Dunedin biotechnology company Pacific Edge is seeking to raise $3.5 million to $5 million from shareholders to target the marketing of its two cancer test products into the United States and Europe.
The two products, one for detecting bladder cancer and the other for ongoing tests of patients with colorectal cancer, will be marketed mainly to the United States and secondly to European countries.
During the past six years, Pacific Edge has used more than $14 million of shareholders' cash during its development and the latest offer is its fourth to shareholders, with a minimum $3.5 million to up to $5 million being sought, chief executive David Darling said when contacted yesterday.
The Cxbladder test is being used in two New Zealand clinics at present; having been released into the New Zealand and Australian markets and negotiations are under way for its use with European partners, he said.
"We are looking to commercialise [the prognostic, Cxcolorectal] and be in the market by early 2011," Mr Darling said.
Shares in Pacific Edge have been trading around 24c-25c recently and have eased to around 23c this month.
Pacific Edge have booked consecutive losses for each of its first five financial years and last month booked a $2.5 million loss for the year ended March 2010.
Mr Darling said a "significant" cost during the past financial year was on Cxbladder's clinical trial and $360,000 was spent on intellectual property management and protection, compared to $500,000 spent the previous financial year.
"Pacific Edge continues to make significant investments in intellectual property and this is the cornerstone of the company's ability to commercialise products," Mr Darling said in the annual report.
When asked if he was concerned the issue of more shares would dilute shareholders' existing value, Mr Darling said this current offer would enable smaller shareholders, who had been with the company for many years, to boost their stake "as we get closer to commercialisation", he said.
"We want to get ourselves into a position of [delivering] a positive cash-flow as soon as possible," Mr Darling said.
In his full-year report, Mr Darling said during the present financial year Pacific Edge would be in a position to generate revenue from its products and "move the company towards a cash-positive position".
"We expect these tests will be non-invasive and provide a level of information for the clinician and patient not previously seen in the field," he said.
He said the company's European licensee, Signature Diagnostics, had successfully completed a international clinical trial of Cxcolorectal, and planned to launch a commercial product to European clinicians, as a central laboratory service beginning late this year.
"Once our test prototypes have been developed, it is necessary to conduct formal, independent clinical trials to provide ... [proof] that these tests are accurate and better than existing commercial products," Mr Darling said.
