By Matthew Willett

In what has been a tough first quarter for public offerings, Third Wave Technologies Inc. priced its initial offering at $11 per share, raising about $18 million less than it expected it would when it registered the shares.

Third Wave announced its intention to go public in the hot IPO summer of last year. The Madison, Wis., producer of genetic analysis tools at that time estimated its proceeds at about $100 million. (See BioWorld Today, Aug. 2, 2000.)

Friday the company priced at the low end of its $11 to $13 range only after lowering the offering by a million shares, from 8.5 million to 7.5 million, grossing $82.5 million.

Lehman Brothers Inc., of New York, is lead underwriter for Third Wave's offering. The other underwriters are CIBC World Markets Corp. and Fidelity Capital Markets, both of New York; Robert W. Baird & Co. Inc., of Milwaukee; and Dain Raucher Wessels Inc., of Minneapolis. The underwriters have the option to purchase an additional 1.125 million shares to cover overallotments.

The move to go public last summer came just two months after Third Wave and Foster City, Calif.-based PE BioSystems scuttled plans to merge because federal regulators couldn't approve the deal fast enough.

And as the hot IPO summer cooled into a less forgiving autumn, Third Wave found itself the defendant in a patent infringement lawsuit brought by Vancouver-based ID Biomedical Corp. (See BioWorld Today, Sept. 18, 2000.)

That suit centers on nucleic acid amplification and detection technology that can detect both pathogens and single nucleotide ploymorphisms, pitting Third Wave's Invader technology against ID's Cycling Probe gene identification system.

Cycling Probe technology uses target DNA as a catalyst for a reaction, introducing a probe that attaches to the target, and an enzyme that clips that probe. The process repeats itself, or cycles.

Invader technology, according to Third Wave's IPO registration, makes use of two short strands of synthetic DNA, called Invader probes and Primary probes, that bind, or hybridize, to the target. The primary probe contains a short portion that does not bind to the target, and together the probes form a structure recognized by Third Wave's patented Clevase enzyme, which cuts the unbound flap, which in turn hybridizes to a third probe, called the signal probe.

Third Wave has agreements related to its Invader technology with GlaxoSmithKline plc, of Brentford, UK; Novartis AG, of Basel, Switzerland; and Pfizer Inc., of New York.

The company has about 28.9 million shares outstanding after the offering, and its shares (NASDAQ:TWTI), which rose 6.25 cents in its first day of trading Friday, closed down 6.25 cents Monday at $11. n