September 19, 2007 at 07:00 AM EDT
Cepheid Awarded Federal Supply Service Contracts to Provide Veterans Hospitals With Diagnostic Tests and Instruments for MRSA Surveillance
Contracts eliminate need for purchase negotiations with individual hospitals; Great Lakes Health Care System (VISN 12) plans to screen every patient admitted to and discharged from intensive care units with Xpert(TM) MRSA diagnostic test

SUNNYVALE, Calif., Sept. 19 /PRNewswire-FirstCall/ -- Cepheid (NASDAQ:CPHD) today announced it has received two Veterans Affairs Federal Supply Service Schedule (VA/FSS) contracts for Cepheid's GeneXpert(R) System and the Xpert(TM) MRSA test for the rapid detection of Methicillin-resistant Staphylococcus aureus. The two contracts, VA/FSS 65 VII and GSA 66, respectively cover the purchase of Xpert MRSA tests and GeneXpert Systems. These two contracts are expected to streamline the acquisition process and ensure VA hospitals and other federal agencies can purchase GeneXpert Systems and Xpert MRSA test kits without individual negotiations as they await funding for the next fiscal year.

The Veterans Health Administration (VHA) -- one of the largest integrated healthcare systems in the country -- is taking a leading role in improving policies to reduce MRSA infection. In January 2007, it issued a directive requiring all VHA facilities to implement MRSA surveillance programs of all patients. While this directive does not mandate polymerase chain reaction (PCR) testing, it advises molecular based testing wherever feasible.

"We continue to see strong adoption of our Xpert MRSA test at VA hospitals across the country," said Cepheid Chief Executive Officer John L. Bishop. "The GeneXpert System and Xpert MRSA test are easy to deploy in accounts with and without prior experience in clinical molecular diagnostics. In addition, the scalability of the system lends itself to a variety of testing volumes while simultaneously maximizing work flow efficiency. These benefits are enabling groups of hospitals like regional Veterans Integrated Services Networks to be able to standardize MRSA surveillance with a single molecular diagnostic test."

In an additional development, the Veterans Integrated Services Network (VISN) 12, known as Great Lakes Health Care System, plans to screen every patient admitted to and discharged from intensive care units and projects to complete approximately 40,000 Xpert MRSA tests per year. VISN 12 provides healthcare services to 1.1 million veterans residing in Illinois, Michigan's Upper Peninsula, Wisconsin and Northwest Indiana. VISN 12 operates seven medical centers, 30 outpatient clinics, five nursing homes, and two domiciliaries.

"With Xpert MRSA, VISN 12 now has a rapid molecular diagnostic for MRSA that can be used around the clock. It also provides us with a standard test that can be used at small facilities with a few beds to large facilities with hundreds of beds," said VISN 12 Chief Pathologist Dr. Bruce Dunn. "Our preliminary validation data is positive and we see the potential to achieve significant savings in current infection control and treatment costs."

MRSA is a growing public health concern, and is cited as the leading cause of Hospital Acquired Infections (HAIs). According to the U.S. Centers for Disease Control and Prevention (CDC), HAIs number over 2 million annually, and that more than 100,000 hospital patients die each year as a result of contracting an infection while being treated for another condition. According to U.S. Congressional Record (H.R. Bill 1174), these HAIs contribute to over $50 billion in annual medical costs. MRSA infection rates have increased every year since 1970.

About the GeneXpert System

The GeneXpert System is a closed, self-contained, fully-integrated and automated platform that represents a paradigm shift in the automation of molecular analysis, producing accurate results in a timely manner with minimal risk of contamination. Three clinical diagnostics for the GeneXpert System have received FDA clearance for marketing in the U.S. including Xpert MRSA for Methicillin-resistant Staphylococcus aureus, Xpert(TM) EV for enteroviral meningitis, and Xpert(TM) GBS for Group B Streptococcus.

About Federal Supply Service

The U.S. General Services Administration (GSA) Federal Supply Service (FSS) provides federal customers such as Veterans Affairs with the products, services, and programs to meet their supply, service, procurement, vehicle purchasing and leasing, travel and transportation, and personal property management requirements. FSS helps federal agencies better serve the public by offering, at best value, superior workplaces, expert solutions, acquisition services, and management policies.

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 http://www.cepheid.com 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 product performance and future demand for and usage of Cepheid's products. 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: unforeseen manufacturing problems; customer market acceptance of the product; the failure of products to perform as expected, whether due to manufacturing errors, defects or otherwise; the impact of competitive products and pricing; currently expected testing rates may not be the testing rates that are ultimately conducted; and the fact that the VA has no commitment to purchase specific amounts of products, and there can be no assurance that it will do so in the future. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K for 2006 and 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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