ANZ New Zealand Investments has bought $22 million of new shares in cancer diagnostics company Pacific Edge at a premium.
Pacific Edge will issue 33.8 million shares to ANZ at 65 cents per share, a 14 per cent premium to the volume weighted average share price over the previous 5-day trading period. The company currently has more than 689 million shares on issue.
The share price jumped 17.24 per cent to 68 cents in early trading, up 467 per cent year-to-date.
The investment from ANZ follows Pacific Edge's breakthrough in the United States after its Cxbladder tests were approved for patients covered by the US's national health insurance programmes, Medicare and Medicaid.
Each test is charged at US$760 with the additional income stream estimated, by one investor, to be worth an additional NZ$10 million in annual revenues.
Pacific Edge chair, Chris Gallaher, said the move reflected growing investor interest following major commercial milestones in the US.
"The suite of Cxbladder products are rapidly being accepted as an alternative to many of the traditional testing options for bladder cancer," he said.
"This additional growth capital will accelerate our commercial progress and allows us to execute on our future growth opportunities, therefore adding value for all shareholders."
The new cash will be put to use expanding Pacific Edge's activity in key target markets and allow the company to scale-up quickly to meet an anticipated demand increase for Cxbladder.
Andrew Bascand, managing director of Harbour Asset Management which owns 17 per cent of Pacific Edge, said he was pleased another substantial shareholder had thrown in their support, despite it technically diluting his shareholding slightly.
"ANZ will be delighted to get on the register before Pacific Edge goes in the index, because now it has such a market cap that it is the next entry into the index," he said. The company's market cap is currently $476.3 million.
In a note to Harbour, the firm's chief executive David Darling said the company could've gone through the expansion without the share issue but ANZ's investment means they'll have no hesitation over hiring additional staff.
Now the cancer diagnostics company will have a healthy cash buffer to "go hard on the sales force and get the message out there," Bascand said.