Percheron Therapeutics Ltd (ASX:PER, OTC:PERCF) could be set for a re-rating as it advances its newly in-licensed immuno-oncology candidate, HMBD-002, according to a new report from Pitt Street Research.
Analysts Stuart Roberts and Nick Sundich argue that Percheron, currently trading close to its cash backing, has substantial upside potential as it prepares to move HMBD-002 into Phase 2 clinical development.
“Percheron is now a player in immune-oncology, with HMBD-002 targeting an immune checkpoint called VISTA,” the analysts said. “There is now potential for Percheron to move into a multibillion-dollar drug class that has featured success stories such as Merck & Co.’s Keytruda, which sold a massive US$29.5 billion globally in 2025.”
Pivot into immuno-oncology
Percheron’s lead compound HMBD-002 is a monoclonal antibody targeting VISTA, an immune checkpoint that plays a key role in suppressing T-cell responses and limiting the effectiveness of existing immunotherapies like Keytruda.
The drug completed a Phase 1 study in multiple tumour types earlier this year, showing a strong safety profile and early signs of efficacy. Percheron secured the global rights in June 2025 from Singapore’s Hummingbird Bioscience on favourable terms — paying just US$3 million upfront, with further milestone payments and royalties only triggered on clinical or commercial success.
“In the last decade, this new field has emerged as one of the most promising types of cancer therapy and has been headlined by the development and commercialisation of key drugs including Keytruda, which have created a US$40 billion market,” the analysts noted.
“Immuno-oncology therapies enhance the immunological response to cancer by targeting the interaction between tumours and the immune system,” they added. “HMBD-002 has shown promise in a recently completed Phase 1 study in multiple tumour types, in terms of both its safety and potential efficacy.”
Targeting a new checkpoint
Pitt Street Research describes HMBD-002 as the most advanced VISTA-targeting antibody in development, an area that could be crucial in overcoming resistance to PD-1 inhibitors.
“Pre-clinical studies have suggested that drugging VISTA, which HMBD-002 does, has a powerful anti-cancer immune response in a wide range of tumours,” the analysts said.
The company is now collating final Phase 1 data ahead of a planned publication, which will guide the design of a Phase 2 program expected to begin in 2026. Potential indications include triple-negative breast cancer (TNBC) and squamous cell carcinoma of the head and neck (SCCHN), both of which represent areas of high unmet need.
Phase 2 options for Percheron.
Valuation gap
Despite these developments, Percheron’s current market capitalisation of around $9 million reflects only its cash balance, with no value attributed to HMBD-002.
“We think there is significant upside for Percheron Therapeutics since it is only at cash backing,” Roberts and Sundich wrote. “We observe that its peers trade at an average market cap of $78.8 million — which would be 6.4 cents per diluted Percheron share.”
Where HMBD-002 sits relative to competitors
Pitt Street Research also modelled multiple net present value (NPV) scenarios for HMBD-002 assuming successful Phase 2 and Phase 3 outcomes. These suggest valuations in the hundreds of millions of dollars, with base cases for TNBC and SCCHN ranging from $162 million to $329 million, and bull cases reaching up to $467 million.
Management and momentum
The analysts noted Percheron’s leadership team as another key strength. CEO Dr James Garner has extensive experience in drug development, while chair Dr Charmaine Gittleson, a former CSL executive, brings deep expertise in clinical strategy.
“Percheron has the leadership team qualified and capable of developing the drug,” Pitt Street Research wrote. “Backing Dr Garner is a board… that has all of the skills required to foster an early-stage drug developer.”
Catalysts ahead
Looking forward, Pitt Street Research highlighted several potential catalysts for a re-rating:
- Percheron’s clinical advisory board determining the optimal clinical pathway for HMBD-002 by year-end;
- publication of Phase 1 results;
- initiation of Phase 2 in 2026;
- potential Orphan Drug Designation in the US; and
- any sub-licensing deals or additional pipeline opportunities.
While acknowledging risks around funding, regulation and clinical execution, the analysts concluded that investors may not yet be appreciating the opportunity represented by Percheron’s pivot into immuno-oncology.
“We think a re-rating is plausible in the next 12 months subject to the company commencing Phase 2,” they said.