As at the end of September, the Dunedin-based bladder cancer diagnostic company had $10.06 million cash in hand, now a further $7 million, and is now launching into a separate non-underwritten shareholder placement plan to raise a further $5 million; its closing date being January 25.
On reopening after a trading halt yesterday, Pacific Edge’s shares dropped 10% from the previous 40c closing price, to trade around 36c; which was up more than 17% on a year ago.
In reporting its half year to September result earlier this week, Pacific Edge booked revenue up 43% at $2.03 million, while operating expenses fell 6% to $11.3 million, with its loss down 13% from a year ago from $10.03 million to $8.71 million. In a market update Pacific Edge’s chairman Chris Gallaher said he was pleased to have completed the first phase of capital raising.
"It will provide funding to progress our commercial objectives and become cash flow positive as soon as possible," he said.
Including this week’s $7 million, shareholders and investors have been called upon at least six times between 2013-18 to recapitalise the company, to the tune of more than $94 million so far.
Forsyth Barr broker Lyn Howe said the $12 million capital raising should help remove some near-term uncertainty around Pacific Edge’s balance sheet, although flexibility remained limited.
"It remains difficult to pin-point the timing of when the large US customers come on board, albeit there has been nothing to suggest this won’t eventuate," she said.
In looking to raise up to $12 million, which is now subject to shareholder uptake to secure the second tranche of $5 million, the new and existing capital would equate to about eight to 17 months of cash on hand.
"[Half year] costs were well controlled through the period, with cash burn below our expectations," Mrs Howe said.
The net loss of $8.7 million was below Forsyth Barr’s expectations of an $11 million loss, she said.
Mrs Howe said the average price for the Cx-bladder test had continued to lift, from $778 this time last year to $923.
She said while there were no new customer or regulatory milestones in the US announced with the result, Pacific Edge had recently been issued a national price for its test with key US health insurer, Centre for Medicare & Medicaid Services, of $US760 ($NZ1106) per test.
