CORRECT: Pacific Edge widens annual loss, shares drop
(Corrects percentage change in first paragraph, updates with share price and investor comment)
By Suze Metherell
May 28 (BusinessDesk) - Shares in Pacific Edge were the biggest decliner on the benchmark NZX 50 Index today, dropping 7.2 percent after the bladder cancer test developer said it widened its annual net loss by 44 percent.
Pacific Edge had a loss of $9.95 million, or 3.2 cents per share, in the 12 months ended March 31, compared to a loss of $6.92 million, or 2.5 cents, a year earlier, the Dunedin-based company said in a statement. Sales rose 63 percent to $838,000, while trading revenue almost tripled to $523,000 after it started selling its first bladder cancer product in the US in July. The company is targeting $100 million in gross revenue from the US market in the next five years.
"It was in line with our expectations, there was nothing in the result that provides any cause for concern and the company has increased its trading revenue significantly and commercial milestones have been outlined quite clearly," said Andrew Bascand, who holds 6.3 percent of the company among the $1 billion of equities he helps manage at Harbour Asset Management. "The success of this product will be measured in years, not months."
The shares fell 7 cents to 90 cents, after earlier touching a seven-month low of 86 cents. Since the stock was added to the benchmark in March, the shares have dropped almost 40 percent amid a global sell off of growth-orientated tech stocks, giving up most of the gains it made last year on news of US partnerships. No dividend for the stock will be paid this year.
The company has signed four deals with US national network healthcare managers to supply its diagnostic test to providers covering about 130.6 million people. The non-invasive bladder cancer test was adopted by New Zealand district health boards earlier this year.
"Whilst the New Zealand and Australian markets are important to us from a product development and commercialisation process perspective, it is the scale and accessibility of the American market that is paramount to the success of the company," said chairman Chris Swann. "Evaluating hematuria (blood in urine) in American patients for bladder cancer is a significant market of scale and could be worth up to $100 million in gross revenue for our company in five years' time."
Coinciding with the first announcements of the US deals the company raised $20 million from shareholders to fund its push into the world's biggest economy. Pacific Edge held cash and equivalents of $20.4 million as at March 31, up from $10.7 million the year earlier and is debt free.