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California Legislation Highlights Need for Broad Menu of Tests in Growing Healthcare Acquired Infection Market

HAIs continue to be a national healthcare concern. According to the U.S. Centers for Disease Control and Prevention, in 1974 Methicillin-resistant Staphylococcus aureus (MRSA) infections accounted for two percent of the total number of staph infections. In 1995 that number had grown to 22 percent, and by 2004 that number had further increased to 63 percent.

"California will be the fifth state to mandate active MRSA surveillance and testing for patients hospitalized for certain procedures," said John Bishop, Cepheid's Chief Executive Officer. "This new legislation demonstrates the need for a portfolio of HAI testing products to address this rapidly growing market. As the HAI testing leader, Cepheid is committed to delivering products and services to help healthcare facilities implement effective HAI testing programs."

California SB 1058, signed into law by Governor Schwarzenegger on September 25th, will require hospitals to test certain patients for MRSA within the first 24 hours of hospitalization. In addition, hospitals will have to report, on a quarterly basis, incident rates of HAIs, including MRSA, Vancomyacin-Resistant Enterococci (VRE), and Clostridium difficile (C. difficile).

Cepheid's 2008 and 2009 menu of HAI products includes current and planned GeneXpert(R) System tests for MRSA surveillance, MRSA skin and soft tissue, MRSA positive blood culture samples, VRE, and C. difficile. These products continue to position Cepheid with the most comprehensive HAI testing menu available.

HAI Reduction is a Priority at the Federal Level

Dr. Don Wright, the Principal Deputy Assistant Secretary for Health for the U.S. Health and Human Services Department (HHS) recently reiterated HHS' commitment to reducing HAIs, by discussing his five point strategy to address the growing HAI problem.

Starting October 1st, 2008, Centers for Medicare & Medicaid Services (CMS) will no longer pay for the added costs of complications arising from certain hospital-acquired conditions, including catheter associated urinary track infections, vascular catheter associated infection, and certain surgical site infections (mediastinitis after coronary artery bypass graft, certain orthopedic procedures and certain bariatric surgery for obesity). A portion of these infections can be caused by MRSA.

About the GeneXpert System Molecular Diagnostic Platform

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. The GeneXpert System is the only system to combine on- board sample preparation with real-time PCR (polymerase chain reaction) amplification and detection functions for fully integrated and automated nucleic acid analysis. The system is designed to purify, concentrate, detect and identify targeted nucleic acid sequences thereby delivering answers directly from unprocessed samples. Modular in design, the GeneXpert System has a variety of configurations to meet the broad range of testing demands of any clinical environment.

About Cepheid

Based inSunnyvale, Calif., Cepheid (Nasdaq: CPHD) is an on-demand molecular diagnostics company that develops, manufactures, and markets fully- integrated systems and tests 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. The company'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 future products, product performance and future market opportunities. 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 delays in clinical studies or in regulatory approvals; regulatory developments and evolving best practices regarding testing levels; customer and market acceptance of the product; unforeseen manufacturing problems; the failure of products to perform as expected, whether due to manufacturing errors, defects or otherwise; the impact of competitive products and pricing; potentially lengthy sales cycles in some markets; reimbursement rates for the products; and underlying market conditions worldwide. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K for 2007 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.

     CONTACTS:
     For Media Inquiries:
     Jared Tipton
     Cepheid Corporate Communications
     408-400-8377
     jared.tipton@cepheid.com

     For Cepheid Investor Inquiries:
     Jacquie Ross
     Cepheid Investor Relations
     Tel: (408) 400 8329
     jacquie.ross@cepheid.com

SOURCE Cepheid