The 21-year-old Swiss international has scored 16 goals in 29 games for the Bundesliga side this season.
However, Allardyce admits that he was not able to see the forward in top form as Nuremberg were beaten 4-1 at Wolfsburg.
"I was at Nuremberg versus Wolfsburg," he told reporters. "The sausages were great!
"They got beat quite comfortably so in terms of that particular player, you wouldn't be able to judge him on that particular game because they got battered."
It is understood that Drmic has a £5m release clause in his contract.