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Cepheid Revenues Grow 25 Percent in Q3

NEW YORK (GenomeWeb) – Cepheid reported after the close of the market Thursday that its third quarter revenues increased 25 percent year over year.

The Sunnyvale, California-based molecular diagnostics firm, which signed a deal in September to be acquired by Danaher for around $4 billion, released its earnings through a quarterly report filed with the US Securities and Exchange Commission.

For the three months ended Sept. 30, its revenue was $158.5 million, up 25 percent from $126.5 million in the year-ago quarter and above the Wall Street estimate of $153.7 million.

The firm saw a 23 percent year-over-year increase in reagent and disposable revenue from $106.7 million in the year-ago period to $131 million.

In the reagent and disposable category, a $7.1 million increase in the firm's critical infectious disease business was driven by higher tuberculosis and influenza test volumes, including a large order from India, while a $4.9 million increase in the hospital-acquired infection testing business was due to higher volumes of MRSA, C. Diff. and Carba-R tests. Larger test volumes for CT/NG drove a $4.7 million gain in its sexual health franchise revenue, and the firm also reported a $7.6 million increase in other reagents and disposable revenue that included higher anthrax cartridge sales to the US Postal Service.

The firm's systems and other revenue segment grew 39 percent in the quarter from $19.7 million to $27.5 million, driven by higher shipment volume to customers participating in the high-burden developing country program.

Cepheid had a net loss of $10.9 million, or $.15 per share, in the quarter compared to a loss of $22.9 million, or $.32 per share, in the year-ago period, and beating analysts' consensus estimate for a loss per share of $.31.

In the quarter, Cepheid also recorded an estimated $20 million charge related to an ongoing lawsuit with Roche over patents relating to PCR, reverse transcription and nucleic acid quantification methods, real-time PCR detection, and methods for detection of viral and cancer targets.

Cepheid reports that in April an arbitration panel transmitted a partial award holding that the company was liable for damages for the manufacture and sale of "certain accused products starting after the company terminated [its] license until September 2015," with the final amount to be determined by audit.

Cepheid's R&D expenses in the quarter totaled $29.9, down from $32.9 million in Q3 2015. The firm reported $48 million in SG&A expenses, up 9 percent from $44.1 million in the year-ago period.

The company ended the quarter with cash, cash equivalents, and investments of $115.7 million.

Danaher recently received antitrust clearance for the acquisition, and Cepheid's shareholders are scheduled to vote on the deal tomorrow.