After a trading halt over the weekend, Pacific Edge said in an announcement to the stock exchange yesterday it "cannot believe" Medicare administrative contractor Novitas did not review its most recent evidence for its Cxbladder cancer tests, after committing to do so in writing, and is considering a legal challenge.
Last week Novitas, which has jurisdiction for Pacific Edge’s US laboratory, dealt a blow to the company by denying coverage for the cost of its Cxbladders tests in the US.
The decision, which would end reimbursement by Medicare for its Cxbladder Triage, Detect and Monitor lines, is scheduled to take effect from February 23.
Cxbladder is a non-invasive test used for the detection of bladder cancer from a urine sample.
Pacific Edge’s share price fell from 13.40c to $5c early yesterday after a trading halt imposed on Friday was lifted.
It rebounded slightly to $6c.
In a statement to the New Zealand stock exchange yesterday, the company said the finalised decision remained flawed, particularly in its review of the clinical evidence underpinning the Cxbladder tests.
Novitas continued to "misunderstand the current standard of care in evaluating hematuria patients" and failed to consider new peer-reviewed evidence, including a "ground-breaking" randomised control study supporting the use of the tests that was published since a revised draft decision.
This was despite Novitas being notified of the evidence and stating in writing it would incorporate it into the review, the company said.
It also repeated "flawed analysis" of existing clinical evidence for the tests and created "confounded conclusions by lumping the evidence in future publications from all assays together and not the clinical evidence supporting the individual products".
Pacific Edge chief executive Dr Peter Meintjes said the finalised decision "misunderstands the science of biomarker discovery and diagnostic test development in the context of the standard of care in urology" and did not understand the decision’s framing of the tests.
"Furthermore, we cannot believe that Novitas would commit in writing to review our most recent evidence as part of developing this [decision] and then fail to do so.
"Ignoring a randomised controlled trial published during the lengthy deliberations on the [decision] and the consensus of the urology community runs counter to the mandate of a US government health insurance programme."
Pacific Edge’s plan of action may include pursuing a preliminary injunction and legal challenge to the final decision, a further review of the structure of its operations and plan to regain coverage, a coverage reconsideration request submission to Novitas and other strategic alternatives, he said.
Pacific Edge chairman Chris Gallaher said the company wasdisappointed by Novitas’ determination, which was made despite "strong representations from Pacific Edge, many key opinion leaders in urology, bladder cancer patient advocates and the molecular diagnostics industry".
But it was an outcome Pacific Edge had prepared for, and the company had restructured its business to reduce its cash burn-back when the draft determination had been released.
"With the [decision] finalised, we are now activating the contingency plans and strategies to further reduce our expense base until we regain reliable Medicare coverage.
"With $28.5 million in reserves as at the end of December 2024, the company is well placed to fund the re-coverage process if necessary and regain reimbursement for our tests."
