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Current as of 24/10/14 07:40PM NZST

Breakthrough for cancer test firm

By Dene Mackenzie

NZ company Pacific Edge Biotech on track to roll out product to US, Australia, Spain and Portugal.

David Darling says the use of Cxbladder can either rule out cancer or indicate a problem. Photo / Otago Daily Times
David Darling says the use of Cxbladder can either rule out cancer or indicate a problem. Photo / Otago Daily Times

Tracking down David Darling is not an easy task. Dr Darling, the Otago Daily Times Business Leader of the Year, has been travelling extensively this year as the Pacific Edge Biotech company continues to roll out its diagnostic cancer test, Cxbladder.

The Dunedin-based company has broken through globally, recruiting staff in the United States, rolling out its product in the US, launching in Australia and is on track to launch in Spain and Portugal.

During the next 12 to 18 months, Pacific Edge would continue with the transformation from a research operation to a world-leading cancer molecular diagnostics company providing high-performance cancer detection tools.

Darling acknowledged the path to success had not been easy for Pacific Edge but that the persistence he learned in a "previous life" has paid off.

Darling was involved in tree genetics in Rotorua, which involved developing trees particularly suitable for the pulp and paper industry. Some of those trials took 14 years for the trees to show the signs the researchers were looking for, he said.

In the early days Pacific Edge was making continual losses as it poured money into market and product research, he said.

But those years of struggle had allowed the company to build a base from which it could launch subsidiaries around the world.

"Into the new year, we will have more announcements. I am delighted by the people we have recruited in the United States."

In the US, executive, technical and laboratory teams had been recruited and Pacific Edge was ready to go to market.

Franchising the operation from out of Dunedin meant it could be done at a relatively low cost.

"We are burning up a bit of money flying people in and out of the US but our core operations are at a lower cost than in the US," he said.

When he had originally told people how much money Pacific Edge was spending on developing Cxbladder, there was a sense of disbelief.

"They asked how far had we got. They didn't believe how much less we spend than them," he said.

"We compared it to being offered a new Jaguar for $10,000 - you would think it was stolen or broken."

That was a salient lesson. But now, people were more understanding of the New Zealand attitudes of keeping costs low but working hard to get the results.

Once the prototype was established, it took a long time to get it commercialised, he said.

Pacific Edge wanted to build its own capability and become its own commercial entity. When the product was taken to Healthscope, in Australia, Darling wanted it "plugged" into Healthscope's laboratory.

"We told them our people will come in and train you. It's like Starbucks or McDonald's. It's this cup for this type of coffee or this beef patty with this bun. The process has to be exact."

The health professionals needed their own clinical experiences and Pacific Edge needed to establish Cxbladder as its own brand.

"This should be known as the CX family of products and Pacific Edge should be marketed internationally. Every brand should produce a good customer experience."

With franchise operations, those skills had to be taught across the organisation, he said.

Keeping it "small and tight" in New Zealand gave Pacific Edge the ability to change any part of the product at the same time around the world.

"We can say that on July 26 the colour of the coffee is going to change from brown to green and everybody will change on that date. It's a different business model."

Cxbladder is on its schedule to launch in March next year in the US, the largest market for medical applications.

Pacific Edge decided to target five cancers, building data and making the tools to better understand each cancer.

There was a "glimmer of hope" as the company moved from one cancer to another and that kept staff motivated as they searched for more data.

Darling became convinced that Cxbladder could be used by general practitioners to combat bladder cancer.

If a patient had blood in their urine, the GP could only use cystology or refer them on to a specialist urologist.

With the test, there was 99.7 per cent certainty that if the result was negative, then the patient was negative for cancer, he said.

For women, Cxbladder provided a breakthrough. It was rare for blood in the urine of women to mean cancer was in the bladder. Often, women were sent home without tests because of the rarity.

However, the use of Cxbladder could either completely rule out cancer or indicate there was a problem, Darling said.

Asked about his reaction to the progress that had been made since the results ramped up, Dr Darling said when the results were tangible, "it was a thing of beauty".

"The first time we got paid for it ... it took time to sink in that it was here. We knew we had a product that was making a difference to people and we felt good about that."

Cloning trees was technically challenging and rewarding but it was not the same as making a difference to people and that was what the Cxbladder tests could do, he said.

One of Darling's favourite stories about the company's loyal shareholders was about an elderly woman in the North Island who bought into Pacific Edge, not to make money from the shares but to provide money for the research. Her husband had died of bladder cancer.

Later, when the company was going to shareholders with a share offer, she phoned Dr Darling to say she was in hospital with some broken limbs and could not sign any documents. She asked would he hold her allocation of shares for her as she wanted to participate.

When the shares started rising, she phoned Dr Darling to congratulate him. "She didn't come in to make money from the shares but now she was seeing the work we were doing come to fruition and her shares rising in price. That sums up our loyal shareholders. You have to believe in what you do."

Other more commercially-focused shareholders had latterly come in but the band of loyal early shareholders and directors remained.

None of the board had taken on the job to make large amounts of money, he said. They had provided him with loyal support as the company went through its teething problems.

Pacific Edge was now trying to find a US director but was being careful that the person appointed would blend in with its mix of directors. "People have to fit the style that we have and be in tune with the team. That doesn't mean they are sycophants. If the going gets tough, then the board has to make some tough decisions."

- Otago Daily Times

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