Profit-taking and unease over Pacific Edge's plunging share
price have resulted in its shares shedding more than 60% in
value during the past six months.
Following a stellar run in its share price to a peak of $1.76
in early February, its shares were down 61% for the past six
months, including a 25% decline during the past month.
Yesterday, shares in the Dunedin cancer diagnostic company
were down more than 6%, or 4c, trading around 62c.
Craigs Investment Partners broker Peter McIntyre said while
Pacific Edge's business plan and overall strategy ''remained
intact'', following the strong share-price showing, investors
were looking for it to start producing revenue.
However, for the three months from mid-October, Pacific Edge
clinched several regulatory approvals and major international
distribution deals, and its share price more than tripled by
February, enticing many to take the profits offered.
''Some investors would have made money when the price was on
the way up, but now that it's falling, some don't have the
stomach for it, because of the volatility,'' he said.
Pacific Edge and cloud accounting company Xero, neither of
which has posted a profit but have market capitalisations in
the hundreds of millions, were last year's sharemarket
Xero shares have also plunged in recent months, down
47% from $44.79 to $23.35 yesterday.
''We've been seeing a lot of the high growth stocks sold off,
as people move to more conservative shares, because of less
risk,'' Mr McIntyre said.
While Pacific Edge has booked total losses of $43.88 million
during the past decade, at the end of its full year to March
it had $20.4 million cash in hand from capital raisings to
fund its crucial expansion into the large US health market.
For its full year trading to March, Pacific Edge booked an
expected $9.3 million loss, up 44% from $6.9 million the
Its revenue stream was up 187% to $523,000, including
$571,000 on foreign exchange gains.
Because of the large US market for bladder cancer testing,
the company maintains its gross annual revenue in five years
could be $100 million.
Mr McIntyre said investors wanted ''positive signs'' that
level of revenue was attainable.
Pacific Edge's non-invasive CX-bladder test costs less than
$400 in New Zealand, while the cost in New Zealand and the US
for repeated invasive tests runs into thousands of dollars
Earlier this month, Pacific Edge launched an e-commerce
platform where New Zealanders can pay a rebated $368 for a
test, send off a urine sample, and receive the results in a
matter of weeks.