Oppenheimer initiated coverage on OnKure Therapeutics Inc (NASDAQ:OKUR). Last week, OnKure Therapeutics completed its merger with Reneo Pharmaceuticals Inc. The combined company started trading on Monday.

Concurrent with the closing of the merger, the company completed a $65 million private placement with a group of new and existing investors.

Following the transactions, OnKure is expected to have a cash runway through multiple clinical readouts and into Q4-2026.

The analyst initiated coverage with an Outperform rating with a price target of $35 and notes that OKI-219 can become the go-to option for one of the most frequent mutations in breast cancer.

"We believe Onkure can address key limitations of currently approved targeted agents by reducing off-target toxicity with greater selectivity," the analyst writes.

The analyst's investment thesis on OnKure revolves around PI3Kα inhibition demonstrated by alpelisib, though its efficacy is limited by toxicity concerns OKI-219 promise as a third-generation PI3Kα inhibitor.

Alpelisib is generic name for Novartis AG's (NYSE:NVS) Piqray.

The analyst points out that privately-held Scorpion Therapeutics has established a bar with an approximate 20% objective response rate (ORR). While OKI-219 offers significantly greater selectivity for the H1047R mutation—about eight times more than its nearest rivals—this comes at the cost of lower selectivity for helical mutants.

OnKure has accepted this tradeoff, and they are actively developing pipeline programs aimed at targeting helical mutations. OKI-219 is being evaluated in a Phase 1 trial in solid tumor patients with PI3KαH1047R mutations, including breast cancer.

Alpelisib has received approval as a second-line treatment for advanced breast cancer that is HR+ and carries PIK3CA mutations.

Currently, its annual sales have stabilized at around $500 million. The analyst notes the market potential could be significantly higher. About 40% of HR+ breast cancer patients have PI3Kα mutations, which accounts for approximately 25,000 new cases in the U.S. each year, suggesting a market opportunity that likely exceeds $1 billion.

In summary, "we believe that the clinical characteristics of alpelisib may be hindering its ability to achieve greater commercial success," the analyst writes.

Price Action: OKUR stock is up 2.81% at $19.02 at last check Thursday.

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