Third Wave Shares Drop 5.5 Percent After Analyst Downgrades Stock on Poor Q4 Earnings

This is a corrected version of a previous  article, which mistakenly reported a downgrade by two analysts.

NEW YORK, Feb. 24 (GenomeWeb News) - Shares in Third Wave Technologies were down 5.5 percent, or $.40, at $6.82 in late-afternoon trading after Cairns & Company downgraded Third Wave to "Average" from "Above Average"  after the company reported lackluster fourth-quarter revenues.

As GenomeWeb News reported yesterday, Third Wave reported a 16.5-percent drop in revenues and almost tripled losses for the fourth quarter of 2004.

Total receipts for the three-month period ended Dec. 31, 2004, fell to $8.1 million from $9.7 million during the same quarter in 2003. Third Wave said that more than half, or $4.7 million, of total revenues were derived from clinical molecular diagnostics, meaning that this business segment grew almost 90 percent compared to the fourth quarter of 2003.

R&D costs decreased to $2.9 million from $3.8 million during the same period a year ago.

Third Wave's net loss for the quarter swelled to $4.7 million, or $.12 per share, from $1.6 million, or $.04 per share, during the last quarter of 2003. This loss was primarily due to severance-related charges, non-recurring litigation, and Sarbanes-Oxley compliance expenses, according to the company.

The company said it plans to grow its USclinical molecular diagnostic revenues further in 2005. Third Wave is also finalizing plans for a multi-year agreement with private and government entities in Japanto perform extensive disease association studies. Though details of the study may not be available until early summer, the company anticipates deriving $10 million to $15 million in research product revenue from the project.

As of Dec. 31, Third Wave had $66.7 million in cash, cash equivalents, and short-term investments.