Percheron Therapeutics (ASX:PER) has one of the most promising oncology assets in HMBD-002. HMBD-002 is an immune-oncology therapy (meaning it utilises a patient’s immune system) that inhibits a pathway called VISTA that plays a key role in suppressing T-cell responses to cancer treatments. Following positive Phase 1 data, Percheron is taking HMBD-002 into Phase 2 in 2026.

Multiple indications to minimise downside risk

The Phase 2 trial will begin with one or two arms, but will ultimately have several that each explore different tumour types to determine which are most responsive for the drug. As was the case with Phase 1, there will be regular data readouts to keep investors and other stakeholders informed.

Identified high priority targets include Triple-Negative Breast Cancer, EGFR-Mutant Non-Small Cell Lung Cancer, HER2- Negative Oesophageal Adenocarcinoma and Endometrial Cancer. The company hopes to have initial data as early as late 2026 with final data from all arms in mid-2028, at which point the company could file to the FDA for an accelerated approval.

A major market opportunity

Percheron needs to only obtain approval for one indication to unlock significant commercial potential. All of the aforementioned indications have a global addressable market in the billions, led by Triple-Negative Breast Cancer which has US$9bn, half of which is in the US. All indications have treatments that cost well over US$200k per annum. HMBD-002 may be able to be used in  combination with other treatments such as Keytruda to increase their efficacy and expand their usage.

We see upside to $0.064 per share

We think there is significant upside for Percheron Therapeutics since it is only at cash backing. We observe that its peers trade at an average market cap of $78.8m – which would be $0.064 per diluted Percheron share. We have also modelled various NPV scenarios for HMBD-002’s ultimate commercialisation and these likewise suggest significant upside. We think a re-rating is plausible in the next 12 months subject to the company commencing Phase 2. Please see page 10 for the key risks.