After monitoring a pilot program in 2002, last December the U.S. Postal Service awarded Cepheid and three other companies a contract to expand and continue testing of the bio-agent detection system being developed by the four-company team. Northrop Grumman, a global defense enterprise with a branch in Sunnyvale, handled the system design, contract work and deployment and installation of the bio-detection system. They also worked out the training logistics for the operation.

Several of the bio-agent detection systems are already in place in Baltimore, and more will be installed in other postal service facilities to test the machines in various locations across the nation.

Cepheid's contribution to the system is GeneXpert, a DNA analyzer that works as part of the larger bio-agent detection system.

The DNA analyzer can be placed near a mail-sorting machine in the post office. The analyzer sucks air through a mechanical sniffer, which feeds into a DNA detector. The detector scans for genetic signatures of bio-chemical weapons like anthrax, and results are available within 30 minutes.

Bacteria, spores and viruses can be identified by their DNA, said Tom Gutshall, co-founder and chairman of Cepheid. "We have been working on technology that works on very rapid DNA identifications," Gutshall said.

The GeneXpert machine can detect anything that is biological that can be deployed as a bio-weapon, like anthrax, said Gutshall.

Postal service spokesman Bob Anderson said the postal service is working with Cepheid and the other companies to test and modify the machines in Baltimore.

If the machine detects a bio-weapon, the postal service center would follow standard emergency protocol and employees would be evacuated, Anderson said.

As to whether the machine could have prevented the deaths from anthrax attacks in 2001, Anderson said, "It's hard to speculate on that, and that's why we're testing it."

Though Cepheid is continuing work on bio-weapons detection projects, the company is moving on in a different direction, said Gutshall. Cepheid's next product is in the branch of clinical diagnostics and is a machine that detects diseases in delivery rooms at hospitals. "Our next product will be used for labor and delivery so mothers do not transmit their diseases to their newborn children," Gutshall said.

As for GeneXpert, the postal service has not closed the deal with Cepheid yet, but Gutshall said prospects look good and as many as 1,500 machines could be installed by 2004.