Investors in Third Wave Technologies yawned Tuesday after the company posted a 43-percent jump in total revenues during the second quarter.
Shares in the Madison, Wis., pharmacogenomics company settled to just above $4 through most of Wednesday after reaching a high of $4.30 soon after Third Wave released its second-quarter earnings Tuesday morning.
Despite Third Wave’s positive earnings, the stock failed to reach the heights it reached two months ago, after a change in top management sent shares soaring to within pennies of their 52-week high of $5.48.
Total receipts for the three months ended June 30 swelled to $12.6 million from $8.8 million. Sales of the company’s flagship Invader systems represented the bulk of the revenue growth, contributing $12.5 million to the top line. By contrast, $8.5 million worth of Invader units were sold during the second quarter of 2003, the company said.
Similarly, revenue from licenses and royalties, and grants, inched up to $40,000 and $48,000, respectively, from $49 million and $24 million, year over year, respectively.
R&D spending increased to $3.4 million from $2.9 million in the second quarter last year.
Still, net loss shrank to $10,000, or $0.0 per share, from $2.2 million, or $.05 per share, one year ago.
Third Wave said it had around $69 million in cash, equivalents, and short-term investments as of June 30.
In the report, the company raised its 2004 revenue guidance to $42 million from $39 million.
Third Wave also reiterated its plan to release an HPV detection product, and to establish a clinical trials program for an HCV viral load prototype assay during the second half of 2004.
In addition, the company said it expects to release a prenatal chromosomal analysis product during the fourth quarter, and begin selling “various CYP450 products” for the identification of drug response variability by the end of 2004.
Strong Revenue Growth, Weak Investor Reaction
Despite Third Wave’s strong revenue growth, investors remained unfazed, especially after they rejoiced in May after CEO Lance Fors said he would relinquish control of the company to president and COO John Puisis.
The changeover in management, which went into effect June 22, will enable Fors “to focus on the identification of novel technologies that could add future value to the company,” the departing CEO said in a statement in May. “I now feel compelled to return to what I love most — identifying breakthrough technologies for the future,” said Fors, who will become executive chairman.
The reins were handed to Puisis, 44, who joined Third Wave in September 2001 from Kraft Foods, where he was executive director of finance and strategy. Puisis will also become a Third Wave director.
Third Wave has been in the midst of a sector change for a little more than one and a half years. In the waning days of 2002, as genomics and proteomics technology companies lost their luster on Wall Street, Third Wave, led by Fors, was putting the finishing touches on a massive restructuring that saw headcount shrink by 125 people.
Falling revenue and rising net losses forced the company to shutter its in-house oligo manufacturing (though the company continues making oligos for its clinical products) and sell much of its manufacturing equipment.