Third Wave posts $22 million loss, stock rises

Madison, Wis. — A decline in research revenue led Third Wave Technologies to a loss of $22.3 million in 2005, or 54 cents a share, but because the loss was expected share price rose slightly in light trading.

As a company in transition, Third Wave expected something of a rough patch. It has a new focus – on the clinical market, rather than research – and a new CEO.

Third Wave's 2005 revenue was $23.9 million, compared to 2004 revenue of $46.5 million. Its net loss in 2004 was a mere $1.9 million. In addition to the hit from its transition out of the research market, Third Wave said it spent $6.9 million on patent litigation in 2005.

Third Wave stock closed at $3.09 on Tuesday, up 7 cents, and rose further in after-hours trading to open at $3.12 on Wednesday.

The firm now has finished almost all its lawsuits. The remaining case, a patent dispute with Stratagene, has favored Third Wave but is on appeal. Stratagene has put aside a $21 million bond to pay damages and legal fees.

"During 2005, we increased our recurring clinical customer base to more than 140, and launched new clinical products, including our FDA-cleared UGT1A1 pharmacogenetic test," said CEO Kevin Conroy in a press release. "Our Invader chemistry also enables us to capture recurring-revenue opportunities in the research and agricultural markets and we will continue to do so in 2006."