The recent volatility in Pacific Edge's share price was
surreal, chief executive David Darling said yesterday.
The Otago Daily Times 2012 business man of the year
predicted last December 2013 would be a significant year for
the Dunedin-based cancer diagnostic company. And so it has
Dr Darling spoke to the ODT before the company
announced yesterday its two for 15 pro rata renounceable
rights issue to boost the Cxbladder launch.
At that stage, the share price had soared to a high of $1.75
before settling at $1.49. At the same time last week, the
share price was 51c.
The company went into a trading halt before its rights issue
at $1.49 and the shares dropped to $1.20 on opening. The
shares closed at $1.37, up 28% on the day. More than eight
million shares were traded in the day, compared with 1.6
million shares traded last Wednesday.
Craigs Investment Partners broker Chris Timms put the price
volatility down to investors not understanding the rights
issue and the reason for the announcement.
''The share price has had such a large run-up and now the
company is asking for cash with the shares at a significant
discount. Investors will take some time to understand,'' he
The renounceable offer for the two for 15 shares was at 55c,
a 16.6% discount to the theoretical ex-rights price.
Mr Timms said it appeared the company had been planning the
issue for a while and it was coincidental the share price had
moved up so far above the discounted rights issue price.
Dr Darling said there was ''latent demand'' for the Cxbladder
technology and people were seeing the barriers and risks to
the future of the product, which detects bladder cancer
through urine tests, coming down.
Four major announcements in the space of a week included the
first sales of the product in the United States.
''We have a network of providers in the US and people are
feeling good about the opportunities.''
There was a challenge for the company when the share price
reached highs as it had done recently, and the price might
continue to rise on the company's potential, he said.
There were more deals to come as the company kept ''chipping
away''. Some deals took a while to get signed.
Dr Darling paid tribute to the long-time shareholders who had
been patient as Pacific Edge had worked to get Cxbladder into
Pacific Edge chairman Chris Swann said the funds raised by
the rights issue would provide funding for the US sales force
to pursue achieving $100 million of commercial sales of
Cxbladder in the US within five years.
The board was fully confident the funds being raised would be
sufficient to cover operating expenses until the company
The new funds would also be used to further develop a suite
of Cxbladder products based for clinical value propositions
identified by urologists in the extensive user programmes
undertaken in the US and New Zealand, he said.
The capital raising comes after Pacific Edge announced two
agreements with US healthcare network providers, giving it
access to sell its CXbladder test to 44 million Americans,
and announced its first commercial sale to US clinicians.
Dr Darling said there had been quite a lot of interest from
overseas investors after the company received coverage in the
Wall Street Journal.
The offer was ''carefully priced for our shareholders to make
sure they get upside'' he said.
At a glance
• Renounceable rights issue of two for 15 shares opens on
• Rights issue shares priced at discount of 55c.
• Issue closes November 27.
• Share price reached high of $1.75 and closes at $1.36.