The grant totals 14.2 million euro ($17 million) from the Bavarian Ministry of Economic Affairs. The inhaled drug is PRS-220.
Clinical development of the program is expected to begin next year, the Boston company said.
Pieris recently traded at $5.05, up 15%, following on Thursday's 23% leap. The shares have more than doubled over the past month.
The Bavarian grant will enable Pieris to “address an evolving medical need precipitated by the global COVID-19 pandemic that we believe will persist," said Stephen Yoder, Pieris’s chief executive.
In May, Pieris said it entered a drug-development agreement with Roche's RHHBY Genentech.
Under the agreement, Pieris and the subsidiary of the Swiss health-care giant will discover, develop and commercialize respiratory and ophthalmology therapies. The venture will use Pieris's Anticalin technology platform.
Terms call for Pieris to receive $20 million up front. It then may be eligible to receive more than $1.4 billion in milestone payments across multiple programs, as well as tiered royalties for products that are commercialized.
In other health news, the FDA granted breakthrough status to Eli Lilly’s (LLY) - Get Report donanemab treatment for Alzheimer’s disease Thursday.
That speeds the Food and Drug Administration’s consideration of the drug for marketing clearance.
Lilly said it intends to submit a biologics-license application for donanemab later this year under the accelerated approval process.
Cowen analyst Steve Scala on Thursday affirmed an outperform rating for the company.