Percheron Therapeutics (ASX:PER): An Oncology Biotech That’s Growing Its Footprint

Percheron Therapeutics is not the kind of company that typically commands market attention at a A$6–7m valuation. Yet the more one looks at its trajectory over the past twelve months, the more it becomes clear that the market is missing something important. The company has moved from being a near‑dormant shell to a clinical‑stage immuno‑oncology developer with a genuinely differentiated asset, HMBD‑002, and a growing presence within the global cancer research community. We believe the scientific momentum is building faster than the share price suggests.

The Percheron Story Recapped

Percheron’s transformation began in mid‑2025 when it in‑licensed HMBD‑002 from Singapore‑based Hummingbird Bioscience for just US$3m upfront. At the time, the company had little more than a listing and a mandate to find a new direction. The acquisition of HMBD‑002 changed that overnight. The licence gives Percheron global development and commercial rights, with milestone obligations of up to US$287m that are heavily back‑end loaded and contingent on clinical and commercial success. No further upfront payments are required.

HMBD‑002 is a monoclonal antibody targeting VISTA, a next‑generation immune checkpoint that regulates T‑cell activity. VISTA is unusual because it functions both as a co‑inhibitory receptor and a co‑inhibitory ligand, giving it broad immunosuppressive reach. Tumours exploit VISTA to evade immune attack, and the body often upregulates VISTA in response to therapy, making it a key mechanism of treatment resistance. Blocking VISTA therefore has the potential to restore immune activity and enhance the efficacy of existing checkpoint inhibitors such as Merck’s Keytruda.

The challenge has always been safety. VISTA has long been considered undruggable because early attempts triggered cytokine release syndrome and other severe immune reactions. HMBD‑002 appears to overcome this. It is an IgG4 antibody designed to modulate rather than destroy VISTA‑expressing cells, giving it a gentler safety profile. This design choice proved critical in Phase 1.

Phase 1 Was A Success

The Phase 1 study enrolled 48 heavily pre‑treated patients across monotherapy and combination arms. The safety readout was the standout. No dose‑limiting toxicities were observed at any dose level, and treatment‑related adverse events were modest in both incidence and severity. Fatigue occurred in 41.7% of patients but none were Grade 3 or 4; cough occurred in 20.8% of patients with only 4% reaching Grade 3 or 4. Crucially, no cytokine release syndrome was observed in any patient.

Efficacy signals were encouraging for a first‑in‑human oncology study. Several patients demonstrated durable responses, including individuals who had failed multiple prior lines of therapy. The overall disease stabilisation rate was 27.5% across evaluable patients, split between monotherapy and combination cohorts. Evidence of pharmacological activity increased at higher doses, consistent with the drug’s mechanism. For a Phase 1 oncology trial, where roughly half of candidates fail outright, this is a meaningful achievement.

What has changed in recent months is visibility. Percheron presented the full Phase 1 dataset publicly for the first time at the American Association for Cancer Research (AACR) Annual Meeting in San Diego. This was the company’s first opportunity to showcase HMBD‑002 to the global oncology community at scale. The upcoming presentation at the American Society of Clinical Oncology (ASCO) Annual Meeting, at the end of May, will extend that visibility further, particularly as the company will present preclinical data from its collaboration with QIMR Berghofer. These are the forums where early‑stage oncology assets are discovered, debated, and, in many cases, partnered.

Next Up, Phase 2

The next step will be a Phase 2 trial. Percheron is designing a basket trial that will evaluate HMBD‑002 across four priority indications in parallel. Triple‑negative breast cancer is expected to feature prominently given the strong evidence of VISTA expression in this tumour type. Other likely candidates include EGFR‑mutant non‑small cell lung cancer, HER2‑negative oesophageal adenocarcinoma, and endometrial cancer.

The company expects to initiate the first arm later in 2026 (specifically in Q3), subject to final protocol design and regulatory interactions. Each arm will include two stages, allowing for early read‑outs before committing to larger cohorts. This structure gives Percheron flexibility, efficiency, and the ability to generate multiple data points across tumour types.

Alongside clinical progress, the company is also preparing for the long game. Manufacturing optimisation is underway, with HMBD‑002 already demonstrating reliable production at 500L scale with high yield and viable cost of goods. This matters because manufacturability is often the hidden determinant of whether a promising oncology asset becomes a commercial product.

Looking Further Ahead

Commercial interest is plausible. The PD‑1 inhibitor market is heading toward a patent cliff, with Keytruda’s expiry in 2028 being the most significant. Companies facing biosimilar erosion will be looking for next‑generation combinations that can extend the life of their franchises. HMBD‑002 is not the only VISTA‑targeting drug in development, but it is the most advanced.

Recent deals in the checkpoint inhibitor space, including AbbVie’s US$650m upfront licensing of RemeGen’s RC148 and Bristol Myers Squibb’s multi‑billion‑dollar partnership with BioNTech, show that big pharma is willing to pay for differentiated immuno‑oncology assets with combination potential.

Percheron’s funding position is reasonable for now, with close to a year of runway, but additional capital will be required as Phase 2 progresses. The company could pursue non‑dilutive funding through partnerships or milestone‑based collaborations, particularly if early Phase 2 signals are strong. The scientific rationale is compelling, and the unmet need across VISTA‑expressing tumours is significant.

In our view, the most interesting dynamic is the divergence between scientific momentum and market perception. The medical community is beginning to take notice. AACR and ASCO are not casual venues; they are where the next generation of oncology drugs is shaped. Percheron is now on that stage. Investors, however, have not yet followed. The company still trades near cash backing, a valuation that does not reflect the progress made or the potential embedded in HMBD‑002.

Big Upside Potential

Pitt Street Research has covered Percheron since last year and values the company at A$0.052 per share, based on a peer‑weighted approach and supported by multiple NPV scenarios across key tumour types. The note also highlights the catalysts that could drive a re‑rating as the company advances through Phase 2 and engages with potential partners.

Percheron is still early, still small, and still working through the realities of clinical development. But the science is moving, the visibility is rising, and the company is positioning itself for a pivotal 2026. In our view, the story is only just beginning to reach the audience it deserves.

Percheron is a research client of Pitt Street Research.