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119. Bull, Bear & Beyond – Percheron Therapeutics: executive interview
5 Plays4 months ago
In this interview, Percheron Therapeutics CEO Dr James Garner discusses the company’s recent pivot to immuno-oncology and the rationale for licensing HMBD-002 as its lead programme. He outlines the potential of HMBD-002 as a novel VISTA-targeting checkpoint inhibitor, its differentiated positioning and the positive preclinical and clinical data reported to date. Dr Garner provides further insight into the ongoing preparatory work for the upcoming Phase II trials in 2026. He also discusses the company’s strategic approach to financing the upcoming studies, and development plans beyond Phase II.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
Original interview published on 01/09/2025 and reposted as a podcast
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Transcript
Introduction of Guests
00:00:07
Speaker
Hello everyone and welcome to Edison TV. My name is Jyoti Prakash, a healthcare care analyst here at the Edison Group.
Pivot to Immuno-oncology
00:00:14
Speaker
We are joined today by James Karner, the CEO of Percheron Cerepeutics and ASX-listed biotech, which has recently pivoted focus to immuno-oncology with the in-licensing of HMBD 002, a novel Vista targeting checkpoint inhibitor.
00:00:31
Speaker
Welcome James. It's great to be here. Great to talk to you, James. To start off, James, congratulations on in-licensing HMBD002, which is a novel, potentially first-in-class checkpoint inhibitor. What drove this pivot for Percheron towards immuno-oncology, and how did you settle on this particular asset?
Strategic Shift to Oncology
00:00:57
Speaker
Well, Josiah, I think our journey has has really been one of trying to seize victory from the jaws of defeat. We we had a late stage trial failure in December of last year, and it left us looking for a new asset around which to rebuild our our company. We didn't specifically look solely at oncology. we and We continue to think of ourselves as an oncology and rare diseases company.
00:01:21
Speaker
But of course, the reality is about half of all the deal flow out there is oncology. About half of all the investment into the life sciences industry is oncology. So if you're if you're in the market for a new asset, oncology looms large.
00:01:33
Speaker
But also, i think for all of us working in drug development, for everybody who invests in drug development, it's really where the opportunity to make a big difference in the lives of patients looms greatest.
Selection of HMBD 002
00:01:45
Speaker
And so there was a natural gravitation to to that space. We reviewed over 100 assets as part of our search, and this was by far the standard outed. We loved the quality of the work that had been done on it. We could see a clear path to take it forward.
00:02:02
Speaker
And we were really appreciative the fact that they completed a successful phase one study and we had some good clinical data in hand. So this was a standout opportunity. We were really excited to bring it into our company. And as you say, it's given us a new lease of life as an oncology business.
Difference and Significance of HMBD 002
00:02:17
Speaker
And James, when we think of oncology and maybe checkpoint inhibitors in particular, we think of Keytruda or Optivo, which are huge blockbuster drugs. How is HMBD002 different? And can you tell us a bit more about Vista, the protein it is targeting?
00:02:35
Speaker
Yeah. Well, Vista is an immune checkpoint regulator. So just like the PD-1, PD-L1 axis that Keytruda and Optivo target, Vista is a newer target. It was only first described about 13, 14 years ago, and one that's still not quite as well understood as some of the more heavily prospected targets like PD-1.
00:03:00
Speaker
um But it's a particularly interesting target because it seems to be almost ubiquitously expressed on a very, very wide range of cancers. And it seems to have ah in common with PD-1 very central role to in the immune response to cancer.
00:03:19
Speaker
um But intriguingly, it also seems to be linked to resistance to existing immunotherapies to, for example, PD-1 inhibitors such as pembrolizumab and nivolumab. So it it has, um you know, a lot of really interesting potential ah around it. And we think it's, I think ever since ah drugs like Keytruda and Optivo became mainstream, people have been looking for the next ah immune checkpoint targets. And I think Vista has a very, very solid claim to be that next target. um And we yeah we very much hope so.
00:03:55
Speaker
That's great, James.
Scientific Nuances of HMBD 002
00:03:56
Speaker
And we also see that HMBD002 is a IgG4 antibody versus some of the other VISTAs which are in development, which are targeting IgG1.
00:04:06
Speaker
So what is the significance of this? Yes, this is one of the things that at first sight seems to be a question of scientific nuance. And that actually potentially seems to be quite important. So as we all know, antibodies of of which the which is the class of drugs which HMBD002 belongs, as well as drugs like Keytruda and Optiva belong.
00:04:31
Speaker
um Antibodies come in different types. And so now IgG1 antibodies, are what we've tended to use in cancers, And they are just like the antibodies that our body produces. They're designed to destroy things. They latch onto a tumor cell and destroy it.
00:04:48
Speaker
ah and And if it's a target that's just expressed on a cancer cell, well, that can be very, very helpful. But what we're actually trying to do with a lot of immunotherapies is not so much to destroy cells per se, but in fact, to modulate the activity of the immune system. We're trying to make quite subtle changes in terms of how the immune system reacts to the cancer.
00:05:11
Speaker
And an IgG4 antibody, which has less of this destructive effect, less of what we call antibody-dependent cellular cytotoxicity, ADCC, an IgG4 antibody can be a much more subtle instrument for for modulating the immune system. As it happens, both Keytruda and I believe Opdivo are IgG4 antibodies. So we're in good company.
00:05:33
Speaker
And as you say, just about everybody else who's trying to produce a Vista antibody has produced IgG1 antibodies. We've seen some real safety concerns with many of these drugs.
00:05:44
Speaker
So far, touch with 48 patients worth of clinical data, we have not seen those concerns with our drugs. So on the face of it, it looks like this is a real point of differentiation.
Phase One Study Results
00:05:55
Speaker
You mentioned the safety profile of HMBD002. It has successfully completed a phase one dose escalation study where it was tested both as monotherapy and in combination with Keytruda.
00:06:08
Speaker
What were some of the key highlights from the study and when can we expect the full data to be released? We're hoping to have the full data in hand, I want to say within the next couple of months. It's a little bit vague at the moment, but because this is a licensed drug, we don't have full control of of everything at the moment. But I expect within the next couple of months, we'll be able to share full data with with investors. But um we've already been able to share some highlights. And ah the key things with these, first of all, The drug was very, very safe and well tolerated. In fact, it was so safe and well tolerated that we were not actually able to establish a maximum tolerated dose. that There just weren't enough toxicities. Now, sometimes with a drug, that can be a concern because it can suggest that the drug just isn't doing very much. But we've got some quite good pharmacodynamic data, which shows that the drug is indeed acting on the immune system. It is doing what it's supposed to do.
00:07:08
Speaker
So um so it it looks like the therapeutic window, the the space in which the drug can operate between where it becomes effective and where it becomes toxic, that window is large. And that's a godsend for a cancer drug because many of the drugs we develop in cancer are quite toxic and it can really limit their use.
00:07:26
Speaker
So that's one key thing. um The second thing is that the phase one study actually included some combination with tembrilizumab, with Keytruda, 20 of the 48 patients in the study were in combination. And really, it doesn't look any different in terms of toxicity in the combination than it does as monotherapy. There's just no additive toxicity between the two drugs. And that's great because that makes us feel really comfortable about combining this with drugs like Keytruda.
00:07:55
Speaker
And then finally, we we yeah this was a study done in advanced cancer patients, which is normal. It was done in a whole range of different tumor types. And that always makes it very, very difficult to infer efficacy signals from these kinds of studies. But we did see a number of individual patients who certainly seemed to be on drug and stable and doing well, for much longer than we would expect on the basis of the natural history of their disease.
00:08:22
Speaker
So it's it's really just hints at the moment. But there are definitely some good hints that the drug is is having an impact for some patients. We'll be picking through that data in particular over the next couple of months to to really kind of understand that signal. But on the face of it, a drug that looks extremely safe and well tolerated and with some potential glimpses of
Phase Two Trial Targets and Strategy
00:08:42
Speaker
efficacy. And that's a nice place to be at the end of phase one.
00:08:45
Speaker
Great. um We've seen our checkpoint innovators such as Keytruda target multiple indications, be successful in multiple indications. You have also recently reported positive preclinical data in head and neck cancer and triple negative breast cancer.
00:09:01
Speaker
Can we expect two or these to be the target indications for your phase two trials? And will you be testing this drug as monotherapy or in combination? we're We're literally working through those kinds of questions as we speak. um ah And both of those are real opportunities for us.
00:09:23
Speaker
Head and neck cancer can be a complex one just because it's such a heterogeneous tumour. There's so many different subtypes there. um And so we're we're just a little wary of that. And especially because that data, that preclinical data was specifically in combination with radiotherapy. and we need to just work out a little bit how we would approach that in a clinical trial setting. So high interest, but it might end up being something a little bit more in the nature of a side project.
00:09:52
Speaker
Triple negative breast cancer is of huge interest. We may try and do just a little bit more work to understand how we can focus the patient population. And then beyond that, there's there's a number of other cancer types that we're really interested in where we think this drug can have real potential. some of those um Some of those areas of interest take us down the path of using the drug as a monotherapy. Some of them point us towards combination use with a whole range of different drugs. So potentially with pembrolizumab, but potentially with radiotherapy, potentially with an EGFR inhibitor. um There's really an embarrassment of riches with this drug. And actually our problem is not so much working out
00:10:29
Speaker
what to do with it, but but it's trying to narrow this um huge smorgasbord of opportunities to a couple that that we think are most likely to succeed.
Funding and Partnerships
00:10:39
Speaker
The next question is related to to financing, which is always a major consideration when it comes to drug development.
00:10:46
Speaker
ah How do you plan to fund the phase two trials, especially given that it's immuno-oncology and these trials can get super expensive? um So how do you plan to fund these trials is my first question. And what would be your strategy beyond phase two in terms of commercialization and subsequent development?
00:11:06
Speaker
um To answer the second part of that question first, um I think it's probably fair to say that we have no great ambition to become a commercial pharmaceutical company. In other words, we don't really see ourselves selling this drug into the market. um Never say never, but I think we'd be wise to recognize our limitations, and I think that may not be the most natural path. So we will be looking to partner this drug with a larger company at some stage, one or more larger companies at at some stage.
00:11:37
Speaker
I think some clinical proof of concept data will enable us to maximize the value of that transaction for shareholders. So our focus is very much how do we get that clinical proof of concept data, some clinical evidence that the drug is efficacious as economically and as quickly as possible.
00:11:57
Speaker
And that's really what we're focused on now in our phase two study. Now, we're we're thinking about some quite innovative designs that I think potentially would let us do this work perhaps a little more economically than is commonly the case. we um As of our last financial statements, which are as on thirtieth of 30 June, we did it have 10.2 million Australian dollars in the bank.
00:12:19
Speaker
um We stand to receive, obviously, the full benefit of the Australian government's R&D tax incentive, where we can get 43.5 cents in the dollar back from the from the government. um So that, in effect, leverages the money that we have And, you know, like every company in our position, we're alert to things like grant funding opportunities. And then, of course, we're pre-revenue listed biotech companies. So recourse to capital markets is always there as an opportunity. It's not something that we anticipate making very heavy use of at this stage. I think we can get a lot of work done um with not much more than the resources we have. So we're we're really working to try and at least get some some runs on the board before we start thinking about very substantial financing activity.
00:13:07
Speaker
Great.
Future Plans
00:13:08
Speaker
That's very insightful. Thanks, James. And just to wrap up, you plan to com commence the first, the phase two trials from 2026 onwards. What can investors look forward to in the run up to these trials?
00:13:22
Speaker
think there's um there's a couple of things that are relatively near term, actually, that I think will will potentially be really kind of important points for investors. The first is that we'll be getting full phase one data, which we'll share with the market as soon as we have it. As I say, we're expecting that somewhere probably in September, October timeframe. And we don't yet have all that data in hand, so don't really have any any pointers. It is a phase one safety study, so to manage expectations, there probably won't be blinding insights here, but um I think that will be really important data, particularly in terms of putting the drug on the radar for investors and for a potential future part that with potential future partners. so that's one thing. Second thing is that we plan sometime, yeah know maybe ah a month or two later, sort of in a fourth quarter timeframe, to share details of our plan phase two. three i think We want to be in a position to come out and say, here is the study, here's what we're going to do, here's the cancer type or types that we're focused on, and perhaps even here's some indication of of the economics the study. And I think that will really make plans real for for investors. That's really where they can see, well, here's where this goes, and here's how we start to value it.
00:14:35
Speaker
And then I think um beyond that, investors will see quite a lot of sort of progress milestones, yeah the sort of soft pointers as we as we start to kind of engage CEOs, and as we, as CROs, as we start to form our team, as we start to to do all the work in the run-up to it to a study, um I think investors will start to see us picking up the pace. We're in a little bit of a planning phase at the moment, which is not always the most exciting time for the market. But once that switches into an implementation phase, I think that there's a steady flow of operational milestones that start to come through. And again, I think that's really where where the rubber hits the road and where things get exciting for investors. And I think that will be coming up in in a match of months. So um so I think it's ah it's a really exciting time for the company.
Conclusion and Further Information
00:15:22
Speaker
Thank you, James, for talking to us today. We look forward to following your progress with this asset. For more information, we direct our audience to the Purcharon Therapeutics website and edisongroup.com, where we plan to publish an initiation note in September.