I have written about Cerus before – I write a letter on shorting stocks and I view Cerus as a “short” on the blood supply, especially in the US. INTERCEPT is being adopted in many European countries, notably France, Germany, Belgium and Switzerland. However, the company is still negotiating with an embarrassingly reluctant FDA for the design of as Phase III trial. A few weeks back on long statistician held up approval of a new trial design, their successful Phase III results being rejected a few years back due to amorphous safety concerns that have not phased more progressive – and at the same time, more conservative - European regulators. I believe the company will eventually get the FDA to agree to a new trial in the US.
Cerus is also moving forward to move INTERCEPT into a much larger market –red blood cells. The company successfully completed a Phase I trial and is moving forward as rapidly as is possible to get to Phase III and a marketing approval.
Few analysts follow the stock, one reason for it being relatively unknown. One house has a target price of $5; I think the company will turn profitable next year and even without a US approval could be worth $8-$11 a share in two to four years based on the market adoption rates seen in Europe and other parts of the world. Short term potential catalysts include an FDA approval for a Phase III trial design for INTERCEPT for platelets; movement to a Phase II or directly to a Phase III trial for red blood cells; signing a partnering agreement for the red blood cell development or even for INTERCEPT for platelets in the US; and the publication of the XMRV study results in October.Disclosure: I recommend the stock in my service and own shares, they are my second largest holding.