Pacific Edge full-year loss widens on costs of US push, to raise $35.3M
By Jonathan Underhill
May 28 (BusinessDesk) - Pacific Edge, which commercialised a non-invasive test for bladder cancer, widened its full-year
loss and said it will raise $35.3 million in a discounted rights issue to continue funding its expansion in the US,
which is burning through cash.
The net loss was $10.6 million in the 12 months ended March 31, from $9.4 million a year earlier, the Dunedin-based
company said in a statement. Product sales jumped to $1.9 million from $145,000 a year earlier. Grants and research
rebates added $1.4 million and other revenue such as foreign exchange and interest gains amounted to $786,000, lifting
total income to $4.1 million from $838,000.
Pacific Edge is chasing US sales to tap the world's largest healthcare market with more than 10,000 urologists, It
expects another year "of significant investment" in 2016 and the rollout of its second Cxbladder product, Triage, after
the launch of the product in New Zealand, it said. It held $2.8 million of cash and equivalents as at March 31, down
from $4.9 million a year earlier.
"The revenue potential in this market is immense and it is our primary focus for growth," it said.
The company hired First NZ Capital to manage and fully underwrite a two-for-11 entitlement offer to raise $35.3 million
to further its US ambitions, evaluate Asian markets and complete commercialisation of its third and fourth Cxbladder
products, Cxbladder Monitor and Cxbladder Predict, which it hopes to launch in 2015 and 2016 respectively.
Pacific Edge has increased its US sales team to 12 from four, signed agreements with the four largest national provider
networks and is in talks with the Centre for Medicare and Medicaid Services, it said.
The subscription price of 61 cents is a 15 percent discount to the last traded price of 72 cents. Following today's
announcement, the shares dropped 8.3 percent to a nine-month low of 66 cents.
Trading in the rights will start on June 5 and the offer will open on June 12 and close on June 29.
Chief executive David Darling said the capital raising will also help strengthen the company's balance sheet "to allow
the company to take advantage of commercial opportunities as they arise".
The results made no mention of the company's agreement this week to make a $500,000 compensation payment to shareholders
after an investigation by the Financial Markets Authority found that the company probably breached NZX listing rules on
continuous disclosure.
The regulator issued a public warning to Pacific Edge after investigating delays in disclosing new US contracts in 2013.
The compensation payment will go to shareholders who sold the stock in the window between the company signing the
contracts and making an announcement to the NZX, the FMA said in a statement. The shares soared as much as 250 percent
in little more than a week following the company's October 2013 announcements.
(BusinessDesk)