Cepheid and bioMérieux enter into strategic commercial program

06 January, 2004

bioMerieux to Apply Cepheid Platform Technology to NASBA Amplification Technology.

Cepheid and bioMérieux enter into strategic commercial program

Sunnyvale, California CA, USA - January 6, 2004. bioMerieux to Apply Cepheid Platform Technology to NASBA Amplification Technology.

Cepheid (NASDAQ: CPHD) today announced that it has entered into a strategic commercial relationship with bioMerieux for bioMerieux to develop DNA testing products embodying its proprietary NASBA (Nucleic Acid Sequence-Based Amplification) technology to be run on systems employing Cepheid’s Smart Cycler® and GeneXpert® platform technologies. Cepheid will receive a total of $15.0 million in up-front and milestone payments in addition to product purchases and royalty payments on end-user GeneXpert test cartridge sales. The $2.0 million option payment received in October 2003 from bioMerieux will be credited toward the initial up-front payment.

“This program complements the strategic programs of both companies by extending the use of Cepheid’s platform technologies to bioMerieux’s proprietary NASBA amplification technology while Cepheid continues to develop its position in the Life Science Research, Clinical Genetic Assessment and BioThreat markets with PCR (Polymerase Chain Reaction) amplification technology. This program is additive and does not restrict Cepheid’s ability to potentially complete other programs currently under review,” stated John Bishop, Cepheid’s Chief Executive Officer. “We look forward to working with bioMerieux as they move to develop their own unique strategic initiatives.”

“We are extremely excited about our relationship with Cepheid,” said Dr. Christophe Merieux, Senior Executive Vice President R&D. “Together we will create the next generation molecular diagnostics system, leveraging bioMerieux’s proprietary amplification system (NASBA) and its deep biology expertise with Cepheid’s unique engineering, all focused on ease of use in highly clinically relevant situations. Together we will truly bring nucleic acid diagnostics into routine clinical use.”

About Cepheid

Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is a leading developer, manufacturer and marketer of fully integrated systems that enable genetic assessment when and where it is needed. Founded in 1996, the company is commercializing its technology and products worldwide for research, medical, and industrial applications requiring assessment of the human genome, infectious disease and biothreat agents. See www.cepheid.com for more information.

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Cepheid, Smart Cycler® and GeneXpert® are trademarks of Cepheid in the United States and other countries. Other trademarks are the properties of their respective owners.

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 integration of NASBA amplification technology with Cepheid’s Smart Cycler® and GeneXpert® platform technologies, growth in identified markets, 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 include risks and uncertainties such as those relating to: whether the integration of such technologies is technically and economically successful; the potential need for FDA regulation in the clinical diagnostic markets that Cepheid may target; Cepheid’s ability to develop additional products for the Clinical Genetic Assessment market; the potential need to obtain rights and licenses with respect to certain technologies, targets and tests in markets Cepheid may pursue; Cepheid’s reliance on distributors to market, sell and support its products; Cepheid’s success in increasing its direct sales; the impact of competitive products and pricing; the ability of Cepheid to manage geographically-dispersed operations; underlying market conditions in the U.S. and in international markets; and development and 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 2002, 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.

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