Cerus Corporation is developing medical products based on a platform technology that prevents nucleic acid (DNA and RNA) replication, allowing for the development of systems to inactivate viruses, bacteria and other pathogens in blood components. For the 9 months ended 09/30/00, revenues fell 24% to $1.7M. Net loss rose 62% to $25.2M. Results reflect decreased development revenue from Baxter for the Intercept Platelet System and higher R&D expenses.

January 4, 2001

Cerus is in the business of developing medical products based on a platform technology that prevents nucleic acid (DNA and RNA) replication. Cerus' initial application of this technology is the development of systems to inactivate viruses, bacteria and other pathogens in blood components used for transfusion. We are adding this company to our list of stock split candidates based on several factors. First, in December the stock achieved a new 52-week high of $81.88 on better than twice its normal volume. Next, to date the company has not split its stock and we feel that at these levels company officials may choose to do so. Finally, with 50 million shares authorized and only 14.4 million currently outstanding, we again think that board members may elect to split the stock to make it more affordable to the average investor and more attractive to mutual funds. Recent news events worth noting include a deal with Baxter Healthcare. The two companies have announced that they have submitted a CE Mark application for approval to market the Intercept Platelet System in Europe. The system, which is being jointly developed by Cerus and Baxter Healthcare Corporation, is designed to inactivate viruses, bacteria, other pathogens and white blood cells in platelets intended for transfusion. If approved, the Intercept Platelet System will be the only system commercially available to enhance the safety of platelet transfusions through pathogen inactivation. On Thursday, the stock tacked on $2.13 on volume of 111,000 shares. This volume represents a 58% increase above the 3-month average of 70,000. At the close of trading on Thursday, CERS has support at the 20-dma at $68.78. Resistance will likely pose a challenge at the 10-dma at $73.01 and the 5-dma at $73.53. When considering a play on CERS, possible entry points might be a bounce off one of these support levels if immediately followed by good volume and positive momentum in the stock. Look for leadership in the NASDAQ Composite Index (COMPX) to accompany any new plays. We will post our protective stop at $68.00.

Picked on January 4th @ $72.13
Change since picked 0.00
Stop Loss @ $68.00