Cepheid Inc said it signed deals with the Bill & Melinda Gates Foundation and three other aid organizations to make its tuberculosis diagnostic kit available at reduced prices in developing countries burdened with the disease.
Shares of Synnyvale, California-based Cepheid were up 7 percent at $36.61 after the bell. They closed at $34.16 on Monday on the Nasdaq.
Other than the Gates Foundation, the company entered into deals with the United States President's Emergency Plan for AIDS Relief (PEPFAR), the United States Agency for International Development (USAID) and UNITAID, a group that facilitates the procurement of AIDS, malaria and tuberculosis drugs.
Cepheid said the four organizations will provide funds that will allow government agencies and donor organizations in the 145 countries that face the most tuberculosis cases to purchase the Xpert MTB/RIF test at a reduced cost.
The agreements will see the test sold for $9.98, down from its current price of $16.86 per test.
Cepheid said the Bill & Melinda Gates Foundation will make an initial payment of $3.5 million to make the test immediately available at the lower price.
The company expects the remaining sales to be recognized over the next 18 months.
(Reporting By Pallavi Ail in Bangalore, Editing by Anthony Kurian)
(This story corrects paragraph four to make clear that the aid organizations will provide funds that will allow government agencies to buy the test at a reduced cost. The original story implied the organizations will be buying the test on behalf of the 145 countries)