In response to the company's new collaboration deal, shares of Pieris Pharmaceuticals (PIRS 2.37%), a clinical-stage biotech focused on cancer and other diseases, jumped as much as 16% in early morning trading on Friday. As of 12:15 p.m. EST, the stock was up 9%.
Pieris Pharmaceuticals stated that it has signed a new collaboration deal with Seattle Genetics (SGEN 2.12%), a biotechnology company that is also focused on cancer. The aim of this new partnership is to leverage both companies' expertise and technology to develop new immuno-oncology treatments for solid tumors and blood cancers.
This deal provides Pieris with an up-front payment of $30 million and the ability to earn up to $1.2 billion in milestone payments, plus double-digit royalties on any potential product sales.
While the companies will produce multiple compounds together, Seattle Genetics retains the option to select up to three products for further development. What's more, if the companies get to the pivotal-trial stage with a compound, then Pieris has the option to pick one compound and can share in global costs and profits on a 50-50 basis.
This deal represents yet another vote of confidence for Pieris' technology, so it's easy to understand why investors are bidding up shares today.
Pieris has a knack for getting deep-pocketed biopharma companies to help fund its growth. Last year, it successfully signed lucrative deals that featured up-front payments with a French pharma company called Servier and pharma giant AstraZeneca. In prior years, the company also earned payments from the likes of Allergan, Sanofi, Roche, and Daiichi Sankyo.
My ears always perk up when I see a small-cap biotech with an interesting technology that grabs the attention of the industry giants. Today's announcement only enhances my interest in this company's future so I plan to follow Pieris' progress with great interest from here on out.