Pacific Edge first-half loss widens, ramps up sales in US
By Paul McBeth
Nov. 26 (BusinessDesk) - Pacific Edge, which compensated shareholders over the way it announced major US deals in 2013, widened its first-half loss, spending more on the roll-out of products across North America where it ramped up sales of its Cxbladder non-invasive bladder cancer test.
The Dunedin-based company reported a loss of $6.4 million, or 1.7 cents per share, in the six months ended Sept. 30, from $4.7 million, or 1.5 cents, a year earlier, it said in a statement. Revenue climbed 68 percent to $2.7 million, including $575,000 in grants and research and rebates and $320,000 from interest and foreign exchange gains. Commercial sales more than trebled to $1.8 million as the company rolled out its product across the US. Expenses climbed 50 percent to $9.7 million.
"Investment into people, product development, market expansion and the protection of intellectual property remain the largest areas of expenditure for Pacific Edge, and along with the roll-out in the USA, formed the majority of $6.42 million loss for the six month period," chief executive David Darling said. "North America remains the primary growth opportunity for Pacific Edge, with more than 10,000 urologists and millions of potential clinical opportunities for the use of Cxbladder tests."
The company is chasing sales in the US, hinging its test on the fact that bladder cancer, which is highly treatable, is the ninth most common cancer globally and the fourth most for men.
Pacific Edge has signed up a series of health provider networks in the US, and today said it's working to expand its deal with Kaiser Permanente to a nationwide agreement. It's also in talks with the Federal Supply Schedule, which would open the door for the company to sell directly to the Veterans Administration, and is seeking to close deals with the Centre for Medicaid and Medicare Services.
"We have a number of milestones to complete in the second half of the financial year, including the commercial launch of Cxbladder Triage into the United States, and the launch of our third product, Cxbladder Monitor, in New Zealand," Darling said. "We are focused on driving growth in the second half of the 2016 financial year and expect commercial revenue to continue to rise as we execute our growth strategy, particularly in the USA."
Pacific Edge's operating cash outflow rose to $8.8 million in the period from $5.9 million a year earlier, and the company had cash and equivalents of $32.7 million as at Sept. 30.
The stock dropped out of the benchmark index in September, and last traded at 45 cents. The shares have plunged 44 percent this year, compared to a 4.3 percent increase in the S&P/NZX All Index over the same period.