Pieris Pharmaceuticals Inc (NASDAQ:PIRS) Is An Attractive Near Term Play

Pieris Pharmaceuticals Inc (NASDAQ:PIRS) opened the week trading in and around $2.3 a share. By market close on Wednesday, the company went for $3.67, gaining nearly 55% on the back of its latest announcement. Here is a look at what the announcement involves and what it means for the company and its shareholders moving forward.First, for those not familiar with this company, let's kick things off with a brief introduction. Pieris is a Boston, Massachusetts-based biotech company that probably wouldn't mind us referring to it as tiny right now. Preannouncement, the company traded for a little less than $100 million market capitalization. Right now, this is up to $158 million.It's developing a pipeline of products based around what it refers to as Anticalins. The science behind the sorts of drugs is pretty interesting. Basically, Pieris has taken a protein called lipocalin and engineered it to look like (and in turn, act like) an antibody. Antibodies are quite large, however, and have drawbacks when used as the basis of drug therapies. Many of these drawbacks are rooted in size, so by creating a type of antibody mimetic, Pieris is able to harness the benefits of using antibodies as the root of therapy while overcoming the negatives associated with doing so.It is a pretty neat technology, and Pieris is the only company in the world using it in a commercial manner.Right now, all of the company's programs (and there is a pretty expansive list of these, covering oncology, anemia type diseases, and respiratory conditions) are very early stage – we're talking preclinical the vast majority. Its strategy, however, means that this early stage pipeline isn't necessarily a bad thing. The company seeks to strike partnerships with companies that can fund the advance of its early stage assets into and along the development pathway, and this is exactly what it has done with the latest announcement.Specifically, Pieris announced on Wednesday that it has struck a deal with AstraZeneca plc (ADR) (NYSE:AZN), which will see the two team up on the development of an asthma drug called PRS-060.As per the terms of the deal, the tiny biotech picks up a $45 million initial payment and will qualify for a further $12.5 million when it kicks off a phase 1 trial for the drug in question. That's a $57.5 million windfall just for getting the assets through a successful IND application and into the clinic. Beyond that, there is up to $2.1 billion in potential development and commercialization related milestones on offer. Remember we are talking about a company valued at less than $100 million at the time of the deal.So what's next? Well, AstraZeneca is going to fund the trials, but Pieris has to carry them out. There's no real dilution concern at the moment given the $45 million windfall and this makes the company an attractive punt going forward. Sure, the assets are very early stage, and there's a good chance the PRS-060 asthma indication won't reach a pivotal trial, never mind hit the shelves in the US. At this end of the development pathway, however, that is not too important. There is plenty of room for share price advance based on early-stage initiation, milestone qualification and promising safety/early clinical benefit data before we need to think about phase 2 and beyond.For us, this validates Pieris as one to watch near term.Factor in the potential for additional partnership deals on the remainder of its expansive pipeline (the company already scored deals with Roche Holding Ltd. (VTX:ROG), Sanofi SA (ADR) (NYSE:SNY) and more before the AstraZeneca deal hit press) and the short to medium term bull thesis strengthens considerably.We will be updating our subscribers as soon as we know more. For the latest updates on PIRS, sign up below!Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.