Key Takeaways:
Pomerantz LLP has initiated an investigation into PepGen Inc. (NASDAQ: PEPG) concerning possible securities fraud and other unlawful business practices, the law firm announced on April 30, 2026.
The probe follows two severe downturns in PepGen’s stock price, which cumulatively erased more than 65 percent of the company's value in March. "The investigation concerns whether PepGen and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices," Pomerantz LLP said in a statement. The firm is actively soliciting investors to join a potential class action.
The company’s troubles began on March 4, 2026, when PepGen disclosed that the U.S. Food and Drug Administration (FDA) had placed a partial clinical hold on its FREEDOM2-DM1 Phase 2 trial for patients with myotonic dystrophy type 1. The company stated the FDA’s questions related to preclinical pharmacology and toxicology studies. Following the news, PepGen’s stock price fell $1.25 per share, or 18.57 percent, to close at $5.50 on March 5.
Later that month, PepGen’s stock plunged again after it released an update on the same trial. On March 30, the company announced what it called "promising" clinical data from a cohort in the study. However, analysts noted a lack of meaningful improvement in key patient metrics, including handgrip strength. The market reaction was severe, with the stock falling $2.46 per share, or 58.16 percent, to close at $1.77 on March 31.
The sharp declines and subsequent investigation place significant pressure on the biotechnology firm. For investors, the probe by Pomerantz, a firm known for pioneering securities class actions, signals a period of heightened legal and financial risk. The next catalyst for the company will likely be any official filings related to the class action or further updates from the FDA regarding the clinical hold.
This article is for informational purposes only and does not constitute investment advice.
