The cancer diagnostic company yesterday released its full-year financial results ended March 31 — a year which chief executive Peter Meintjes described as one of "enormous change and achievement".
In an update to the market, the company said the increased loss reflected a 58% increase in operating expenses to $53.1million as it invested to drive growth.
That reflected the expansion of the company’s global team including direct sales, marketing and sales support teams and the introduction of new medical affairs and market access capabilities to the business.
Investment in people accounted for 52% of operating expense growth. The company had now largely completed scaling for its next phase of growth.
Operating revenue, the income generated from Cxbladder test sales, increased from $11.4million to $19.6million.
Total laboratory throughput of its Cxbladder tests increased 37% to 31,565 tests and commercial tests increased 39% to 26,691 tests.
Yesterday, Dr Meintjes said there had already been questions around how much investment would need to be made to continue that growth.
Last year, it had to "build a lot of things from scratch". This year, it was about making the team it had built more effective and more efficient.
While that would require investment, it would not be at the same scale as when "starting up something from nothing".
Dr Meintjes was very pleased with the company’s growth, saying the team was also very excited about it.
Successes had been tempered by the ongoing lack of clarity over Cxbladder’s continued coverage by Medicare.
Last year it was reported its Cxbladder tests could be dropped by Novitas, the Medicare administrative contractor with jurisdiction for Pacific Edge’s US laboratory.
An unfavourable final version of the local coverage determination (LCD) had the potential to significantly reduce revenue from patients with Medicare and Medicare Advantage insurance plans.
But, with cash reserves of $77.8million, the company was well positioned to execute on the "significant opportunities" it saw, whatever the outcome, chairman Chris Gallaher said.
Dr Meintjes said the company was "geared for growth". While the draft LCD had created some uncertainty, Cxbladder remained a covered test by Medicare and there had been little impact on demand for it from customers.
With advice and feedback it had received from its legal advisers, industry academics and clinicians and following "numerous" representations to Novitas, Pacific Edge remained optimistic that Cxbladder would retain coverage.
It looked forward to the deadline on July 28 when Novitas must either make a decision or withdraw the proposed LCD and the associated Local Coverage Article that cast Cxbladder’s continued Medicare coverage into doubt.
Pacific Edge was prepared for an unfavourable outcome but believed a favourable one was "much more likely".
Dr Meintjes said he was "immensely proud" of what had been achieved over his first full financial year leading Pacific Edge.
"The team has embraced change and the new approaches we are taking to drive the commercial success of the company in the US, our most significant market, and around the world," he said.
Despite some headwinds, it was a good result and a good return for the investment that the company was making.
Pacific Edge’s New Zealand business delivered a steady performance. Its tests were available to more than 75% of New Zealand’s population.
Over the last year, contracts were added with Te Whatu Ora Health New Zealand Southern and expanded coverage in Tairawhiti on the East Coast.
The most significant catalyst in the New Zealand market was an opportunity to expand access through a national contract with HNZ, he said.
Pacific Edge’s annual meeting would be held in Auckland in July. Shares were trading yesterday afternoon at $0.455.
