Biotech stock #3: Cepheid (CPHD)

Filed under: Stocks to Buy

When my son had a huge boil under his arm, it turned out that it was filled with the killer staph, MRSA. It also turns out that my (otherwise) great doctor used a traditional lab to process the test, which took a week to determine it was MRSA.

Cepheid (NASDAQ: CPHD) manufactures the equipment and test that takes just two hours to do the same thing -- and is better and cheaper than traditional tests. CPHD wins 90%-plus of all competitive bids and its test could be available in low-tech facilities, such as doctor's offices or nursing homes, next year.

The big catalyst for this stock, however, is that Medicare will stop paying for all hospital-acquired infections except MRSA in October. So institutions need a quick test if they are going to be reimbursed for treatment.

The stock has fallen from $30 to under $9. It's worth $20 - $22 to an acquirer.

Your best strategy for life-changing profits?

Buy the call options.

Next: Biotech Stock #4

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Biotech stock #3: Cepheid (CPHD) originally appeared on BloggingStocks on Sat, 11 Jul 2009 14:30:00 EST. Please see our terms for use of feeds.

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