PEB Investor Update – October 2020

DEAR SHAREHOLDER
The last few months have been an exciting and transformational
time for our company and our shareholders, as we have successfully
achieved two of our most significant commercial milestones in the
US whilst the world has been grappling with a pandemic.
Firstly, we reached agreement with Kaiser Permanente, one of the
US’s largest and best regarded healthcare providers, to
commercially use our all of our Cxbladder products in the US.
Secondly, after a long and protracted period of clinical evidence
development, Cxbladder has now been covered by the Centers for
Medicare and Medicaid Services (CMS). Coverage by the CMS’s LCD
was the final of the three elements needed to gain national
reimbursement for the approximately 62 million
1
people receiving
insurance coverage by the CMS in the USA. We have now had two
full months of revenue from the CMS, with all of our eligible claims
being paid to date. This is the key driver enabling our US business to
post monthly record revenues in August and September.
To conclude these outcomes during the COVID-19 pandemic is
testimony to the relationships that we have built over time with
these organisations and the proven, outstanding performance of
our Cxbladder technology.
It has also been a time of significant challenge as we have navigated
the world of urology during the global COVID-19 pandemic. Our
focus remains on keeping our people safe and keeping our
operations team functioning to provide the essential service that
makes such a big impact on the patients with or who are suspected
of having bladder cancer.
Turning up the gas on growth
For our company, these two outcomes have triggered a scale-up of
our commercial operations and our teams to deliver on the growth
opportunities that are now available to us in the US and our other
targeted markets.
There are three separate initiatives underway. First; we are
underway with the expansion of our direct sales force in new sales

1
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMS-Fast-Facts

OCTOBER 2020
IN THIS EDITION:
• Turning up the Gas on Growth
• Getting in close to Kaiser Permanente
• Medicare and Inclusion in the LCD
• Ongoing Impact of COVID-19
• Our Short and Near Term Focus
• 2020 Annual Shareholders’ Meeting
• Cxbladder In-Home Sampling Program
• Growing our US Reimbursement
• A Day In The Life Of.....Jim DeMarco

Pacific Edge Limited Investor Update October 2020

2
territories in the US, who will focus on large urology and community practices and encourage them to use
our Cxbladder products.
Second; our specialist sales executives are focussed on converting other large institutional customers in the
US and leveraging the great validation milestones from Cxbladder’s coverage in the CMS’s LCD and our
commercial relationship with Kaiser Permanente.
Third; we are expanding our customer services liaison team as we work with Kaiser Permanente and others
who are using the Cxbladder patient in home sampling program.
Our laboratories in both New Zealand and the US have plenty of existing testing capacity to cope with the
expected increase in demand for Cxbladder.

Impact of COVID-19 will be felt for some time
While we are on a very positive growth trajectory,
our outlook has been somewhat tempered by the
ongoing impact of COVID-19 for businesses,
healthcare organisations, people and patients
around the world.
The escalation of COVID-19 in March through to
July 2020, in the US and around the world, saw
our test numbers and revenue drop as urologists
scrambled to work out how best to manage their
patients, many of whom are over 60 years of age
and are considered ‘at-risk’.
As more healthcare providers transitioned to
telehealth, urologists saw the opportunity to use
the Cxbladder urine sample collection system as a
means of keeping people at home while also
being able to keep on top of clinical needs for
evaluation for disease. More urologists started to
utilise our Cxbladder patient in-home sampling
programme (PIHSP) and test numbers and
revenue have begun recovering and trending
upwards to our expected performance numbers.
In New Zealand, monthly test volumes have
recovered strongly from their April lows with total
lab throughput for the month of September
recording a 55% year on year increase. In the US,
monthly test volumes have largely recovered from
their April lows. However, we expect COVID-19
restrictions will continue to have a negative
Getting in close to Kaiser Permanente

Since reaching commercial agreement with Kaiser,
the Kaiser and Pacific Edge teams have been
focussed on the integration and inclusion of Pacific
Edge’s Cxbladder logistics and supply chain
Cxbladder into Kaiser’s ordering systems and
Health Connect, their Electronic Medical Records
system. Health Connect provides the final test
results back to the urologist in the format and on
the standard system that Kaiser use to manage
their patients, and will facilitate easy access for
review of patient results by the physician.

It is critical to a successful outcome in this
relationship that the urologist user-experience is
first class. We have been integrating and testing
our services and our supply-chain logistics with
Kaiser’s electronic ordering process so that Kaiser
urologists and their patients, experience our gold-
standard of service and care. We expect to have
the majority of this work completed shortly,
enabling Kaiser to start ordering commercial tests.

Medicare and CMS Coverage

Attaining CMS coverage in the Local Coverage
Determination, or the LCD, is one of our biggest
achievements to date and enables Pacific Edge to
receive reimbursement for the many CMS patients
that utilise Cxbladder. With more than 43% of our US
commercial tests being for CMS patients, we are now
seeing a significant increase in our recognised
revenue and cash receipts.

Although tempered by the continued COVID-19
impact in the US, with many patients still unable to
visit a clinic, we are nevertheless continuing to see
growth in the numbers of tests we are processing
each month for patients covered under Medicare
and Medicare Advantage.

The first payments for claims submitted under the
LCD have now been successfully processed and the
cash received. As more hospitals and clinics re-open,
we expect to see test numbers and revenue continue
to increase.

Pacific Edge Limited Investor Update October 2020

3
impact on US lab throughput numbers until those
restrictions are eased.
It has been a tribute to our team that we have
been able to lift and grow the business despite
the many challenges presented by COVID-19.
Whilst the PIHSP helps our growth, it is not
necessarily a panacea for all people in all
situations to deal with the challenges presented
by COVID-19 and we have yet to see how
dominant it will become in our commercial
programme post-COVID-19.

Our short to medium term focus
As we outlined at our recent annual shareholders’
meeting, our short to medium term focus is all
about generating significant growth in the number
of commercial tests processed in our two
laboratories, contributing revenue growth and
improving cashflow.
Specifically for the US this involves executing on
the two recent and positive commercial catalysts,
Cxbladder’s coverage in the LCD for CMS patients
and the commercial rollout within Kaiser
Permanente. Both will require investment in
additional resources to ensure we are fully
leveraging these commercial opportunities and
the anticipated increase in demand in a seamless
and positive manner.
Cxbladder’s coverage in the LCD by the CMS is
now opening the doors for Cxbladder to be
further recognised by some commercial insurance
providers and insurance networks. Of the more
than 500 private payers in the US we are focusing
on the top 100 private payers who account for
approximately 80% of all commercial payer
transactions. Of these top 100, approximately 30
cover the majority of our current patient private
insurance coverage. We intend to use a new
dedicated contracted team of specialists to carry
out negotiations for coverage by the remaining
commercial payers.
With Kaiser Permanente, our future growth
opportunity is to follow the successful integration
of Cxbladder Monitor with our other Cxbladder
products, thereby delivering further growth in
revenue and cashflow for our business.
In New Zealand, we are continuing the work to
bring the remaining public healthcare providers
into contract and to expand the number of
Cxbladder products in mainstream commercial
use by our existing customers. Our goal is to get
the New Zealand business to a break-even
position as soon as possible.
The focus for Australia and Southeast Asia is to
transition the public health care providers from
their clinical studies to commercial customer
relationships and to consequently grow
commercial test volumes for these new markets.
We have now concluded the recruitment of
patients into the Singapore User Programmes at
the five public hospitals and are underway with
the analysis of the data. We will continue to
progress discussions with potential strategic
partners in Southeast Asia in conjunction with the
large public healthcare providers.
At a time when many companies have been
crippled by COVID-19 and are reporting significant
losses on a prior comparative period basis, we
have been successfully able to weather the global
pandemic, significantly de-risk the company
through the achievement of two major
commercial milestones, further strengthen our
balance sheet and continue to grow our business.
We look forward to keeping you updated on our
progress, when we release our FY21 half year
results in November 2020.
Thank you for your continued support.


David Darling
Chief Executive Officer

GROWING VALUE FROM CXBLADDER PATIENT IN-HOME SAMPLING PROGRAM

While New Zealand was quick to react to control the spread of
COVID-19, the USA, our largest market for our Cxbladder tests, is
still facing significant challenges with new waves of re-
emergence COVID-19. This has seen the closure of hospitals and
clinics and at-risk patients remain hesitant to leave their homes
to visit busy medical centres, hospitals and collection points
unless absolutely necessary.
This is where the value offered by the Cxbladder patient in-home
sampling programme is really coming to the fore. In New
Zealand, we have seen several DHBs actively using Cxbladder for
in-home sampling for many of their patient referrals and, in the
US, uptake is also increasing.
Kaiser Permanente will also be using the Cxbladder in-home
sampling programme with their patients. The Cxbladder sample
collection system will be sent to patients who are scheduled for
their next clinical evaluation for monitoring for recurrence of
bladder cancer. This will allow them to provide a non-invasive
urine sample in the privacy and safety of their own home and for
the physician to maintain an active clinical surveillance of their
patients.
The use of Cxbladder in this home setting resets the traditional face to face patient care model and is of
particular relevance and importance during this global pandemic. We would like to see this become the
‘normal’ for managing patients over these challenging times where it is not possible to bring them into clinic.
Telehealth has become a more mainstream component of patient health management and we expect to see
Cxbladder continue to benefit as in-home sampling becomes a more integrated and valued alternative for
many patients and physicians around the world.

2020 ANNUAL SHAREHOLDERS’ MEETING
This year, given the COVID-19 environment, we made the decision to hold our Annual Meeting virtually. We had great
participation online, with more than 100 shareholders joining the meeting and a record number of questions.
The meeting provided an opportunity to talk in more detail about our recent achievements and the progress our
company is making. If you are interested, we encourage you to view the presentation and speeches on our website at:
www.pacificedgedx.com/investors/shareholder-meetings/.
All resolutions were passed by shareholders, comprising the following:
• Re-election of Bryan Williams as a Director of the Company.
• Re-election of David Darling as a Director of the Company.
• Authorised the Directors to fix the auditors’ remuneration for the ensuing year.

Pacific Edge Limited Investor Update October 2020

5
BUILDING OUR REIMBURSEMENT IN THE US

The US healthcare reimbursement system consists of a mix of public
and private third-party insurance coverage with approximately 18%
of the US population covered by Medicare public insurance and
67% covered by private insurance
2
.
Medicare is the public health insurance scheme for all US adults
aged 65 years and over, and provided through the CMS. The recent
coverage of Cxbladder by the CMS’s LCD has now enabled Pacific
Edge to receive reimbursement for Cxbladder tests ordered by the
physicians for their Medicare patients. Right now, approximately
43% of all of our commercial Cxbladder tests in the US are carried
out for patients who have Medicare coverage and another 28% are
for patients with Medicare Advantage plans. As a result,
approximately 71% of our commercial tests in the US are currently
for Medicare and Medicare Advantage patients.
The remaining 29% of our current commercial tests are for patients
covered by private commercial insurance companies, making these
commercial payers a significant contributor to our reimbursement
and one of the focal points for our future growth.
The US market consists of approximately 500 regional and national
commercial payers. The top 100 commercial payers account for
approximately 80% of the private pay covered lives in the US and
include companies such as United Healthcare, Blue Cross Blue
Shield, Aetna and Humana. Of these top 100 there are approximately 30 commercial payers who currently
provide the majority of our reimbursement for patients with private healthcare insurance in the US.
In addition there are also other large healthcare systems in the US, such as Kaiser Permanente which offer
their own healthcare insurance plans. Reaching commercial agreement with Kaiser Permanente for all of our
Cxbladder products in the US, is a significant vote of confidence in our Cxbladder technology. It also provides
external validation for Cxbladder with other large commercial payers that we are seeking coverage and
reimbursement from in the US.
Our focus over the next 12 to 24 months is to work with the top 100 private payers to gain coverage and
inclusion in their reimbursement networks, thereby ensuring rapid and repeated reimbursement payments
for the Cxbladder tests processed for their patients. As our test volumes grow and the mix of customers
changes we expect the proportion of tests contributing to our revenue to change.

2
https://www.census.gov/library/publications/2019/demo/p60-267.html

Pacific Edge Limited Investor Update October 2020

6
A DAY IN THE LIFE OF.....
JIM DEMARCO VICE PRESIDENT OF INSTITUTIONAL ACCOUNTS AND PAYER RELATIONS


Institutional and Payer Accounts are two market sectors that have a major impact
on our business in the US and currently make up approximately 29% of Pacific
Edge’s commercial tests sales. These types of accounts typically demand their own
specialised strategy and commercial execution due to their increased bureaucracy
and cross functional key stakeholders involved in diagnostic testing decision
making.
Jim DeMarco is responsible for leveraging into the US market the recent
commercial successes with Medicare and Kaiser Permanente. The key components
that we leverage to grow our US sales include building and sustaining relationships
with key opinion leaders in urology, dissemination of Pacific Edge’s pivotal clinical
evidence dossier to build urologist awareness, and recognition and inclusion in the
national bladder cancer guidelines. Iteration of these key components on a daily
basis help us to refine our commercial plans and deploy our sales resources in an
optimal way resulting in further awareness and broader use of Cxbladder products.
Payer Accounts
Our recent announced Medicare coverage is a game changer for our commercial business in the US and will
allow us to be more aggressive in pursuing commercial payer access and potential contracting where
appropriate. The key is to tailor our clinical evidence to meet the specific perspective. Over the short to
medium term we will continue building and shaping our US sales team by adding additional National Account
Managers to our team who have strong commercial payer relationships. This will further strengthen our
sales reach in the US and will assist us in executing on our goal of entering into new commercial agreements
with the other commercial payers we are targeting in the US.
Institutional Accounts
These are large academic and institutional accounts, such as John Hopkins, Intermountain, Geisinger and the
University of Southern California to name a few of our targeted institutional customers. Our US sales strategy
continues to focus on converting more of these high volume institutional accounts into commercial
customers to broaden the commercial reach of Cxbladder and to increase commercial usage.
As you can imagine, time is valuable for our targeted commercial payer and institutional account customers.
We spend a lot of our time each day collaborating across our team to ensure the most effective messaging
and presentation is made for each target customer. This includes ensuring we have the market research and
analytics to inform our messaging and Cxbladder’s value proposition for each target customer. We work with
several in-market commercial specialists to gain insights for these customer meetings. Making sure we are
regularly contacting the right person in each organisation is also an important part of our sales process.
Another great way to meet with key Institutional Account customers has been through Bladder Cancer
conferences. Of course, these have been dramatically affected by COVID-19 so we’ve had to adapt our sales
strategy to the current environment. As a result, we are now doing a lot more “virtual selling” by reaching
our target customers through digital marketing, phone calls, emails, Zoom meetings, webinars, and various
conventional marketing initiatives such as product mailers, print advertising and other promotional efforts.
We’ve also adapted our product offering to have an increased focus on the benefits of our patient in-home
sampling program.
Scale adoption of Cxbladder by select healthcare institutions remains a key commercial focus for Pacific Edge
in all markets, but particularly in the US. Commercialising healthcare technologies such as Cxbladder which
disrupts common urology practice, comes with many challenges. However, Pacific Edge is now in a unique

Pacific Edge Limited Investor Update October 2020

7
global position, with a first mover advantage, a large addressable market, high profile validation customers
and proven products that deliver better care for patients, better utility for urologists and savings for the
payers.

STAY IN TOUCH

ENEWS FOLLOW US
We encourage our shareholders to sign up to
receive email notification of news and
announcements from Pacific Edge.

Sign up here or visit the Investor Centre on our
website www.pacificedgedx.com.

www.facebook.com/PacificEdgeLtd/
www.facebook.com/Cxbladder/
www.twitter.com/PacificEdgeLtd
www.twitter.com/Cxbladder
www.linkedin.com/company/pacific-edge-ltd
www.bladdercancer.me

KEY DATES CONTACT US
FY21 1H Financial Results Announcement: 26
th

November 2020
FY21 Financial Year End: 31
st
March 2021
87 St David Street
P O Box 56, Dunedin, New Zealand
T +64 3 479 5800
E enquiries@pelnz.com
www.pacificedgedx.com