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Cepheid, Applied Biosystems and Celera Diagnostics Enter into Real-Time Thermal Cycler Patent License Agreement


Cepheid (NASDAQ: CPHD) and Applera Corporation, through its Applied Biosystems Group (NYSE: ABI) and Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Applera’s Celera Genomics Group (NYSE: CRA), announced today that they have entered into a patent license agreement relating to real-time thermal cycler instruments for research, diagnostics and other applications.

Under the terms of the agreement, Cepheid has been granted a non-exclusive worldwide license to make, use, and sell Cepheid’s Smart Cycler® and GeneXpert® real-time PCR (polymerase chain reaction) thermal cyclers, as well as certain other Cepheid thermal cyclers, under Applera’s Real-Time Apparatus Patent Rights. This agreement expands Cepheid’s rights under the existing Thermal Cycler Supplier Agreement between Cepheid and Applera to the human diagnostics field (excluding detection, characterization, and monitoring of HIV and Hepatitis C infections).

“This licensing agreement is an example of how Applied Biosystems and Celera Diagnostics look to extend the value of Applera’s real-time technology beyond their own strategic product lines,” said Dennis L. Winger, Chief Financial Officer of Applera Corporation.

“This is an extremely important and valuable license for Cepheid in that it provides us with rights to fully exploit our instrument platforms across the entire range of applications that we envision developing in our strategic plan”, said John Bishop, CEO of Cepheid. “These rights will serve to further differentiate our systems in the market place, in that we are providing our customers fully licensed systems.”

Under the terms of the license agreement, all real-time thermal cycling systems sold by Cepheid prior to the execution of this patent license agreement are considered to be licensed under these Real-Time Apparatus Patent rights. Also, Cepheid will pay Applera a license fee of $11.5 million over a two-year period, a majority of which relates to diagnostic rights and will be recorded by Celera Diagnostics. Cepheid will also pay Applied Biosystems and Celera Diagnostics ongoing royalties on sales of products incorporating the licensed intellectual property, based upon the field of use. It is anticipated that a majority of the sales may be in the diagnostics field. The financial effect to Cepheid of these obligations will be reflected in Cepheid’s quarterly financial reports and is consistent with Cepheid management’s expectations discussed in its release of first quarter 2004 results. No other terms of the license agreement were disclosed.

About Cepheid
Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is a leading developer, manufacturer and marketer of fully integrated systems that enable genetic assessment when and where it is needed. Founded in 1996, the company is commercializing its technology and products worldwide for research, medical, and industrial applications requiring assessment of the human genome, infectious disease and biothreat agents. See 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 product plans and intellectual property rights and management expectations regarding Cepheid’s cash needs. 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 ability to successfully develop and introduce new products; market demand for new products; and product performance; the inherent uncertainties of patent protection; potential claims relating to intellectual property; Cepheid's reliance on distributors to market, sell and support its products; Cepheid's success in increasing its direct sales; the impact of competitive products and pricing, including competitive products that may be issued from licensees of the same intellectual property; market acceptance of and demand for the GeneXpert® and SmartCycler® products; and unforeseen development and manufacturing problems with respect to the GeneXpert® and SmartCycler® system and reagents; the scope and timing of actual United States Postal Service (USPS) funding and deployment of the Biohazard Detection System (BDS); the occurrence of additional delays with respect to the BDS, the rate of environmental testing using the BDS conducted by the USPS, which will affect the amount of consumable products sold,; lengthy sales cycles in certain markets; the occurrence of unforeseen expenditures, acquisitions or other transactions; Cepheid’s ability to manage geographically-dispersed operations; 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 2003 and “Factors that Might Affect Future Results 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.

About Applera Corporation, Applied Biosystems and Celera Diagnostics
Applera Corporation consists of two operating groups. The Applied Biosystems Group serves the life science industry and research community by developing and marketing instrument-based systems, consumables, software, and services. Customers use these tools to analyze nucleic acids (DNA and RNA), small molecules, and proteins to make scientific discoveries, develop new pharmaceuticals, and conduct standardized testing. Applied Biosystems is headquartered in Foster City, CA, and reported sales of $1.7 billion during fiscal 2003. The Celera Genomics Group (NYSE:CRA), located in Rockville, MD, and South San Francisco, CA, is engaged principally in integrating advanced technologies to discover and develop new therapeutics. Celera intends to leverage its proteomic, bioinformatic, and genomic capabilities to identify and validate drug targets, and to discover and develop new therapeutics. Its Celera Discovery SystemTM online platform, marketed exclusively by Applied Biosystems, is an integrated source of information based on the human genome and other biological and medical sources. Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of novel diagnostic products. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available at, or by telephoning 800.762.6923.

All information in this press release is as of the date of the release, and Applera does not undertake any duty to update this information unless required by law. Copyright© 2004. Applera Corporation. All rights reserved.

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