Entering text into the input field will update the search result below

Revisiting Pieris Pharmaceuticals

Sep. 17, 2019 11:24 AM ETPieris Pharmaceuticals, Inc. (PIRS)
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Every man has inside himself a parasitic being who is acting not at all to his advantage.”― William S. Burroughs

Today we revisit Pieris Pharmaceuticals (PIRS) as we have not looked in on this intriguing 'Tier 4' biotech concern in some time.  The stock also has shown some strength so far in September and is back over the $5 level.

Company Overview:

Pieris Pharmaceuticals is an early clinical stage biotechnology company that is developing novel Anticalin-based therapies with an initial primary focus on immuno-oncology and respiratory diseases.  The stock has a market capitalization of just north of $250 million.

Pipeline & Trial Milestones:

Source: Company Presentation

The company has a diverse pipeline and various partnerships based on its underlying technology around Anticalin proteins which are described below

Source: Company Presentation

To date, Pieris has received $120 million in upfront payments since January of 2017 and could potentially see over $5 billion in potential milestone payments that could be had in the future if all programs are pursued to fruition.

Source: Company Presentation

Among notable partnerships,  the company has a collaboration agreement with drug giant AstraZeneca (AZN) around PRS-060.   This compound is a localized IL-4Ra antagonist being utilized to address moderate to severe asthma.  It is the first inhaled biologic focused on this target.  Phase 1b results will be presented at the European Respiratory Society International Congress in Madrid on October 1st.  As can be seen below, Phase 1 results for another compound (PRS-343) should be out by the end of the year as well.  A Phase 2 study should kick off by yearend, which will trigger and undisclosed milestone payout to Pieris.

Source: Company Presentation

Pieris has an immuno-oncology co-development agreement with Servier that involves 5 specific programs including a potential best-in-class PD-1 checkpoint inhibitor.  It also has retained U.S. rights for these compounds.  It has a smaller partnering agreement in this space with Seattle Genetics (SGEN).

Analyst Commentary & Balance Sheet:

Since August 1st, three analyst firms have reissued Buy ratings on Pieris including Cowen & Co. and William Blair.  Here is the commentary from H.C. Wainwright within their Buy rating and $7 price target

Valuation and risks to price target achievement. We reiterate our Buy rating and price target of $7. Currently our valuation is based on the three lead assets at the company: (1) PRS-060 for asthma, which is partnered with AstraZeneca contributing 33% of our valuation; (2) PRS-343 for oncology, which currently contributes 39% of our valuation; and (3) PRS-080 for functional iron deficiency anemia contributing 28% of our valuation. Our price target is based on our clinical net present value model, which allows us to flex multiple assumptions affecting a drug’s potential commercial profile."

The company ended the second quarter of 2019 with approximately $100 million in cash and marketable securities on the balance sheet, down from just under $111 million at the end of the first quarter.

Verdict:

Pieris is obviously a very early stage developmental concern.  However, it has intriguing technology, partnerships with several major drug makers, and a huge amount of potential milestones should it see some of its compounds make it to approval and commercialization.  We continue to view the risk/reward profile as favorable and look forward to continue to keep an eye on Pieris as its pipeline develops.

Investors Alley has put out a 10 part 'Options Checklist' for those that want to become more effective using simple option strategies as part of their investor 'toolbox'. It can be downloaded for free HERE.

Option Strategy:

Image result for Stock Purchase

An efficient way to add exposure or initiate a new position in PIRS is via a Buy-Write order. Using the March $7.50 call strikes, fashion a Buy-Write order with a net debit in the $4.30 to $4.50 range (net stock price - option premium). This mitigates a bit of downside risk and sets up a solid potential return for its six month hold period.  Option liquidity is only so-so on this name so this order might have be entered more than once before filled.

Those who exploit the suffering of others are called parasites. Those who exploit their own suffering are called artists.”― Marty Rubin

Image result for Sign Up NOWEvery Monday morning we put out new research on an undervalued small or midcap stock and then outline a simple covered call strategy that can produce a double digit return in coming months even if the underlying stock doesn't move. If you are registered to receive our weekly free reports, you would have received our latest trade idea in your 'in' box before the bell Monday morning. If you are not signed up yet for this free service, just click HERE to download that latest report. This action will also ensure you receive all future free weekly reports as published as well.

Thank You & Happy Hunting,

Bret Jensen

Founder, The Biotech Forum, The Busted IPO Forum & The Insiders Forum

Analyst's Disclosure: I am/we are long PIRS.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.