October 3, 2008

Chembio and Oswaldo Cruz Foundation Sign Supply and Licensing Agreement

Chembio Diagnostics, a developer of diagnostic tests, and the Oswaldo Cruz Foundation of Brazil have completed a technology transfer supply and licensing agreement for Chembio's DPP HIV 1-2 rapid test for use with oral fluid or whole blood samples.

This DPP HIV 1-2 rapid test has been developed by Chembio with its patented Dual Path Platform technology. Oswaldo Cruz Foundation of Brazil (Fiocruz), which is affiliated with the Brazilian Ministry of Health, is its supplier for therapeutics, vaccines and diagnostic tests.

Under the terms of the agreement with Fiocruz, a minimum of 2.5 million of these tests will be purchased for a period of time, followed by an additional period during which components for tests will be purchased, followed by royalties for a period of five years.

The total purchases by Fiocruz from Chembio will ultimately be determined by the demand for the product by the national program, the pace of the technology transfer, and Fiocruz's manufacturing capacity. Sales are anticipated to begin during 2009 once the products are approved for sale in Brazil, at which time a technology transfer fee will be payable to Chembio.

Chembio is currently finalizing preclinical studies with this same product before commencing clinical trials in support of an FDA pre-marketing application and also plans to seek inclusion of this product in major international programs such as the US President's Emergency Plan for AIDS Relief.