Pacific Edge annual loss widens to $21m as US push drives 62% boost in sales
Pacific Edge widened its annual loss as the cancer diagnostic company's focus on expanding its US footprint drove a 62 percent boost in sales.
The Dunedin-based company posted a net loss of $21 million, or 5.5 cents per share, in the 12 months ended March 31, widening from a loss of $15.7 million, or 4.3 cents a year earlier. Operating revenue climbed to $8.1 million from $5 million a year earlier, a slower increase than expected as Pacific Edge took longer to close deals with large US health administrators.
It now has both the Veterans Administration and TRICARE Health Plan Network under contract, which provide cover to 20 million US military personnel, is in commercial talks with Kaiser Permanente which are expected to close shortly, and is still chasing regulatory approval for patients to get reimbursed under the Centers for Medicare and Medicaid (CMS).
"We have made strong commercial progress in FY17, particularly with our targeted scale customers," chief executive David Darling said in a statement. "We are seeing increasing demand and uptake from both private and public healthcare providers and expect to see a ramp up in sales from new and existing customers in FY18."
Pacific Edge got a two-year extension to its Callaghan Innovation research grant to fund its suite of cancer detection products and raised $8.8 million earlier this year to help pay for the US drive and it expects to have all four Cxbladder products fully launched in the US by 2018.
The company's operating cash outflow rose 5 percent to $17.8 million in the year, as a jump in customer receipts largely covered the increased cost paying suppliers and staff, and it held $14.6 million of cash at the March 31 balance date, down from $24.2 million a year earlier.
Pacific Edge's operating costs rose 33 percent to $30.5 million as spending on research and development rose 11 percent to $4.9 million and sales and marketing costs almost doubled to $1.9 million. It also faced a $2.9 million bill to wind up an employee incentive scheme and a $2.6 million charge writing off bad debts.
Revenue from government grants and rebates for research from Callaghan and New Zealand Trade and Enterprise dropped to $1.1 million from $1.4 million a year earlier, with changes to Callaghan's scheme meaning international R&D couldn't be claimed anymore.
The shares fell 1.8 percent to 56 cents at the opening of the NZX, having slipped 3.4 percent so far this year.