserved Shares of Common Stock for Issuance, on an As-Converted Basis (Details) - shares	Jun. 30, 2026	Dec. 31, 2025
Class of Stock [Line Items]
Reserved shares of common stock for issuance	13,317,740	9,343,066
Stock Options
Class of Stock [Line Items]
Reserved shares of common stock for issuance	8,139,082	5,970,707
Restricted Stock and Performance Stock Units
Class of Stock [Line Items]
Reserved shares of common stock for issuance	1,101,110	288,533
Authorized for Future Stock Awards or Option Grants \| 2022 Plan
Class of Stock [Line Items]
Reserved shares of common stock for issuance	2,315,899	1,914,063
Authorized for Future Stock Awards or Option Grants \| 2024 Inducement Plan
Class of Stock [Line Items]
Reserved shares of common stock for issuance	637,184	637,184
Authorized for Future Issuance under Employee Stock Purchase Plan
Class of Stock [Line Items]
Reserved shares of common stock for issuance	1,124,465	532,579