What Makes Penny Stock Pieris Pharma a “Strong Buy”?
Pieris Pharmaceuticals (NASDAQ: PIRS) is a clinical-stage biotechnology company whose pipeline includes locally activated bispecies for immuno-oncology and proprietary proteins Anticalin, a new class of inhaled therapeutics for the treatment of respiratory disease.
In the first quarter, PIRS achieved sales of $ 15.6 million, mainly through its licensing and collaboration agreements with its partners. The company reported a net loss of $ 0.07 per share, the same as in the first quarter of last year.
Yesterday, the company announced that its cinrebafusp alfa (PRS-343) has been granted orphan drug designation by the United States Food and Drug Administration (FDA). According to Pieris, the FDA grants orphan drug designation “to promote the development of a drug that targets a disease affecting 200,000 US patients or less each year.”
This designation will allow Pieris to obtain development and commercial incentives, assistance from the FDA in the design of clinical trials, tax credits for eligible clinical trials, waivers of application fees and, after the FDA approval, commercially exclusive for 7 years.
Cinrebafusp alfa (PRS-343) is a 4-1BB / HER2 fusion protein used in the treatment of stomach cancer, and after encouraging phase 1 results, PIRS is now working to launch a phase 2 study .
In March of this year, Pieris announced the modification of its previous agreement with Seagen (SGEN) and stated that SGEN had made a strategic equity investment in the company. As part of a combined study agreement, the Phase 2 study of PRS-343 will be combined with Seagen’s tucatinib, a small molecule HER2 tyrosine kinase inhibitor.
At the end of last month, HC Wainwright analyst Joseph panginis reiterated a buy on the stock with a price target of $ 9 (~ 106% upside potential).
Commenting on the amended agreement with Seagen, Pantginis told investors: “Pieris now has a co-promotion option in the US, with Seagen being fully responsible for development beyond Phase 2; if the option is exercised, Pieris would be entitled to a royalty increase (we would project a low double-digit rate)… We are encouraged by this announcement as it provides an enlargement profile for PRS-343 in gastric cancer and in -of the.
Collaboration with Genentech
At the end of last month, PIRS announced its collaboration with Genentech, a member of Roche Holding AG (UK: 0QOK), to develop, discover and commercialize “local respiratory and ophthalmologic therapies that take advantage of Pieris’s proprietary Anticalin technology”.
As part of the deal, Pieris will receive an upfront payment of $ 20 million and may be eligible to receive more than $ 1.4 billion in additional milestone payments on multiple programs and tiered royalties for commercialized programs.
Under the terms of the agreement, while PIRS will be responsible for discovery and early preclinical development, Genentech will be responsible for the New Drug Research (IND) activities, clinical development and commercialization of these programs. (See Pieris stock chart on TipRanks)
Pantginis commented on the agreement: “We continue to be impressed with Pieris’ business development capabilities as interest in the Anticalin platform continues to grow. We look forward to additional visibility on the assets developed through this new partnership. “
The company said in its Q1 press release that the assay began as part of the global Phase 2a study of PRS-060 / AZD1402, an inhaled IL-4 alpha receptor inhibitor currently being developed with AstraZeneca (AZN) for the treatment of moderate to severe asthma. Data from the phase 2a study is expected to be announced next year.
Additionally, as part of its deal with AstraZeneca, PIRS also received a milestone payment of $ 13 million in the first quarter. Pieris will have the opportunity to co-develop and market the PRS-060 / AZD1402 in the United States.
Valuation of the PIRS
Analyst Pantginis’ assessment of PIRS is “currently based on PRS-060 (23% contribution) and PRS-343 (77% contribution). Our price target is based on our clinical net present value (NPV) model, which allows us to relax several assumptions affecting a drug’s potential market profile.
“Factors that could hinder our achievement of our price target include the failure or failure of clinical trials or the inability of the company to secure adequate funding to advance its drugs through the development process.” , added the analyst.
The consensus among Wall Street analysts is a strong buy based on 3 buys. Peiris Pharmaceuticals analysts’ average price target of $ 6 implies upside potential of around 37.3% from current levels.
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