Pacific Edge to raise $21 mln for US laboratory, expansion into world’s biggest market
July 29 (BusinessDesk) - Pacific Edge Ltd., the biotech start-up, plans to raise up to $21 million to fund a laboratory in Pennsylvania as part of its strategy to target sales in the world’s biggest economy.
The company plans to raise $5.1 million selling 23 million shares to professional investors at 22 cents apiece, an 8% discount to their last trading price. It will also raise up to $15.9 million via a three-for-seven entitlement offer to existing shareholders at 19 cents a share, it said in a statement.
It will build a CLIA, or clinical laboratory improvement amendments, laboratory in Hershey, Pennsylvania, a state that will provide US$1.5 million for the fit-out and US$500,000 as an occupancy grant. CLIAs are U.S. federal regulatory standards for clinical lab tests on humans.
Cxbladder is “a non-invasive, accurate test that enables the early detection of bladder cancer from a small volume of urine,” the company says. The test reduces the medical profession’s reliance on invasive tests such as cystoscopy and is more accurate than other tests on the market, it said.
The company expects to have U.S. licences and be ready for a launch test by March 2013, it said.
The capital raising would lift Pacific Edge’s market capitalisation on the NZX by about a third to $62 million and would eclipse last year’s $4.88 million raised by selling shares.
The company, whose flagship product is the Cxbladder diagnostic test for bladder cancer, had cash and cash equivalents of $2.49 million at March 31, mainly in a Bank of New Zealand call account.
Total expenses in its latest 12 months were $3.45 million, while operating revenue was $305,000, which included $201,116 of grants. The 2011 accounts don’t reflect any revenue from the Cxbladder.
Accumulated losses were $24.4 million.
Shares of Pacific Edge were halted from trading today, pending the placement to institutional and habitual investors. They last traded at 24 cents on the NZX and have gained by about a third this year.