Cepheid Announces First Phase Of Xpert MTB/RIF Buy-Down For High Burden Developing Countries
SUNNYVALE, Calif., Aug. 6, 2012 /PRNewswire/ -- Cepheid (Nasdaq: CPHD) today announced the first in a series of agreements with the Bill & Melinda Gates Foundation, the United States President's Emergency Plan for AIDS Relief (PEPFAR), the United States Agency for International Development (USAID) and UNITAID to buy-down the price of the Xpert® MTB/RIF test in an effort to drive adoption of the technology as a critical tool in interrupting the transmission cycle of tuberculosis.
In recognition of the molecular test's accuracy, ease-of-use, speed and portability, Xpert MTB/RIF was endorsed by the World Health Organization in late 2010 for use in many of the world's most tuberculosis-challenged regions, a group referred to collectively as the High Burden Developing Countries (HBDCs).
"We are pleased to be working with the Bill & Melinda Gates Foundation, PEPFAR, USAID and UNITAID to make our innovative Xpert MTB/RIF test available for patient management in 145 HBDCs at less than $10 per test," said John Bishop, Cepheid's Chief Executive Officer. "As a result, every investment in GeneXpert® technology in HBDC countries will go further to identify patients with tuberculosis or drug-resistant tuberculosis, the first critical step in reducing the shocking mortality rates associated with this deadly disease."
The Bill & Melinda Gates Foundation, PEPFAR, USAID and UNITAID today announced that they have finalized an agreement to fund the buy-down of the Xpert MTB/RIF for HBDC customers from $16.86 to $9.98. As the first in a series of anticipated agreements between Cepheid and these organizations, the Bill & Melinda Gates Foundation has agreed to fund an initial payment to make the test immediately available at the lower price.
From an accounting perspective, Cepheid expects this initial payment of $3.5 million will be recognized as revenue at $6.88 per test, pending the execution of the agreements with the remaining collaborators, at which time the remainder will be recognized straight-line over 18 months.
Based in Sunnyvale, Calif., Cepheid (Nasdaq: CPHD) is a leading molecular diagnostics company that is dedicated to improving healthcare by developing, manufacturing, and marketing accurate yet easy-to-use molecular systems and tests. By automating highly complex and time-consuming manual procedures, the Company's solutions deliver a better way for institutions of any size to perform sophisticated genetic testing for organisms and genetic-based diseases. Through its strong molecular biology capabilities, the Company is focusing on those applications where accurate, rapid, and actionable test results are needed most, such as managing infectious diseases and cancer. For more information, visit http://www.cepheid.com.
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 future agreements and future financial results. 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: the need to finalize and execute additional definitive agreements related to the program and potential changes in accounting standards or policies, unforeseen costs; uncertainties as to volumes purchased and duration of the program; and underlying market conditions worldwide. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K, its most recent Quarterly Report on Form 10-Q, and its other reports 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.