Exhibit 99.1
Contacts:
Third Wave Technologies Vida Communication
Rod Hise Stephanie Diaz (investors)
(608) 663-4010 (415) 885-2298
Tim Brons (media)
(646) 319-8981
For Immediate Release
THIRD WAVE REPORTS SECOND-QUARTER FINANCIAL RESULTS
Growing molecular diagnostic account penetration, revenue
demonstrate marked improvement
MADISON, Wis., July 27, 2005--Third Wave Technologies Inc. (Nasdaq: TWTI)
today reported financial results for the second quarter ended June 30, 2005.
Third Wave reported total revenue of $5.8 million and a net loss of $5.5
million, or ($0.13) a diluted share, for the quarter ended June 30, 2005,
compared to total revenue of $12.6 million and a net loss of $106,000, or
($0.00) a diluted share, for the same period of 2004.
The company reported clinical molecular diagnostic revenue of $4.3 million
for the second quarter of 2005. Second-quarter total clinical revenue increased
38% from the prior quarter and 25% from the prior-year period. The company
previously indicated that research revenue would be markedly lower; it declined
by $8.0 million during the second quarter of 2005 from the same period of 2004.
Despite the expected research revenue decrease, the company continued to make
significant strides in its clinical molecular diagnostics business.
Total revenue for the six-month period ended June 30, 2005, was $12.9
million with a net loss of $9.9 million, or ($0.24) a share, compared to total
revenue of $27.9 million and net income of $2.7 million, or $0.07 a share, for
the same period of 2004.
Third Wave reported gross margins of 69% for the quarter ended June 30,
2005. Gross margins were approximately 70% for the sixth consecutive quarter
despite an $8-million decline in research revenue during the quarter. Total
operating expenses were $11.5 million for the second quarter of 2005, compared
to $13.4 million for the same period of 2004. Total operating expenses for the
six-month period ended June 30, 2005, were $23.1 million, compared to $25.2
million for the same period of 2004. General and administrative costs were
higher due to patent litigation the company is prosecuting; selling and
marketing expense was higher due to the expansion of the company's sales
organization.
The company ended the second quarter of 2005 with cash, cash equivalents,
and short-term investments of $61.5 million.
"Third Wave's clinical molecular diagnostic results and strong account
penetration in the second quarter are a clear demonstration of the increasing
traction we are seeing in the molecular diagnostic market," said John Puisis,
president and chief executive officer of Third Wave. "Molecular diagnostic
revenue grew nicely and we secured an unprecedented 26 customer wins during the
quarter--including 13 incremental, new accounts--an important indicator of the
quality of our products and of our future prospects.
"The company also achieved significant milestones in our efforts to build
a broad, valuable molecular diagnostic pipeline," Mr. Puisis said. "Our
submission of the Invader(R) UGT1A1 test to the FDA is the company's first. This
product is strategically important as we position the company to capture
opportunities in the emerging and potentially high-value pharmacogenetics
market."
Current Product Review
Genetics: Factor V Leiden, Factor II (prothrombin) and others
Third Wave's menu of Invader(R) analyte-specific reagents (ASRs) for
Factor V Leiden, Factor II (prothrombin) and others generated $2.8 million in
the second quarter of 2005, compared to $2.1 million in the prior quarter and in
the same period of 2004. The company secured three new accounts for these ASRs
during the second quarter, including Emory Healthcare. Third Wave remains on
track to submit its Factor V Leiden and Factor II (prothrombin) products to the
FDA this fall for clearance.
Genetics: CFTR
Third Wave's Invader(R) ASRs that enable laboratories to develop tests for
cystic fibrosis gene detection (CFTR) generated $0.8 million in the quarter
ended June 30, 2005, compared to $0.5 in the prior quarter and in the same
period of 2004. Customer response to the company's new CFTR InPlex ASRs, which
were released in April, continues to be favorable. The company added nine new
CFTR accounts during the second quarter, bringing its CFTR account penetration
total to 32. Second-quarter customer wins include Dartmouth-Hitchcock Medical
Center, Mills-Peninsula Health Services, and Adena Health System.
Infectious Disease: HCV
Third Wave's Invader(R) HCV ASRs, released during the second quarter of
2004, generated $0.3 million during the second quarter ended June 30, 2005,
compared to $0.1 million in the prior quarter. The company nearly doubled its
HCV market penetration during the quarter, adding 14 new HCV accounts and
bringing its total of HCV accounts to 31. These new accounts include Detroit
Medical Center and Morton Plant Health Care.
Oncology/Women's Health: HPV
Third Wave continued its early-access rollout of Invader(R) ASRs for use
by laboratories to develop tests for HPV. The number of clinical laboratories
conducting on-site evaluations of the company's HPV ASRs is growing, continuing
to increase the company's confidence that HPV will add significant value for
Third Wave.
Molecular Diagnostic Product Pipeline Update
Third Wave achieved a major milestone with its submission to the FDA of
the Invader(R) UGT1A1 test. Third Wave's UGT1A1 product is designed to detect
select polymorphisms associated with adverse reactions to Pfizer's chemotherapy
drug, Camptosar. Pfizer recently relabeled Camptosar to include dosage
recommendations based on a patient's pharmacogenetic profile.
The UGT1A1 product will be the first of many anticipated molecular
diagnostic-drug therapy pairings and is a part of the company's strategic plan
to capture valuable opportunities as the pharmacogenetics market emerges. The
company is developing other new pharmacogenetic products, including several new
products in the CYP450 gene family.
Due to favorable customer response to the CFTR InPlex ASRs and the
opportunity to expand penetration in this market more broadly, Third Wave
anticipates submitting a CFTR InPlex product to the FDA this fall for clearance.
The company also expects to submit Factor V Leiden and Factor II (prothrombin)
products to the FDA this fall for clearance, as it announced previously.
Third Wave remains on track to meet the following 2005 product
milestones:
o The combination of the performance and flexibility of the Invader(R)
chemistry with the sensitivity of a rudimentary form of polymerase
chain reaction, or PCR, whose patents expired at the end of March.
Third Wave believes Invader(R) Plus provides the most robust
chemistry combination for customers, enabling them to perform
complicated molecular testing more simply and quickly. The company
plans to leverage this new, proprietary chemistry aggressively, with
an initial focus on infectious disease, and expects to detail more
specific plans for Invader(R) Plus during the second half of 2005.
o The company continues to expect that it will release ASRs for
laboratories to develop tests for the human herpes virus family,
including herpes simplex viruses 1 and 2, cytomegalovirus, and the
Varicella-Zoster and Epstein-Barr viruses, during the second half of
2005.
o As part of its effort to further broaden its infectious disease
product menu, the company has initiated development of a
tuberculosis panel and a respiratory virus panel that could include
influenza viruses A and B, and respiratory syncytial virus (RSV).
o The company also continues to develop, test and enhance products
that include HCV detection and viral load, and HIV detection as part
of its infectious disease menu expansion. It will announce more
specific plans for these valuable product opportunities during the
second half of 2005.
"Third Wave continues to demonstrate the fundamental, long-term value we
are building for our shareholders, as we gain traction in the molecular
diagnostic market and build-out a valuable molecular diagnostic product
pipeline," Mr. Puisis said. "While the long-anticipated decline in research
revenue may cloud the company's top-line story in the short term, our
second-quarter results show that the investments we have made and will continue
to make in molecular diagnostic product development and distribution are
beginning to pay off. We are gaining more accounts and product wins. Most
importantly, customers are acknowledging the progress we are making.
"Our expectations are high, so we know we have more to accomplish," Mr.
Puisis said, "but we are pleased to be well positioned for the opportunity in
molecular diagnostics."
Conference Call & Webcast
Company management will host a conference call on Wednesday, July 27,
2005, at 10 a.m. EDT to discuss second-quarter 2005 results and ongoing
corporate activities. Domestic callers should dial (866) 770-7051 and
international callers should dial (617) 213-8064. The access code for both
domestic and international callers is 46102755. Please dial in five to 10
minutes prior to the start of conference call. A live webcast and a replay of
the conference call will be available at www.twt.com. The conference call,
webcast and replay are open to all interested parties.
About Third Wave Technologies
Third Wave Technologies is a leader in the development and marketing of
molecular diagnostics for a variety of DNA and RNA analysis applications,
providing physicians and researchers with superior tools to diagnose and treat
disease. Third Wave's Invader(R) chemistry provides the company's customers with
exceptional performance, scalability, and ease of use. The company offers a
number of clinical products based on its Invader(R) chemistry for genetic
testing related to multiple disease areas. For more information about Third Wave
and its products, please visit the company's website at www.twt.com.
All statements in this news release that are not historical are forward-looking
statements within the meaning of the Securities Exchange Act of 1934 as amended.
Such forward-looking statements are subject to factors that could cause actual
results to differ materially for Third Wave from those projected. Those factors
include risks and uncertainties relating to the company's ability to bring new
products to market as anticipated, the current regulatory environment in which
the company sells its products, the market acceptance of those products,
dependence on partners and customers, successful performance under collaborative
and commercial agreements, competition, the strength of the Third Wave
intellectual property, the intellectual property of others and other risk
factors identified in the documents Third Wave has filed, or will file, with the
Securities and Exchange Commission. Copies of the Third Wave filings with the
SEC may be obtained from the SEC Internet site at www.sec.gov. Third Wave
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in Third Wave's expectations with regard thereto or any
change in events, conditions, or circumstances on which any such statements are
based. Third Wave Technologies, Invader and the Third Wave logo are trademarks
of Third Wave Technologies, Inc.
--Financial Tables Follow--
Third Wave Technologies, Inc
Statement of Operations
(In thousands, except for per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
Clinical Product $ 4,274 $ 3,418 $ 7,375 $ 6,456
Research Product 1,300 9,111 5,113 21,288
License & royalty 90 55 183 95
Grant 108 48 227 69
-------- -------- -------- --------
5,772 12,632 12,898 27,908
-------- -------- -------- --------
Operating expenses:
Cost of goods sold
Product cost of goods sold 1,313 3,152 2,852 6,751
Intangible and long-term asset amortization 498 542 959 1,113
-------- -------- -------- --------
Total cost of goods sold 1,811 3,694 3,811 7,864
Research and development 2,040 3,027 4,506 5,700
Selling and marketing 3,182 2,696 6,546 5,321
General and administrative 4,268 3,212 8,047 5,570
Impairment 203 759 203 759
-------- -------- -------- --------
9,693 9,694 19,302 17,350
-------- -------- -------- --------
Total operating expenses 11,504 13,388 23,113 25,214
-------- -------- -------- --------
Income (loss) from operations (5,732) (756) (10,215) 2,694
Other income (expense):
Interest income 393 143 740 270
Interest expense (95) (59) (184) (116)
Other (80) 566 (275) (105)
-------- -------- -------- --------
218 650 281 49
-------- -------- -------- --------
Net income (loss) ($ 5,514) ($ 106) ($ 9,934) $ 2,743
======== ======== ======== ========
Net loss per diluted share ($ 0.13) ($ 0.00) ($ 0.24) $ 0.07
Weighted average diluted shares outstanding 41,088 40,325 41,105 41,875
Third Wave Technologies, Inc
Balance Sheets
(Unaudited)
June 30, December 31,
2005 2004
-------- ------------
Assets:
Cash, cash equivalents, and short-term investments $61,493 $66,690
Other current assets 6,449 7,281
Equipment and leasehold improvements, net 5,251 5,971
Intangible assets, net of amortization 3,394 4,146
Goodwill and indefinite lived intangible assets 1,497 1,497
Other assets 1,924 2,483
------- -------
Total assets $80,008 $88,068
======= =======
Liabilities and shareholders' equity
Accounts payable, accrued expenses and other $17,010 $14,781
liabilities
Deferred revenue 480 384
Debt 11,018 10,168
Shareholders' equity 51,500 62,735
------- -------
Total liabilities and shareholders' equity $80,008 $88,068
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