Yesterday, the NZX-list cancer diagnostic company released its financial results for the half year to September 30 which showed a 62% surge in operating revenue from test sales to $8.7million on the previous corresponding period.
Total revenue increased 102% to $13.6million, total laboratory throughput increased 34% to 14,917 while after-tax net losses increased from $9million to $10.6million.
In early August, shares took a nose-dive after news its Cxbladder tests could be dropped by Novitas, the Medicare administrative contractor with jurisdiction for Pacific Edge’s US laboratory.
If the proposal was approved unchanged, Cxbladder would not qualify for coverage from Novitas.
Those tests represented a significant portion of current Cxbladder testing revenue.
In a release to the market, chairman Chris Gallaher said successes achieved by the company over the past six months had been tempered by that uncertainty.
Given its technological leadership and the growing awareness for how Cxbladder improved clinical practice, it remained confident its tests would, over the longer term, be integrated into global standards of bladder cancer care including those used by the key US market.
The period for public comment on the proposal were extended until September 6 and, while it had not provided a specific date for a decision, Pacific Edge understood it must either publish or withdraw the draft LCD within a year of the end of the public comment period.
Chief executive Dr Peter Meintjes said the proposed LCD had been factored into the phasing of its investment programme as the company looked towards the long term.
It continued to be reimbursed by Medicare for its tests and had not seen any reduction in demand for Cxbladder since the release of the proposed LCD.
Yesterday, Dr Meintjes told the Otago Daily Times Pacific Edge had requested a meeting with Novitas but had been told it would not meet until it had reviewed the comments.
In the meantime, Pacific Edge had made sure it planned contingencies and mitigation, understanding what the impact would be and the path to re-coverage, should the worse case scenario happen.
He believed it was well positioned and understood the risk; he also believed it was a low likelihood of occurring, but the consequences were potentially large and it had planned appropriately.
Dr Meintjes, who moved from the US to Dunedin in February this year, having taken over from long-serving predecessor David Darling, was happy with the half-year results.
The company had made good progress on its strategic objectives. It introduced new capability and energy into the business with the establishment of its new medical affairs and virtual sales teams and the recruitment of new account executives, marketing personnel and a VP of market access.
Its global team had risen to 100 FTEs at the end of September, from 86 at the end of March.
Those investments were aligned with the strategies for value creation Pacific Edge outlined in May.
As expected, they resulted in an increase in cash outflow and a larger loss for the half year period.
Dr Meintjes had no regrets about moving to New Zealand, nor joining Pacific Edge, saying he was ‘‘absolutely enjoying it’’.
He was energised by the passion shown by the team and, with recent hirings, being able to attract people of such a high calibre indicated that it was doing something right.
He continued to be engaged personally in US investor-related opportunities to present to healthcare conferences and attend meetings in the US.
