Pacific Edge launches $20m capital raise

Pacific Edge has launched a $20 million capital raise. Photo / Thinkstock

Pacific Edge has announced a $20 million capital raise, in part to allow it to operate for a year without United States Medicare reimbursement of its tests.

The medtech company’s non-invasive Cxbladder tests detect bladder cancer by analysing a urine sample for specific genetic markers.

Pacific Edge is offering $15 million of new ordinary shares to selected investors and $5m of new ordinary shares to its existing retail investors.

All Pacific Edge directors intend to take part in the equity raising.

The company announced a trading halt on its shares on the New Zealand Exchange (NZX) this morning.

It is expected to lift the trading halt on June 3, along with announcing the share placement results with selected investors.

The tranche of retail shares will be on offer in July and August. The share issue price is 10 cents a share, representing a 22% premium on the NZX closing price of 8.2 cents a share on May 29, and an 18% premium on the 20-day volume average weighted price of 8.5 cents a share.

Pacific Edge stated the capital raise aimed to provide enough cash to support its operations for over 12 months while it sought to restore Medicare coverage, which ended on April 24.

That assumes it raises at least $20m to add to its net cash of $22.6m as of March 31, and the average monthly cash burn is kept below $2.6m.

More positively, in February of this year, the company’s Triage test was included in the American Urological Association’s (AUA) guidelines for microhematuria. The capital raise is designed to take advantage of that to increase marketing and sales. Pacific Edge has lodged reconsideration requests for Medicare coverage of its tests and is challenging the non-coverage of its Cxbladder Triage through the Medicare appeals process.

Pacific Edge chair Chris Gallaher stated that inclusion in the AUA guideline allowed the company to see the loss of Medicare coverage in a different light.

“The robust evidence emerging from our clinical evidence programme is shifting clinical sentiment towards the broader adoption of our tests in the US and farther afield. We are determined not to lose that momentum.”

At the same time, the company reported its full-year result with revenue down 16% to $24.6m and a net loss after tax of $29.9m marginally better than its 2024 financial year.