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 turned out.
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 said.
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 the market.
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 achieved profitability.
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 November 5.
• Rights issue shares priced at discount of 55c.
• Issue closes November 27.
• Share price reached high of $1.75 and closes at $1.36.
