bioMérieux - Business Review for the Three Months and Full Year Ended December 31, 2014

Regulatory News:

bioMérieux (Paris:BIM), a world leader in the field of in vitro diagnostics, today released its business review for fourth-quarter and full-year 2014.

SALES

Consolidated sales rose by 8.7% year-on-year at constant exchange rates in 2014, including €78 million in sales from BioFire as from January 16. Organic growth (i.e. at constant exchange rates and scope of consolidation) came to 3.8% for the year. The recent appreciation of the U.S. dollar against the euro helped to limit the negative currency effect to €28 million, or 180 basis points of growth. In this environment, sales for the year amounted to €1,698 million, up a reported 7% from €1,588 million in 2013.

⁽¹⁾ BioFire has been consolidated since its acquisition closed on January 16, 2014

In the fourth quarter, sales amounted to €506 million, reflecting a sharp acceleration from the prior quarter and year-on-year organic growth of 4.5%. They were lifted by the solid momentum in Latin America (up 18%) and the Asia-Pacific region (up 8%), particularly in clinical applications.

During the year, the Company leveraged all the benefits of its vast geographic footprint. Geographic diversification is an important strategic building block that enables bioMérieux to seize growth opportunities in its various regions where it operates and gives its business model resilience. In 2014, sales rose sharply in the Americas and remained satisfactory in Western Europe. These two geographies, which account for 74% of consolidated sales, therefore more than offset the weak sales in China (8% of the consolidated total, down slightly year-on-year) and the slowdown observed starting in the second half in the Eastern Europe-Middle East-Africa area. Furthermore, the performance in China continued to dampen the pace of organic growth in emerging markets, which stood at just 6% year-on-year. In all, these markets accounted for 29% of consolidated sales for the year. At constant exchange rates and scope of consolidation (like-for-like), 2014 sales may be analyzed by region as follows:

⁽¹⁾ Including the Middle East and Africa
⁽²⁾ Including €76 million in BioFire sales

• In the Europe-Middle East-Africa region (48% of the consolidated total), sales improved by 2.2% year-on-year, marking a clear acceleration from 2013.
  • Sales rose by 2% in Western Europe (40% of the consolidated total), with gains in every country except the Benelux region and the Czech Republic. In particular, tangible improvements were reported in Germany (up 5%), the United Kingdom (up 6%) and Switzerland (up 5%). As well, the Southern Europe geography saw around a 3% year-on-year increase. Lastly, sales remained stable in France in an uncertain market.
    In clinical applications, growth was driven by instrument sales in microbiology, VIDAS^® immunoassays and molecular biology. Industrial application sales varied by country and were penalized by weak equipment sales.
  • As previously announced, geopolitical tensions weighed on demand in the Eastern Europe-Middle East-Africa area in the third and fourth quarters, with the result that overall growth ended the year at 3%.
• In the newly created Americas region, which accounts for more than one-third of consolidated sales, full-year sales were up by nearly 7% in a favorable market environment.
  • In North America (26% of the consolidated total), sales grew by nearly 5% year-on-year for the second year in a row. In particular, in the United States, bioMérieux, Inc. reported growth of 5.2% for the year.
    In clinical applications, sales were driven by VIDAS^® reagents, which benefited in particular from the continued success of VIDAS^® B.R.A.H.M.S PCT^TM in emergency care units. In addition, in microbiology, the Company installed significant numbers of VITEK^® MS instruments, the only mass spectrometry system approved by the U.S. Food and Drug Administration (FDA) for the routine identification of a complete menu of disease-causing microorganisms. In industrial applications, reagent sales showed a solid increase.
  • In Latin America (8% of the consolidated total), sales grew at more than 12% year-on-year. All the countries with direct distribution enjoyed high growth rates with, in particular, 9% in Brazil, 10% in Mexico and 12% in Columbia.
    Sales of microbiology reagents and VIDAS^® tests fueled growth in clinical applications. With a 14% growth rate, industrial applications expanded rapidly in this geographic area.
• In the Asia-Pacific region (18% of the consolidated total), sales rose by more than 3% year-on-year. Sales in India continued their rapid ascent, with a 20% gain for the year. In China, clinical application sales turned upward in the second half, showing in particular a nearly 9% increase in the fourth quarter. Nevertheless, full-year performance was impacted by weak industrial application sales, resulting in a slight 1% year-on-year decline. The Company continued to strengthen its local organization and distribution network, with the intention of gradually being able to return to sustainable growth in this strategic country by 2015.
  In the region as a whole, reagent sales for clinical applications were robust across almost every range, with the main exception of microplates, where competitive pressure remains high. In particular, the VIDAS^® reagents gained nearly 20% over the year. In industrial applications, slower sales in China continued to weigh on business.
  At constant exchange rates and scope of consolidation (like-for-like), 2014 sales may be analyzed by application as follows:

⁽¹⁾ Including VIDAS^®, up 10%
⁽²⁾ Including €66 million in BioFire Diagnostics sales

• In the fourth quarter, sales of clinical applications rose 5.1% to end the year up 4.6%.
  • Microbiology sales increased by 2.8% over the year, with a gain of more than 4% in the third and fourth quarters as production rates at the Durham plant improved (see the related paragraph under "Fourth-quarter operating highlights”). The automated ID/AST range, which includes the VITEK^® 2 system and the more recent VITEK^® MS mass spectrometry solution for fast bacterial identification, delivered a solid performance for the year. In this favorable environment, the Company will i) continue to introduce its new VIRTUO^TM automated blood culture system, which was CE-marked in July; ii) launch its new FAN Plus blood culture bottles using the patented adsorbent polymeric beads (APB) technology in the United States; and iii) start marketing its new "Lab Efficiency” solution combining its own platforms and Copan systems (see the paragraph concerning the strategic partnership with Copan under "Fourth-quarter operating highlights”).
  • In immunoassays, VIDAS^® sales grew by 10% over the year, reflecting i) the product range effect stemming from the recent launch of VIDAS^® 3 and the marketing of new parameters (including the VIDAS^® 25 OH Vitamin D Total test) and ii) the sustained progress made in strategically repositioning the system.
    At a time of market consolidation and declining sales of routine tests in developed countries, demand remained robust for certain high medical value parameters, such as VIDAS^® B.R.A.H.M.S PCT^TM, a test that measures procalcitonin (PCT), a biomarker recognized as the gold standard for the early detection of sepsis in critically ill patients. The test helps doctors to make an early determination whether an infection is bacterial or viral and provides information on the severity of a patient’s condition for appropriate treatment. In the United States, it is used on ICU admission and, combined with other laboratory tests and clinical assessments, aids in risk assessment of patients for progression to severe sepsis and septic shock. CE-marked and FDA-cleared in 2007, VIDAS^® B.R.A.H.M.S PCT^TM has become bioMérieux’s best-selling parameter, with sharply rising sales reaching €103 million in 2014. The Company is preparing for a possible increase in competition as from 2016, working to broaden the marker’s diagnostic indications and enhance its menu of high medical value VIDAS^® tests for emergency applications (see the paragraph concerning the agreement with Astute Medical under "Fourth-quarter operating highlights”).
    In addition, VIDAS^® continued to enjoy solid growth in emerging markets. In India, for example, VIDAS^® sales rose by 34% over the year, even though VIDAS^® is already a leader in this country.
  • Molecular biology delivered a 7.5% year-on-year increase in organic sales, thanks to fast growth in the ARGENE^® line. With the consolidation of BioFire since January 16, 2014, reported growth stood at more than 90% for the year.
• Sales of industrial applications, which represent 19% of the consolidated total, edged up by around 1% year-on-year, held back by weak sales in China, particularly in instruments. In all of the other regions, sales rose during the year, vigorously in emerging markets with the main exception of China, and more unevenly in mature markets. To sustainably anchor its leadership in this strategic field, bioMérieux is capitalizing on its more than 20 years of expertise, its extensive distribution network and its product line-up, which is currently the broadest in the market and is being enhanced (see the paragraph concerning the acquisition of CEERAM, specialized in molecular biology solutions for the agri-foods industry, under "Fourth-quarter operating highlights”).
• Sales of reagents and services, which represented 88.8% of the consolidated total, rose by more than 5% on an organic basis.

OTHER INFORMATION

• Installed base
  The installed base at December 31, 2014 represented approximately 79,500 instruments, including in particular 29,000 units of the VIDAS^® range in clinical applications and 1,400 FilmArray^® systems. It rose by 4,800 new systems during the year, of which 700 FilmArray^® units.
• Consolidated income statement
  As expected, the 2014 income statement should reflect the Company’s development priorities, notably in the areas of competitiveness, innovation, geographic expansion and improvement of customer-service levels. In addition, following the signature of the automated microbiology agreement with Copan, it will likely be impacted by additional operating expense, corresponding in particular to allocations to provisions for the depreciation of some equipment. On the upside, earnings should benefit from the strict operating cost discipline implemented over the year. Under these conditions, contributive operating income before non-recurring items is expected to be in line with the target set last March.
• Net debt
  At December 31, 2014, net debt stood at €249 million after payment in January 2014 of the BioFire acquisition price in an amount of €353 million. A year earlier, the Company had a net cash position of €25 million.
  The Company has €300 million in seven-year bonds, placed with institutional investors in October 2013. Lastly, it has a €350-million syndicated line of credit whose expiration date was extended during the first half to May 20, 2019.
• Human resources
  As of December 2014, the Company had 8,935 full-time-equivalent employees and agency workers, including 655 BioFire employees. Based on the same method of calculation and excluding BioFire, there were 8,145 full-time-equivalent employees and agency workers at December 31, 2013.

FOURTH-QUARTER OPERATING HIGHLIGHTS

• The Durham, NC site in the United States
  The Durham plant, which is dedicated to the production of BacT/ALERT^® reagents, has returned to a controlled, reliable state of quality and manufacturing, while moving into a positive inventory situation. Standard operating and quality control procedures have been revamped and all production lines are running on a 24 hour, 7 day a week schedule, thereby substantially increasing the reliability of the site’s production output. The Durham plant resources have been sustainably reinforced with more than 90 new full-time employees hired in the Quality and Operations team. In July 2014, a new bottle production line, representing a capital investment of about $60 million, broke ground in order to further expand production capacities to satisfy the anticipated growing customer demand in the years to come.
  In addition, the Durham team is continuing to dedicate its efforts to complete the deployment of the action plan following the FDA inspection and its warning letter.
• FDA warning letter concerning the St. Louis, MO plant in the United States
  On October 13, 2014, the Company received a warning letter from the FDA relating to an inspection in July 2014 of its St. Louis, MO site that is dedicated to the production of VITEK^® cards and certain microbiology instruments. The letter noted nine points related to the site’s quality system management. The Company answered to the FDA warning letter on time and proposed an action plan. The St. Louis plant is working at normal capacity and all the products made at the St. Louis site respect final acceptance release criteria.
• Pursued integration of BioFire and its successful sales performance
  Based on 11.5 months of consolidation over the year (from January 16 to December 31), BioFire contributed sales of €78 million, reported in "change in the scope of consolidation”. During the year, sales were increased by an estimated €5 million by the combined impact of the relatively severe seasonal flu outbreak in December, the enterovirus D68 (EV-D68) epidemic in the third quarter and the fast-track EUA received by the BioThreat-E test^TM to detect the Ebola virus. As a result, BioFire reported more than 60% organic growth in sales at December end, led by the success of the FilmArray^® respiratory panel, particularly in the United States.
  In addition, the legal protest action initiated by a competing company regarding the award of the $240 million Next Generation Diagnostic System (NGDS) Technology Development contract to BioFire Defense by the U.S. Department of Defense (DoD) has been lifted in the final quarter and the related work started again.
  During the quarter, the FilmArray^® clinical Ebola virus detection test (BioThreat-E test™) received Emergency Use Authorization (EUA) from the FDA. It is available to high and moderate complexity clinical laboratories in the United States for the duration of the declaration that circumstances exist justifying the authorization of the related emergency use.
  Lastly, BioFire filed for FDA clearance of the FilmArray^® 2.0 system, whose main feature is its higher throughput, which allows laboratories to process up to 175 samples in a day within a small footprint. The new version accommodates up to eight FilmArray^® 2.0 units operated by a single computer. The system is also capable of connecting to Laboratory Information Systems.
• Commercial offer
  In 2014, bioMérieux enhanced its commercial offer by bringing 13 new products to market. In particular, two innovative clinical microbiology reagents were launched in the fourth quarter:
  • ChromID^® CPS^® Elite for the isolation, enumeration and direct or presumed identification of organisms responsible for urinary infections. The product is part of a new bioMérieux line of chromogenic media that deliver a wide range of improvements, notably including more reliable differentiation of pathogens, faster and easier results reading and enhanced sensitivity and specificity parameters for specific bacteria.
  • The RAPIDEC^® CARBA NP test to rapidly and cost-effectively confirm or detect carbapenemases in patients suspected of been infected with carbapenemase-producing bacteria, which are often multi-drug resistant.

In addition, during the fourth quarter, bioMérieux renewed and expanded its distribution agreement with Hain Lifescience, a company specializing in molecular diagnostics. Under this 10-year agreement, bioMérieux will be the exclusive distributor of Hain’s current mycobacteria molecular tests in most countries. These tests enable the rapid and accurate diagnosis of tuberculosis (TB), one of the world’s deadliest diseases. They also provide rapid results of antibiotic resistance in TB, a key tool in achieving tuberculosis control. The WHO estimates that in 2013 nine million people developed TB and 1.5 million died from the disease. Perfectly adapted to emerging countries’ needs, these tests will be commercialized to all customer types, and especially to global health organizations.

• Partnership and acquisition agreements signed in the fourth quarter
  • Strategic alliance with Copan to automate clinical microbiology laboratories
    bioMérieux and Copan, a leading manufacturer of innovative pre-analytic solutions, have signed a strategic partnership in clinical microbiology laboratory automation. Under the terms of the agreement, Copan has granted bioMérieux distribution rights for its automated platforms, including the WASP^® Walk-Away Specimen Processor and the WASPLab^TM solutions, which automate microbiology laboratory tasks and provide digital imaging and analysis. The agreement allows bioMérieux to speed up deployment of its "Lab Efficiency” vision for the automation and enhanced operational efficiency of clinical microbiology labs. In this field, the two companies also plan to collaborate in particular for the development of innovative clinical microbiology diagnostic solutions.
  • Agreement with Illumina in Next-Generation Sequencing (NGS)
    bioMérieux and Illumina, a world leader in genomics, have signed an exclusive agreement to launch a Next-Generation Sequencing (NGS) solution for epidemiological monitoring of bacterial infections for service labs. The collaboration is a first step that will enable bioMérieux to identify opportunities and fields of application that sequencing can bring to infectious disease diagnostics.
  • Agreement with Astute Medical, Inc. in high medical value VIDAS^® immunoassays (see today’s press release)
    bioMérieux and Astute Medical, a company dedicated to improving the diagnosis of high-risk medical conditions and diseases through the identification and validation of protein biomarkers, have signed a global, semi-exclusive agreement regarding the development of a test for the early risk assessment of acute kidney injury (AKI). This innovative test, known as the NEPHROCHECK^® Test, detects the presence of two biomarkers. Through this worldwide agreement, Astute Medical grants bioMérieux a license to develop, produce and market the NEPHROCHECK^® Test for use on its immunoassay system range VIDAS^®, mini VIDAS^® and VIDAS^® 3. A major public health threat, AKI is common, costly and potentially fatal in hospitalized patients.
  • Acquisition of CEERAM, specialized in molecular biology solutions for agri-foods applications (see appendix 2 – About CEERAM)
    In late December 2014, bioMérieux acquired all outstanding shares of France-based CEERAM, thereby entering the market for food-related molecular virology tests and consolidating its position as a pioneer in industrial applications.
    CEERAM reported €1.3 million in sales in 2013.
  • Agreement with Novartis in personalized medicine
    In October 2014, bioMérieux signed an agreement with Novartis to validate and potentially commercialize the bioMérieux assay, THxID™-BRAF, as a companion diagnostic for Novartis compounds currently in phase III development for patients with BRAF+ melanoma.
• Creation of the 42^th marketing subsidiary, in Serbia
  In December, bioMérieux opened its 42^nd marketing subsidiary, in Belgrade, Serbia, thus strengthening its presence in Central Europe. The new unit is wholly owned by bioMérieux SA.

2015 ORGANIC SALES GROWTH OBJECTIVE

2015 will probably be marked by a persistently tight economic environment, varying by geography.

As a result, bioMérieux has set an organic growth objective of between 4.5% and 6.5% for the year, at constant exchange rates and scope of consolidation.

In particular, the Company expects BioFire to expand quickly in the United States, thereby playing its role as a driver of faster growth. BioFire’s sales should be led both by the start-up of sales of the gastrointestinal panel and the continued success of the FilmArray^® respiratory panel. Sales of BioFire Defense and sales of FilmArray^®, assuming a flu epidemic of average intensity, should add around 150 basis points to consolidated organic growth for the year.

In addition, bioMérieux will continue to decentralize its organization in its three key regions, which should enable it to seize growth opportunities in its various markets. The Company will also seek to return to sustainable growth in industrial applications.

In line with its strategic roadmap and building on the milestones reached in 2014, the Company will continue in 2015 to pursue its strategy of innovation and geographic expansion, its two major growth drivers in the years ahead. At the same time, it will strengthen its quality control and production organizations. In addition, using its structural capacity for strong cash generation, it will increase its industrial capital expenditure. To meet the anticipated rapid growth in some of its flagship product lines, it will invest in the related production sites, in particular in Durham, NC in the United States (as explained above) and in Marcy L’Etoile in France, where a new VIDAS^® strip packaging line will be built and a new building will be constructed to extend the site. The Company will also undertake construction of a new facility in Salt Lake City, UT to meet the strong demand for FilmArray^® generated by its success in the market and the start of its commercialization by bioMérieux sales forces in the United States.

INVESTOR CALENDAR
2014 financial results: March 11, 2015, before start of trading

The above forward-looking statements are based, entirely or partially, on assessments or judgments that may change or be modified, due to uncertainties and risks related to the Company's economic, financial, regulatory and competitive environment, notably those described in the 2013 Registration Document. Accordingly, the Company cannot give any assurance nor make any representation as to whether the objectives will be met. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange.

ABOUT BIOMERIEUX
Pioneering Diagnostics
A world leader in the field of in vitro diagnostics for 50 years, bioMérieux is present in more than 150 countries through 42 subsidiaries and a large network of distributors. In 2014, revenues reached €1,698 million with 88% of sales outside of France.
bioMérieux provides diagnostic solutions (reagents, instruments, software) which determine the source of disease and contamination to improve patient health and ensure consumer safety. Its products are used for diagnosing infectious diseases and providing high medical value results for cancer screening and monitoring and cardiovascular emergencies. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products.
bioMérieux is listed on the NYSE Euronext Paris market (Symbol: BIM – ISIN: FR0010096479).
Corporate website: www.biomerieux.com. Investor website: www.biomerieux-finance.com.

Appendix 1: Quarterly Sales Data

⁽¹⁾ Including the Middle East and Africa
⁽²⁾ R&D-related revenue

⁽¹⁾ Including the Middle East and Africa
⁽²⁾ R&D-related revenue
⁽³⁾ L-f-L: At constant exchange rates and scope of consolidation

Appendix 2: About CEERAM

Founded in 2005, CEERAM is an innovative molecular virology laboratory that serves the agri-foods and environmental industries with a comprehensive range of internally-developed molecular biology reagents for the detection and identification of pathogenic viruses (particularly noroviruses and the hepatitis A and E viruses). A very frequent source of food contamination, particularly in fruit, vegetables and shellfish, noroviruses are responsible for most of world’s viral gastroenteritis outbreaks. As a result, their fast, accurate detection has become a critical issue for the agri-foods industry, especially in the event of public health crises. CEERAM test kits are compatible with bioMérieux’s easyMAG^® extraction system and use RT-PCR technology. CEERAM’s portfolio of virus detection assays will expand the already broad range of bioMérieux agri-food diagnostic solutions, which until now have been focused on the detection of food bacteria.
Based in Nantes, in Western France, CEERAM has nine employees and is equipped with facilities certified to ISO-9001 and ISO-13485 standards.