As retold in Volume 2, Pen Pen was a genetic experiment at the place where Misato used to work. After the completion of the experiment he was going to be euthanized, but Misato Katsuragi chose to rescue him and took in Pen Pen as her pet.
Pen Pen was created by Yoshiyuki Sadamoto and Hideaki Anno for the anime series Neon Genesis Evangelion, which Sadamoto was responsible for adapting as a manga. Anno felt that the series needed an animal mascot and chose a penguin for the irony that the animal was unsuited for hot springs. The name Pen Pen was chosen for the repetition and 'cuteness' appeal (the alternative, Pen2, means 'the second power of Pen') by Anno. Sadamoto is credited with coming up with the idea of the hot springs.
Major Story Arcs
For the most part, Pen Pen is just a part of Shinji Ikari's everyday life and has little involvement in the conspiracies and apocalyptic events that shape the series as it has progressed further. He does, however, have an important role in establishing Shinji's everyday life which does create a story arc for the character.
Shonen and Knife
As Misato’s pet penguin he is introduced in Volume 2 of the series, after Shinji's battle against the Third Angel. After Shinji's later battle against the Fourth Angel and decision to run away, Pen Pen is the least worried and even oblivious to what's going on. He was merely happy when Misato returned home from work.
He is later present when Kensuke Aida and Toji Suzuhara visit Misato's apartment to visit Shinji. After Misato speaks with the two boys and realises that Shinji had rebelled only to receive attention she grabs Pen Pen and takes him to the train station where Shinji is about to leave. Misato explains Pen Pen's origin to Shinji and says that all she wanted was to have a kind of 'family'.
After this Pen Pen's appearances become less frequent - he appears briefly in Volume 3 when Misato gives Shinji the errand of giving Rei Ayanami her new security pass, and is startled in Volume 5 due to the sudden addition of Asuka Langley Soryu to their 'family'.
This trend continues for the rest of the series. In Volume 8 he greets Misato happily after she was briefly arrested, and is seen being fed by Shinji later in Volume 9. After the apparent death of Rei Ayanami in Volume 10, he offers Misato comfort in her distress.
A Fistful of Memories
After the death of Kaworu Nagisa in Volume 11, Misato decides that things have become too dangerous for her to look after Pen Pen and realises that she needs to find someone else to look after him.