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You can read more about it in the devlog "0.1.8 - Kidlat + Transformation Update." In short, there are drugs introduced into the game that can make changes to the character that has taken them - whether they ingested the pill willingly or unwillingly. These changes are temporary, unless you take a MorphIn pill to make them permanent. You can enable an option in the settings to allow NPCs to potentially force-feed you MorphIn pills to make transformations permanent. If you don't, then only you can make those transformations permanent on yourself.

The update also introduces a new game mode, the Drug Den, that is styled like that of the "rogue-like" genre. The dungeon is randomly generated each time. This is the main place you'll find "strange pills" that you can identify later as one of the new drugs. (You have to discover the drugs to reveal them. Else, any of the new pills will just be labeled as "strange pill.") You start at level one, with no perks. You quickly level-up and find items to progress as far as you can through the dungeon before being defeated, or giving up. Your actual level in the rest of the game is independent of your level in the drug den.

Kidlat is a new npc with a bit of her own story who is found in the drug den. You progress her story with repeated interactions on future runs through the dungeon.

Dr. Quinn is a central coordinator for much of this stuff - the quest to discover and test the drugs, the drug den, and gaining the ability to manufacture the drugs. She also has some new story added, which you can progress along with the new drug den and drug system. 

I think that about covers most things.