SCHEDULE: RA Capital Boosts Stake in PepGen to 29.2% via Public Offering

RA Capital Management and its affiliates increased their beneficial ownership in PepGen Inc. to 29.2% by purchasing 9.375 million shares in a recent public offering.

Summary

• RA Capital Management, L.P. and its affiliates (the "Reporting Persons") now beneficially own 20,099,753 shares of PepGen Inc. common stock.
• This represents 29.2% of PepGen's outstanding common stock, based on 68,737,224 shares outstanding as of September 26, 2025.
• RA Capital Healthcare Fund, L.P. purchased 9,375,000 shares at $3.20 per share in PepGen's 2025 Public Offering on September 26, 2025.
• The aggregate purchase price for these shares was $30.0 million, funded by the Fund's working capital.
• The Reporting Persons' beneficial ownership includes shares held by RA Capital Healthcare Fund, L.P., RA Capital Nexus Fund II, L.P., a separately managed account, and vested/vesting stock options held by Dr. Joshua Resnick for the benefit of RA Capital.
• PepGen's directors and executive officers, including Dr. Resnick, entered into a 60-day lock-up agreement with underwriters in connection with the 2025 Public Offering.

Sentiment

Score: 7

Explanation: The filing indicates strong continued support from a major institutional investor (RA Capital) through a significant equity purchase, which is a positive signal. The capital raise provides funding for the company. However, the offering price being significantly lower than previous option exercise prices and the inherent dilution from a public offering temper the overall positive sentiment.

Positives

• A significant institutional investor, RA Capital, increased its stake, indicating continued confidence in PepGen Inc.
• The public offering successfully raised $30.0 million for PepGen Inc., providing additional capital for operations.

Negatives

• The public offering likely resulted in dilution for existing shareholders due to the issuance of new shares.
• The purchase price of $3.20 per share is significantly lower than the $12.00 exercise price of some existing stock options, potentially indicating a lower market valuation compared to previous periods.

Risks

• Dilution of existing shareholders due to the issuance of new shares in the public offering.
• Potential downward pressure on share price if the market perceives the offering price as low or if the lock-up period expiration leads to increased selling pressure.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from the company, but the significant investment by RA Capital suggests a positive long-term view from this institutional investor.

Industry Context

This filing reflects a significant capital raise for PepGen Inc., a biotechnology company, which is common in the industry for funding research and development, especially for companies in clinical stages. The continued strong support from a major healthcare-focused investment firm like RA Capital is notable within the biotech sector.

Comparison to Industry Standards

• The 29.2% beneficial ownership by RA Capital is a substantial stake for an institutional investor in a publicly traded company, often indicating a high level of conviction or potential for influence.
• Public offerings are a standard method for biotech companies to raise capital, similar to how companies like Moderna or BioNTech have funded their growth.
• Lock-up agreements are standard practice in public offerings to prevent immediate selling pressure from insiders.

Corporate Governance

Stakeholder Impact

• Shareholders: Existing shareholders experienced dilution due to the issuance of new shares in the public offering. The increased stake by RA Capital could be seen as a vote of confidence.
• Company (PepGen Inc.): Received $30.0 million in capital from the public offering, strengthening its financial position for operations and development.
• Management/Directors: Subject to a 60-day lock-up period, restricting their ability to sell shares.

Next Steps

• Expiration of the 60-day lock-up agreement for directors and executive officers following the 2025 Public Offering.
• Continued vesting of Dr. Joshua Resnick's stock options.

Key Dates

Recommendation

The significant capital raise and increased institutional ownership by RA Capital are positive indicators, suggesting confidence in PepGen's future. However, the dilution from the public offering and the lower offering price compared to previous option exercise prices introduce uncertainty. Investors should hold to observe how the new capital is deployed and how the market reacts post-lock-up, while monitoring future financial performance and clinical developments.

Keywords

PepGen Inc., RA Capital Management, Schedule 13D, Beneficial Ownership, Public Offering, Equity Investment, Biotechnology, Healthcare Fund, Institutional Investor, Stock Purchase, Dilution, Lock-up Agreement