Investing in Innovation. John Bishop CEO & Chairman Baird Healthcare Conference 4 September, 2014

Transcription

1 Investing in Innovation John Bishop CEO & Chairman Baird Healthcare Conference 4 September, Cepheid 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. 2 Cepheid

3 CPHD: a High Growth Leader in Molecular Diagnostics High Growth Razor/Razor Blade Model Clinical Reagent Sales Grew 25% in 2013 Total Revenue Grew 21% in 2013 Large Installed Base of 7,096 Systems Record 1,084 Systems in Q214 49% CAGR ( ) * Commercial Installed Base: 3,876 HBDC Installed Base: 3,220 Broad and Growing Test Menu 19 Tests Available Today ex-us, 14 in US Extending into High Value/Volume Markets Democratizing Molecular Diagnostics Total Clinical Sales in $ Millions * 2014 Reflects Mid-point of Guidance dated 7/17/14 3 Cepheid

4 Q2 2014: Solid Execution Record 1,084 GeneXpert System Placements More Systems Placed in Second Quarter of 2014 Than All of 2012 Clinical Revenue +27% Total Revenue +21% Continued Menu Execution Xpert HPV CE-IVD in April Xpert Norovirus CE-IVD in April Xpert Carba-R CE-IVD in June 4 Cepheid

5 Continued Investment Supports 3-Pronged Strategy GLOBAL MARKET EXPANSION APPLICABLE MARKET EXPANSION MAINTAINING GROWTH LEADERSHIP BROAD MENU EXPANSION 5 Cepheid

6 Applicable Market Expansion: Early Traction Hospitals Independent Labs Alternative Sites POLs Urgent Care Nursing Homes Retail Clinics Cruise Ships Universities Public Health Home POL s Urgent Care Nursing Homes Retail Outlets Cruise Ships Home 6 Cepheid

7 Independent Reference Labs 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 Closed National US Reference Lab 10 Infinity Systems (Reagent Rental) in Process of Roll Out Throughout Q3 Expected to Run ~400,000 Xpert GBS Tests Per Year (When Ramped) Potential for Additional Add-On Tests Discussions Continue with Other Major National US Reference Labs 7 Cepheid

8 Dean Street: High Volume at Point of Care Sexual Health Clinic in Central London Expected to Run 50,000+ 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 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. 8 Cepheid Wingrove I, McOwan A, Nwokolo N, et al. Sex Transm Infect 2014:90:474

9 Industry Leading Throughput & Operating Efficiency 2:1 Advantage 3:1 Advantage 4:1 Advantage 4:1 Advantage 4:1 Advantage Infinity-80 Gen Probe Tigris Gen Probe Panther BD Viper Roche Cobas Taqman 96 Abbott m Cepheid CT/NG Testing Over One 8-Hour shift

10 Aggressive R&D Investment Continues to Drive Broad Menu Expansion GLOBAL MARKET EXPANSION APPLICABLE MARKET EXPANSION MAINTAINING GROWTH LEADERSHIP BROAD MENU EXPANSION 10 Cepheid

11 Executing Well on Test Menu Expansion Eight Xpert Tests Targeted for 2014 Release Five Delivered: Trich & Flu/RSV CE-IVD This Week Xpert Norovirus (US), Flu/RSV (US), and HIV Viral Load (CE-IVD) Expected by End 2014 Flu/RSV Submitted to FDA at end July Virology Tests Progressing Well Targeting HIV Viral Load CE-IVD End 2014 HIV Viral Load Data at AMP in November Targeting HCV Viral Load, HIV Qualitative CE-IVD Late Q1/Early Q Sharpening Focus on Oncology Tests Xpert Bladder Cancer Now Expected Early 2017 (Was Late 2017) in US 11 Cepheid Xpert Breast Stratifier Now Expected 2016 (Was )

12 Strong Progress on High-Multiplexing "Honeycomb" 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 ex-us 12 Cepheid

13 Xpert Breast Cancer Stratifier Determination of ER, PR, HER2, and Ki67 RNA expression in patients diagnosed with Breast Cancer, supporting physician decisions on appropriate treatment (hormonal, anti-her2, and/or chemotherapy). Using 4uM FFPE section, Pathologist performs H&E stain and macrodissects invasive tumor tissue. Add FFPE lysis reagents and heat. Add ethanol and vortex. Add lysate to GX cartridge. Place cartridge in GeneXpert Total time-to-result <2 hours Rapid, accurate, standardized, cost-effective, and easy to perform. 13 Cepheid

14 Preliminary Studies Show Strong Concordance ER Concordance = 96% 14 Cepheid Positive by Expert Pathologist Negative by Expert Pathologist sample ID ER Expert Path call GX result delta Ct 1 Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Rich Positive Rich Positive Rich Rich Rich Positive Rich Positive Positive Negative Positive Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative Negative -6.5 High GX values GX Values Compared with Expert Pathologist Calls Low GX values Sample ID HER2 FISH Expert Path call GX result delta Ct 1 Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified Not Amplified -4.6 HER2 Concordance = 100% Positive by Expert Pathologist Negative by Expert Pathologist

15 Xpert Bladder Monitor More Accurate Than Market Leader, With Trademark Ease-of-Use An adjunct to cystoscopy for detection of bladder cancer in: 1. Patients with bladder cancer being monitored for recurrence (Monitoring); and 2. Patients with symptomatic hematuria being evaluated for possible bladder cancer (Detection). Interpretation algorithm incorporates RNA measurements of 4 analytes: CRH, IGF2, ANXA10, UPK1B Transfer urine to preservative tube. Load sample into cartridge. Place cartridge in GeneXpert Total time-to-result 90 minutes 15 Cepheid

16 Xpert Bladder Performing Well Against Market Leader Symptomatic Detection Xpert Bladder (n=43) Source: Early Clinical Data 1 UroVysion (n=51) Source: Package Insert 2 Sensitivity High Grade/CIS 3 100% 88% Grade 3 70% Grade 2 Sensitivity Low Grade 82% 48% Overall Sensitivity 93% 69% Monitoring 16 Cepheid Xpert Bladder (n=78) Source: Early Clinical Data UroVysion (n=49) Source: Package Insert 4 Sensitivity High Grade/CIS 96% 94% Grade 3 78% Grade 2 Sensitivity Low Grade 72% 55% Overall Sensitivity 86% 73% 1. These data are preliminary and validation in independent datasets is proceeding. 2. UroVysion Package Insert Table 15, Comparison of UroVysion Sensitivity to Cystoscopy/Histology by Tumor Grade, Symptomatic 3. CIS: Carcinoma In Situ 4. UroVysion Package Insert Table 6, Comparison of UroVysion Sensitivity to Cystoscopy/Histology by Tumor Grade, Monitoring

17 Updated Targeted Test Menu Available Now Tests MRSA Surveillance SA Nasal Complete C. diff & C. diff/epi vana for VRE MRSA/SA SSTI MRSA/SA Blood Culture EV Flu MTB/RIF CT/NG GBS & GBS Lim Broth Factor II&V 19 Tests Norovirus Carba-R MRSA Surveillance-Next Gen Flu/RSV (Submitted) CW Flu/RSV Trichomonas 33 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 39 Tests Group A/C Strep Meningitis/Encephalitis GBS Ultra CW GBS Ultra CW Group A/C Strep CW HPV (Cervical CA) Breast CA Signature 19 Tests 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 (NEW in Q314) MTB/RIF CT & CT/NG Trichomonas (NEW in Q314) GBS HPV (Cervical CA) (Q214) Factor II&V BCR-ABL Monitor 17 Cepheid 24 Tests MRSA Surveillance-Next Gen HIV Quant (2014) HIV Qualitative HCV Quant BCR-ABL Ultra Bladder CA Monitor/Symptom 33 Tests 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 36 Tests Pancreatic CA Monitor EBV / NPC Screen EBV / NPC Monitor = US Tests = International Tests

18 Firm Commitment to Targeted 2017 Business Model No Change to Target Established at 2012 Analyst Event Gross Margin Target* High 60s Research & Development 15-16% Comment GM was 62% in Q214 Highest Volume Tests Already >70% MRSA COGS <$5 (excluding Royalty) Heavy Clinical Trial Expenses (HPV, Virology) Step Down in 2017 Sales & Marketing ~18% General & Administrative ~8% Operating Margin Mid 20s * All targets are Non-GAAP and apply to our Commercial Business only (excluding HBDC) 18 Cepheid

19 We are a better way. 19 Cepheid Cepheid NASDAQ: CPHD Questions? Contact Investor Relations: investor.relations@cepheid.com or tel. (408)