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Cepheid Enters Into Five-Year Agreement With Northrop Grumman for the Purchase of Anthrax Test Cartridges for Use in United States Postal Service Biohazard Detection Systems

SUNNYVALE, Calif., Aug. 16 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD) today announced that it has entered into a five-year master purchase order with Northrop Grumman for the purchase of up to $200 million in Bacillus anthracis (anthrax) test cartridges and associated materials. The anthrax test is currently used in Biohazard Detection Systems (BDS), installed at United States Postal Service (USPS) mail processing centers nationwide. The agreement covers the USPS fiscal years of 2007 through 2011. Cepheid began supplying USPS with GeneXpert(R) modules and anthrax test cartridges in 2003.

Under the terms of the agreement, the purchase quantity of anthrax tests will be determined on an annual basis, based on the USPS fiscal year of October 1 through September 30. Cepheid has received notice that expected test purchases for fiscal 2008 will be approximately two million cartridges.

"This agreement is a testament to the success of the ongoing program with the USPS, in which more than 5.2 million tests have been run with no false positives," stated John Bishop, Cepheid CEO. "The achievements in the biothreat market reflect the versatility and the reliability of the GeneXpert System that is now being brought to the molecular clinical diagnostic market."

The GeneXpert modules and anthrax test cartridges serve as the foundation of the BDS system. The BDS system rapidly analyzes air samples taken from the mail sorting systems in order to detect any potential trace levels of DNA from anthrax spores as mail travels through the mail processing equipment.

About Cepheid

Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is an on-demand molecular diagnostics company that develops, manufactures, and markets fully-integrated systems for genetic analysis in the clinical, industrial and biothreat markets. The Company's systems enable rapid, sophisticated genetic testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. Cepheid's easy-to-use systems integrate a number of complicated and time-intensive steps, including sample preparation, DNA amplification and detection, which enable the analysis of complex biological samples in its proprietary test cartridges. Through its strong molecular biology capabilities, the Company is focusing on those applications where rapid molecular testing is particularly important, such as identifying infectious disease and cancer in the clinical market; food, agricultural, and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market. See for more information.

This press release contains forward-looking statements that are not purely historical regarding Cepheid's or its management's intentions, beliefs, expectations and strategies for the future, including those relating to the proposed purchases for the USPS BDS program, and business prospects. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations. Factors that could cause actual results to differ materially including that the maximum of $200 million may not be achieved, include risks and uncertainties such as those relating to: the rate of environmental testing using the BDS conducted by the USPS, which will affect the amount of consumable products sold; whether the BDS continues to perform to specifications; manufacturing problems, including with respect to the GeneXpert system and reagents. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K for 2006 and "Risk Factors" in its most recent quarterly report on Form 10-Q, each filed with the Securities and Exchange Commission.

All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.

SOURCE Cepheid

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