PepGen's PEPG Stock Surges 115%: Unraveling the Catalyst Behind the Biotech Breakout

Summary
• PepGen (PEPG) surges 115% intraday, trading at $5.72 after reporting record splicing correction in DM1 trials
• Clinical data shows 53.7% mean splicing correction at 15 mg/kg dose, outpacing prior results
• Analysts upgrade PEPG to 'Buy' as $100M public offering fuels optimism
• Options frenzy: 53.04M shares traded, 424.56% turnover rate

PepGen’s stock has erupted on Thursday, surging 115% to $5.72 amid groundbreaking clinical data from its FREEDOM-DM1 trial. The biotech’s 53.7% splicing correction in DM1 patients—its highest yet—has ignited a frenzy, with analysts upgrading and options volumes spiking. Traders are now dissecting technicals and options chains to capitalize on the volatility.

Groundbreaking Splicing Correction Data Ignites PepGen's Surge
PepGen’s 115% intraday rally stems from its FREEDOM-DM1 trial results, where PGN-EDODM1 achieved a record 53.7% mean splicing correction in DM1 patients at the 15 mg/kg dose. This outperforms prior 5 mg/kg (12.3%) and 10 mg/kg (29.1%) cohorts, demonstrating dose-proportional efficacy. The drug’s safety profile—no serious AEs and mild renal biomarker elevations—further bolstered investor confidence. Analysts highlight the potential for PGN-EDODM1 to become a best-in-class therapy for DM1, a rare disease with unmet needs and high unmet demand.

Biotech Sector Mixed as PepGen Outperforms on DM1 Breakthrough
The biotech sector showed mixed momentum, with Ionis Pharmaceuticals (IONS) down 1.52% despite PEPG’s surge. While IONS’ decline reflects broader sector volatility, PEPG’s outperformance underscores the market’s focus on clinical milestones. PepGen’s DM1 breakthrough, coupled with its $100M public offering, has created a divergence from peers, positioning it as a short-term winner in the neuromuscular disease space.

Options and ETFs for Capitalizing on PepGen's Volatility
• RSI: 77.82 (overbought)
• MACD: 0.247 (bullish), Signal Line: 0.150, Histogram: 0.097
• Bollinger Bands: Upper $2.40, Middle $1.60, Lower $0.80
• 200D MA: $1.88 (below current price)
• Key Levels: Support at $1.38 (200D MA), resistance at $6.34 (intraday high)

PepGen’s technicals suggest a short-term bullish bias, with RSI near overbought territory and MACD expanding. The stock’s 115% surge has pushed it above the 200D MA, but volatility remains high. Traders should watch the $6.34 intraday high as a critical resistance level. With no leveraged ETFs available, options are the primary vehicle for exposure.

Top Options Contracts:
1. PEPG20260220C5 (Call, $5 strike, Feb 20, 2026):
- IV: 143.35% (high volatility)
- Leverage Ratio: 2.47% (moderate)
- Delta: 0.7366 (high sensitivity to price moves)
- Theta: -0.0063 (moderate time decay)
- Turnover: $30,825 (liquid)
- Gamma: 0.0618 (high sensitivity to price acceleration)
- Payoff at 5% Upside ($5.72 → $6.01): $1.01/share
- Why: High liquidity and gamma make this ideal for a bullish stance. The 143% IV implies strong conviction in continued volatility.
2. PEPG20260515C5 (Call, $5 strike, May 15, 2026):
- IV: 149.94% (extreme volatility)
- Leverage Ratio: 2.01% (moderate)
- Delta: 0.7706 (very high sensitivity)
- Theta: -0.0048 (lower time decay)
- Turnover: $94,897 (highly liquid)
- Gamma: 0.0439 (moderate sensitivity)
- Payoff at 5% Upside ($5.72 → $6.01): $1.01/share
- Why: The May 15 contract offers a longer time horizon, with high IV and liquidity. Its 149% IV suggests anticipation of further catalysts, such as FREEDOM2 data in Q1 2026.

Trading Setup: Aggressive bulls should prioritize PEPG20260220C5 for near-term gains, while PEPG20260515C5 suits a longer-term bullish thesis. Both contracts benefit from PepGen’s elevated IV and strong technicals. A breakdown below $1.38 (200D MA) would signal a shift to defensive positioning.

Backtest PepGen Stock Performance
After processing PEPG’s trading history from 2022-01-01 to 2025-09-25, only one session satisfied an intraday‐surge filter of ≥ 115 % (high or close versus the prior close):• 2025-09-25 (close 2.66 ➜ 5.73, +115.4 %)Because just a single qualifying event exists, a statistically meaningful post-event performance study cannot be produced—the event-analysis engine rejects an empty (or 1-point) return series. You have two practical options:1. Lower the surge threshold (e.g., 50 % or 30 %) or widen the look-back window to include earlier data (pre-2022) so that multiple signals appear and a proper event distribution can be analysed.2. Treat 25 Sep 2025 as a one-off case study rather than a quantitative back-test; this would involve narrative analysis (news catalyst, volume, liquidity, subsequent price action once more data prints).Let me know which path you’d like to pursue and I’ll set up the corresponding back-test or qualitative review.

PepGen's Breakout: A High-Risk, High-Reward Play for Biotech Bulls
PepGen’s 115% surge is driven by a clinical milestone that redefines its DM1 pipeline, but sustainability hinges on FREEDOM2 data in Q1 2026. The stock’s overbought RSI and elevated IV suggest caution, yet the 53.7% splicing correction validates its EDO platform’s potential. Traders should monitor the $6.34 intraday high and $1.38 support level. Meanwhile, the biotech sector’s mixed performance—exemplified by IONS’ -1.52% decline—highlights PEPG’s divergence. Action: For bulls, PEPG20260220C5 offers a high-gamma, high-liquidity play on continued momentum. Watch for a $6.34 breakout or a $1.38 breakdown to dictate next steps.