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1 © Cepheid
Jefferies Global Healthcare Care Conference 3 June 2015
Leading in Molecular Diagnostics
© Cepheid
2 © Cepheid 2
Forward-Looking Statement
During the course of this presentation, we may make projections or other forward-looking statements regarding future events or the future financial performance of Cepheid. We wish to caution you that such statements are just projections and that actual events or results may differ materially. We refer you to the documents that we have filed from time to time with the SEC, specifically our last filed Forms 10-K and 10-Q. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in these projections and forward looking statements.
3 © Cepheid
• High Growth Razor/Razor Blade Model ‒ Commercial Clinical Reagent Sales Grew 35% in Q115 ‒ Total Clinical Revenue Grew 25% in Q115
• Large Installed Base of 8,321 Systems ‒ Record Commercial Placements in 2014 ‒ Commercial Installed Base: 4,473 ‒ HBDC Installed Base: 3,848
• Broad and Growing Test Menu ‒ 8 Tests Added in 2014; 3 in 2015 So Far ‒ 22 Test Menu ex-US, 17 in US ‒ Extending into High Value/Volume Markets
CPHD: a High Growth Leader in Molecular Diagnostics Democratizing Molecular Diagnostics
22 47
96 124
174
236 286
360
441
526
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Clinical Sales in $ Millions
45% CAGR (2006–2014)
* 2015 Reflects Mid-point of Guidance dated 4/23/15
*
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GeneXpert System Installed Base – Now at 8,321 4,473 in Commercial Applications
More than 30% of All GeneXpert Systems EVER Placed were Delivered in 2014
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More Systems Installed in the US Than Any Other MDx Manufacturer
System Installed Base as % of Total Instruments (Different Colors Represent Different Systems Offered by Same Manufacturer)
0%
5%
10%
15%
20%
25%
Abbott Other Siemens Qiagen Meridian HOLX/GPRO BD Roche Cepheid
Source: Market Diagnostics International, Manufacturer Share of Hospital Placements, 2012. Based on proprietary survey of 1,800 Labs. Note: most labs have more than one instrument.
6 © Cepheid
A Broad & Rapidly Growing Test Menu…. 22 Test Menu ex-US, 17 Commercially Available in US
Cepheid: Global Leader in Molecular MRSA
Cepheid: Global Leader in Molecular C. difficile
Cepheid: Global Leader in Molecular TB
New Tests: Xpert HPV (CE-IVD), Xpert Norovirus, Xpert HIV-1 (CE-IVD), Xpert HCV VL (CE-IVD)
#1
#1
#1
Source: Cepheid Internal Analysis
Cepheid: US Leader in Molecular Flu #1
?
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• Cepheid Continues to Compete Effectively & Gain Share
Emmes Database Based on 1,000 US Molecular Institutions
CPHD 2014
Account Share
CPHD 2013
Account Share
CPHD 2014
Volume Share
CPHD 2013
Volume Share
Comment
MRSA & SA 86% 84% 73% 73% BD # Accounts ↔, Roche ↓
C. Diff 63% 60% 63% 59% Meridian & BD # Accounts ↓ Meridian & BD Volume ↓
CT/NG 28% 10% 7% 2% Hologic, BD, Roche # Accounts ↓
GBS 64% 61% 29% 19% BD # Accounts ↓, Volume ↑ Meridian # Accounts & Volume ↑
MTB 44% 28% 27% 21% Hologic # Accounts & Volume ↓ Homebrew # Accounts & Volume ↓
Flu 72% 64% 64% 48% Competitors ↔ to ↓
Used with permission.
8 © Cepheid 8
BROAD MENU EXPANSION
APPLICABLE MARKET SEGMENT
EXPANSION
GLOBAL MARKET EXPANSION
MAINTAINING GROWTH
LEADERSHIP
Continued Investment Supports 3-Pronged Strategy
9 © Cepheid
Market Opportunity Continues to Expand with Menu
2012 2013
2014–15 2016–17
Oncology
Virology
Critical Infectious
Sexual Health
HAIs
$900M
$1.7B
$3.4B
$5.2B
Source: Cepheid Internal Analysis. Reflects expansion of CPHD’s addressable market as additional Xpert tests are added to available menu.
10 © Cepheid
MRSA Surveillance SA Nasal Complete C. diff & C. diff/Epi Norovirus (Q414) vanA for VRE MRSA/SA SSTI MRSA/SA Blood Culture EV Flu & Flu/RSV (Q414) Ebola (EUA, Q115) MTB/RIF CT/NG GBS & GBS Lim Broth Factor II&V
Solid Progress on Test Menu Expansion Eight Tests Added in 2014, Three Added in 2015 So Far
MRSA Surveillance SA Nasal Complete C. diff/Epi vanA/vanB for VRE MRSA/SA SSTI MRSA/SA Blood Culture Norovirus (Q214) Carba-R (Q214) EV Flu & Flu/RSV (Q314) MTB/RIF CT & CT/NG Trichomonas (Q314) GBS HPV (Cervical CA) (Q214) HIV-1 Viral Load (Q414) HIV-1 Qual (Q215) HCV Viral Load (Q215) Factor II&V BCR-ABL Monitor
MRSA Surveillance-Next Gen BCR-ABL Ultra Bladder CA Monitor/Symptom
Carba-R MRSA Surveillance-Next Gen CW Flu/RSV (Submitted Q215) Trichomonas
Notes: Targeted Test Menu Subject to Revision; CW = CLIA-Waived Tests in Italics Represent Product Improvements and are Excluded from Total Test Counts
SA Nasal Complete-Next Gen Group A/C Strep Meningitis/Encephalitis Pertussis GI Panel HSV 1/2 Typing Vaginitis GBS Ultra HBV Quant Breast CA Stratifier Breast CA Signature
Pancreatic CA Monitor EBV / NPC Screen EBV / NPC Monitor
= US Tests
= International Tests
34 Tests
33 Tests
40 Tests
36 Tests
20 Tests
24 Tests
17 Tests
22 Tests
SA Nasal Complete-Next Gen Pertussis GI Panel HSV 1/2 Typing Vaginitis CW Vaginitis CW CT/NG HPV (Cervical CA) HIV Quant HCV Quant HBV Quant BCR-ABL Ultra Breast CA Stratifier Bladder CA Monitor Bladder CA Symptomatic
Available Now 2015 2016-17 2018-19
Group A/C Strep Meningitis/Encephalitis GBS Ultra CW GBS Ultra CW Group A/C Strep CW HPV (Cervical CA) Breast CA Signature
11 © Cepheid
Xpert HIV-1 Viral Load ‒ 97% Correlation with Abbott Assay
within Quantitative Range ‒ Lower Limit of Detection than Abbott ‒ CE-IVD Achieved December 2014
Xpert HIV-1 Qualitative ‒ 98% Concordance with Roche Assay ‒ Lower Limit of Detection than Roche ‒ CE-IVD Achieved April 2015
Xpert HCV Viral Load ‒ 95% Concordance with Abbott Assay ‒ CE-IVD Achieved April 2015
Cepheid Entering $1 Billion Virology Market $250 Million Addressable Market with Initial CE-IVD Tests
HIV data based on clinical trial activity and was reported by the GWU School of Public Health at AMP in November 2014.
11 © Cepheid
12 © Cepheid
• Completed Prototype Honeycomb GeneXpert System
‒ Module Runs in Existing GeneXpert Systems
• Functioning Microwell PCR Reactions ‒ Up to 1,000 Targets
‒ Qualitative & Multiplexed Quantitative mRNA Expression
• Completed Prototype Honeycomb GX Tube with Microwells
• Fluidic Feasibility Achieved
• Targeted for Release to R&D in 2015 ‒ First Commercial Product: Xpert Breast Signature
in 2016–17 ex-US
Strong Progress on High-Multiplexing "Honeycomb"
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BROAD MENU EXPANSION
APPLICABLE MARKET SEGMENT
EXPANSION GLOBAL MARKET
EXPANSION
MAINTAINING GROWTH
LEADERSHIP
Continued Investment Supports 3-Pronged Strategy
14 © Cepheid
Applicable Market Expansion: Early Traction
• POL’s • Urgent Care • Nursing Homes • Retail Outlets • Cruise Ships • Home
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Hospitals Independent Labs Alternative Sites
• POLs • Urgent Care • Nursing Homes • Retail Clinics • Cruise Ships • Universities • Public Health • Home
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• Infinity System + Broad Xpert Test Menu Opening New Possibilities
‒ Highest Volume System Available
‒ Unmatched Labor Efficiency
‒ LEAN, 24/7 Operation
‒ Broadest Menu & Most Tests on Board
• LabCorp Added as Customer in Sept 2014 ‒ 10 Infinity Systems Placed (Reagent Rental)
‒ Expected to Run ~400,000 Xpert GBS Tests Per Year (When Ramped)
‒ Xpert C. difficile Also Adopted
• Second National US Ref. Lab in Oct 2014 ‒ ~100,000 Xpert MRSA, C. diff & GBS
‒ GX Systems Placed Q414-Q115 (Reagent Rental)
Independent Reference Labs
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• Sexual Health Clinic in Central London
• 100,000 Xpert CT/NG Tests in 2014
• Service Evaluation: ‒ Median time from test to informing patient
reduced from 8 days to 1 day ‒ Median time to treatment for positive patients
reduced from 10 days to 2 days
Dean Street: High Volume at Point of Care
Wingrove I, McOwan A, Nwokolo N, et al. Sex Transm Infect 2014:90:474
The introduction of the GeneXpert within sexual health services has the potential to reduce the prevalence of CT and NG in the community by reducing the duration of infectivity.
“
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Firm Commitment to Targeted 2017 Business Model
* All targets are Non-GAAP and apply to our Commercial Business only (excluding HBDC)
Target* Comment
Gross Margin High 60s GM was 63% in Q414
Highest Volume Tests Already >70% MRSA Cost <$5 (excluding Royalty)
Research & Development 15-16% Heavy Clinical Trial Expenses (HPV, Virology) Step Down in 2017
Sales & Marketing ~18%
General & Administrative ~8%
Operating Margin Mid 20s
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Cepheid Remains Well Ahead of Competition
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What Competitors are Aspiring to Deliver Tomorrow
GeneXpert Delivers Today…
Accurate
Rapid Results in as Little as 30 Minutes
Easy-to-use Moderately Complex
Scalable From 1 to 2,000 tests/day
Proven More than 8,300 Systems Placed Globally
Broad test menu 22 Tests Available Now (17 in US)
Flexibility True Random Access, not Random Batch
Multiplexing capability Low-to-High Level
19 © Cepheid
Cepheid NASDAQ: CPHD
Questions? Contact Investor Relations: investor.relations@cepheid.com or tel. (408) 400 8329
We are a better way.
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