Pacific Edge (PEB) last week released an investor update, outlining its expansion into the crucial US market, and inroads being made into establishing a beachhead in Southeast Asia.
PEB chief executive David Darling said Cx bladder cancer tests, its mainstay product, had notched up an almost 20% gain on test numbers, compared with the previous six months' trading, while on a year earlier, tests were up 185%, but without the company having supplied any actual test numbers.
Mr Darling's only mention of any pressing issues was that patient recruitment for a large US trial was ''slightly slower than anticipated'' and that PEB was in negotiation with a ''new commercial partner'' in Australia.
Mr Darling has repeatedly maintained for the past two years that by 2018 PEB is targeting revenue of $100million, while through capital raising PEB has about $40million cash in hand to ride out its US establishment period.
PEB shares had experienced a roller coaster two year period, rising from 46c in October 2013 to $1.72 in January last year, before trailing back to about 46c by September this year.
After having been one of the sharemarket's top performers, to worst performers, PEB shares were trading down slightly last week, at about 42c.
In response to the update, Forsyth Barr broker Ken Lister said the update was ''tracking behind our expectations'', and while keeping his stock recommendation at ''outperform'', he estimated full year 2016 earnings would decline from $9.5million to $7million.
The stock's target price was downgraded from $1.25 to $1.
''Lab throughput growth is tracking behind our expectations, with growth of more than 19% in first half 2016, against second half 2015,'' Mr Lister said.
He said PEB had attributed the slowing growth to a seasonal downturn in the US, during July and August and timing in New Zealand with the transition of user programmes to commercial tests.
PEB is into its third year of US commercialisation and was continuing to make progress in market awareness.
''We're waiting for three key milestones to provide another leg of support for clinical adoption and commercialisation of Cx bladder,'' Mr Lister said.
Those milestones are concluding a reimbursement process with US public health insurers Veterans Association (VA) and The Centre for Medicare and Medical Services (CMS), and also recruitment of patients for a user programme with Kaiser Permanente.
Mr Darling was upbeat on US operations, saying the dedicated sales force had been increased by four to 16 specialists in the US, targeting 19 sales regions.
He noted the VA provided patient care and other services to 8.8million veterans and their families through 1700 care centres, and had an annual budget of $152billion ($NZ230.3billion).
''To gain access to the VA and reach these patients, we need to be approved and added to the Federal Supply Schedule ... we are now in the final stages of review,'' Mr Darling said.
On CMS, he said the US government healthcare programme provided medical and health related services ''to tens of millions'' of elderly and low income people.
''They represent approximately 40% of our potential market,'' Mr Darling said.
PEB was ''progressing well'' in discussions to get approval for reimbursements for Cx bladder tests, under Medicare.
Mr Lister said, ''All three [milestones] appeared achievable, however [they] are tracking behind expectations, with the timing largely out of PEB's control.''
Mr Darling said Southeast Asia was attractive for patients requiring bladder cancer tests and ''medical tourists'' travelling for wellness tests.
Mr Lister said while there were ''near term risks'' for PEB and the stock's risk assessment was ''speculative'', he said PEB was ''on track'' for commercial success, expected to be ''more evident'' over the short term.
