'It's a different quantum of money over here and really
could throw up all sorts of options for us' - Pacific Edge
chief executive David Darling on the 44% share price gain.
Photo by Craig Baxter.
A massive share spike followed Dunedin-based cancer
diagnostic company Pacific Edge announcing it is signing up a
key US client, FedMed, a national health network servicing 40
The news caused shares to surge 44%, or 22c, to hit 72c after
the announcement; and closed at 67c. Share volumes were the
highest in two years, with 2.08 million changing hands, worth
When contacted in Los Angeles yesterday, and updated about
the 44% gain, Pacific Edge chief executive David Darling said
it was ''good news'', and hoped overseas investor interest
would be spurred by the gains.
''Overseas investor interest has been picking up. It's a
different quantum of money over here and really could throw
up all sorts of options for us,'' he said.
Craigs Investment Partners broker Peter McIntyre said the
share spike percentage was possibly the largest
one-day gain on the New Zealand stock exchange; the FedMed
deal being ''very significant'' for Pacific Edge.
''With access to 10 times New Zealand's population [40
million plus] this gives Pacific Edge scale and access to
huge patient numbers, and funds,'' he said.
While it was debatable the share price gain could be
sustained, the spike was likely to come to the attention of
overseas investors, which would be positive for the company,
Forsyth Barr broker Haley Van Leeuwen said the FedMed deal
was a ''good result'' for Pacific Edge; its investment of
having a US-based chief executive and the Pennsylvania lab
was paying off and creating a ''product pathway''.
''Like other New Zealand technology companies, such as Xero,
their commercial success relies upon making it in highly
populated countries such as the US,'' Ms Van Leeuwen said.
Pacific Edge's Cx-bladder diagnostic tool, from a
non-invasive urine sample, is set for full commercial release
in the US market after having gained regulatory approval.
Overseas regulatory approval has been the bane of Dunedin's
many biotech-related start-up companies, with Botry-Zen
having been forced into liquidation in 2009, and Blis
Technologies still making losses but successfully raising
funds to target primarily Asian markets.
Pacific Edge has its own $4.5 million laboratory in
Pennsylvania, to eventually process up to 260,000 tests
annually, plus a further 35,000 tests at its Dunedin lab.
For clinicians, insurers, health boards and health providers,
not only is the test non-invasive and quick, in New Zealand
dollar terms, invasive full clinical tests cost $1740 to
$2200, but Cx-bladder costs $320.
Mr Darling said the FedMed deal was was further recognition
of Cx-bladder's ability to enable clinicians to detect
urothelial carcinomas, including bladder cancers, from a
small urine sample.
''The Cx-bladder technology makes detection of bladder cancer
a more effective proposition for both clinicians and patients
alike,'' Mr Darling said.
While having spent more than $35 million in research and
development since listing in 2003, with consecutive annual
losses, as of its September annual shareholder meeting in
Dunedin, Pacific Edge had $10 million cash in hand to finance
operations for the year ahead.
The agreement provides FedMed access to Cx-bladder testing,
for its contracted insurance carriers, third-party
administrators, health and welfare funds, and self-insured
health plans. More than 40 million Americans have access to
FedMed's network of more than 550,000 physicians, 4000
hospitals and 60,000 ancillary care providers.