Rise in Pacific Edge's first half loss

Pacific Edge [NZX: PEB] 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 1.7c per share, in the six months ended September 30, from $4.7 million, or 1.5c, a year earlier.

Revenue climbed 68% 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% 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 US, formed the majority of $6.42 million loss for the six month period," chief executive David Darling says.

"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 highest for men.

Pacific Edge has signed up a series of health provider networks in the US, and says it's working to expand its deal with Kaiser Permanente to a nationwide agreement.

It is also in talks with the Federal Supply Schedule, which will 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," Mr Darling says.

"We are focused on pushing 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 US."

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.

The stock dropped out of the benchmark index in September, and last traded at 45c. The shares have plunged 44% this year, compared to a 4.3% increase in the S&P/NZX All Index over the same period.

(BusinessDesk)

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