Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) Secured a Cancer Research Collaboration

[[tagnumber 0]]Yesterday the stock price of Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) spiked up on the highest trading volume that the company has ever seen on the market. The reason was the announced new cancer drug collaboration agreement, yet with the current valuation it is uncertain if there will be more upside potential for the stock once the rally is over.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]PIRS closed at $2.79 on Tuesday which is a 35.44% gain from the previous session close. The trading volume nearly reached 6 million shares, or over 18 times higher than the average for that illiquid stock. Though the technical indicators all give strong buy signals for today and the stock gains further in the pre–market, short–sales data shows significant short interest that will inevitably cause a negative correction.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 8]]PIRS is a clinical–stage biotechnology company that seeks to identify potential drug candidates using [[tagnumber 9]][[tagnumber 10]]its proprietary Anticalin scaffold technology. All the revenues come currently from an agreement with [[tagnumber 11]][[tagnumber 11]][[tagnumber 13]][[tagnumber 9]][[tagnumber 10]][[tagnumber 16]][[tagnumber 17]]Daiichi Sankyo Co., Ltd[[tagnumber 11]][[tagnumber 11]][[tagnumber 11]][[tagnumber 11]][[tagnumber 11]][[tagnumber 9]][[tagnumber 10]] from 2011. According to that agreement, PIRS is entitled to receive up to $91.1 million upon achievement of various development and commercial milestones, as well as royalties on any future sales of approved products.[[tagnumber 11]][[tagnumber 11]][[tagnumber 27]][[tagnumber 11]][[tagnumber 1]] [[tagnumber 0]][[tagnumber 31]][[tagnumber 10]]Currently, these proceeds cannot cover the research and developments costs, thus PIRS will probably need to raise more cash on the market next year, which means investors should consider significant potential dilution as a downside to the stock.[[tagnumber 11]][[tagnumber 11]][[tagnumber 1]] [[tagnumber 0]][[tagnumber 31]][[tagnumber 10]]Yesterday, PIRS announced its latest project. The company is going to collaborate with Roche in cancer immunotherapy and will use its proprietary technology to search for potential drug candidates for a still undisclosed target. The agreement provides for a $6.4 million upfront payment to PIRS as well as other milestone payments that could exceed $400 million.[[tagnumber 11]][[tagnumber 11]][[tagnumber 1]] [[tagnumber 42]] [[tagnumber 1]]