Pacific Edge narrows first-half loss as canned staff share scheme cuts costs

Cancer diagnostics company Pacific Edge narrowed its first-half loss after clamping down on costs by ditching a staff share scheme and lifting revenue.

The Dunedin-based company reported a net loss of $8.7 million, or 22 cents per share, in the six months ended Sept. 30, compared to a loss of $11.3 million, or 30 cents, a year earlier. Revenue lifted to $4.9 million from $3.8 million, while total operating expenses fell to $13.5 million from $15.1 million, due largely to savings from the winding up of an employee incentive scheme that began in 2011 and cost $2.9 million in the prior period.

Pacific Edge's laboratory throughput - which includes both commercial sales and tests from user program - was up 26 percent to 7,107 tests compared to the same period a year earlier.

"Lab throughput is an important metric for Pacific Edge as it reflects the increasing trial and adoption of Cxbladder by key urologists and healthcare providers," chief executive David Darling said in a statement. Cxbladder is a suite of non-invasive laboratory tests for the detection and management of bladder cancer.

Pacific Edge raised $21.3 million last month in a deeply discounted rights issue, which it said would fund its goal to break even in the 2019 financial year.

The firm remains focused on growing revenue by commercialising large-scale customers, including the Veterans Administration, Kaiser Permanente and the Centers for Medicare and Medicaid (CMS) in the US as well as district health boards in New Zealand and other large healthcare providers.

"While the administration and clinical sign off for commercial use by these large organisations can be long and time-consuming, the scale and long-term sales opportunity they present is significant," Darling said.

Looking ahead, he said the company expects a stronger second half as the first six months of the year tend to be traditionally softer due to the US summer holiday period and because it is usually before Americans with private insurance reach their deductible level, which is the amount a patient has to pay before their insurance kicks in.

The shares last traded at 38 cents and have dropped 35 percent so far this year.

(BusinessDesk)