Capital hungry Pacific Edge is asking shareholders and other investors to stump up with another $12 million after burning through another $8.6 million in cash in the six months ended September.
That cash outflow was 15 percent down on the $10.2 million the company burned in the same six months last year and the company had just over $10 million in cash left at Sept. 30.
The results show a significant 43 percent step up to more than $2 million in sales of the company’s tests used to help detect bladder cancer and the net loss for the six months narrowed to $8.7 million.
The company says billable test volumes were up 12 percent on the previous first half and currently account for 82 percent of total laboratory throughput.
“Commercial adoption of Cxbladder by national healthcare providers is at a high level in Pacific Edge’s home market of New Zealand and continues to improve with 62 percent coverage providing significant local and international validation,” it said. The latter figure is up from 36 percent in the previous first half.
But the big prize for Pacific Edge, as ever, is in the United States and it said it has completed two of three milestones required for national reimbursement, being receipt of product codes and notification of a national price at US$760 per test.
The company said John Hopkins Medicine, a US$8 billion integrated global health enterprise and one of the leading health care systems in the US, is evaluating the tests.
The latest capital raising is priced at 35 cents per share with $7 million coming from a placement to institutions and the other $5 million coming from a share purchase plan to the company’s retail investors.
Pacific Edge said a number of new local and international investors participated in the placement.
It said it chose an SPP rather than a rights issue to allow for greater flexibility – there is no cap on how many shares retail shareholders can apply for, although the aggregate will be capped at $5 million.
The shares last traded at 40 cents ahead of the trading halt while the placement takes place.
In July, Pacific Edge gained a new investor, Manchester Management, a privately-owned US company that specialises in biotech investments, when it bought a $2.6 million placement at 32 cents per share, a premium to the previous on-market trade at 23.5 cents.
The shares have risen from as low as 19.5 cents in June.
Pacific Edge said it expects laboratory throughput in the second half should increase 23 percent with about 16,500 tests done for the full year, up from 14,448 in the year ended March 2018.
“The expected laboratory throughput in full-year 2019 excludes test volumes from any new commercial agreements which have yet to be signed,” the company said, adding that the New Zealand market is expected to account for about 18 percent of total laboratory throughput.
Chair Chris Gallaher said the board is committed to the company’s strategy and to achieving the key milestone of breaking even.
“The impact Cxbladder makes for the large healthcare providers that have burgeoning patient needs, few resources and need to show value changes for their clinical services is very clear,” Gallaher says.
“We are looking forward to successfully executing on the next phase of our global growth plan as we continue to progress our objective of taking Cxbladder to the world.”
Pacific Edge’s tests replace much more costly and invasive tests to detect and manage bladder cancer with simple urine tests.