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Cepheid's Q3 Revenues Fall 7 Percent on Lower Systems Sales; Beat Estimates

NEW YORK (GenomeWeb News) – Cepheid reported after the close of the market Wednesday that its third-quarter revenues declined 7 percent as its total systems sales fell 24 percent year over year.

The Sunnyvale, Calif.-based molecular diagnostics firm generated total revenues of $41.6 million for the three-month period ended Sept. 30, compared to $44.9 million for the third quarter of 2008. Its results beat analysts' consensus estimate of $40.9 million.

"As expected continued strength in clinical test sales significantly offset anticipated declines in biothreat and other revenue," Cepheid CEO John Bishop said during a conference call following the release of the results. "Our clinical business is, of course, our strategic focus, and now represents more than 70 percent of our total revenue."

The firm's portfolio of GeneXpert tests includes seven tests sold in the US and 11 sold in Europe. Bishop said that the Xpert MRSA product, the firm's recently introduced Clostridium difficile test, and its tuberculosis tests as strong performers for the quarter.

Cepheid reported system sales of $10.6 million for the quarter, down from $14 million for the third quarter of 2008. Its reagent and disposable sales increased 6 percent to $30.2 million from $28.4 million. Its "other" revenues — from contracts, grants, and research — fell to $837,000 from $2.5 million.

The firm said that it placed a total of 94 GeneXpert systems and 629 modules during the quarter, bringing its cumulative total of placements to 1,241 GeneXpert systems and 6,757 modules.

Cepheid's net loss dropped 42 percent to $3.8 million, or $.07 per share, from $6.6 million, or $.12 per share. Its loss per share easily beat Wall Street estimates of $.12 for Q3 2009.

The firm's SG&A spending dropped slightly to $12.3 million from $12.4 million, while its R&D spending declined 25 percent to $8.7 million from $11.6 million.

"The timing of specific clinical trials resulted in an unusually low R&D expense, which translated into outperformance on the bottom line," Bishop said. "We expect R&D to return to its first and second quarter levels in the fourth quarter."

Cepheid finished the quarter with $33.3 million in cash and cash equivalents.

The firm said that it expects full-year 2009 revenues to be in a range between $165 million and $169 million. It also has guided for a loss per share of between $.42 and $.45.

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