PIRS Stock Surges on Promising Drug Data Ahead of Earnings

Pieris Pharma call options are running hotter than usual today

Deputy Editor
Jul 29, 2019 at 2:23 PM
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Drugmaker Pieris Pharmaceuticals Inc (NASDAQ:PIRS) is enjoying a huge surge today, after the European Respiratory Society (ERS) accepted the firm's early-stage study of its asthma treatment PRS-060. The company will present to the ERS' International Congress on Oct. 1. PIRS is now eyeing its best day in over two years -- up 24% at $5.90, at last glance -- with earnings right around the corner.

The pop comes just days ahead of PIRS' second-quarter earnings release, slated for before the open on Thursday, Aug. 1. Taking a look at its past six post-earnings moves, the security has suffered only two negative reactions, averaging a next-day swing of 5.9%, regardless of direction. This includes a massive 13.5% loss the day after its November report. This time around, options players are pricing in a much bigger swing, at 15.1%. 

Drilling deeper into the options pits, the typically quiet PIRS stock is awash with activity today. Calls are dominating the board, with more than 500 contracts across the tape so far -- 19 times the average intraday pace. Much of this activity is transpiring at the September 5 call, while the March 7.50 call is trailing close behind, where positions are likely being sold to open. By writing the calls, the investors are predicting a ceiling in the $7.50 region for PIRS through March options expiration. 

Analysts have been resoundingly optimistic, with all five calling Pieris stock a "strong buy." Plus, its consensus 12-month price target of $7.33 is a 24% premium to current levels, and represents a level the stock hasn't touched in over a year. 

This optimism is unsurprising, considering PIRS' behavior over the past few months. Right now, the security boasts a 122.6% year-to-date gain, and earlier touched a fresh annual high of $6.04. And while the $4.80 region has been acting as an area of pressure of late, today's news has the stock trading well above this former ceiling. 

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