William Blair & Company Initiates Coverage of Cepheid With Outperform Rating

William Blair & Company initiated research coverage of Cepheid (Nasdaq:CPHD) ($11.24), which develops and markets systems to rapidly conduct nucleic acid analysis, with an Outperform rating and company profile of Aggressive Growth.

Analyst Ben Andrew and associate analyst Brian Weinstein estimated that the company would generate revenue of about $115 million in 2007 and $139 million in 2008.

Our research indicates Cepheid's GeneXpert and SmartCycler instruments are widely acknowledged by end-users as leading platforms for performing molecular diagnostic testing, Weinstein said. The SmartCycler integrates DNA amplification and detection to allow rapid analysis of a sample, and the GeneXpert integrates sample preparation in addition to DNA amplification and detection. The GeneXpert is the only fully automated PCR-based molecular diagnostic testing system and has been validated by 4.7 million anthrax tests with no false positives having been reported.

With an impressive management team possessing decades of experience in the diagnostics industry, Cepheid continues to make strides in executing its growth strategy, and we expect the company to cross over into profitability on an adjusted basis (excluding stock-based compensation) in 2008, he added.

William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months.

William Blair & Company, L.L.C. was a manager or co-manager of a public offering of equity securities within the prior 12 months.

William Blair & Company, L.L.C. is a market maker in the security of this company and may have a long or short position.

William Blair & Company, L.L.C. (www.williamblair.com) is a Chicago-based investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost.

For important disclosures and information regarding the firms rating system, valuation methods and potential conflicts of interest, please visit: http://www.williamblair.com/Pages/news_story_dept.asp?uid=1215&depID=4

Additional information is available upon request.

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