Defusing the time bomb

By December of 2003, this US$4.50 stock will eliminate bioterrorist threats

Remember last year’s anthrax scare? It turned out to be far less lethal than the two deranged snipers who kept the Baltimore-Washington Metropolitan area hunkering down behind the questionable protection of gasoline pumps. And yet, the economic cost of last year’s anthrax mailings dwarfs even the cost of the Great American Sniper Hunt. And so far, there are no clear suspects, no arrests, and no other results.

We have found a small biotech company that is working diligently to provide a solution to future bioterror attacks. In a matter of months, Cepheid (CPHD:NASDAQ) will unveil a device that will nip bioterror in the bud… just as soon as Congress passes the proposed Terrorism Insurance Bill.

As soon as this happens, GeneXpert will be unleashed.

Just add water

Here’s how the system works:

A sample is taken from, say, a suspicious envelope or a dead animal. This sample is placed in a tube filled with a special chemical fluid. The data is read by the machine and out come the findings. Simple. Sample in, answers out. If anthrax or another biological weapons substance is present, you know within twenty minutes.

The product is currently being tested at various post offices throughout the United States. But it gets even better: on October 16 of this year, just weeks before this issue went to print, Cepheid made a major announcement.

Collaboration with well-established Applied Biosystems Inc. was put on the table. ABI is a leading biotech company with several fields of research and development in genetics and forensics testing.

This will enable the two companies to join their efforts towards putting a stop to
bio-terror in the near future.

Combining ABI’s DNA testing successes with Cepheid’s new products could make a drastic difference in CPHD’s bottom line. Because real-life applications for GeneXpert are not limited to the post office, potential new ventures abound. GeneXpert can go to hospitals, military bases, government buildings, possibly even to grocery stores and malls.

The stock is currently trading below US$5.00, with a 52-week low of US$2.23. Earnings per share from continuing operations in the last quarter of fiscal 2002 (ended June 30, 2002) were US$0.68 per share. Net revenue for the last quarter of fiscal 2002 was US$3,206,000, compared to US$2,791,000 in the first quarter of fiscal 2002.

Buy CPHD:NASDAQ during the inevitable drawbacks of the stock price past US$5.00. n