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Third Wave Reports Small Revenues, Steep Losses Amid Restructuring

This update adds one detail about the future of Third Wave's oligo business.

 

NEW YORK, Nov. 18 - Third Wave Technologies reported steep net losses and soft revenues for the third quarter of 2002.

 

The company's net loss for the quarter was $26.9 million, including a restructuring charge of $20.3 million. Due to that charge, losses increased sharply from the $7.4 million net loss taken in the third quarter of 2001.

 

Quarterly revenues were a mere $5 million, down considerably from the $8.2 million reported in the third quarter of 2001. In a conference call discussing the report, company chief financial officer John Puisis blamed transitions in the Japanese millennial project for the slide, and said that the company's revenue stream was likely to grow again as the Japanese marketplace expands and as the international Hap Map project gets underway.

 

It's "highly likely" that the company will provide technology for this project, Lans Fors, Third Wave's CEO, said in a conference call at the end of last month.

 

The company spent $2.6 million on R&D for the three months ended Sept. 30, 2002, compared with $4.4 million for the equivalent period in 2001.

 

Third Wave is nearly done with a major restructuring that will shutter its in-house oligonucleotide manufacturing for research products. (The company continues to make oligos for its clinical products.) That change, executed over the last two quarters, slashed the staff from 290 to 165 employees, reduced the company's breakeven point from $125 million to the low $40 millions, and spurred Third Wave to sell off much of its manufacturing equipment. 

 

"Developments in enzymology have now enabled us to outsource our DNA probe production to vendors who make PCR primers, now that the quality is acceptable," said Fors.

 

Fors told GenomeWeb that the company's genomics business unit, launched in February, now accounts for about two-thirds of the company's revenues. That division, based in Piscataway, NJ, is led by vice president Ivan Trifunovich and has about a dozen employees.

 

"By the end of this year, you'll be able to access the [Invader] technology just like PCR," he said. "You can design your own assay like you design a primer, on the web site, and order the enzyme, with open access to the technology for the general research community."

 

The unit has a "significant" customer base, Fors said, although he declined to specify.

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