William Blair initiated coverage of Pieris Pharmaceuticals (NASDAQ:PIRS) with an “outperform” rating. The stock closed $7.46 on Jan. 16.
Analyst Matthew Phipps writes that the company’s Anticalin platform continues to be “undervalued by the Street and proof-of-concept clinical data over the coming 12-to-18 months will drive stock outperformance.”
The company’s platform technology has been validated by several collaborations with large pharmaceutical companies, providing up-front capital and future milestones.
With about $90-million in cash, the company trades at an enterprise value of under $250-million, below many peers, and “we do not believe this reflects the potential of Pieris’ lead assets,” he added.
In particular, “we believe PRS-343 and PRS-060, which both entered clinical studies in 2017, have significant potential, and initial proof-of-concept data will further validate Pieris’ platform,” Mr. Phillips said.
The company’s lead bispecific program, PRS-343, builds on the backbone of the Herceptin antibody, trastuzumab, with the addition of an Anticalin designed to stimulate activated T cells at the site of the tumor.
PRS-343 is in a Phase 1 study in patients with HER2-positive tumors, and given the success of antibodies targeting HER2, “we believe proof-of-concept data expected in the second half of 2018 showing the stimulation of a local immune response, with a tolerable safety profile, would significantly increase interest in the program,” Mr. Phillips said.
He also believes there is significant value in the company’s collaboration with AstraZeneca for PRS-060, an inhaled Anticalin for the treatment of severe asthma.
