The cancer diagnostic company’s sales team now comprised 17, halved from its peak of 34 in February last year, ahead of the Medicare Administrative Contractor Novitas releasing its non-coverage determination in June. In its latest investor update, Pacific Edge said company-wide adaptation to a restructure and the seasonal headwinds of holidays, reduced laboratory operating days and physician schedules also contributed to the fall in US volumes. In the three-month period, the team processed 7172 tests, a 15.9% reduction over the 8525 tests processed in Q2 24 and a 7.7% reduction on the 7768 tests processed in Q3 23.
The fall was led by US test volumes, which were down 17.7% on Q2 24 at 6040 and down 8.9% on Q3 23, while the number of clinicians ordering the test in Q3 24 fell to 1016 from 1147 in the prior quarter and 1082 on Q3 23.
Chief executive Peter Meintjes said Pacific Edge entered 2024 looking for certainty on Medicare’s coverage of Cxbladder. The company was prepared however events unfolded.
At any time prior to July 26, Novitas could republish, as final, an unfavourable version of the draft determination Genetic Testing of Oncology that would see Medicare coverage cease for Cxbladder products. The best case outcome was that Novitas recognised the merit of the evidence Pacific Edge had submitted last year and the series of "highly supportive" representations from peers, industry and the professional urology community. The impact to Pacific Edge’s commercial operations from the uncertainty endured for 18 months had already been substantial and the test volume figures demonstrated the cumulative effects.
US test volumes were now at their lowest level since Dr Meintjes took over as chief executive and, following the organisation undertaken in Q2 24 its sales force was now at its smallest size.
"The silver lining — and the correct reading of this quarterly result — is that the fall in test volume is due principally to the reduction in the size of our sales team ... It is the inevitable consequence of the steps necessary to preserve capital given the elevated risks of a non-coverage determination and an acknowledgement that re-hiring for departing account executives prior to obtaining clarity from Novitas is simply the wrong decision," he said.
