The week ahead is likely to be a quiet one as traders transition back from vacation, but there is an obscure event that could make for a big move in a microcap that trades like an option — biomedical products company Cerus Corporation (NASDAQ: CERS).
The event has the catchy name of “1st International Workshop on XMRV: Pathogenesis, Clinical and Public Health Implications.” A central focus of this brain buster is the retrovirus XMRV and its role in infecting patients with Chronic Fatigue Syndrome.
What does this have to do Cerus? Well, this little outfit has the only system in the world for eradicating XMRV (and virtually all other pathogens, including HIV) from blood when it is turned into blood platelets. In short, the use of Cerus’ INTERCEPT System makes collecting blood for platelets “donor independent.”
I believe XMRV will be the next great blood scandal. It may take the equivalent of a Rock Hudson press conference (for those of you too young to get the reference, Google “Rock Hudson, HIV, press conference”) to push XMRV to the front page, but it is going to get there. And it should make good headlines for Cerus next week and thereafter.
Cerus is a real company, with real revenue and sales, and its systems are in place in many countries in Europe. It has not been approved in the United Stares due to terrible treatment by the FDA. However, Cerus just got the endorsement of Swiss authorities (believe me, you can’t you imagine a more conservative bunch of regulators), and this may enable the company to get the go ahead for an inexpensive Phase III trial in the United States, another upside catalyst for this $3 stock.
XMRV coverage could lead to a pop next week. And over time, this little company has almost no downside risk in its business, and numerous positive catalysts ahead.
There are options on CERS, but they are so illiquid that I would just look at buying the stock.
Disclosure: Michael Shulman owns shares of CERS.
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