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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934.

Commission file number: 0-21872

Gen-Probe Incorporated

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:

(858) 410-8000

Securities registered pursuant to Section 12(b) of the Act:

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.0001 per share

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ       No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes þ       No o

      As of June 30, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $2.3 billion, based on the closing price of the registrant’s common stock on the Nasdaq National Market on June 30, 2004 of $47.32 per share.

      As of March 1, 2005, 50,402,454 shares of registrant’s common stock, $0.0001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after close of the fiscal year are incorporated by reference into Part III of this report.

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GEN-PROBE INCORPORATED

TABLE OF CONTENTS

FORM 10-K

For the Year Ended December 31, 2004

INDEX

PART I

TRADEMARKS AND TRADE NAMES

      ACCUPROBE®, APTIMA®, APTIMA COMBO 2®, DTS^tm, GEN-PROBE®, LEADER®, PACE®, TIGRIS®, TMA^tm and our other logos and trademarks are the property of Gen-Probe Incorporated. PROCLEIX® and ULTRIO^tm are trademarks of Chiron Corporation. VERSANT® is a trademark of Bayer Corporation. All other brand names or trademarks appearing in this Annual Report on Form 10-K are the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress or products in this Annual Report is not intended to, and does not imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.

FORWARD-LOOKING STATEMENTS

      This Annual Report and the information incorporated herein by reference contain forward-looking statements that involve a number of risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Although our forward-looking statements reflect the good faith judgment of our management, these statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in the forward-looking statements.

      Forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “hopes,” “may,” “will,” “plans,” “intends,” “estimates,” “could,” “should,” “would,” “continue,” “seeks,” “pro forma” or “anticipates,” or other similar words (including their use in the negative), or by discussions of future matters such as the development of new products, technology enhancements, possible changes in legislation and other statements that are not historical. These statements include but are not limited to statements under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as other sections in this Annual Report. You should be aware that the occurrence of any of the events discussed under the heading “Item 1. Business — Risk Factors” and elsewhere in this Annual Report could substantially harm our business, results of operations and financial condition. If any of these events occurs, the trading price of our common stock could decline and you could lose all or a part of the value of your shares of our common stock.

      The cautionary statements made in this Annual Report are intended to be applicable to all related forward-looking statements wherever they may appear in this Annual Report. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report.

Overview

      We are a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid probe-based products used for the clinical diagnosis of human diseases and for screening donated human blood. Founded in 1983, we pioneered the scientific and commercial development of nucleic acid testing, or NAT. By utilizing nucleic acid probes that specifically bind to nucleic acid sequences known to be unique to target organisms, NAT enables detection of microorganisms that are difficult or time-consuming to detect with traditional laboratory methods. We have received United States Food and Drug Administration, or FDA, approvals or clearances for a broad portfolio of products that use our patented technologies to detect a variety of infectious microorganisms, including those causing sexually transmitted diseases, tuberculosis, strep throat, pneumonia and fungal infections. Our FDA-approved human immunodeficiency virus (type 1), or HIV-1, assay, hepatitis C virus, or HCV, assay, and our investigational test for West Nile virus, our Procleix WNV assay, are currently utilized to screen over 80% of the United States donated blood supply for HIV-1, HCV and WNV. In addition, our TIGRIS DTS instrument, or TIGRIS instrument, is the only integrated, fully-automated, high-throughput instrument approved for NAT testing in clinical diagnostic applications by the FDA. The TIGRIS instrument is also currently used for investigational use in blood screening applications

in the United States and is approved in Europe for use with our Procleix Ultrio assay. We have more than 20 years of nucleic acid detection research and product development experience, and our products are used daily in clinical laboratories and blood collection centers throughout the world.

      We generate revenues primarily from sales of clinical diagnostic and blood screening assays. Our clinical diagnostic products are marketed to clinical laboratories, public health institutions and hospitals in the United States and Canada through our direct sales and service force of approximately 49 representatives. Our blood screening products are marketed and distributed by Chiron Corporation, or Chiron. In addition, we have agreements with Bayer, bioMérieux and Fujirebio, through its subsidiary Rebio Gen, Inc., to market some of our products in various global markets. In addition to product sales, we also generate revenues through research collaborations with government organizations and healthcare companies and through licensing of our patented NAT technologies.

      We have achieved a leading position in the industry because of our technologically advanced and reliable NAT assays and instruments and the capabilities of our sales force and technical support group. Our investment in research and development has enabled us to develop a portfolio of proprietary and patented technologies that we combine to create NAT products to meet our customers’ changing needs for rapid, accurate and cost-effective assays. We also have worked with outside vendors to develop a range of instrument systems to perform our assays.

      We have developed what we believe to be the world’s first fully automated, integrated, high-throughput, NAT instrument system, the TIGRIS instrument. We believe the TIGRIS instrument significantly reduces labor costs and contamination risks in high-volume diagnostic testing environments and also enables large blood collection centers to individually test donors’ blood. The TIGRIS instrument is intended initially for clinical diagnostic applications. In December 2003, we received approval from the FDA for sexually transmitted disease, or STD, testing on the TIGRIS instrument using our APTIMA Combo 2 assay. We have developed and manufacture the only FDA-approved blood screening assay for the simultaneous detection of HIV-1 and HCV, the Procleix HIV-1/HCV assay, which is marketed by Chiron. We have also developed the Procleix Ultrio assay, in collaboration with Chiron, which adds an assay for hepatitis B virus, or HBV, to the previously FDA-approved Procleix HIV-1/HCV assay. In January 2004, the Procleix Ultrio assay, running on our semi-automated instrument system, received its Conformite Europeene, or CE, mark which permitted Chiron to launch the product in the European Economic Area. We filed a Biologics License Application, or BLA, for our Procleix Ultrio assay for use on our semi-automated Procleix system and our TIGRIS instrument, with the FDA in the third quarter of 2004. The TIGRIS instrument, and our Procleix Ultrio assay for use on the TIGRIS instrument, received CE marks in December 2004. We filed a BLA with the FDA for our Procleix WNV assay in January 2005 for use on our TIGRIS instrument and our semi-automated instrument platform.

      We were incorporated under the laws of the state of Delaware in 1987. In September 2002, we were spun off from Chugai Pharmaceutical, Ltd., our former indirect parent, as a separate, stand-alone company. Our common stock began trading on the Nasdaq National Market on September 16, 2002.

      We make available free of charge on or through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. Our Internet address is http://www.gen-probe.com. The information contained in, or that can be accessed through, our website is not part of this Annual Report.

Technology

      Nucleic acid testing technology is based on detection of unique portions of nucleic acids, which store and transfer genetic information in all living organisms. The two main types of nucleic acids are deoxyribonucleic acid, or DNA, and ribonucleic acid, or RNA. DNA functions as a stable repository of genetic information, while RNA typically serves to transfer the information stored within DNA to the cell’s machinery for making proteins.

      DNA and RNA are both composed of chains of chemical subunits called nucleotides. There are four types of nucleotides in DNA, which differ in one chemical part called a base. The four different bases are: adenine, thymine, guanine and cytosine (abbreviated A, T, G and C). These four nucleotides form the building blocks of all DNA. The sequence of the individual A, T, G and C nucleotides in a DNA molecule encodes the genetic information that instructs the cell how to make particular proteins. Because DNA sequences determine which proteins a cell will make, the differences in a cell’s DNA sequences make the cells of one organism differ from the cells of another.

      Most DNA in cells exists in the form of a double-stranded structure that resembles a twisted ladder. In double-stranded DNA, the nucleotides on opposite sides of the ladder are always paired in a precise way. An “A” nucleotide binds only to a “T” nucleotide on the opposite strand, and vice versa. Likewise, a “G” nucleotide binds only to a “C” nucleotide, and vice versa. Each combination of an “A” nucleotide with a “T” nucleotide (or a “C” with a “G”) is referred to as a “base pair.” The way in which each type of nucleotide binds only to one other type of nucleotide is called “complementary base pairing.” As a result of complementary base pairing, the sequence of nucleotides on one strand of a DNA molecule necessarily determines the sequence of nucleotides on the opposite strand.

      The “attraction” of a nucleotide sequence to its complementary sequence allows a scientist to use pieces of nucleic acid as probes to detect the presence of a target nucleic acid in a test sample. If two complementary pieces of DNA (or RNA) are present in a solution under the right conditions, the complementary bases will come together and bind to form double strands. This method is commonly known as “nucleic acid hybridization.” Nucleic acid hybridization techniques can be applied in a diagnostic test to detect an infectious organism (the target organism) by the use of a probe that is designed to bind specifically to a nucleic acid sequence known to be unique to the target organism. The sample suspected of containing the infectious organism is treated to break open the organism, release its nucleic acids into the solution, and render them single-stranded, if necessary. The specific probe is then added, and conditions conducive to hybridization are established.

      If the target organism is present in the sample, the probe should bind to the target organism’s nucleic acids because the sequence of the probe has been designed to be complementary to them. By attaching a detectable label to a probe, it is possible to determine how much, if any, probe has bound to sequences from the target organism.

Current Market Opportunity

      The NAT market developed in response to a need for more rapid, sensitive and specific diagnostic tests for the detection of infectious microorganisms than were previously available using traditional laboratory procedures, such as culture and immunoassays. Culture methods require the growth of a microorganism in a controlled medium and can take several days or longer to yield a definitive diagnostic result. By contrast, nucleic acid probes, which specifically bind to nucleic acid sequences that are known to be unique to the target organisms, can generally deliver a diagnostic result in just hours. For example, culture tests for Mycobacterium tuberculosis can take six to eight weeks for a traditional culture-based diagnosis, compared to only a few hours for NAT. The greater sensitivity and increased specificity of NAT allows for the detection of the presence of a lower concentration of the target organism and helps clinicians distinguish between harmful and benign microorganisms, even when the organisms are closely related, reducing the potential for “false negative” results and thus the number of undiagnosed individuals or individuals who are incorrectly diagnosed as having the disease. For example, the greater sensitivity of amplified NAT allows for the rapid, direct detection of a target organism like Chlamydia trachomatis in urine, even when it is present in low concentrations. In addition, without amplified NAT, more invasive methods of collection like cervical or urethral swabs must be used.

      According to Boston Biomedical Consultants, Inc., the worldwide in vitro diagnostic, or IVD, NAT market in 2004, was approximately $1.9 billion. While NAT represents only a small portion of the estimated $28 billion worldwide IVD market, it is the fastest growing segment. Boston Biomedical Consultants, Inc.,

reported that the worldwide NAT market grew approximately 17% from 2003 to 2004. We focus our business on market opportunities in two principal segments of the NAT market, clinical diagnostics and blood screening. The clinical diagnostic market currently accounts for the majority of our NAT sales. According to Sannes and Associates, Inc., our products represented approximately 53% of the total chlamydia and gonorrhea tests sold in the United States in 2004. In addition, according to a January 2004 survey by the Centers for Disease Control and Prevention, or CDC, our sales represented approximately 75% of the United States amplified tuberculosis testing market at that time. We also are exploring opportunities to develop products to address emerging segments of the NAT market. The diagram below illustrates existing and emerging worldwide NAT markets with some examples of product targets of Gen-Probe and others within each category.

      Clinical Diagnostics for the Detection of Non-Viral Microorganisms. NAT assays currently are used to detect the microorganisms causing various STDs, including chlamydia and gonorrhea, as well as those causing various other infectious diseases, such as Mycobacterium tuberculosis, Group A Streptococcus and Group B Streptococcus.

      Chlamydia, the common name for the condition of infection with the bacterium Chlamydia trachomatis, is the most prevalent bacterial sexually transmitted infection in the United States, with an estimated 2.8 million new cases in the United States each year according to the CDC. The clinical consequences of undiagnosed and untreated chlamydia infections include pelvic inflammatory disease, ectopic pregnancy and

infertility. Gonorrhea, the disease caused by the bacterium Neisseria gonorrhoeae, is the second most frequently reported bacterial STD in the United States, according to the CDC. The CDC estimates that each year approximately 700,000 people in the United States develop gonorrhea. Untreated gonorrhea is also a major cause of pelvic inflammatory disease, which may lead to infertility or abnormal pregnancies. In addition, recent data suggest that gonorrhea facilitates HIV transmission. Chlamydia and gonorrhea infections frequently co-exist, complicating the clinical differential diagnosis. Because chlamydia and gonorrhea infections are often asymptomatic, screening programs are important in high-risk populations such as sexually active men and women between the ages of 15 and 25. Currently, most of the testing for chlamydia and gonorrhea occurs in the United States.

      Tuberculosis, or TB, the disease caused by the microorganism Mycobacterium tuberculosis, remains one of the deadliest diseases in the world. The World Health Organization, or WHO, estimates that each year there are more than eight million new cases of tuberculosis worldwide and approximately two million people die from the disease. Group B Streptococcus, or GBS, represents a major infectious cause of illness and death in newborns in the United States and can cause epilepsy, cerebral palsy, visual impairment, permanent brain damage and retardation. Group A Streptococcus, or GAS, is the cause of “strep” throat, which if left untreated may cause serious complications, such as rheumatic fever and rheumatic heart disease.

      Clinical Diagnostics for the Detection of Viral Microorganisms. NAT assays can be used to detect viral DNA or RNA in a patient sample. These tests can be qualitative, meaning that the tests simply provide a “yes-no” answer for the presence or absence of the virus, or quantitative, meaning that the quantity of virus is determined in the patient sample. Quantitative tests are useful in monitoring the efficacy of treatments to reduce the amount of virus in circulation. NAT assays currently are used to detect viruses such as HIV, HCV and HBV.

      HIV is the virus responsible for acquired immune deficiency syndrome, or AIDS. In 2003, there were approximately 930,000 reported cases of AIDS in the United States, according to the CDC. Individuals with AIDS show progressive deterioration of their immune systems and become increasingly susceptible to various diseases, including many that rarely pose a threat to healthy individuals.

      HCV is a blood-borne pathogen posing one of the greatest health threats in developing countries. According to WHO, about 80% of newly infected patients progress to develop chronic infection, which can lead to both cirrhosis and liver cancer. In addition, WHO reports that approximately 170 million people are infected worldwide with HCV. According to the CDC, an estimated 3.9 million people in the United States have been infected with HCV, of whom 2.7 million are chronically infected.

      The CDC estimates that almost 73,000 additional people in the United States are infected with HBV each year. Chronic HBV infection can lead to the development of severe, potentially fatal complications, such as cirrhosis of the liver.

      Blood Screening. We believe the field of blood screening is one of the fastest growing areas for NAT assays. According to WHO, approximately 80 million units of blood are drawn annually worldwide. Before being used for transfusion, blood must be screened to ensure that it does not contain infectious agents. The most serious threats to recipients of donated blood are HIV, HCV and HBV. There is also growing concern over the presence of other viruses in the donated blood supply, including WNV, parvo B19 and hepatitis A virus, or HAV. In the United States, most blood collection centers perform NAT screening of donated blood by taking samples from individual units of blood and then combining these samples into pools of 16 or 24 samples. These pooled samples are then tested to determine whether HIV or HCV is present. If the presence of a virus is detected, additional testing is then conducted to determine which sample in the pool contains the virus. Some of our customers, such as the United States military, test blood units individually rather than in pools.

      Prior to the introduction of NAT for blood screening, blood collection centers used immunoassays to determine the presence of blood-borne pathogens through the detection of virus-specific antibodies and viral antigens. These tests either directly detect the viral antigens or detect antibodies formed by the body in response to the virus. Consequently, if the donor has not developed detectable antibodies or detectable

amounts of viral antigens as of the time of the donation, recipients of that blood may be unwittingly exposed to serious disease. In the case of HIV-1, antibodies are detectable in the blood approximately 22 days after infection. With HCV, the window between the time of infection and the detection of the antibodies is much longer, approximately 70 days or more. NAT technology can narrow both windows significantly through amplification and detection of the nucleic acid material of the viruses themselves rather than requiring the development of detectable levels of antibodies or viral antigens. According to the CDC, NAT will reduce the window period for HIV-1 detection from 22 days for tests relying on HIV-1 antibodies to 12 days. We believe that NAT reduces the window period for HCV detection by approximately 50%, compared to tests relying on HCV antibodies. We believe that individual donor testing, or IDT, NAT assays may reduce the window period for HBV detection by up to 42%, compared to HBV antibody tests for detection of HBV surface antigen. We also believe that the only effective means of accomplishing individual donor testing, or IDT, with HBV is using our TIGRIS instrument. IDT on our TIGRIS instrument was recently demonstrated as part of our Procleix WNV TIGRIS Investigational New Drug application, or IND, for IDT.

      Adoption of amplified screening technology. We believe that the market for clinical diagnostic products for the detection of non-viral microorganisms, particularly STDs, will expand due to the adoption of amplified screening technology. Target amplification is particularly advantageous when screening for the presence of a microorganism when the level of that microorganism in clinical samples might be insufficient to permit detection with other methods. While many potential carriers of STDs forego diagnosis due to the current invasive methods of testing, we believe amplified NAT technology, which can use samples collected non-invasively, such as urine, will expand screening of high-risk populations and asymptomatic individuals. We believe expansion of the screening of these populations will be accelerated by adoption of guidelines by the Health Plan Employer Data and Information Set, or HEDIS, an organization that provides information about, and recommendations to, managed health care organizations, that call for routine screening of certain populations, such as women between the ages of 16 and 25, to improve early detection and treatment of chlamydia.

      Advances in automated testing. We believe that the introduction of automated instrumentation, such as our TIGRIS instrument, will facilitate growth in both the clinical diagnostics and blood screening segments of the NAT market. It is becoming increasingly difficult for clinical laboratories to recruit and retain skilled laboratory technologists. Within the STD segment, we anticipate that demand for automated testing will increase as the technology is applied to diagnose new target viral microorganisms, including human papillomavirus, or HPV, which has been linked to cervical cancer, and the herpes simplex virus. The rate of market growth for testing additional STD-related microorganisms will depend heavily upon automation, as well as continuing advances in testing methodologies that address the issues of specificity, sensitivity, contamination, ease of use, time to results and overall cost effectiveness.

      Additionally, we believe there will be significant demand for automation if blood collection centers begin the screening of individual blood donations, rather than the current widespread practice of testing of pooled samples, in an effort to further improve the safety of the nation’s blood supply. Individual unit screening at larger blood centers currently is impractical without automated instrumentation because of the throughput limitations of current semi-automated instruments. We believe that the availability of automation will encourage adoption of additional blood screening tests, such as tests for HBV and WNV.

      Responsiveness to newly emerging threats. We believe that our ability to respond rapidly to the emergence of new infectious diseases, such as WNV, will contribute to the growth of our blood screening and diagnostic businesses. Our platform of generic reagents and assay formats allows us to rapidly develop new assays for our blood screening or diagnostic businesses as soon as we know the genetic sequence of a new organism.

      Increased focus on safety of blood supply. We believe blood collection centers will continue to focus on improving the safety of donated blood by adopting the most advanced blood screening technologies available. In addition, we believe that some blood collection centers will seek to adopt individual donor testing for some

or all organisms, rather than the testing of pooled samples, as automated instrumentation technologies make such testing feasible. During the peak period of the WNV season in 2004, some blood centers used our technology and assays, under an investigational exemption, for individual unit testing. Approximately 1200 infected units have been intercepted using our WNV assay since July of 2003.

      Growth in viral load testing. We expect increased monitoring of patients on antiviral therapies to contribute to the growth in the market for NAT products. Antiviral therapies are managed by periodic measurement of the concentration of virus present in the blood, or the “viral load.” Monitoring the viral load can be used to determine when therapy is appropriate, to monitor the course of therapy and to determine the optimal time for a change in therapy. NAT tests can also provide additional information useful in managing patients with these viral infections, including identification of subtypes that are known to be resistant to certain antiviral agents or that are associated with different responses to certain treatments. The primary viral infections for which viral monitoring is useful include those caused by HIV, HCV and HBV. Nucleic acid viral load tests for HIV have been widely adopted by clinical laboratories over the past seven years, but we expect market growth in the short-term because of the introduction of new therapies and increased testing worldwide. In addition, we expect increases in monitoring for HCV in connection with the emergence of new antiviral therapies for HCV. Numerous research programs exist today in anti-viral therapy, with novel anti-viral therapeutics in development that have the potential to produce additional diagnostic opportunities. As these therapies are developed and marketed, we expect a corresponding increase in demand for NAT products to monitor the efficacy of these therapies.

      Development of emerging markets for NAT technology. We believe markets will continue to develop for new applications for NAT technology in both clinical and non-clinical fields. Among clinical fields, we believe NAT technology will be utilized in the areas of new analytes, such as cancer diagnosis, genetic predisposition testing and pharmacogenomics, which involves the study of the relationship between nucleic acid variations and an individual’s response to a particular drug.

      New markers to detect the presence of cancer cells in tumors are being discovered at an ever-increasing rate, and we believe that once these markers have been clinically validated, there will be a large market for NAT-based cancer diagnostic products. Our license and collaboration agreement with DiagnoCure and our license agreement with Corixa Corporation, or Corixa, could represent an innovative application of our NAT technology to detect genetic markers in urine for prostate cancer. These markers are called PCA3 (DD3) and AMACR, respectively.

      We believe that NAT diagnostic assays will be used in the field of pharmacogenomics to screen patients prior to administering new drugs. Many genetic variations are caused by a single mutation in nucleic acid sequence, a so-called “single nucleotide polymorphism,” or SNP. Individuals with a specific SNP in a drug metabolism gene may not respond to a drug or may have an adverse reaction to that drug because the body may not metabolize the drug in a normal fashion. We believe the emergence of pharmacogenomics and individually targeted therapeutics will create opportunities for diagnostic companies to develop tests to detect genetic variations that affect responses to drug therapies.

      Genetic testing to identify individuals at risk of certain diseases and pathological syndromes is emerging as an additional market for NAT technology. NAT-based testing for SNPs and other genetic anomolies can be used to determine an individual’s predisposition to such conditions as thrombosis or bloodclotting. Our license of bioMérieux’s intellectual property rights for the factor V and prothrombin mutation tests could allow us to access this market.

      Emerging non-clinical markets for NAT include water, food, beverage, bioterrorism, pharmaceutical manufacturing, personal care products manufacturing and environmental testing. Today, these markets predominately use traditional methods for microbiological testing, such as culture. However, we believe NAT testing has the potential to provide more rapid and efficient tests in this new market.

      Improvements in Detection Technologies. Current amplified nucleic acid tests generally provide an “end point” result, requiring that the amplification and detection processes are completed before a result is obtained. New technology now in development is likely to permit kinetic or “real time” detection of target

analytes as amplification proceeds, permitting conclusions to be drawn before the amplification process is complete, and thereby reducing the time to an “end point” result. Real time detection methods also offer the advantage of providing both a qualitative and quantitative result from a single test.

Our Competitive Strengths

      Our competitive strengths form the foundation for our business and position us to compete effectively within the NAT market.

      We believe that we have developed one of the broadest arrays of core NAT technologies in the industry. Our products incorporate these technologies, which, in combination, have significantly advanced NAT assays, making them more specific, more sensitive, easier to use and faster than products based on competing NAT technologies. For example, our proprietary Transcription-Mediated Amplification, or TMA, technology offers significant advantages over other available amplification methods, including Polymerase Chain Reaction, or PCR. We believe TMA technology allows our products to offer a higher degree of sensitivity, less risk of contamination and greater ease of use than our competitors’ amplification products. We believe our target capture technology, which is used to extract specific target sequences from a complex clinical specimen, can remove inhibitory substances that interfere with amplification, can be easily automated, and can be performed in an extremely short duration of time. In the past, we have leveraged our core technologies to develop products that have achieved leading positions in new NAT markets, such as blood screening and tuberculosis testing. We plan to continue to use our core NAT technologies, and technologies that we may acquire, as a platform for the development of additional products addressing emerging segments of the NAT market.

      We believe that we are unique in offering our customers a broad portfolio of both non-amplified and amplified NAT assays, as well as multiple instrumentation platforms on which to perform our NAT assays. Our expertise in NAT products has enabled us to develop FDA-approved products for the detection of microorganisms causing infectious diseases. In February 2002, we received FDA approval for our Procleix HIV-1/ HCV assay, which is currently utilized to screen over 80% of the United States donated blood supply for HIV-1 and HCV. Prior to FDA approval, our Procleix HIV-1/ HCV assay was used pursuant to IND protocols. In 2004, we conducted clinical testing in United States blood centers of our WNV assay to detect the virus in freshly donated human blood. Our NAT assays currently are performed on our proprietary luminometers and our semi-automated Direct Tube Sampling, or DTS, and TIGRIS (in the case of our APTIMA Combo 2 and Procleix Ultrio assays) instruments. Our products and technologies are covered by 390 United States and foreign patents, and we proactively pursue an aggressive patent strategy designed to protect both existing products and new innovations.

      We pioneered the development of the NAT market with our introduction of the first FDA-approved probe-based assay in 1985. As of January 31, 2005, our world-class research and development group consisted of more than 225 employees, 92 of whom hold advanced degrees. From our PACE family of products to our amplified APTIMA Combo 2 assay, which can detect both chlamydia infections and gonorrhea in urine samples from symptomatic or asymptomatic patients, our scientists have developed proprietary assays that have brought significant innovation to the market for NAT clinical diagnostics. To complement these products, we have developed and continue to develop instrumentation technologies that enable our customers to increase throughput while improving accuracy in a cost-effective manner. We have developed what we believe to be the world’s first fully automated, integrated, high-throughput, NAT instrument system, known as the TIGRIS instrument. Our current initiatives to expand our position in clinical diagnostics and blood screening while applying our core NAT technologies to cancer detection, genetic testing pharmacogenomics and industrial testing, are consistent with our philosophy of designing innovative products to meet the existing needs of our customers as well as the emerging needs of new markets.

      We believe that we benefit from significant brand name recognition and customer loyalty among laboratories and physicians in the market for NAT assays. We believe our history of technological innovation, quality manufacturing, comprehensive sales capabilities and commitment to customer support has resulted in customer satisfaction and retention. We estimate that greater than 90% of our STD product sales during 2004 were to repeat customers. We believe that our brand name also facilitates market acceptance of our new products, providing us with opportunities for growth. Since 1998, the American Red Cross has used us as its sole source for NAT assays for blood screening, which is an example of our standing in the industry.

      As of January 31, 2005, our direct sales force consisted of approximately 31 representatives and an 18-member technical field support group. We believe that these individuals comprise one of the most knowledgeable and effective sales and support organizations in the molecular diagnostics industry. Our sales representatives have an average of 15 years of overall sales experience, with an average of six years focused on sales of NAT products. We view our long-standing relationships with laboratory customers and the value-added services that our sales force and technical field specialist group offer, including technical product assistance, customer support and new product training, as central to our success in the United States clinical diagnostics market. We complement our sales force with leading international distributors and the direct sales organizations of our collaborative partners.

      Our products, design control and manufacturing processes are regulated by numerous third parties, including the FDA, foreign governments, independent standards auditors and customers. Our team of approximately 99 regulatory, clinical and quality systems professionals has successfully led us through multiple quality and compliance audits. We began production in our blood screening product manufacturing facility in 1999. This facility meets the strict standards set by the FDA’s Center for Biologics Evaluation and Research, or CBER, for the production of blood screening products. In addition, we have obtained ISO 9001 and EN 13485 certification from the TUV, a global leader in independent testing and assessment services. We believe our expertise in regulatory, clinical and quality assurance and our manufacturing facilities enables us to efficiently and effectively design, manufacture and secure approval for new products and technologies that meet the rigorous standards set by governing bodies and our customers.

Our Growth Strategy

      We have successfully created and maintained a leadership position in the NAT testing market. From this strong position, we plan to grow our business through the following strategies:

      We have had a successful track record in identifying new market opportunities and becoming the market leader in a number of NAT testing segments by providing innovative product solutions based on our proprietary technology base. In the past we have utilized our patented technology portfolio, innovation and market development expertise to establish leadership positions in a number of areas, including chlamydia, gonorrhea and tuberculosis testing. Our ability to strategically identify and assume leadership roles in new markets was evidenced by our entrance into the blood screening market. We successfully developed the first FDA-approved NAT assay for HIV-1/ HCV detection, our Procleix HIV-1/ HCV assay, which is currently used to screen over 80% of the United States donated blood supply. Our WNV assay, which is available for use by United States blood centers for investigational clinical testing of the virus in freshly donated human blood, also is currently being used to screen more than 80% of the United States blood supply. We developed the WNV assay for use in conjunction with our TIGRIS instrument to enable high volume IDT in the blood screening market. We received CE mark clearance for the use of the Procleix Ultrio assay in conjunction with our TIGRIS instrument for Europe, which represents the first fully automated blood screening NAT system

cleared for commercial distribution in Europe. We currently are exploring opportunities and expect to develop new products for emerging NAT markets. We developed our first cancer-related product, a TMA-based assay for the detection of chronic myelogenous leukemia, or CML, and commercialized it in Japan. Our license and collaboration agreements with DiagnoCure and Corixa could represent an innovative application of our NAT technology to detect new, highly specific genetic markers for prostate cancer. In the industrial market, we developed a NAT assay for Listeria monocytogenes, a food pathogen, that is used by the dairy industry in Europe, and a NAT assay for mycoplasma that is used by tissue culture facilities to detect contamination of cell lines. We also are evaluating additional product opportunities in genetics, pharmacogenomics, food and industrial testing.

      We will continue to develop instruments that complement our established product lines in clinical diagnostics and blood screening. For example, we have developed and received FDA approval for STD testing on the TIGRIS instrument. The TIGRIS instrument should significantly reduce the time, labor costs, risk of contamination and complexity associated with performing NAT assays and blood screening. We believe that the increased utility of this platform will lead to significant advances in both the clinical diagnostics and blood screening markets. The automation and increased throughput of the TIGRIS instrument will enable blood collection centers to process the large testing volumes necessary to screen each individual unit of donated blood for the presence of life-threatening viruses. In addition to the TIGRIS instrument, we currently are developing other next-generation systems to meet customers’ needs for increased productivity. Ultimately, we believe this approach of providing our customers with the latest generation of systems solutions will allow us to sustain and reinforce our market position and brand recognition.

      We will continue to use a systems approach to product development, which involves combining elements of our core proprietary technologies to create products that best meet our customers’ needs. For example, our APTIMA Combo 2 assay, which was launched in August 2001, integrates over 20 of our proprietary technologies. The Procleix Ultrio assay, which we developed in collaboration with Chiron, adds an assay for HBV to the previously approved Procleix HIV-1/ HCV assay and is designed to detect the presence of all known HIV-1 groups and subtypes and HCV and HBV genotypes in human plasma during the very early stages of infection, when those agents are present but cannot be detected by immunodiagnostic tests. By understanding how our technologies complement one another and by combining reagents in our new products, we expect to capitalize on the substantial product development work that went into some of our prior products. We believe that this approach and our experience in bringing FDA-approved products to market will reduce development cycle times for new products. This, in turn, will help us expand our menu of clinical diagnostic and blood screening products available to be performed on the instruments we place with our customers.

      We historically have supplemented our internal research and development efforts by obtaining licenses to new technologies. To maintain our leadership position in NAT testing, we intend to selectively obtain rights to complementary technologies through licenses and acquisitions. For us to enter emerging NAT markets such as cancer testing, genetics, pharmacogenomics and industrial testing, we may need to obtain rights to new technologies and disease markers, as these markers are discovered and clinically validated by third parties. For example, in 2003, we acquired a majority of the outstanding shares of Molecular Light Technology Limited and its subsidiaries, providing us with a base for operations in Europe. We also signed a license and collaboration agreement with DiagnoCure to develop an innovative urine test to detect the PCA3 gene marker for prostate cancer. In addition, in November 2004, we signed an exclusive option agreement with Qualigen, Inc. to develop a point-of-use NAT testing platform using Qualigen’s FDA-approved FastPack® technology. In December 2004, we entered into a license agreement with AdnaGen AG, or AdnaGen, under which we received an exclusive license to AdnaGen technology that may help increase the accuracy of molecular diagnostic tests for prostate and other cancers. In addition, in December 2004 we entered into a license

agreement with Corixa Corporation pursuant to which we received rights to approximately 50 potential genetic markers in the areas of prostate, ovarian, kidney, lung, colon and other cancers.

      We will pursue collaborative relationships that enable us to implement our strategies, particularly with respect to the development of new products and entry into new markets. We seek to partner with industry leaders who can offer access to intellectual property or who can complement our commercialization capabilities by distributing co-developed products through their sales organizations. For example, our collaboration with Chiron for the blood screening market has allowed us to combine our NAT technology with Chiron’s patent portfolio relating to HCV and to leverage Chiron’s distribution and sales resources.

Our Proprietary NAT Technologies

      We have developed technologies that make NAT assays practical and effective for commercial use, thereby overcoming many of the limitations of previous DNA probe assays that restricted their use to research laboratories. Our products incorporate a combination of patented technologies that have significantly advanced NAT assays, making them more specific, more sensitive, easier to use and faster than products based on competing technologies. These technologies include the following:

      Together, these technologies have allowed us to commercialize new diagnostic tools that provide results in hours instead of days or weeks. This has led to quicker time to result and diagnosis, thereby making a difference in patient treatment and outcome.

      Targeting Ribosomal RNA. We have developed and patented a technique that detects and identifies organisms by targeting their rRNA. The major benefits in targeting rRNA include the following:

      Target Capture/ Nucleic Acid Extraction Technology. Detection of target organisms that are present in small numbers in a large-volume clinical sample requires that target organisms be concentrated to a detectable level. One way to accomplish this is to isolate the particular nucleic acid of interest by binding it to a solid support, which allows the support, with the target bound to it, to be removed from the original sample. We refer to such techniques as “target capture.”

      We have developed target capture techniques to immobilize nucleic acids on magnetic beads by the use of a “capture probe” that attaches to the bead and to the target nucleic acid. We use a magnetic separation device to concentrate the target by drawing the magnetic beads to the sides of the sample tube, while the remainder of the sample is washed away and removed from the reaction tube. We use these techniques in conjunction with our patented amplification methods in our current generation of amplified assays. When used in conjunction with our patented amplification methods, target capture techniques concentrate the target organisms and also remove materials in the sample that might otherwise interfere with amplification.

      Target capture offers the following benefits:

      Transcription-Mediated Amplification. The goal of amplification technologies is to produce millions of copies of the target nucleic acids that are present in samples in small numbers, which can then be detected using DNA probes. Amplification technologies can yield results in only a few hours versus the several days or weeks required for traditional culture methods.

      Some amplification-based NAT assays for routine clinical laboratory use a technology known as Polymerase Chain Reaction, or PCR, to amplify DNA. With additional steps, PCR also can be used to amplify RNA. Since most organisms contain only one or two copies of DNA, there are fewer target molecules to initiate amplification when DNA targets are used, and sometimes amplification does not begin at all. In such cases, assays using PCR can fail to produce results. PCR also uses repeated heating and cooling steps requiring complex and expensive thermocyclers. Because PCR produces large amounts of DNA, which is a stable molecule, there is an increased risk of cross-contamination from one PCR assay to another, potentially leading to a high number of false positive results.

      Our patented TMA technology is designed to overcome the many problems faced with other target amplification methods such as PCR. TMA is a transcription-based amplification system that uses two different enzymes to drive the process. The first enzyme is a reverse transcriptase that creates a double-stranded DNA copy from an RNA or DNA template. The second enzyme, an RNA polymerase, makes thousands of copies of the complementary RNA sequence, known as the “RNA amplicon,” from the double-stranded DNA template. Each RNA amplicon serves as a new target for the reverse transcriptase and the process repeats automatically, resulting in an exponential amplification of the original target that produces over a billion copies of amplicon in less than 30 minutes.

      TMA offers the following benefits:

      Chemiluminescent Technologies and Hybridization Protection Assay. Our current DNA probes use chemiluminescent acridinium esters, or AE molecules, that generate light as a label for detection. The AE technology is much more sensitive than fluorescence or absorbance techniques used by our competitors. When AE-labeled DNA probes are mixed with chemical activators, a light signal is produced. Many DNA probe assays and immunoassays use enzyme or radioisotope labels. Assays that use enzyme-labeled DNA probes are complex and can be inhibited by contaminants present in the sample. Radioisotopes offer a strong signal but are difficult to handle, difficult to dispose of and dangerous because they give off harmful radiation.

      We have simplified testing, further increased test sensitivity and specificity and increased convenience with our patented Hybridization Protection Assay, or HPA, technology. With HPA, we introduced the first NAT assay that did not require the cumbersome wash steps needed with conventional probe tests and immunoassays. In the HPA process, the AE molecule is protected within the double-stranded helix that is formed when the probe binds to its specific target. Prior to activating the AE molecule, known as “lighting off,” a chemical is added that destroys the AE molecule on any unbound probes, leaving the label on the bound probes unaffected. When the “light off” reagent is added to the specimen tube, only the label attached to the hybridized probe produces a signal indicating the target organism’s DNA or RNA is present. All of these steps occur in a single tube or microtiter plate and without any wash steps.

      Our Dual Kinetic Assay, or DKA, technology uses two types of AE molecules  — one that “flashes” and another one that “glows.” By using DKA, we have created NAT assays that can detect two separate targets simultaneously.

      APTIMA Technology. We have combined target capture, TMA and DKA together into an integrated family of technologies known as APTIMA. APTIMA assays represent the latest generation of nucleic acid amplification testing, simplifying sample handling, minimizing contamination and allowing for the simultaneous detection of two analytes in one tube. APTIMA assays offer modern clinical laboratories the significant advantage of carrying out all steps of the assay in a single tube. APTIMA thereby increases assay performance, reduces laboratory costs and improves laboratory efficiency. APTIMA technology combined with automation such as the TIGRIS instrument supports true walk-away automation, allowing hundreds of specimens to be tested by an individual technician in a single run.

Our Products

      We have applied our core technologies to develop multiple product lines, all of which utilize our expertise in NAT probes, sample collection and processing. We categorize our products into clinical diagnostic products and blood screening products.

     Clinical Diagnostic Products.

      Within our clinical diagnostic product group, we have developed products for the detection of non-viral and viral microorganisms.

      Clinical Diagnostic Products for the Detection of Non-Viral Microorganisms. We have developed FDA-approved amplified and non-amplified NAT assays that detect non-viral microorganisms. We have established a market-leading position in non-amplified NAT assays, particularly with respect to assays for the detection of chlamydia and gonorrhea, and we have obtained FDA approval for an amplified STD test to compete in that market segment. Our principal products for the detection of non-viral microorganisms include our non-amplified AccuProbe and non-amplified PACE family of products and our amplified Mycobacterium Tuberculosis Direct Test and amplified APTIMA Combo 2 product, as set forth below.

Clinical Diagnostic Products for the Detection of Non-Viral Microorganisms