Should you invest in trending stocks Osmotica (OSMT) & Pieris (PIRS)?

Stocks of biopharmaceutical firms Osmotica Pharmaceuticals plc (NASDAQ:OSMT) and Pieris Pharmaceuticals Inc. (NASDAQ:PIRS) gained investors' attention at market open on Friday, June 25. Both the companies made gains on the share prices due to business-related developments.

The healthcare sector is booming since the onset of the pandemic and the S&P 500 Health Care Index has climbed 10 per cent this year and 1.5 per cent month-to-date. Meanwhile, the NASDAQ Health Care Index surged 24 per cent in the past year.

Investors are eyeing healthcare companies as this sector is likely grow further. Here's why the stocks of both these companies were trending:

Pieris Pharmaceuticals Inc. (NASDAQ:PIRS)

The Boston-based company announced that it is developing PRS-220, a drug that can be used for the treatment of idiopathic pulmonary fibrosis. Pieris also stated that a grant of US$ 17 million has been given to the company to evaluate the use of PRS-220 for the treatment of post-COVID-19-related disease.

The PIRS stock gained three per cent on the back of this development and was trading at US$ 4.5 apiece at 11 AM EDT. The stock has returned 77 per cent year-to-date (YTD). It surged 70 per cent in the last three months and surpassed the NASDAQ Composite Index's growth of about 58 per cent.

Earlier on June 24, the US Food and Drug Administration (FDA) had granted orphan drug designation to PRS-343, a drug that can be used for the treatment of gastric cancers. The orphan drug designation means that PRS-343 underscores the high unmet medical need that exists in cases of treatment of gastric cancer.

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Osmotica Pharmaceuticals plc (NASDAQ:OSMT)

The OSMT stock soared 36 per cent at the start of the trading session on June 25, priced at US$ 3.86 apiece at 11 AM EDT.  The spike came after Osmotica announced that it is selling its portfolio of legacy products and Georgia manufacturing facility to Alora Pharmaceuticals LLC.

The deal is estimated to be around US$170 million, in which Osmotica will likely get US$ 110 million as upfront cash payment, and the remaining US$ 60 million could be paid in “additional milestone payments”.

The biopharmaceutical firm will continue to retain its RVL Pharmaceuticals business. The average daily trading volume was 283,838 shares in the last 10 days and the company holds a market cap of C$ 242.1 million, as per TMX data.

OSMT share prices climbed about 20 per cent quarter-to-date (QTD) and 34 per cent in the past month.

The company aims to improve it debt position with the proceeds of this sale and invest in further “commercialization of its flagship product UPNEEQ”.

The stock can further climb under conducive market circumstances and healthy balance sheet.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.



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