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Cepheid Inks Five-Year Deal with Northrop Grumman for USPS Anthrax Tests

NEW YORK (GenomeWeb News) - Cepheid today said it has signed a purchase order with Northrop Grumman through which it will supply the United States Postal Service with its Bacillus anthracis test cartridges and related materials through 2011.
Cepheid said the five-year deal could be worth as much as $200 million. The firm said it expects to provide the USPS with around 2 million anthrax test cartridges in its 2008 fiscal year, which begins Oct. 1.
The amount of cartridges under the agreement will vary year-to-year through 2011, Cepheid said.
Cepheid has been supplying its GeneXpert test and anthrax cartridges to the USPS since 2003. The technology forms the basis of Biohazard Detection Systems at the USPS, which analyze air samples taken from mail-sorting systems in order to detect trace levels of DNA from anthrax spores.
Cepheid has been negotiating the new contract with Northrop Grumman and the USPS since late 2006 and the delay has had a negative impact on the company’s biothreat revenues. For the second quarter of 2007, Cepheid posted a 26 percent decrease in biothreat sales compared to the year-ago quarter amid an overall revenue increase of 25 percent.
"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," Cepheid CEO John Bishop said in a statement.
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