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 $1.4 million.
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, he said.
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.
