Pacific Edge first-half loss widens on push for US growth; sales jump 67%
(Correct's year-earlier loss in second paragraph to $7 million from $6.4 million)
By Jonathan Underhill
Nov. 24 (BusinessDesk) - Pacific Edge reported a wider first-half loss as the bladder cancer test company hired more salespeople in the US and spent more on research, sales & marketing.
The net loss was $11.3 million in the six months ended Sept. 30, from a loss of $7 million a year earlier, the Dunedin-based company said in a statement. Operating revenue climbed to about $3 million from $1.8 million.
Pacific Edge shares have gained about 2 percent this year and were last at 53 cents. They jumped about 20 percent on Nov. 14 after the company said a study of its Cxbladder Triage test, used to rule out patients with a low risk of bladder cancer, was evaluated in a large study of patients of not-for-profit US healthcare provider Kaiser Permanente and found to a negative predictive value of 98.5 percent, matching previous studies. Cxbladder Triage only became available in the US late in the first half and the bulk of the sales to date have come from its Cxbladder Detect product. A third product, the Cxbladder Monitor, will become available in the second half.
“We are seeing a steady increase in customer numbers and have a growing number of clinicians trialling and using our products through user programmes, which is an essential part of the clinical adoption cycle," said chief executive David Darling. "We expect to report a strong second half uplift in line with annual trends.”
Operating expenses rose to $15 million from $9.7 million and included $2.93 million for the employee incentive scheme, and research costs of $2.47 million, up from $1.9 million a year earlier. Wages rose 14 percent to $4.2 million.
The company said the first-half loss was in line with its expectations. The majority of revenue comes from existing customers, mostly smaller urologist practices, with no contribution yet from the recent new customers - the Veterans Administration (VA) and Tricare, it said. Pacific Edge said it had to contend with a stronger kiwi dollar in the first half and reduce grant income from Callaghan Innovation as a result of changes to the funding body's growth grant scheme.
In its home market of New Zealand, sales rose 187 percent, it said.