Health firm sees $100m chance in US

Kiwi firm hits the road in lucrative market after approval of lab for bladder cancer test

David Darling says Pacific Edge is aiming for 20 sales staff in the US. Photo / Otago Daily Times
David Darling says Pacific Edge is aiming for 20 sales staff in the US. Photo / Otago Daily Times

Years of hard work will finally come to fruition for New Zealand biotechnology outfit Pacific Edge when, on Monday, the company's sales team will hit the road in the United States, the world's biggest healthcare market.

The Dunedin-based firm, which has developed a simple and non-invasive test for bladder cancer, called Cxbladder, received regulatory approval for its US lab in Hershey, Pennsylvania, in March.

Chief executive David Darling said Pacific Edge had been able to begin recruiting and training sales staff in the US only after it received the green light for the lab.

"We have three people on the ground now and we'll be continuing to add sales people as we need them right throughout this year."

Darling said Pacific Edge worked with a consultancy to establish 19 sales regions across the US and when the lab was "at full noise" the company would have 20 sales staff in the country.

The lab in Hershey benefited from being only 20 minutes' drive away from one of the largest Fedex hubs in the US, he added.

"We're in a great spot for the logistics of the test kits."

Darling said Pacific Edge had the potential to be earning $100 million in annual revenue in the US within five years.

"That's our goal ... that's our stake in the ground - we're putting our cojones on the line and saying that's what we're going for," he said. "That [$100 million annual revenue] would make a sizeable business and we believe we can get there."

And Darling said Pacific Edge was expecting to turn its maiden profit next year. "We're pushing ourselves pretty hard."

With around 15,000 urologists, the US is by far the most important market for the company, whose Cxbladder technology uses genetic biomarkers in urine to detect the presence of cancer.

"By comparison, there are only 300 urologists in Australia and New Zealand," Darling said. "You've got 40 here [in New Zealand] and they're all on our Christmas card list."

But while the US was a lucrative healthcare market, it was not without its challenges - not least the worries American medical practitioners had of facing malpractice law suits.

"You don't realise how much of a big deal that is until you go and operate over there but that's their big fear because it impacts not only on their revenue line [because of insurance and litigation costs] but also impacts on their professional capability."

Pacific Edge, which reported a net loss of $6.9 million in its last financial year, has touted Cxbladder as being almost a third cheaper than existing methods of detecting bladder cancer. The technology has its roots in the US-led Human Genome Project, which identified the roughly 30,000 genes in human DNA.

At the end of last month Pacific Edge announced that the MidCentral District Health Board, based in Palmerston North, would become the first district health board to be a commercial customer for Cxbladder.

The company has other products in development, including a test for gastric cancer.

The company's shares closed up 2c at 60c yesterday.

- NZ Herald

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