Pacific Edge full-year loss widens on costs of US push
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)