Visible Genetics Inc. is lowering its revenue projections for the year after releasing financial results for the first quarter.

At the same time, Toronto-based VGI said it is in discussions with third parties regarding various strategic alternatives, including a potential sale. As VGI considers such a transaction, it is lowering its 2002 revenue estimates to the range of $20 million to $25 million instead of the $32 million to $37 million previously estimated.

The pharmacogenomics company's stock (NASDAQ:VGIN) took a 29.6 percent hit on the news Thursday, falling $1.11 to close at $2.64.

VGI reported sales of $4.3 million for the first quarter ended March 31, compared to $3.6 million for the same period a year earlier. The company's net loss grew to $10.8 million, or 56 cents per share for the quarter, compared to a net loss of $9.4 million, or 58 cents for the period last year.

On a sequential basis, total expenses fell 7 percent to $11.1 million in the first quarter, down from $11.9 million in the fourth quarter of 2001. VGI reported cash, cash equivalents and short-term investments of approximately $42 million.

"We haven't given guidance for next year, but that will clearly carry us beyond the end of this year," President and CEO Dick Daly said. "We have plenty of cash."

VGI said the lowered outlook reflects a slower uptake of genotyping kits and consumables, and delays in securing a distribution partner for its hepatitis C product. Sales of genotyping kits and consumables increased by 40 percent to $3.6 million during the first quarter compared to $2.6 million in the fourth quarter of 2001.

"This [revised guidance] is a function of that particular cash market and the rate at which the market is adopting a product," Daly said.

VGI said - before its stock fell Thursday - that any potential sale would likely be at a modest premium to its current share price, but the company added that the timing and outcome of the process is uncertain. VGI hired New York-based Bear, Stearns & Co. as its financial adviser.

While Daly did not elaborate on potential buyers, he stressed VGI's strengths as appealing to a third party.

"We have a worldwide footprint of about 300 clinical sites; we're the world leader in sequencing technology in the clinical area," he said. "And we have the only FDA-approved product in that particular product category."

Its Trugene HIV-1 Genotyping Kit and OpenGene DNA Sequencing System received marketing clearance in September.

VGI postponed its scheduled conference call to discuss first-quarter results.