Cepheid (NASDAQ:CPHD)

CPHD reporting 3rd quarter earning today (11-1-07). Total revenues up 53% compared to 3rd quarter 2006 due mainly to their new "GeneXpert(R) System" which provides rapid detection of Methicillin- resistant Staphylococcus aureus (MRSA). MRSA has had a lot of press recently and this rapid testing is a need in hospitals and medical facilities to detect drug-resistant organisms for quick treatment. I listened to their webcast of their earnings this pm and they are really increasing the number of sales of this system. This one will go higher and I would not be surprised to hear news that this company would be an M&A target. This one will go higher.

diagnostic co. with large pipeline, little competiition, also in the MRSA universe. reminds me of young gemprobe.

fast money stem cell diagnostics

A fantastic growth stock. Poised to grow over 15% per annum over the next five years.

Their Genxpert system is the best system available, and even with the recent runup in price, the FDA clearence of the various tests and the system itself provide a good economic moat and arguably, a slight margin of safety. I believe this stock will easily double by the end of 2008.

Genxpert is an amazing platform will likely be in the majority of hospitals if its success continues as it is a very well designed product with little competition. CPHD is not profitable now largely because of massive R&D costs (~25% of expenses) going towards designing assays for the platform (EV and MRSA already cleared FDA). As the system gains popularity it will become profitable (the company estimates profitability in 2008). In addition, licensing the system for other companies to develop assays will provide further revenue. Biothreat is becoming less of a big deal, but as the recent USPS deal shows, still a reasonable revenue stream. Smartcycler is still a solid product, but is targeted towards a relatively small niche and will mean less and less as time progresses.

Oh, and the stock has a lot of short action right now (short ration of 10 IIRC), which is great for someone who has confidence in the company because the covering buys will help push it higher

These guys got their foot in the door prior to the anthrax scares and were in try-out phase when the letters hit. Now Northrup has picked them up for 5 years to cover USPS processing stations. The technology transplants easily into medical diagnostics, which is where they plan to really succeed. This MOA with USPS gives them the scratch (and peace of mind) to fund their medical industry development.

this is a definite takeover in the next 6-12 months imo

They are in the right industry at the right time. USPS doesn't hurt.

Cepheid manufactures equipment that sets itself apart from its competitors. For those in the diagnostic field such as myself, their smartcycler 2 is really the only game in town. With the constant threat of biological attacks as well as the increased prevalence of naturally occurring pathogens, demand for their products is going to do nothing but increase. Very innovative products with proprietary consumables will keep the money flowing in.

Good Backing

MRSA scare will certainly boost the stock

A thoroughly relevant and greatly needed product line. Only one way -- UP!

great technology,razor blade business model.i work in the field and see the need.

Another Cramer hyped stock.

Cramer loves it

razors and razor blades business model; moving to profit in 2008; building range of biodetection cartridges that work in their biodetection equipment; on a hiring spree.

Meningitas test approved by FDA

Cepheid is a molecular diagnostic solutions company, specializing in designing, developing and marketing fully integrated systems for genetic and molecular analysis that can be used in clinical and molecular diagnosis, industrial and bio-threat markets. Technological advances have allowed suitable systems to be introduced into the process of molecular and genetic analysis, thus cutting down the time needed and increasing the accuracy. Cepheid caters to this market with two principle platforms Smartcycler and GeneXpert. These systems are used as a testing platforms for a wide array of molecular disorders and identifying bio terrorism agents. Government agencies and major academic centers form the major clients of the company.

The molecular diagnostic market is one of the fastest growing in advanced health care segment and is expected to reach $2 billion by 2007. The market is expected to grow by close to 20% for next few years. Net revenue of the company increased by close to 5% due to the change in the product mix of GeneXpert module sales to the US Postal Service and due to increase in sales of instruments and reagent products to the clinical segment. Biothreat continues to contribute the lion’s share of revenues however its proportion is coming down as new uses in industrial and clinical segments are gaining popularity.

Molecular diagnostic methods are ushering in new techniques in disease detection and clinical testing. The opportunity in this market is evident from the recent spate of alliances between private reference laboratories and biotech companies. This development translates into good market potential for system developers like Cepheid. Also, the scope of genetic testing is abounding with the growth expected at about 65-70% apart from the traditional infectious disease testing market. Thus Cepheid is in a good position to leverage this advantage, as its product offerings are pretty strong compared to competitors. Stock price of the company is expected to ride on these good factors in the coming months.

passed u.s.p.s. test, on to bigger, better things