By Mary Welch

Despite an increasingly uneasy initial public offering market for biotechnology companies, Cepheid filed to raise $92 million, with the proceeds earmarked for funding research and development activities, expand manufacturing and customer service for existing products, and continuing development and manufacturing of additional products.

Warburg Dillon Read LLC, of New York, is the lead manager. Prudential Vector Healthcare Group and Invemed Associates LLC, both of New York, are co-managers.

Cepheid, based in Sunnyvale, Calif., develops, manufactures and markets microfluidic systems that integrate, automate and accelerate biological testing. The company's systems combine microinstrumentation technologies with molecular biology to create miniaturized systems that rapidly perform all the steps required to analyze complex biological samples - including sample preparation, amplification and detection - on a single platform.

Initially, the company is focusing on the detection and analysis of DNA and RNA in samples such as blood, urine, cell cultures, food and industrial water for such applications as life science research, clinical diagnostics, industrial testing and pharmacogenomics.

Its proprietary I-CORE technology, which is incorporated into both the Smart Cycler and GeneXpert systems, generally achieves amplification and detection in less than 25 minutes, the company said.

Cepheid expects to market its first product, the Smart Cycler, in the next few months. Initially directed toward the life sciences research market, the Smart Cycler is a fast, versatile DNA amplification and detection system, the company said. In the second half of the year, Cepheid expects to launch the Smart Cycler XC, a portable version.

Another product, GeneXpert, currently in development, is designed to integrate automated sample preparation with the company's amplification and detection technology in a disposable cartridge format.

On Dec. 31, the company reported year-end 1999 revenues of $3.6 million, and a net loss of $7.9 million. As of March 31, the company had $18.4 million in cash. According to the SEC filing, Cepheid expects that with the existing capital and net proceeds from this offering, it can maintain currently planned operations through at least 2001.

As of March 31, Cepheid had 7.1 million shares outstanding. The largest institutional shareholders are Invemed Associates, which owns 8.6 percent of the company, and Wheatley Partners II LP, of Great Neck, N.Y., which controls 10.8 percent of the stock.

Cepheid's proposed NASDAQ ticker symbol is CPHD.

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