PEB Investor Update – April 2018

CONTENTS
A Word from the Chair
Executive Update
Accolades for Pacific Edge
Second Study Highlights Clinical Utility of
Cxbladder
CDHB Lookback Report Shows Outstanding
Outcome
Understanding Our Business: National
Provider Networks
Recap: First Commercial Agreement Signed
in Singapore
Stay in Touch
A WORD FROM THE CHAIR
Chris Gallaher
What we are achieving at Pacific Edge is truly leading edge in a global
context.
We are looking to change longstanding clinical practices and importantly
also, funders and insurers mindsets and we are now starting to see these
changes effected in public health boards in NZ, some of the biggest
healthcare organisations in the USA and some early progress in Singapore
and Australia.
Our goal is to position our Cxbladder suite of tests as the first choice for
physicians wanting better detection and disease management for their
bladder cancer patients.
We continue to make positive progress - there is growing clinical recognition
and validation of our products, revenues are increasing, and management
are well progressed in commercial negotiations with targeted large
healthcare organisations.
We are very aware however that our commercial progress has not been as
fast as we originally anticipated.
Over the last couple of years, the proof of performance and clinical utility
hurdles have increased requiring significant investment of time and
resources before enterprises will change their clinical practices and adopt a
new medical device. In addition, the time required to navigate the
complexity of the USA reimbursement process when bringing disruptive
products to market has been significant. However, we are making good
progress.
The size of the opportunity for Pacific Edge has not diminished and the
Board and management continue to be absolutely committed to delivering
on this opportunity.
In 2017 we increased our capital resources to continue funding our
progress and we thank shareholders supporting this capital raising.
Your Board is committed to delivering a profitable business and we are
working with the management team to achieve this. We appreciate your
support and patience as we work towards achieving our goals.
Chris Gallaher
Chair
APRIL 2018

Pacific Edge Limited Investor Update April 2018

EXECUTIVE UPDATE
David Darling, Chief Executive Officer
As we begin the new financial year, we continue our focus on achieving our goals –
building our footprint in our key markets, bringing on board the large transformational
customers we have identified, growing sales and gaining further adoption of Cxbladder
into the physician’s standard of care.

We came off a year of strong revenue growth in FY17 of 62% and we are looking to
continue this positive trajectory in our lab throughput and revenue growth. While we
are still in the early stages of our commercial journey, our company is growing stronger
every month and we are progressing our underlying goals of delivering medical
technology that enables better care for patients, better decision making by physicians
and better resourcing for the healthcare sector.

We are tracking well on most of our strategic and operational goals for the year, however getting both Kaiser
Permanente and the CMS across the line commercially continues to take more time than envisaged. While we
have little to no control over the internal processes of these large organisations, we are confident that we are
making good progress.
Strategic Milestones
The benefits of our Cxbladder tests for urothelial cancer are now well proven with many peer reviewed
publications. Our products are simple to use and non-invasive; they are accurate and allow for improved
detection and better management of patients; and they enable healthcare organisations to save significant
amounts of money - all of which are key needs of our customers and revenue drivers for the company.
We have rolled out Cxbladder Monitor in the USA, launched Cxbladder Resolve in New Zealand and Australia,
started our commercial business in South East Asia and signed healthcare providers of scale to the use of
Cxbladder and continue to increase our lab throughput and our revenue.
In the USA, we have gained further acceptance across the National Provider Networks and are continuing to
initiate new User Programmes with leading healthcare providers and key opinion leaders.
Sales to the Veterans Administration and TriCare are progressing, albeit slower than we would like, and the
USA sales team is working hard to market and encourage use of Cxbladder in high volume sites in targeted
areas. As expected, it will take a while to build scale in these organisations but we are now starting to see a
steady progression of repeat orders for tests coming through.
Positive Progress with CMS
The Centres for Medicare and Medicaid (CMS) is a massive federally run and funded organisation, which spans
the US and is targeted to be a cornerstone customer for us. We have recently announced a great USA
milestone, with the receipt of dedicated reimbursement codes for two of our products. This is a direct
measure of the recognition of Cxbladder as mainstream diagnostic tests and will help with our revenue
generation and payment times.
The next step will be to set the price for our tests and the complete the Local Coverage Determination. With
these integrated pieces in place, we will be able to unlock revenue from the many patients who are covered by
the CMS. This will also enable contracts with many private insurance companies and other commercial
opportunities. Completing the LCD process is a long, iterative and unprescribed process that takes most
companies four to five years to attain. We have little control over the time it takes for the LCD process to
conclude however, we are well down the track and will continue our dialogue with them.

Pacific Edge Limited Investor Update April 2018


Working on Final Commercial Sign Off from Kaiser Permanente
We are working hard to complete the final commercial sign-off with Kaiser Permanente. This is one of the
largest healthcare providers and insurers in the US, with over 400 urologists. We have been working with them
for several years, to fit our products to their needs, including running one of Pacific Edge’s largest User
Programmes.
Our team is working with a multi-disciplinary group within Kaiser to secure a commercial agreement. Like
many large corporates, this can be quite protracted, particularly where it involves a radical change to Kaiser’s
clinical practices and a significant cash investment into the use of a new technology. However, we are getting
closer. And while we’ve been working through the negotiations, we’ve also been working with Kaiser’s staff on
the necessary business logistics and the training of the first batch of urologists to ensure that the long
anticipated start-up of commercial tests can occur as expediently as possible following the completion and
signing of the agreement.
There is no doubt that Cxbladder is a break-through product – all the clinical validation and published scientific
papers point to the outperformance of the Cxbladder products, their clinical utility, and their potential to
lower healthcare costs and to provide a better clinical experience for patients. More and more urologists and
healthcare providers are recognising these values and are progressively adopting our product into clinical use.
We look forward to providing a further progress update to shareholders in our full year results announcement
and report. As always, we thank you for your continued support.
David Darling
Chief Executive Officer

ACCOLADES FOR PACIFIC EDGE

Over the past six months, Pacific Edge has received recognition in a number of high
profile business reports.
In October last year, Pacific Edge was named in the TIN Top Ten List of Hot Emerging
Companies for the third year in a row. Technology Investment Network produces the
annual TIN Report, which tracks the progress of New Zealand's technology
companies.
Then in December, Pacific Edge was named the 20th fastest growing company in the
Deloitte Fast50 Awards, coming in with 324% growth in revenue over three
years. This was followed up with a 171st ranking in the Deloitte Asia Pacific
Technology Fast500 in the same month.
Most recently, Pacific Edge was ranked number 5 in the inaugural Financial Times FT
1000 High Growth Companies Asia-Pacific. Pacific Edge is the only health company
and one of only three New Zealand companies in the top 10.
These rankings are a reflection of the company’s triple-digit revenue growth over the
past three years as Pacific Edge has focused on building a suite of highly accurate,
non-invasive Cxbladder tests for the detection and management of bladder cancer.
Management remain focused on building traction in the global market, particularly
the United States, and enabling better care and outcomes for patients and converting
all of this positive traction into revenue.

Ranked 6th
TIN Top Ten Hot
Emerging Companies
Ranked 20th
Deloitte Fast50 New
Zealand
Ranked 171st
Deloitte Asia Pacific
Technology Fast500
Ranked 5th
FT 1000 High Growth
Companies Asia Pacific

Pacific Edge Limited Investor Update April 2018

OUTSTANDING OUTCOME IN ‘LOOKBACK’ REPORT
RESULTING IN THE ADDITION OF CXBLADDER TO THE CDHB HEALTH PATHWAY

Medical products by their very nature have a high threshold of proof of
performance before mainstream adoption. Changing embedded
clinical behaviour is not an easy process; but when the benefits to both
patients and the healthcare system are so clear, it makes sense to
advocate for change.
In a world first, the results of a performance lookback on the
commercial use of Cxbladder by the Canterbury District Health Board
were presented to an international audience of urologists in Australia
recently, showing unequivocally that the use of Cxbladder delivers
greater accuracy and significant patient and cost advantages than the
existing pathway guidelines.
The lookback at 475 fully investigated patients showed that the risk of
missing a significant bladder cancer is negligible when Cxbladder Triage
is added into the algorithm for the assessment of haematuria. In
addition, 32% of patients were able to avoid secondary care, and to
have their assessment in the community through their primary care
GPs.
This has resulted in Canterbury DHB extending its inclusion of Cxbladder in its HealthPathway to include the
use of Cxbladder Triage as the primary tool for the evaluation of haematuria, replacing cytology and up to a
third of all of the cystoscopies, a costly and invasive procedure requiring specialist assessment.
The results of this outcome have been published in the British Journal of Urology International and a follow-up
clinical paper is being drafted for submission for peer review and publication in the British Journal of Urology.

SECOND STUDY HIGHLIGHTS CLINICAL UTILITY OF CXBLADDER
A second international study has recently been published demonstrating the compelling changes to clinical
decision making by urologists when provided with Cxbladder results for patients presenting with haematuria
(blood in the urine and a key indicator of urothelial/bladder cancer).
The study found the use of Cxbladder Triage and Cxbladder Detect leads to significantly fewer total tests and
invasive procedures for patients with low probability of urothelial carcinoma (bladder cancer), leading to
reduced costs and less potential for treatment related harm. In contrast, in patients where Cxbladder tests
indicated a higher probability of urothelial carcinoma, more tests were recommended leading to the targeted
diagnosis of urothelial carcinoma.
This shows that the use of a cascade of Cxbladder tests can significantly improve the identification of urothelial
carcinoma, when compared to existing and invasive tests, without compromising patient safety. This is of
significant additional importance to all clinicians involved in the diagnosis of bladder cancer and is of particular
relevance to payers and funders of healthcare, such as the Centres for Medicare and Medicaid.
Changing clinical behaviour has a high threshold of proof of performance and in this study, overwhelmingly,
clinicians made significant changes and reallocations of their diagnostic procedures, particularly expensive and
invasive procedures, when provided with the Cxbladder results. Clinical and scientific papers such as these are
an important part of Pacific Edge’s commercial strategy and essential in validating its products with major
healthcare providers and funders in the United States, which is the company’s primary focus.

Pacific Edge Limited Investor Update April 2018

UNDERSTANDING OUR BUSINESS:
NATIONAL PROVIDER NETWORKS

The health system in the United States is substantially different to New Zealand, with payment primarily
through insurance, either private or public.
National (and regional) provider networks are key components of the US healthcare reimbursement system.
They comprise networks of clinicians, hospitals, laboratories and other specialists who contract at a negotiated
price with the healthcare provider to offer services to the patients of their clients, who are private insurers,
large employers and third party administrators (TPAs).
Companies such as Pacific Edge negotiate agreements with these large commercial healthcare networks to
provide their products and services at agreed prices to patients who are insured by clients of the NPN. The
approved coverage of Cxbladder provided by the agreements encourages its use by clinicians as an accepted
diagnostic test for determining the presence, or not, of bladder cancers.
Since its commercial launch in the US in 2013, Pacific Edge has signed multiple agreements with NPNs
including FedMed, America’s Choice Provider Network (ACPN), Stratos and MultiPlan. These agreements give
millions of Americans access to Cxbladder and help to expedite payment to Pacific Edge on agreed payment
terms.
Most recently, the company has entered into an agreement with MediNcrease Health Plans, LLC, a national
provider network in the United States, to make Cxbladder available to 5.5 million covered lives through its
clients and payers.


“The signing of this agreement reflects the growing acceptance of Cxbladder as an effective, highly accurate
and non-invasive test for the detection and better management of urothelial cancer. Having commercial
agreements in place with provider networks is an important part of reimbursement of Cxbladder in the US,
minimising barriers for urologists who order Cxbladder tests for their patient care.”
CEO Pacific Edge Diagnostics US, Jackie Walker

Pacific Edge Limited Investor Update April 2018


RECAP: FIRST COMMERCIAL AGREEMENT SIGNED IN
SINGAPORE
In March this year, Pacific Edge reached a commercial agreement with Raffles
Diagnostica Pte Ltd to offer its suite of Cxbladder tests in Singapore.
This is the first commercial agreement to be signed by Pacific Edge in
Singapore, where the company has established a base for its investigation
into the opportunity for Cxbladder tests within South East Asia. User
Programmes are currently being run in the majority of the large private
hospitals in the country and the focus remains on transitioning these into
commercial customers once these studies have concluded.
Raffles Medical Group is a leading integrated private healthcare provider in
Asia, operating medical facilities in 13 cities throughout Singapore, China,
Japan, Vietnam and Cambodia and caring for over 2 million patients and more
than 6,800 corporate clients each year. RMG is the only private medical
provider in Singapore to own and operate a fully integrated healthcare
organisation, which includes Raffles Hospital in Singapore.
Whilst this is a relatively small commercial proposition for Pacific Edge, it offers a significant stepping stone into
the Raffles Medical Group across South East Asia. The region remains an exciting proposition for Pacific Edge
with approximately 9,500 urologists and an estimated 1.8 million potential tests.

STAY IN TOUCH
We welcome contact from our shareholders and have provided a number of ways that you can follow our company
and stay in touch.
ENEWS

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KEY DATES
CONTACT US
Balance Date: End FY18 Financial Year:
31 March 2018
87 St David Street
P O Box 56, Dunedin
New Zealand
T +64 3 479 5800
E enquiries@pelnz.com
www.pacificedgedx.com
2018 Results Announcement:
May 2018
2018 Annual Report:
By end-June 2018

This Investor Update has been provided to keep our shareholders informed of our progress, and complements our formal
communications such as our shareholder reports, results announcements and annual meeting. Further information on our
products and on bladder cancer can be found on the websites listed above.