We Innovate for Life John Bishop Chairman and Chief Executive Officer June 2016

Transcription

1 We Innovate for Life John Bishop Chairman and Chief Executive Officer June 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: The High Growth Leader in Molecular Diagnostics High Growth Razor/Razor Blade Model 2015 Commercial Reagent Growth of 19% GeneXpert System World s Largest Footprint Installed Base of >10,000 Record Commercial Placements in Q116 Broad and Growing Test Menu 23 Tests ex-us, 20 in US First Oncology Tests Expected in 2016 Business is Scaling into Multiple Market Segments 22 42% CAGR ( ) Total Clinical Sales in $ Millions 3 Cepheid

4 Unique Cartridge Enabling Unmatched Ease-of-Use World s First Sample In, Answer Out Solution Sample Preparation, Amplification & Detection Seconds of Hands-on Time Universal Sample Application All Sample Types: Blood, Tissue, Fecal Material, Sputum, Urine, CSF Universal Cartridge Utilization Same Cartridge For All GeneXpert Systems Inclusive of Infinity and Omni 4 Cepheid

5 Fully Scalable: Unique Applicability for Low to High Throughput Molecular Server Cabinet architecture enables system to grow with testing needs 5 Cepheid

6 Applicability for Today and Tomorrow Cell Chromosome Genes Genes Sequence mrna Transcription Proteins 6 Cepheid

7 Today s Fragmented Market 7 Cepheid

8 Tomorrow s Operational Efficiency 8 Cepheid

9 Efficiency Realization 25% System Installed Base in US Hospitals as % of Total Instruments (Different Colors Represent Different Systems Offered by Same Manufacturer) 20% 15% 10% 5% 0% Other Abbott Siemens Qiagen Meridian biomerieux LDT Becton Bioscience Dickinson Hologic Roche Cepheid Source: Market Diagnostics International, IVD Insights, Molecular Infectious Disease , March US Only. Excludes Unspecified or Incomplete Respondents. 9 Cepheid

10 Ramping Installed Base of GeneXpert Systems 10,000 8,000 6,000 4,000 Commercial HBDC 2, * * As of December 31, 2015, Cepheid no longer discloses quarterly system placement data. In March 2016, we disclosed the 10,000 th GeneXpert System placement. 10 Cepheid

11 Cepheid Continues to Lead MDx Growth 15% 10% 5% 0% -5% -10% Note: Revenue reported for quarter ending March , on constant currency basis. CPHD reported fastest growth rate among companies >$300 million 11 Cepheid

12 3-Pronged Strategy to Drive Continued Growth Global Market Expansion Applicable Market Segment Expansion Maintaining Growth Leadership Broad Menu Expansion 12 Cepheid

13 Key Initiatives for Emerging Markets Expansion India Targeting 500 GeneXpert Systems installed in 1H16 (~300 installed in Q116) Build out commercial organization China Build full sales & service capabilities to support installed base of systems Broaden reach with distribution expansion Brazil Expand commercial capabilities to accelerate adoption of 7 cleared Xpert tests Develop KOLs for important market segments 13 Cepheid

14 Applicable Market Segment Expansion Global Market Expansion Applicable Market Segment Expansion Maintaining Growth Leadership Broad Menu Expansion 14 Cepheid

15 Plenty of Runway to Expand Installed Base US Only Independent Reference Lab 200 Opportunities: Cepheid <10% Penetrated Hospital Moderate/ High Complexity POL Moderately Complex POC CLIA-Waived 5,400: Cepheid ~35% Penetrated 10,000: Cepheid <1% Penetrated 100,000 0% 15 Cepheid Source: American Hospital Association, American Hospital Directory, CMS, Cepheid Internal

16 Immediate 10,000 POL Opportunity with New Distributor Partners in US Extends Reach Beyond Hospital Labs 10,000 Moderately Complex Physician Office Labs (POLs) Non-acute care laboratory customers Green Field Opportunities for Cepheid Long-term Care, Urgent Care, Correctional Facilities, Student Health Care 16 Cepheid

17 Broadest Reach Across Full Molecular Opportunity And Unique Opportunity in POL Point of Care CLIA-Waived Physician Office Labs Moderate Complexity Hospitals Moderate Complexity Large Hospitals/ Ref Labs High/Moderate Complexity Flu/RSV ? +2 tests +3 tests Up to 9 tests NA 17 Cepheid +2 tests

18 Penetration: US Point of Care Market GeneXpert Mod. Complex POL +18 Available Now Xpress Flu/RSV Xpress Flu Xpress Strep A Xpress CT/NG Xpress Vag/Vag Q415 1H16 End 2016 Mid 2017 Q317 Q GeneXpert CLIA-Waived Xpert Flu/RSV CW Xpress Flu/RSV CW Xpress Flu CW Xpress CT/NG CW Xpress Vag/Vag CW Omni CLIA-Waived Omni Launch (ex-us) + Menu Omni Launch (US) +Menu 18 Cepheid

19 Broad Menu Expansion Global Market Expansion Applicable Market Segment Expansion Maintaining Growth Leadership 19 Cepheid Broad Menu Expansion

20 Balancing Critical Mass Menu with Profitability Objectives Available Now on HAI 20 Tests US, 23 Tests ex-us MRSA Surveillance (NxG CE-IVD only) SA Nasal Complete C. difficile (US only) & C. diff/epi Norovirus vana for VRE (US only) vana/b for VRE (CE-IVD only) MRSA/SA SSTI MRSA/SA BC Carba-R United States MRSA Next Gen Xpress Flu (2016) Xpress Flu CW Xpress Flu/RSV (2016) Xpress Flu/RSV CW Xpress Strep A Xpress Strep A CW Trichomonas (Male) (2016) HIV-1 Viral Load 22 CID MTB/RIF EV Flu & Flu/RSV XC Ebola (CE-IVD & US EUA) Women s & Sexual Health Virology Oncology & Genetics CLIA-Waived 20 Cepheid CT (CE-IVD only) & CT/NG Trichomonas GBS & GBS Lim Broth (US only) HPV (CE-IVD only) HIV-1 Qualitative (CE-IVD only) HIV-1 Viral Load (CE-IVD only) HCV Viral Load (CE-IVD only) BCR-ABL Ultra (CE-IVD, US RUO) FII & FV Flu/RSV (US only, CLIA-Waived) International MTB Ultra (2016) Xpress Flu (2016) Xpress Flu/RSV (2016) Xpress Strep A Bladder CA Detection (2016) Bladder CA Monitor (2016) Breast CA Stratifier HBV Viral Load 28 Targeted Test Menu Subject to Revision, particularly in the section. EUA = Emergency Use Authorization; RUO = Research Use Only Tests in Italics are Updates/Upgrades, and not included in the test count. This menu does not include any Omni targeted tests.

21 Xpert Bladder Cancer Monitor Xpert Bladder Cancer Monitor* Non-invasive test that uses a voided urine specimen * Sensitivity (overall) 75% 51.2% Specificity (overall) 80.8% 79.1% Sensitivity for High Grade Tumors 84% 75% 5 mrna target genes +1 internal control Add Sample Insert Cartridge and Start Test Sensitivity for Low Grade Tumors 63.2% 21.1% Negative Predictive Value 94% 80.6% 2 Minutes of Hands on Time 90 Minutes Turn Around Time to Results *Pre-clinical data - assay not available in US. Performance relative to cystoscopy/histology. Study included 257 evaluable subjects. 21 Cepheid

22 Xpert Bladder Cancer Detection Xpert Bladder Cancer Detection* Non-invasive test that uses a voided urine specimen * Sensitivity (overall) 75.8% 57.8% Specificity (overall) 84.6% 87.9% Sensitivity for High Grade Tumors 88.4% 77.5% 5 mrna target genes +1 internal control Add Sample Insert Cartridge and Start Test Sensitivity for Low Grade Tumors 52.2% 25% Negative Predictive Value 97.8% 80.6% 2 Minutes of Hands on Time 90 Minutes Turn Around Time to Results 22 Cepheid *Pre-clinical data - assay not available in US. Performance relative to cystoscopy/histology. Study included 897 evaluable subjects.

23 2H16 and 2017 Revenue Growth Driven by Multiple Factors CEPHEID GROWTH DRIVERS Existing** Product Growth New* Product Growth NA Sales Expansion Intl. Comm. Growth HBDC US Dist. All test categories continue to grow: HAI, CID, Sexual Health, Virology Added 14 tests since 2014; Virology in earliest stages of adoption Building Momentum of 2015 Expansion Heavy S&M infrastructure investments in 2014 and 2015 Strong India system placements in Q116 1H16 POC distribution agreements signed with Medline, McKesson, Henry Schein *New products includes products launched since 2014 **Existing products includes products launched prior to Cepheid

24 Focus on Execution. Business Model 24 Cepheid

25 Targeting Substantial Step-Up in Gross Margin 56 58% Non-GAAP Targeted for 2017 Approximate Non-GAAP Gross Margin 60% 58% 56% 54% 52% 50% 48% 2015 Royalty Expiration Cost Reduction Allowance for Mix & ASPs 2017 Target 25 Cepheid

26 More Than 4% Improvement Already Executed 56 58% Non-GAAP Targeted for 2017 Approximate Non-GAAP Gross Margin 60% 58% 56% 54% 52% 50% 48% 1.5% 2015 Manuf. Efficiencies 3% Royalties 3% On Track 1% On Track 2015 No Additional Action Enzymes Other Manufacturing Initiatives Allowance for Mix & ASPs 2017 Target 26 Cepheid

27 Poised for Substantial Operating Margin* Step Up in 2017 Gross Margin Improves 4% R&D Investment Moderated with Achievement of Critical Mass Menu Virology Submitted to FDA in US Hurdle for New Product Investment Raised Sales & Marketing Investment Decreases as % of Revenue 2% 5% Mid to High Teens Leveraging NA Sales Force Expansion Executed in 2015 Incremental Investment in Oncology Sales & Marketing 27 Cepheid *Non-GAAP. A reconciliation of our 2015 non-gaap to GAAP is available on our press release available on our website.

28 Cepheid Investment Thesis Largest Worldwide Installed Base >10,000 Broadest Test Menu Available for Single Platform Fastest and Most Consistent Revenue Growth in MDx* Investing in Menu & Platform Extensions Committed to 2017 Breakthrough to Sustainable Profitability 28 Cepheid * Companies with revenue >$300 million/yr.

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