Cepheid has entered into a collaborative agreement with Takara Bio Inc. of Shiga, Japan, under which Cepheid will package and distribute a dry-formulated version of Takara's Taq HS polymerase product that has been optimized for use on Cepheid's Smart Cycler and GeneXpert systems. This general use PCR enzyme reagent can be used by researchers in combination with other target specific reagents to perform DNA probe based assays.

OmniMix HS will also utilize Cepheid's proprietary bead lyophilization technology, which will provide the Life Sciences researcher several advantages for carrying out PCR-based test determinations. Specific advantages include ease of use, storage stability, improved flexibility in processing variable sample volumes, and more predictable and consistent results. OmniMix HS is formulated to complement the speed, flexibility, and reliable performance offered by the Smart Cycler and GeneXpert systems.

"Takara Bio Inc is well regarded worldwide as a supplier of high quality polymerase reagents. We are pleased to be expanding our partnership with Takara in order to make such reagents available in a format complementary to Cepheid's systems. This program represents an additional step in line with our strategic plan to become a leading developer, manufacturer, and marketer of integrated instrument systems and tests to selected high-value markets requiring determination of genetic information," said John Bishop, Cepheid's Chief Executive Officer.

Cepheid will distribute the OmniMix products on an exclusive basis in the U.S. and Canada, and on a non-exclusive basis in other international markets, including Europe. Takara Bio Inc., which currently serves as Cepheid's exclusive distributor of the Smart Cycler in Japan, South Korea, Taiwan, and China, will retain exclusive rights to sell the OmniMix products in those territories and on a non-exclusive basis in other international markets, including Europe.

Worldwide market introduction and shipment of OmniMix HS for the Smart Cycler system is expected to begin in January 2003. Introduction of OmniMix optimized for the GeneXpert is scheduled for simultaneous market introduction with the GeneXpert System into the Life Sciences market in the third quarter of 2003.