April 30, 2004 – The U.S. Postal Service has delayed the rollout of the Biohazard Detection System, which uses anthrax technology developed by Cepheid Inc., because of inconclusive results at several of the 15 pilot sites.

The inconclusive, or so-called “non-determinant” results do not indicate a threat is suspected, but rather, that the test did not provide an answer. The Postal Service said such results were isolated, but decided to make sure the system is working properly before its planned nationwide rollout, according to a news release.

The Postal Service awarded a $175-million contract last year to Cepheid collaborator Northrop Grumman Corp. for the Biohazard Detection System, which contains Cepheid’s GeneXpert platform for identifying pathogens. A second phase of the contract, expected later this year, should be equal or slightly larger in value.

Cepheid officials could not be reached for comment, but said in a written release that a new program like this one may run into issues during initial deployment. The Sunnyvale, Calif-based firm said it is working with Northrop and the Postal Service to deal with the problems.

Cepheid shares, listed on Nasdaq, fell as much as 35 percent Thursday, hitting a low of 6.16. It was trading mid-day Friday at 7.28. For much of last year, Cepheid shares hit a 52-week high of 13.56.