<PAGE>   1
                                                                   EXHIBIT 10.10

*CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC
INFORMATION HAS BEEN FILED SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


                                                Fisher Scientific Company L.L.C.
                                                            2000 Park Lane Drive
                                                      Pittsburgh, PA  15275-1126

                                                               Tel: 412-490-8300
                                                               Fax: 412-490-8990

[FISHER SCIENTIFIC LOGO]




January 10, 2000

CEPHEID CORPORATION
1190 Borregas Avenue
Sunnyvale, CA 94089-1302
Attn: Thomas L. Gutshall, Chairman & CEO

Dear Mr. Gutshall:

This letter is to confirm discussions between representatives of both firms
concerning the Smart Cycler(TM) System, accessories, and reaction tubes
developed by and made by or for Cepheid ("SUPPLIER") and the terms of our
agreement for Fisher Scientific Company L.L.C. ("FISHER") to distribute those
products.

1.    Product Line. The "Products" shall include the Smart Cycler(TM) System
described in Exhibit A, the accessories listed in Exhibit A, and the reaction
tubes described in Exhibit A. The "Products" shall further include additional,
upgraded and improved Smart Cycler(TM) Systems, accessories and reaction tubes
introduced by Supplier as a replacement for existing Products and intended for
sale in the life science research market (the "Field"). Additional thermal
cyclers, accessories, and reaction tubes offered by Supplier shall become
"Products" only upon agreement of the parties. All Products shall conform to
SUPPLIER's specifications as have been disclosed to FISHER. All outer shipping
cartons shall conform to applicable Department of Transportation specifications.

2.    Distribution Rights. SUPPLIER grants to FISHER the right to distribute the
Products in the United States (including Puerto Rico) into the life science
research market (the "Field"). Such right shall be exclusive, except for: (a)
SUPPLIER's reserved right to sell directly to the end user customers listed in
Exhibit B and (b) SUPPLIER's right to make OEM sales of thermal cyclers,
accessories and/or reaction tubes similar to Products which SUPPLIER may sell
and ship to a firm for resale under that firm's label. In addition, SUPPLIER
grants to FISHER rights to distribute the PRODUCTS in the countries outside of
the United States (including Puerto Rico) listed in Addendum 1, according to the
terms outlined in Addendum 1.

2a.   Definition of Field. Rights are granted by the SUPPLIER to FISHER for
distribution into the Field of life science research. Specifically excluded from
the Field are human and veterinary diagnostics (including applications subject
to regulatory labeling including "For Investigational Use Only" or "For Research

<PAGE>   2

Use Only"), environmental testing, quality assurance and control testing,
identity and forensic testing, and testing for biothreat agents.

2b.   Exclusive Supplier. While the exclusive distribution rights under
Paragraph 2 remain in force, SUPPLIER will be the exclusive supplier to FISHER
of systems capable of performing thermal cycling with real-time optical
detection.

2c.   Sales Targets; Loss of Exclusivity. The parties have set minimum worldwide
sales targets for FISHER, in terms of units of Smart Cycler(TM) Systems (units
defined as the total number of 16-site Smart Cycler(TM) processing blocks,
either as part of a Starter System or as Add-On Blocks). Such sales targets
shall not represent commitments to purchase; but if FISHER fails to achieve a
sales target, SUPPLIER may, by written notice to FISHER terminate the
exclusivity of FISHER's distribution rights under Paragraph 2. Such written
notice shall be given within 90 days after the end of the sales target period
and shall become effective 30 days after FISHER's receipt of the notice. Such
termination of exclusivity shall be SUPPLIER's sole remedy for FISHER's failure
to achieve sales targets. The sales targets are as follows:

<TABLE>
<CAPTION>
               Year 1                       Year 2
               ------                       ------
               <S>                          <C>
               [**] units                   [**] units
</TABLE>

FISHER shall provide SUPPLIER within 30 days after the first of each March,
June, September, and December a true and accurate accounting report of Products
(including units sold and selling price) sold on a country-by-country basis
during the preceding 3 months. In addition, FISHER shall provide to SUPPLIER on
a monthly basis an updated customer and contact list.

FISHER shall also provide SUPPLIER with one year (comprised of four quarters)
worldwide forecasts that will be updated on a quarterly basis and will include
projections for each of the upcoming three months. While the forecast will not
be binding in total, the projections provided for the upcoming quarter will
represent a purchase commitment.

3.    Product Price. The Product list prices and transfer prices to Fisher shall
be as listed in Exhibit A. These prices shall be firm through December 31, 2000.
Thereafter, prices may be increased once annually to be effective January 1 of
the upcoming calendar year by negotiation between the parties, with SUPPLIER
giving FISHER no less than one hundred twenty (120) days prior written notice of
proposed new prices. In no event shall the annual price increase for a Product
exceed the percentage price increase in the Producer Price Increase (excluding
food and energy) published by the U.S. Department of Commerce; however, any
price increases directly resulting from an increase in the price of the computer
as purchased by the SUPPLIER, will not be subject to this price increase limit.


<PAGE>   3

Each shipment shall be billed at the price in effect at the time of order
placement. Notice of price changes shall be sent to:

                      MARKETING SERVICES DEPARTMENT
                      Fisher Scientific
                      2000 Park Lane
                      Pittsburgh, Pennsylvania  15275

        With a copy to:      Central Purchasing

3a.   Payment Terms. Payment terms shall be 1% ten, net forty-five days from
receipt of valid invoice.

4.    Warranty. SUPPLIER shall warrant all Smart Cycler(TM) System Products for
12 months from delivery to FISHER's customer and all accessories (except the
computer) for 12 months from delivery to FISHER's customer. The warranty
provided for the computer by the computer manufacturer will be transferred to
FISHER's customer. SUPPLIER shall provide or reimburse FISHER's Fisher Service
Division for parts used in making repairs during the warranty period and shall
make parts available after the warranty period to such Fisher Service Division
at a discount of [**] from Supplier's list price for such parts. SUPPLIER shall
reimburse FISHER for travel and labor reasonably incurred for repairs during the
warranty period at terms negotiated from time to time between SUPPLIER and such
Fisher Service Division, though the hourly labor rate for support received from
the US Fisher Service Division through December 31, 2000 will be $[**].

SUPPLIER also warrants that the Smart Cycler(TM) System to be distributed by
FISHER in the Field shall be an "authorized thermal cycler" under the terms of
the Thermal Cycling Authorization Program administered by PE Biosystems, a
division of PE Corporation.

5.    Shipping. At the time of initial launch and for three months following
launch, SUPPLIER shall ship all initial customer orders of Smart Cycler(TM)
System Products (systems, accessories, and reaction tubes) directly to FISHER's
customers, FOB Sunnyvale, CA, freight charged to FISHER, within 30 days of order
receipt. Also, at the time of initial launch and for three months following
initial launch, SUPPLIER shall ship accessories and reaction tube Products FOB
Sunnyvale, CA to FISHER's distribution centers (freight collect) within 14 days
of order receipt, in order to fulfill customer re-orders received during this
time period. Beginning three months from initial launch, SUPPLIER will ship all
Smart Cycler(TM) System Products (systems, accessories and reaction tubes) FOB
Sunnyvale, CA to FISHER's distribution center in Santa Clara, CA (freight
collect), in order to fulfill all customer orders and re-orders. SUPPLIER shall
follow FISHER routing guide in the shipment of Products.


<PAGE>   4

6.    Stocking Levels. SUPPLIER shall maintain sufficient inventory of Products
to assure its ability to fill emergency direct shipment orders for FISHER's
customers, including, but not limited to, accessories and reaction tube
Products.

7.    Marketing support. SUPPLIER and FISHER shall each provide Marketing
Support, as described in Exhibit C (for U.S. distribution) and Addendum 1 (for
ex-U.S. distribution). There will be single worldwide contact point within
FISHER for the coordination of transmission of forecasts to SUPPLIER and for
marketing support activities between SUPPLIER and FISHER.

8.    Term. The term of this Agreement shall be from the date of mutual
execution of this Letter Agreement and extending for three years from the date
of initial product launch. Thereafter, the Agreement shall remain in force for
successive six month periods, unless either party gives written notice of
non-renewal to the other at least sixty (60) days prior to the current
expiration date.

9.    Termination. In the event of breach, the non-breaching party shall give
the breaching party (30) days written notice of breach. If the breach is not
cured within the thirty (30) day notice period, the non-breaching party may, at
its sole discretion, terminate the agreement.

10.   Continuing Guaranty. SUPPLIER shall execute and abide by the terms of
DISTRIBUTOR's Continuing Guaranty, a copy of which is attached hereto as Exhibit
D and incorporated herein by reference. The terms and provisions of the
Continuing Guaranty shall survive the termination of this Agreement.

11.   Amendments. Any terms or conditions of SUPPLIER's standard forms or
otherwise introduced by SUPPLIER shall not be binding unless agreed to in
writing by FISHER. Any amendment to this Agreement shall not be effective unless
in writing and signed by an authorized representative of SUPPLIER and of FISHER.

12.   Public Announcements. SUPPLIER shall not issue or cause to be issued any
press release or public announcement or otherwise disclose the existence of


<PAGE>   5

this Agreement or the transactions contemplated hereby except as and to the
extent that FISHER and its parent jointly agree, in writing.

Please signify your acceptance of this Agreement by signing below and returning
one original to Jim Mortimer.

                                                   Yours truly,


                                                   ------------------------
                                                   J. Bradley Mahood
                                                   Vice President
                                                   Strategic Sourcing

Agreed And Accepted:

CEPHEID CORPORATION



By:  /s/ THOMAS L. GUTSHALL
   ---------------------------------

Name: Thomas L. Gutshall

Title: Chairman & CEO

   1-10-00
------------------------------------
Date

Exhibits       A - Products and Prices
               B - End User Customers Excluded From Exclusivity Provision
               C - Marketing Support
               D - Continuing Guarantee
Addendum       1  - List of Fisher International Affiliates




<PAGE>   6
                                    EXHIBIT A

SMART CYCLER(TM) SYSTEM
  (see attached flyer for description and specifications)

<TABLE>
<CAPTION>
Part #         Description                                 List Price**     Fisher Price
------         -----------                                 ------------     ------------
<S>            <C>                                          <C>            <C>
SC1000N1-1     Smart Cycler(TM) Starter System              [**]           [**] of List
               (includes one 16-site processing
                block, accessory pack*, and
                desk-top computer)

SC1000N3-1     Smart Cycler(TM) Processing Block            [**]           [**] of List
               (one 16-site processing block and
                USB interface cable)
</TABLE>

* Accessory pack includes 1 mini-centrifuge, four reaction tube racks, one
  cooling block, software, users manual.

ACCESSORIES:
-----------
<TABLE>
<CAPTION>
Part #         Description                        List Price**        Fisher Price
------         -----------                        ------------        ------------
<S>            <C>                                <C>                 <C>
SCCENT         Mini-Centrifuge                     [**]               [**] of List

SCRACKS        Tube Racks (pack of 4)              [**]               [**] of List

SCBLOCK        Cooling Block                       [**]               [**] of List
</TABLE>

REACTION TUBES:
--------------
<TABLE>
<CAPTION>

Part #         Description                                    List Price**         Fisher Price
------         -----------                                    ------------         ------------
<S>            <C>                                             <C>                 <C>

900-0003       1 Bag of  25 (greek mu)L Smart Cycler(TM)           [**]             [**] of List
               Reaction Tubes (50 tubes/bag)

900-0004       1 Bag of 100 (greek mu)L Smart Cycler(TM)           [**]             [**] of List
               Reaction Tubes (50 tubes/bag)

SCT25          1 Carton of 25 (greek mu)L Smart Cycler(TM)         [**]             [**] of List Reaction
               Tubes (20 bags of 50 tubes ea)

SCT100         1 Carton of 100 (greek mu)L Smart Cycler(TM)        [**]             [**] of List Reaction
               Tubes (20 bags of 50 tubes ea)
</TABLE>

** List prices subject to change by no more than +/- 10% by the time of launch
***List prices subject to change by no more than +/- 15% by the time of launch

<PAGE>   7
                                    EXHIBIT B

U.S. End User Customers Excluded From The Exclusivity Provisions Of Paragraph 2
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NAME:                                                                      ADDRESS:
----                                                                       -------
<S>                                                                        <C>
United States Department of Defense                                        Various
       Including but not limited to USAMRIID, JPOCMO,
       U.S. Marine Corps Systems Command, NRL, SBCCOM,
       Naval Research & Development Command, Armed Forces
       Institute of Pathology, U.S. Army Nuclear & Chemical
       Agency, Special Operations and Low-Intensity Conflict Group,
       Dugway Proving Ground, USAMMDA

United States Department of Justice                                        Various
       Including but not limited to FBI Hazardous Material
       Response Unit, Defense Threat Reduction Agency,
       FBI Technical Support Working Group, National Domestic
       Preparedness Office.

National Guard                                                             Various
       Including but not limited to: RAID Teams, Consequence
       Management Program, Integration Office, Bureau Readiness
       Center, Office of Weapons of Mass Destruction.

Central Intelligence Agency                                                Washington, DC

Centers for Disease Control, BioTerrorism Response                         Atlanta, GA

MKI Systems                                                                Dumfries, VA

Maxwell Technologies                                                       San Diego, CA

Litton Systems, Inc.                                                       Woodland Hills, CA

Battelle Institute/National Security Division                              Columbus, OH

DynCorp                                                                    Various
</TABLE>


<PAGE>   8
                                    EXHIBIT C

Sales & Marketing Support- Respective Roles and Responsibilities of FISHER and
SUPPLIER (U.S. Distribution)
------------------------------------------------------------------------------

During the term of this Agreement, FISHER shall use its reasonable best efforts
to actively promote the Products of this Agreement in the United States and
Puerto Rico through its sales force and through its life science specialists.
FISHER shall support such sales at its own expense via the following activities:

      o     Launch package/training material sent to entire sales and customer
            service organization

      o     Training of Life Science Specialists at Life Science meetings or
            designated and agreed upon training sessions

      o     Full page advertisement in issues of BioTrack publication, according
            to the following schedule: [**]

      o     Product information put on "What's New" section of Fisher web-site

      o     Include Cepheid on supplier lists for Fisher web-site, Life Science
            brochures and publications

      o     Display Products at trade shows where appropriate

      o     Include Products in Fisher sponsored catalogues, brochures, and
            literature

      o     Provide targeted sales incentive and commission program to support
            Product sales

During the term of this agreement, the following activities will also be
undertaken by both parties, as described below:

      o     Fisher and Cepheid will participate in a business review meeting on
            a quarterly basis, or on another agreed upon timeframe

      o     Cepheid will have primary responsibility for providing technical
            support for its products, although the Fisher Life Science
            Specialists will be trained by Cepheid to provide basic response,
            should they be contacted directly by Fisher customers

      o     Cepheid will provide Fisher with product and application literature
            at its own costs, although Fisher will offer printing services at
            cost

      o     Cepheid shall provide Fisher with [**] demo units at no cost to
            Fisher. Additional units will be provided at terms to be negotiated
            between the parties

      o     Fisher will provide a single, designated point of contact in the
            United States to provide worldwide forecasts and sales reports, and
            to help manage any issues arising from the worldwide distribution
            agreement (from the US sales and service organization, non-US
            affiliates, and worldwide customers)



<PAGE>   9

                              EXHIBIT C (CONTINUED)

In addition, Cepheid may choose, at its own discretion and cost, to participate
in the following promotional activities:

      o     Participate in the Fisher New Lab Start-Up Program

      o     Attend and have a booth at Fisher's National Sales Meeting

      o     Participate in account specific vendor shows

      o     Participate is scheduled work days with Fisher sales representatives
            and Life Science Specialists

      o     Advertise and exhibit in other life science research focused
            publications and meetings, making reference to Fisher as the
            distribution source.


<PAGE>   10
                                   ADDENDUM 1


      1.    Canada, upon execution of an addendum between Cepheid and Fisher
            Scientific Limited

      2.    United Kingdom, upon execution of an addendum between Cepheid and
            Fisher Scientific UK Limited

      3.    France, Germany, Belgium and Netherlands, upon execution of an
            addendum between Cepheid and Fisher Bioblock

<PAGE>   11
[FISHER SCIENTIFIC LOGO]




                                   EXHIBIT D

                              CONTINUING GUARANTY

A.   CEPHEID CORPORATION (hereinafter referred to as "SUPPLIER"), having its
     principal office and place of business at 1190 Borregas Avenue, Sunnyvale,
     CA 94089-1302 hereby guarantees that all Products (including their
     packaging, labeling and shipping) comprising each shipment or other
     delivery hereinafter made by SUPPLIER (hereinafter referred to as
     "Products") to or on the order of Fisher Scientific Company L.L.C., a
     Delaware limited liability company, having its principal place of business
     at 2000 Park Lane, Pittsburgh, PA 15275 or to any of its branches,
     divisions, subsidiaries, affiliates, or any of their customers (hereinafter
     collectively referred to as "Fisher"), are, as of the date of such shipment
     or delivery, in compliance with applicable federal, state and local laws,
     and any regulations, rules, declarations, interpretations and orders issued
     thereunder, including, without limitation, the Federal Food, Drug and
     Cosmetic Act, as amended, and conform to representations and warranties
     made by SUPPLIER in its advertising, product labeling and literature.

B.   Further, with respect to any Product that is privately labeled for Fisher.
     SUPPLIER agrees to make no change in such Products or the Fischer artwork
     on the labeling or packaging relating thereto without first obtaining the
     written consent of Fisher. SUPPLIER recognizes that Fisher is the owner of
     the trademarks and trade names connoting Fisher which it may elect to use
     in the promotion and sale of such private label Products and that SUPPLIER
     has no right or interest in such trademarks or trade names. SUPPLIER shall
     periodically analyze and review packaging and labeling for any Products
     which are private labeled for Fischer to ensure conformity with the
     provisions of paragraph A hereof and the adequacy of Product warnings and
     instructions.

C.   SUPPLIER hereby agrees that it will reimburse Fisher for all reasonable
     out-of-pocket costs and expenses incurred in connection with any product
     corrective action or recall relating to the Products which is requested by
     SUPPLIER or required by any government entity.

D.   SUPPLIER agrees to procure and maintain on an occurrence form basis product
     liability issuance with respect to the Products and contractual liability
     coverage relating to this Guaranty, with insurer(s) having Best's rating(s)
     of A-or better, naming Fisher as an additional insured (Broad Form Vendors
     Endorsement), with minimum limits in each case of $1,000,000. SUPPLIER
     shall promptly furnish to Fisher a certificate of insurance and renewal
     certificate of insurance evidencing the foregoing coverages and limits. The
     insurance shall not be canceled, reduced or otherwise changed without
     providing Fisher with at least ten (10) days prior written notice. Fisher
     agrees to maintain corresponding levels of insurance and to provide
     certificates of such issuance to SUPPLIER and further agrees that Fisher's
     insurance coverage shall be primary to the extent that a claim is based
     upon the negligent acts and omissions or willful misconduct of Fisher.

E.   SUPPLIER agrees to and shall protect, defend, indemnify and hold harmless
     Fisher (and with respect to Subparagraph E. (i) below, Fisher's customers)
     from any and all claims, actions, costs, expenses and damages, including
     attorney's fees and expenses arising out of: (i) any actual or alleged
     patent, trademark or copyright infringement in the design, composition, use
     by itself or in accordance with SUPPLIER's instructions, sale, advertising
     or packaging of the Products, (ii) any breach of the representations or
     warranties set forth in this Guaranty; (iii) the sale or use of the
     Products where such liability results from the act or omission of SUPPLIER
     (whether for breach of warranty, strict liability in tort, negligence or
     otherwise), except to the extent that such liability is caused by the
     negligent acts or omissions or willful misconduct of Fisher. Fisher agrees
     to and shall protect, defend, indemnify and hold harmless SUPPLIER to the
     extent that any such liability is caused by the negligent acts or omissions
     or willful misconduct of Fisher.

F.   SUPPLIER agrees to and shall provide to Fisher Material Safety Data Sheets
     and other information concerning any Product as required by then applicable
     federal, state or local law.

G.   If the Products to be furnished by SUPPLIER are to be used in the
     performance of a U.S. government contract or subcontract, those clauses of
     the applicable U.S. Government procurement regulation which are mandatorily
     required by Federal Statute to be included in U.S. Government subcontracts
     shall be incorporated herein by reference including, without limitation,
     the Fair Labor Standards Act of 1938, as amended.

H.   The representations and obligations set forth herein shall be continuing
     and shall be binding upon the SUPPLIER and his or its heirs, executors,
     administrators, successors and/or assigns, whichever the case may be, and
     shall inure to the benefit of Fisher, its successors and assigns and to the
     benefit of its officers, directors, agents and employees and their heirs,
     executors, administrators and assigns.

I.   The agreements and obligations of SUPPLIER set forth in this Guaranty are
     in consideration of purchases made by Fisher from SUPPLIER and said
     obligations are in addition to (and supersede to the extent of any
     conflict) any obligations of SUPPLIER to Fisher or Fisher to SUPPLIER. This
     Guaranty shall be effective upon the first sale to Fisher of any Product by
     SUPPLIER, and the obligations of SUPPLIER under this Guaranty shall survive
     and be enforceable in accordance with its terms.


     SUPPLIER

     CEPHEID CORPORATION

     /s/ THOMAS L. GUTSHALL
     --------------------------------------
     Signature of Authorized Representative

     CEO & CHAIRMAN 1-10-00
     ---------------------------------------
     TITLE



     FISHER SCIENTIFIC COMPANY LLC.

     /s/ [SIGNATURE ILLEGIBLE]
     ----------------------------------------
     Signature of Authorized Representative

     VP Strategic Merchandising 1/13/00
     ----------------------------------------
     Title