ThirdWave reports. Expenses a bit high, but they raised guidance for 2001. Current result for the stock price is pretty much a wash:
>>MADISON, Wis., Jul 26, 2001 /PRNewswire via COMTEX/ -- Third Wave Technologies Inc. (Nasdaq: TWTI chart, msgs) today reported financial results for the second quarter and six-month period ended June 30, 2001. For the quarter ended June 30, 2001, total revenues increased to $8.7 million, up from $0.8 million for the same quarter in 2000. Total revenues for the six-month period ended June 30, 2001, were $19.9 million, up from $1.4 million for the same period of 2000.
Sales of Third Wave's Invader (R) genetic variation analysis products increased to $7.8 million for the quarter ended June 30, 2001, up from $0.6 million during the same period of 2000. Product sales increased to $18.0 million for the six months ended June 30, 2001, up from $1.2 million during the same period of 2000. Product sales for the second quarter were above expectations due to growing demand for the company's products and the completion of orders for standard Invader reagents by the Japanese government's SNP Initiative that had been placed in the first quarter of the year.
"From the research labs of the world's largest genotyping project to the clinics of the world's largest HMO, Third Wave's Invader products are being adopted as the genetic variation analysis products of choice," said Lance Fors, Ph.D., chairman and chief executive officer of Third Wave. "The company's strong second quarter performance is the latest demonstration that Third Wave's Invader product platform is on its way to setting the standard for understanding the genetic basis of disease and enabling more personalized approaches to medicine."
Total operating expenses increased to $16.2 million for the quarter ended June 30, 2001, from $12.3 million for the same period in 2000. Total operating expenses for the six months ended June 30, 2001, increased to $33.9 million, from $17.3 million for the same period in 2000. The increase in operating expenses resulted primarily from the company's continued large-scale expansion of its commercialization activities, including product development, manufacturing, sales and marketing and business development. Research and development expense was slightly above initial expectations as the company continued to accelerate its product development and commercialization strategy. Cost of goods sold was also slightly above initial expectations as the company continued to recognize costs associated with the rapid acceleration of its large-scale manufacturing capacity to meet its customers' demands for an increasing catalog of Invader products.
The company has adopted a strategy to aggressively improve gross margins that includes: a) leveraging scaled capacity for standard Invader (R) reagents over a more diverse customer base; b) introducing new efficiencies to reduce fixed costs; c) beginning to make available its large and rapidly growing catalog of research products as a broad array of standard product offerings for the general research market; and d) increasing the percentage of its product sales addressing higher-value medically associated and routine clinical product applications.
Third Wave reported a net loss of $6.6 million, or ($0.17) per diluted share, for the quarter ended June 30, 2001, compared to a net loss of $11.5 million, or ($0.77) per diluted share, for the same period in 2000. On a pro forma basis, the net losses were ($0.17) and ($0.49) per diluted share for the quarters ended June 30, 2001, and 2000, respectively. The net loss was $12.5 million, or ($0.37) per diluted share, for the six months ended June 30, 2001, compared to a net loss of $15.9 million, or ($1.06) per diluted share, for the same period in 2000. On a pro forma basis, the net losses were ($0.34) and ($0.67) per diluted share for the six-month periods ended June 30, 2001, and 2000, respectively.
Excluding exceptional charges detailed in the attached financial statements, the net loss would have been $5.4 million or ($0.14) per diluted share for the quarter ended June 30, 2001, compared to a net loss of $4.4 million, or ($0.19) per diluted share for the same period in 2000. Excluding exceptional charges, the net loss would have been $9.6 million or ($0.26) per diluted share for the six months ended June 30, 2001, compared to a net loss of $7.5 million, or ($0.32) per diluted share for the same period in 2000.
Business and Market Highlights
Research Market Highlights
* Third Wave introduces product commercialization strategy. Third Wave's
"funnel" product commercialization strategy is rooted in a relatively
simple concept: drive value creation by leveraging one core product (an
Invader DNA or RNA analysis product) into larger and larger revenue
opportunities in both the research and clinical markets. To date the
company has assembled a menu of more than 60,000 unique Invader SNP
analysis research products, many of which may be included with
comparatively little additional development in higher value "medically
associated" SNP research products such as the initial Invader (R)
medically associated SNP panel launched earlier this week, diagnostic
tests (analyte specific reagents) for emerging clinical markers, and
ultimately FDA-approved in vitro diagnostic products for established
clinical markers.
* Japanese government's SNP Initiative to perform approximately 100
million SNP analyses using up to 120,000 unique Invader SNP analysis
products. In May, the Japanese government's SNP Initiative, part of the
Millennium Project, confirmed its commitment to Third Wave's Invader
products for conducting the largest genotyping initiative in the world
to date, with more than 120,000 unique Invader SNP analysis products
anticipated to be ordered. The project plans to perform approximately
100 million SNP analyses using the Invader product platform during the
next year.
* Third Wave established in-house bioinformatics department. The company
has developed a comprehensive, interactive sequence analysis pipeline,
directed by its newly created bioinformatics department, that
automatically annotates each genome sequence targeted by an Invader
product as it is being produced, generating its chromosome location,
linkage, disease association, if known, and other attributes of the
sequence. This information will be used with Third Wave products as
they are moved through each segment of the company's product
commercialization strategy funnel. The bioinformatics department has
used public databases to annotate more than 100,000 SNPs considered well
suited for disease discovery applications. A subset of these SNPs
spread across approximately 6,000 different human genes was then
associated with known predisposition to a variety of medical conditions
using a number of databases such as Johns Hopkins' Online Mendelian
Inheritance in Man (OMIM).
* Third Wave scientists publish advance in gene expression monitoring with
revolutionary RNA Invader product platform. Key findings published in
the July issue of Nature Biotechnology show that Third Wave's Invader
technology is capable of identifying and precisely quantifying low
levels of unique RNAs directly from total RNA or crude cell samples
called cell lysates, providing a new standard for gene expression
monitoring while eliminating several costly, time-consuming steps
required by competing methods. Third Wave will soon begin launching RNA
Invader products into the large research and emerging clinical markets
for gene expression monitoring that leverage these advantages.
Clinical Market Highlights
* Fourth product launched for routine clinical applications. Third Wave
in April launched MTHFR A1298C, its fourth set of analyte specific
reagents for routine clinical use. This reagent set is another in a
series of Invader clinical products for health care professionals
treating patients who may be at risk for developing deep vein blood
clots, a potentially deadly complication in surgical patients and those
with cancer and other chronic illnesses.
* World's largest HMO adopts Invader product platform. Third Wave's
Invader product platform was adopted in May by Kaiser Permanente, the
largest health maintenance organization (HMO) in the world, for routine
clinical use in the early diagnosis of deep vein blood clots. Kaiser
Permanente serves more than 5.9 million members throughout California.
* New study projects clinical DNA and RNA testing market to grow to $16
billion by 2010. According to a new report from Front Line Strategic
Consulting, Inc., the principal findings of which were released publicly
this month, it is projected that the worldwide market for clinical DNA
and RNA testing will grow from over $1.5 billion today to approximately
$16 billion in 2010. Third Wave believes that as it executes its funnel
product commercialization strategy, by providing the broadest menu of
research products, it will be ideally positioned to become the leading
provider of clinical DNA and RNA products.
Guidance for 2001
Third Wave anticipates continued strong demand for its Invader DNA and RNA analysis products. The company continues to project that it will have revenues of at least $6 million in the third quarter and is raising its guidance to revenues of at least $32 million for 2001.
Conference Call
Company management will host a conference call on Thursday, July 26, at 10:15 a.m. EDT to discuss second quarter results and guidance for 2001. Domestic callers should dial (800) 753-0420 and international callers should dial (913) 981-5501. The access code for both domestic and international callers is 713487. Please dial in five to 10 minutes prior to the start of the call for access to the conference call. A live webcast of the conference call and a replay will be available at www.twt.com. The conference call, webcast and replay are open to all interested parties.<<
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Cheers, Tuck |
