Pacific Edge Unaudited Financial Results to 30 Sept 2020
Market Announcement
26 November 2020
1
PACIFIC EDGE UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2020
Transformational half year for Pacific Edge with commercial agreements and accelerating revenue growth
Summary of performance for the period (% changes compared to prior comparative period (pcp)):
• Total revenue increased 50% to $4.1m
• Operating revenue from test sales increased 46% to $3.3m
• U.S. operating revenue increased 46% to $2.9m
• Three consecutive record revenue months achieved in the U.S. following LCD inclusion in July 2020, despite
the ongoing negative impact from COVID-19 on test volumes
• Rest of World (ROW
1
) operating revenue increased 40% to $0.4m, driven by strong growth in the NZ market
following the lifting of Covid-19 restrictions
• Total Laboratory Throughput (TLT) reduced 16% to 6,864 tests
• ROW commercial test volumes increased 18% to 1,631 tests
• Total operating expenses reduced 8% to $11.2m
• Total Comprehensive Loss improved 25% to $7.1m
• Net cash, cash equivalents and short term deposits increased to $29.3m as at 30 September 2020, following
a $22m placement to ANZ New Zealand Investments
• Commenced scale up of commercial operations in U.S. to leverage key commercial milestones of LCD
inclusion and agreement with Kaiser Permanente
Cancer diagnostics company, Pacific Edge Limited (NZX: PEB) is pleased to report accelerating revenue growth in
key growth markets, as it starts to benefit from the major commercial milestones achieved during the first half of
the financial year.
“The Pacific Edge team made significant progress on our strategic growth objectives in the first half,” said David
Darling, Chief Executive Officer of Pacific Edge. “We delivered strong revenue growth, which included three
consecutive months of record revenue in the U.S. following Cxbladder’s LCD inclusion in July 2020, despite the
ongoing negative impact from COVID-19 on our Cxbladder test volumes.
“Our balance sheet has been strengthened allowing us to scale up the business faster to meet the expected increase
in demand for Cxbladder. This has included ongoing investment in our U.S. sales and executive teams, which are
focused on converting other large scale institutional customers in the U.S. and gaining additional reimbursement
coverage for Cxbladder with the top private payers (insurers).
“We remain focused on executing on the global growth opportunities available for Cxbladder and are well
positioned to deliver further long-term growth and value creation for our shareholders.”
1
Rest of World markets are primarily New Zealand as well as early stage in Australia and South East Asia.
Market Announcement
26 November 2020
2
MAJOR COMMERCIAL EVENTS IN 1H21
Inclusion in CMS’s LCD: Cxbladder Detect and Cxbladder Monitor were included in the Local Coverage
Determination (LCD) from 1 July 2020. This has enabled reimbursement for patients covered by the Centres for
Medicare and Medicaid Services (CMS) at the agreed national CMS price of US$760 per test, and has been a major
driver in the increasing revenue and cash receipts reported in the half year.
Kaiser Permanente: In June, agreement was reached with Kaiser Permanente (Kaiser) to commercially use all
Cxbladder products nationally, commencing with Cxbladder Monitor. Kaiser is one of the largest non-profit
healthcare providers in the U.S. with over 12.4 million members (approximately 4% of the U.S. population). During
the period, the Pacific Edge team completed the required testing of services and supply chain logistics to ensure a
gold standard user-experience for both Kaiser urologists and patients. Cxbladder test orders commenced in
November and are expected to positively impact commercial test volumes from 2H21 onwards. More than 800,000
people are regularly monitored for the recurrence of bladder cancer in the US and Kaiser Permanente manages
approximately 2% of these patients, who will present to the clinic for evaluation annually up to 4 times a year for
up to 5 years. This provides a large pool of patients and a significant commercial opportunity for Cxbladder Monitor.
COVID-19 Impact, Response and Recovery: Pacific Edge continued to operate as an essential business during the
COVID-19 restrictions in both New Zealand and the U.S. The impact from the stay-at-home restrictions was
particularly felt in the first two months of the half as these restrictions limited access by patients to medical centres
and urological testing. As a result, Cxbladder commercial test volumes fell 43% on the pcp in April and May but
recovered strongly from June to September with September test volumes an 11% improvement on pcp. A rapid
increase was seen in the use of telemedicine as a response to the pandemic, and the benefit of Cxbladder’s unique
Patient-In-Home Sampling System (PIHSS) became clear. Interest in, and use of the Cxbladder patient in-home
sampling has grown steadily, and is expected to grow further and be a major part of Pacific Edge’s test delivery as
telemedicine becomes more common practise.
1H21 FINANCIAL RESULT SUMMARY
Operating revenue from Cxbladder test sales increased 46% on pcp to $3.3m. This strong revenue growth was
driven by the inclusion of Cxbladder Detect and Cxbladder Monitor in an LCD from 1 July 2020, which has enabled
reimbursement for patients covered by the CMS at the agreed national price of US$760 per test. This
reimbursement coverage has also allowed Pacific Edge to start recognising revenue on an accrual basis for all CMS-
related patients in the U.S
2
.
U.S. operating revenue increased 46% on pcp to $2.9m and accounted for 87% of total operating revenue in the
first half. The first half of the year included a three month contribution for tests completed for CMS patients from
July to September, being two months of cash payments for tests completed in July and August and an accrual of
$0.8m.
2
The successful reimbursement coverage for the two products (Cxbladder Detect and Cxbladder Monitor) that have CPT codes
and LCD inclusion, has allowed Pacific Edge to start recognising revenue (under the NZ IFRS 15 accounting standard) for all
tests that are performed on CMS related patients (Medicare and Medicare Advantage) in the U.S. Tests for these patients
performed after 1 July 2020 are now recognised on an accrual basis based on the expected future cash that will be received
for the tests performed (previously cash basis). The Group continues to recognise revenue on a cash basis for other U.S.
customers who are not yet in contract and will continue to review this regularly.
Market Announcement
26 November 2020
3
The CMS reimbursement was the primary driver behind the U.S. business delivering three consecutive months of
record revenue from July to September, and a year on year 117% increase in average U.S. operating revenue for
the three months. This strong revenue growth has continued into the second half with a further record sales month
recorded in October 2020.
Rest of World (ROW) operating revenue increased 40% on pcp to $0.4m, driven by strong growth in the New
Zealand market following the lifting of COVID-19 restrictions. The continued adoption and increasing test use by
New Zealand public healthcare providers (DHBs) is driving this growth and momentum is expected to continue in
the second half, with a focus on growing the number of Cxbladder tests used by existing customers and converting
the remaining public healthcare providers into commercial customers.
Total Laboratory Throughput (TLT) reduced 16% on pcp to 6,864 tests, as COVID-19 restrictions affected access to
medical centres and testing for patients, particularly in April and May. A strong recovery in TLT was seen from June
to September, with record year on year growth in both June and September.
Commercial test volumes reduced 15% on pcp to 5,591 tests and accounted for 81% of total tests processed. A
strong recovery in ROW partially offset the decline in USA.
CMS related tests (Medicare and Medicare Advantage) accounted for 67% of total U.S. commercial test volume in
the first half. Cxbladder Detect and Cxbladder Monitor (the two Cxbladder tests included in the LCD) accounted for
94% of total U.S. commercial test volumes. Negotiations continue with the CMS for the reimbursement of the
22,634 tests completed for CMS patients as at 30 June 2020, but for which no revenue has yet been recognised or
cash payments received
3
.
ROW commercial test volumes increased 18% on pcp to 1,631 tests, which was a strong outcome given the impact
of COVID-19 on the operating environment during the first half period. A strong recovery was seen from June to
September, with September test volumes for the Group up 11% on pcp.
Cash receipts increased 9% on pcp to $2.6m, which reflects a two month contribution from the CMS offset by the
significantly reduced test demand in April and May. Strong subsequent cash receipts from 1 October 2020 onwards
have supported the accrual of revenue for the period ending 30 September 2020.
The positive impact of cash reimbursement from the CMS saw the average monthly cash burn in the half year
reduce by 6% on pcp, with average monthly cash burn in the second quarter of FY21 reduced 23% on pcp.
LCD inclusion for Cxbladder Detect and Cxbladder Monitor has significantly improved operating cashflow, with CMS
tests now paid in approximately 30 days and other U.S. private payers time to payment improving to average one
to three months for their payments.
The $22m placement to ANZ New Zealand Investments in July significantly strengthened the Company’s balance
sheet and net cash, cash equivalents and short term deposits increased to $29.3m as at 30 September 2020.
3
There is no certainty of any reimbursement for any of these tests performed prior to 30 June 2020, and no ability to reliably
estimate the level of consideration that would be received if agreement can be reached with Novitas Solutions over these
previously performed tests.
Market Announcement
26 November 2020
4
OUTLOOK
Pacific Edge has a strong growth outlook for the second half of FY21 and beyond as the Company leverages the very
successful validation that accrues from the CMS LCD coverage and a commercial relationship with Kaiser
Permanente. The global COVID-19 pandemic has had a profound impact on the delivery of healthcare and this is
expected to continue to impact through 2H21 and beyond. Despite this, Pacific Edge expects continued growth
albeit at a rate that is slower than could otherwise be expected in a COVID-19 free operating environment.
Combined, the inclusion in the CMS’s LCD and the successful conclusion of the Kaiser Permanente agreement are
driving step changes in the growth of the U.S. business. Accordingly, commercial operations have been scaled up,
with a strengthened US commercial leadership team and the recruitment of additional sales executives and
customer support personnel expected to drive further growth. The focus remains on growing the commercial
adoption of Cxbladder by large healthcare organisations (such as Kaiser Permanente), further increasing
reimbursement coverage from private payers (insurance companies) and gaining more favourable guidelines
inclusion language.
Cxbladder’s accelerating U.S. reimbursement, including a full six month contribution from the CMS and the
commencement of orders from Kaiser Permanente, is expected to have a positive impact on US commercial test
volumes, operating revenue and operating cashflows in the second half of FY21 and beyond. Strong growth
momentum has continued into the second half of FY21 with U.S. cash receipts for October increasing 68% on pcp.
New Zealand continues to be an important growth market for the company. The continued adoption and increasing
test use by New Zealand public healthcare providers is driving growth and momentum is expected to continue in
the second half. The management team in New Zealand is also being expanded, with an appointment to the new
role of Chief Technical Officer and the proposed new appointments to the roles of Chief Operating Officer and Chief
Information Officer expected to be made in the second half of the year.
Southeast Asia and Australia are both at an earlier stage in their commercial development, with the goal being to
transition the public healthcare providers in these markets from their User Programme clinical trials to commercial
customers.
Pacific Edge’s strengthened balance sheet and improving operating cashflow position has allowed an acceleration
of global growth initiatives, including the scaling up of the U.S. commercial operations to leverage the key
commercial milestones achieved during the first half.
Chair of Pacific Edge, Chris Gallaher, said: “It has been a step change in progress and revenue growth in this first
half year for Pacific Edge with the achievement of major commercial milestones delivering strong revenue growth,
while successfully weathering the challenges of COVID-19. We are now starting to see the benefits of the significant
effort and resource that has gone into commercialising our bladder cancer technology and we believe this is just
the start of a strong growth trajectory for our company.”
CEO of Pacific Edge, David Darling, commented: “The U.S. offers a potential annual market opportunity for our
company of more than USD$1.2 billion. We now have the major reimbursement and clinical milestones in place to
enable us to scale up and position Cxbladder as the first choice diagnostic test for urologists evaluating patients for
Market Announcement
26 November 2020
5
bladder cancer. We are well positioned with experienced, motivated people capable of maximising the substantial
growth opportunities in front of us.”
ENDS
For more information contact:
David Darling
Chief Executive Officer
Pacific Edge Ltd
P: +64 (3) 479 5800
OVERVIEW www.pacificedge.co.nz www.pacificedgedx.com
Pacific Edge Limited (NZX: PEB) is a New Zealand publicly listed, cancer diagnostic company specialising in the
discovery and commercialisation of diagnostic and prognostic tests for better detection and management of cancer.
Its Cxbladder suite of non-invasive, simple to use and accurate diagnostic tests provide actionable results, and
better detection and management of urothelial cancer. The company is developing and commercialising its range
of Cxbladder bladder cancer tests globally through its wholly owned central laboratories in New Zealand and the
USA. The company’s products have been tested and validated in international multi-centre clinical studies.
ABOUT Cxbladder Triage www.cxbladder.com
Cxbladder Triage combines the power of the genomic biomarkers with additional phenotypic and clinical risk factors
to accurately identify patients with haematuria who have a low probability of bladder cancer and may not require
a more extensive urological evaluation. Cxbladder Triage is a tool for use by clinicians and physicians in primary
evaluation of patients
with haematuria and is intended to reduce the need for an expensive and invasive work-up in patients who have a
low probability of having urothelial carcinoma.
ABOUT Cxbladder Detect www.cxbladder.com
Cxbladder Detect enables the non-invasive detection of bladder and other urinary tract cancers from a small volume
of a patients’ urine. Cxbladder Detect provides clinicians with a quick, cost effective and accurate measure of the
presence of the cancer as an effective adjunct to cystoscopy.
ABOUT Cxbladder Monitor www.cxbladder.com
Cxbladder Monitor allows urologists to monitor bladder cancer patients for recurrence of the disease. Bladder
cancer has a recurrence rate of 50-80% and requires life-long surveillance. Cxbladder Monitor accurately identifies
patients with a prior history of urothelial cancer (UC) whose Cxbladder Monitor score shows that they have a low
probability of recurrent urothelial carcinoma. Cxbladder Monitor is designed to be used as the preferred adjunct
test to cystoscopy in the management of patients for ongoing evaluation of recurrent bladder cancer.
ABOUT Cxbladder Resolve www.cxbladder.com
Cxbladder Resolve identifies those patients who are likely to have aggressive or more advanced bladder cancer.
Cxbladder Resolve, when used as part of the primary evaluation of haematuria and/or in conjunction with other
Cxbladder tests (Triage, Detect), is designed to assist clinicians by accurately identifying patients with a high
Market Announcement
26 November 2020
6
probability of having high grade or late stage bladder cancer, for whom alternative or expedited treatment options
may be warranted, or who can be prioritised for further investigation in high throughput settings.
Refer to www.cxbladder.com for more information.
---
1
FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2020
PACIFIC EDGE
INTERIM FINANCIAL
RESULTS
PRESENTATION
DISCLAIMER
2
Information
The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a
summary of certain information relating to the performance of Pacific Edge Limited. The information in this presentation is of ageneral nature and does not purport to
be complete. This presentation should be read in conjunction with Pacific Edge's other periodic and continuous disclosure announcements, which are available at
nzx.com.
Not financial product advice
This presentation is for information purposes only and is not financial or investment advice or a recommendation to acquire financial products of Pacific Edge, and has
been prepared without taking into account the objectives, financial situation or needs of individuals. Pacific Edge, its directors and employees do not give or make any
recommendation or opinion in relation to acquiring or disposing of shares. In making an investment decision, investors must relyon their own examination of Pacific
Edge, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of
financial products.
Future performance
This presentation contains certain 'forward-looking statements', for example statements concerning the development and commercialisation of new products,
regulatory approvals, customer adoption and results of future clinical studies. Forward-looking statements can generally be identified by the use of forward-looking
words such as, 'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and
other similar expressions. The forward-looking statements contained in this presentation are not guarantees or predictions of future performance and involve known
and unknown risks and uncertainties and other factors, many of which are beyond the control of Pacific Edge and may involve significant elements of subjective
judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ from
these forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements.
The forward-looking statements are based on information available to Pacific Edge as at the date of this presentation. Except as required by law or regulation
(including the NZX Main Board Listing Rules), Pacific Edge undertakes no obligation to provide any additional or updated information whether as a result of new
information, future events or results or otherwise.
No representation
To the maximum extent permitted by law, Pacific Edge and its advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no
representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in thispresentation.
FY21 Interim Results Presentation
KEY EVENTS AND COMMERCIAL MILESTONES
3FY21 Interim Results Presentation
•LOCAL COVERAGE DETERMINATION INCLUSION: Effective from 1 July for Cxbladder Detect and
Cxbladder Monitor for patients covered under Centers for Medicare and Medicaid Services (CMS) in the
USA. Three-month contribution in 1H21, inclusive of accruals.
•COMMERCIAL AGREEMENT WITH KAISER PERMANENTE: Back end integration and testing of supply
chain logistics now completed. Commercial test orders have commenced and are expected to have a
positive impact from 2H21 onwards.
•SCALE UP OF COMMERCIAL OPERATIONS IN THE USA: Expansion of U.S. executive and sales teams to
leverage and deliver on the growth opportunities available to Cxbladder.
•COVID-19:Significant impact on Cxbladder test volumes April and May. Recovery June to September in
both NZ and USA. Remains a challenge to rapid growth despite introduction of in-home sampling
system.
•STRENGTHENED BALANCE SHEET: Successful completion of $22m placement to ANZ Investments to
provide additional growth capital to accelerate global growth initiatives.
•INCLUSION IN THE S&P/NZX 50, S&P/NZX 50 PORTFOLIO and S&P/NZX MIDCAP INDICES: Effective
from 21 October 2020.
COVID-19 IMPACT AND RESPONSE
•Restrictions on patients accessing
medical care and testing.
•Significant reduction in Total
Laboratory Throughput during April-
May 2020.
•Recovery from June 2020 following
the easing of restrictions and growing
demand for Pacific Edge’s Patient In-
Home Sample System (PIHSS).
•While New Zealand has recovered
strongly, USA is still experiencing
continuing shutdowns and restricted
access across a number of states.
4FY21 Interim Results Presentation
•Pacific Edge operated as an essential business during
COVID restrictions in NZ and the USA.
•Took steps to preserve cash and provide flexibility to
employees.
•Global pandemic highlighted the need for novel ways to
detect cancer early and guide patient treatment.
•Sales team driving business via virtual meetings with
many healthcare providers and clinics closed.
•Telemedicine identified globally as a key element in
healthcare provision during the pandemic and beyond.
•Growing recognition of the benefits of Cxbladder in-
home sampling system as an enabler for telemedicine,
leading to more tests in COVID-19 environment.
5
1.“The COVID19 pandemic has driven perhaps the greatest transformation in healthcare delivery in modern times”. MEDPAGE TODAY July 2020, Dr Nancy Gin, Executive Vice-
President of Quality and, Chief Clinical Quality Officer for the Kaiser Federation
FY21 Interim Results Presentation
ADAPTING TO COVID-19:
TELEHEALTH and PATIENT IN-HOME SAMPLING
•Dramatic increase in the use of telehealth as the primary mode of
consultation for patient
1
.
•Telehealth growth in the US supported by FDA and CMS, seen as a
significant change in the US healthcare landscape.
•Cxbladder’spatient in-home urine sample collection system (PIHSS) is
an enabler of telehealth.
•Allows patient evaluation and assessment to be managed remotely.
Benefits for older and ’COVID-at-risk’ patients, removing the need to
visit busy medical centres or collection points.
•Provides another strong point of difference for Cxbladder.
•Expected to continue as an additional option for urologists to better
manage patients during COVID-19 and beyond as demand for
telehealth services continues to grow.
LCD INCLUSION IS A
TRANSFORMATIONAL
REIMBURSEMENT
MILESTONE
CONSECUTIVE RECORD REVENUE MONTHS OVER THE FOUR
MONTHS POST LCD IN JULY.
•Two-months of cash contribution included in the 1H21
reporting period, plus accruals for expected cash
receipts for tests not yet paid
1
to 30 September.
•Cxbladder Detect and Cxbladder Monitor accounted for
94% of U.S. commercial test volume in 1H21.
•CMS related tests (Medicare and Medicare Advantage)
accounted for 67% of U.S. commercial test volume in
1H21.
•Significant increase in recognised revenue and cash
receipts, with CMS tests paid in approximately 30 days;
with strong positive impact on operating cashflow.
•Negotiations continue with CMS for reimbursement of
previous 22,000+ tests done for CMS patients
2
.
6FY21 Interim Results Presentation
1.The successful LCD decision has allowed Pacific Edge to start
recognising revenue (under NZ IFRS 15) for tests that are performed
on CMS patients (Medicare and Medicare Advantage) in the U.S. at
the CMS price of US$760 per test for Medicare. See note 1B in the
Interim Financial Statements.
2.There is no certainty of any reimbursement on any of these tests
performed prior to 30 June 2020, and there is no ability to reliably
estimate the level of consideration that would be received if
agreement can be reached with NovitasSolutions Inc over these
previously performed tests.
Successful inclusion in Local Coverage
Determination (LCD) facilitates
reimbursement of Cxbladder Detect and
Cxbladder Monitor tests performed on
CMS patients on or after 1 July 2020, at
USD $760 per test.
7
ACTIVITY TODATE:
•Focus on integration of Cxbladder into Kaiser Permanente’s systems.
Completed testing to ensure a gold standard user-experience.
•National agreement for all Cxbladder products, initially with
Cxbladder Monitor, other Cxbladder products to follow.
•More than 95% of Kaiser Permanente’s medical consultations are
now telehealth providing an opportunity to utilise Cxbladder in-home
sampling system.
•Commercial testing now underway; expected to positively impact
from 2H21 onwards.
COMMERCIAL TESTING UNDERWAY
WITH KAISER PERMANENTE
Agreement reached with Kaiser Permanente, one of the USA’s largest
non-profit healthcare providers, to commercially use all Cxbladder
products nationally.
FY21 Interim Results Presentation
SCALE-UP OF COMMERCIAL OPERATIONS IN USA
Strengthened leadership team, recruited sales executive and sales reps to drive the growth
following LCD and Kaiser Permanente commercial outcomes.
•LARGE UROLOGY GROUPS, COMMUNITY PRACTICES AND PRIVATE PAYERS: Strengthened frontline
US commercial team -addition of specialist sales and commercialisation skills, five sales reps
added to new sales territories, a medical affairs expert and VP Payer Relations to lead the charge
on private payer negotiations.
•LARGE INSTITUTIONAL CUSTOMERS: Specialist sales executives focussed on converting other large
institutional customers in the US.
•PRIVATE PAYERS: Dedicated contracted team of specialists to carry out negotiations with the top
private payers to gain coverage and inclusion in their reimbursement networks.
•CUSTOMER SUPPORT: Expansion of the customer services liaison team to support Kaiser
Permanente and others who are using the Cxbladder patient in-home sampling program.
•SUFFICIENT CAPACITY IN US LABORATORY to support the expected increase in demand for
Cxbladderwith 260,000 tests per annum design capacity for Hershey P.A laboratory.
8FY21 Interim Results Presentation
GROWING EVALUATION AND USE OF CXBLADDER BY
LARGE HEALTHCARE INSTITUTIONS
USAUSASOUTH EAST ASIA
•Kaiser Permanente
•Carolina Urologic Research
Center
•City of Hope
•Cleveland Clinic
•Cornell
•Fox Chase CC
•Johns Hopkins CC
•MD Anderson
•Moffitt CC
•Ohio State University CC
•Penn State Milton S. Hershey
Medical Center
•Rush University
•Thomas Jefferson University
•TriStar Medical Center
•UCLA
•University of California-San
Diego
•University of California-San
Francisco
•University of Chicago
•University of Colorado
•University of Michigan
•University of Minnesota
•University of Oklahoma
•University of Pennsylvania
•University of Southern
California
•UT Southwestern
•VA Accounts
•Wellstar
•Singapore General Hospital
•Tan Tock Seng
•Khoo Tech PuatHospital
•KK Women’s and Children’s
Hospital
•National University Hospital
•Raffles Medical Group
•Gleneagles Private Hospital
NEW ZEALAND
•Majority of public healthcare
providers
9FY21 Interim Results Presentation
FINANCIAL RESULT
For six months ended 30 September 2020
A BIG STEP FORWARD FOR PACIFIC EDGE IN 1H21
OPERATING REVENUE
INCREASED
+46% to $3.3 million
11
TOTAL LABORATORY
THROUGHPUT
Down 16% on pcpdue to
COVID-19
6,864 tests
AVERAGE MONTHLY CASH
BURN REDUCED
2Q21 down 23% driven by
CMS reimbursement
COMMERCIAL TESTS
Down 15% on pcpdue to
COVID-19
5,591 tests
USA: down 25%
Rest of World: up 18%
FY21 Interim Results Presentation
TOTAL COMPREHENSIVE
LOSS REDUCED
Improved 25% to $(7.1)m
OPERATING EXPENSES
REDUCED
Down 8% to $11.2 million
NET CASH, CASH
EQUIVALENTS AND SHORT
TERM DEPOSITS
Increased to $29.3m
TOTAL LABORATORY THROUGHPUT AND
COMMERCIAL TESTS
COVID-19 restrictions affecting access to medical centres
and testing for patients, particularly in April and May.
Significant impact on test throughput, particularly in USA
which is ongoing. Strong recovery being seen from June
onwards.
•Total Laboratory Throughput(TLT) 6,864 tests, down
16% on pcp.
•Commercial Tests 5,591, down 15% on pcp. Percentage
of commercial tests remains consistent at 81% of TLT.
•Strong recovery in ROW (+18%) partially offsetting
decline in USA (-25%).
•Continuing recovery with commercial test numbers
ramping up: tests in September increased 11% on pcp.
12
*See Slide 27 for definition of Commercial Tests
FY21 Interim Results Presentation
1,1061,1656631,067
Avge 1H20Avg 2H20Avg April-May
1H21
Avg Jun-Sep 1H21
COMMERCIAL TEST NUMBERS
Monthly Average
April –May 2020
43% drop due to
COVID
June to September 2020:
ongoing recovery post
initial COVID-lockdowns
Average commercial
test numbers in FY20
USA REMAINS OUR PRIMARY MARKET
6,864
Total Laboratory
Throughput (TLT)
5,591
Commercial Tests
13
USA
72% of TLT
71% of commercial tests
87% of Operating Revenue
Rest of World
28% of TLT
29% of commercial tests
13% of Operating Revenue
South East Asia
Australia
New Zealand
FY21 Interim Results Presentation
MULTIPLE CXBLADDER PRODUCTS ADDS DEPTH TO
OUR MARKET
14FY21 Interim Results Presentation
USA
72%
Rest of World
28%
Total Laboratory
Throughput
by Region
(as at 30 Sept 2020)
Triage
27%
Detect
49%
Monitor
24%
Total Laboratory
Throughput
by Test
(as at 30 Sept 2020)
STRONG FINANCIALS IN A COVID-19 DOMINATED HALF
(NZ$’000)1H21
1
1H20
1
% Change
Operating Revenue
2
(test sales)3,3262,28546%
ü
Total Revenue4,0602,70150%
ü
Operating Expenses11,15312,090(8)%
ü
Total Comprehensive Loss7,0799,406(25)%
ü
Cash Receipts from Customers2,5532,3509%
ü
Net Operating Cash Outflow7,6797,4054%
-
Net cash, cash equivalents and short term deposits29,2834,737518%
ü
1. Half year ended 30 September
2 The Group has included in Operating Revenue an accrual for tests performed from 1 July 2020 (date at which Cxbladderwas included within the LCD and reimbursement commenced) to 30 September 2020 for which payment has not been received by 30 September 2020.
The accrual included in both Operating Revenue in the Statement of Comprehensive Income and in Receivables in the Balance Sheet is NZ$769,835.
15
STRONG REVENUE GROWTH DRIVEN BY
ACCELERATING REIMBURSEMENT
FY21 Interim Results Presentation
•Total operating revenue increased 46% on pcp.
•Revenue growth primarily driven by reimbursement
of CMS tests from 1 July onwards.
•1H21 included a 3 month revenue contribution from
CMS.
•Average cash receipts for August and September
(excluding accruals) increased 77% on pcp.
•Escalation in operating revenue in August and
September is expected to continue into 2H21.
1.01.42.02.32.6
0.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1H171H181H191H201H21
$Millions
First Half Revenue Comparison
Operating RevenueAccruals
1. LCD inclusion has allowed Pacific Edge to start accruing revenue (under NZ IFRS 15) for tests that are performed on CMS patients (Medicare and Medicare Advantage) in the U.S. CMS tests performed after 1
July 2020 have been recognised on an accrual basis based on expected future cash receipts (previously cash basis). Tests for other non-CMS payers continue to be accounted for on a cash basis. The accrual
included in the 1H21 result is $0.8m. See Note 1b in the 1H21 Financial Statements. .
STRONG REVENUE GROWTH DESPITE COVID-19
FY21 Interim Results Presentation
Total operating revenue:
•U.S. increased 46% v 1H20
•ROW increased 40% v 1H20
•U.S. accounted for 87% of total
operating revenue.
•Growing momentum in the U.S.
market -reimbursement rates up
significantly.
•NZ continued to show strong
momentum –operating revenue well
ahead of plan and pcp.
USA
87%
1H21 OPERATING REVENUE
SPLIT BY GEOGRAPHY
0
1
2
3
4
1H202H201H21
$NZD Millions
OPERATING REVENUE
USAROW
COVID-19
IMPACTED
FROM MARCH
2020
THREE MONTHS REVENUE
CONTRIBUTION FROM LCD
INCLUSION IN 1H21
ROW
13%
REDUCTION IN MONTHLY CASH BURN
•1H21 average monthly cash burn
reduced 6% on pcpand 15% on 2H20.
•Q221 average monthly cash burn
reduced 23% on pcp–driven by CMS
reimbursement.
•LCD coverage has significantly
improved cash conversion.
FY21 Interim Results Presentation18
-1.6
-1.5
-1.4
-1.3
-1.2
-1.1
1H192H191H202H201H21
NZD Millions
CASH BURN
Half Year Comparison
SIGNIFICANT IMPROVEMENT IN CASH PAYMENT TERMS
•Key reimbursement events driving improving
time to payment for most tests.
•Significant improvement in cash conversion
driven by LCD inclusion.
•CMS tests paid in approximately 30 days.
•Other US providers average 1 to 3 months.
•Cash receipts from customers increased 9% on
pcpto $2.6m, which includes only a two
month contribution from the CMS for tests
completed in July and August.
•Strong cash receipts from 1 October 2020
onwards.
19FY21 Interim Results Presentation
Pre-LCD
Post-LCD
0
20
40
60
80
100
Pre-LCDPost-LCD
Days
AVERAGE DAYS TO PAYMENT ON US
TESTS
GROWTH CATALYSTS AND OUTLOOK
For all markets our key objectives remain; achieving commercial
contracts with large institutional healthcare customers, growing
sales to existing customers, gaining stronger inclusion in guidelines
and targeting private payers for coverage inclusion
SIGNIFICANT RECENT PROGRESS
UNDERPINS FUTURE GROWTH
SIGNIFICANT COMMERCIAL AND REIMBURSEMENT
MILESTONES ACHIEVED IN THE US
•Inclusion in LCD and commercial agreement with Kaiser
Permanente
COMPETITIVE ADVANTAGE CONTINUES TO GROW
•Clinical validation, published evidence, inclusion in
guidelines, Intellectual Property
GROWING USE OF TELEHEALTH
•Patient In-Home Sampling System supports the dramatic
increase in the use of telehealth as the primary mode of
consultation for patients
SCALE UP OF OPERATIONS IN US
•Growth capital invested to drive growth. Addition made to
the commercial team in commercial executive roles, sales
reps and medical affairs
FY21 Interim Results Presentation
ACCELERATING U.S. GROWTH IS
OUR KEY OBJECTIVE
•Investment into expanded commercial operations in USA.
•Leverage LCD inclusion to gain reimbursement coverage with
private payers (insurance companies).
•Leverage Kaiser Permanente agreement to complete commercial
agreements with other healthcare institutions of scale.
•‘Gas-up’ the commercial tests for Kaiser Permanente and support
ramp up in demand for PIHSS.
•Publication of additional clinical evidence supporting the
outperformance of Cxbladder, to enable greater recognition of
Cxbladder in guidelines.
•Commercial launch of fourth Cxbladder test (Cxbladder Resolve)
planned for FY22.
22FY21 Interim Results Presentation
FY21 Interim Results Presentation23
NEW ZEALAND
•Bring NZ business to a cash-flow positive position.
•Extend commercial coverage by public healthcare
providers in NZ from 65% towards 100%.
•Grow out the number of Cxbladder products in
use with each of the existing public healthcare
customers.
•Publication of additional clinical evidence
supporting the clinical utility of Cxbladder to drive
further reimbursement, coverage and guideline
inclusion.
AUSTRALIA AND SOUTH EAST ASIA (SEA)
•Transition Australia and Singapore public
health care providers from their clinical
studies to a commercial customer model.
•Facilitate commercial discussions with
large scale SEA healthcare provider
partners to grow Pacific Edge’s SEA
business.
•Publication of a white paper summarising
the results from the completed user
programs from five public hospitals in
Singapore.
CONTINUING PROGRESS IN
‘REST OF WORLD’ MARKETS
STRONG GROWTH OUTLOOK FOR 2H21
AND BEYOND
•Momentum has continued into the second half of FY21 with U.S. cash receipts for
October increasing 68% on pcp.
•Test use and revenue growth expected to continue to escalate in 2H21 and beyond.
•Expect increasing number of commercial tests from CMS and Kaiser Permanente to
underpin strong revenue and operating cashflow growth.
•Identified opportunities for growth in all our targeted markets. US market remains our
primary focus.
•Strengthened balance sheet provides additional growth capital allowing us to scale-up
the business to meet the expected increase in demand for Cxbladder.
•More resources invested in the US, directed towards achieving commercial contracts
with large institutional healthcare customers and growing sales to existing customers
and private payer coverage inclusion.
24FY21 Interim Results Presentation
25
David Darling
Chief Executive Officer
Pacific Edge Limited
Tel: +64 3 479 5802 Mobile: +64 21 797981
Email: david.darling@pelnz.com
Enquiries to:
www.pacificedge.co.nz
www.cxbladder.com
www.pacificedgedx.com
FY21 Interim Results Presentation
CXBLADDER’S PIVOTAL COMMERCIAL CUSTOMERS
GLOSSARY
•CMS: Centres for Medicare and Medicaid in the US. Provide insurance coverage for healthcare of all US citizens over the
age of 65 years. This is approximately 62 million patients.
•Commercial Tests: Tests that have been analysed by Pacific Edge, for a specific customer, including the User Programmes
run by customers as part of their adoption process but excluding any tests run for clinical studies.
•Laboratory Throughput: Total commercial and non-commercial tests processed through Pacific Edge’s laboratories in the
USA and New Zealand, including tests for User Programmes.
•Local Coverage Determination (LCD): A decision by a Medicare Administrative Contractor (MAC) whether to cover a
particular service. In the case of a Laboratory Developed Test, such as Cxbladder, this is a national decision as all national
wide invoices are processed and signed off for coverage by Novitas(our MAC).
•Change in US revenue accounting from cash to accrual basis: Accrual accounting for US revenue (NZ IFRS 15): Since
Cxbladder'sinclusionin the LCD, the Group has beenable to reliably estimate both the probability, timing and size of
payment received from the CMS for each test. The inclusion within LCD combined with the growing support for the use of
Cxbladder within the US has also allowed the Group to reliably estimate both the probability and size of payment received
from customers covered by private insurance, or with no insurance cover. Therefore, an accrual has been included for tests
which have been performed but for which payment had not been received by 30 September 2020. There has been no
change to the revenue accounting policy for ROW which is on an accrual basis.
27FY21 Interim Results Presentation
GLOSSARY
•Rule-Out Tests: A relatively new form of diagnostic process requiring performance metrics of high sensitivity and a high
Negative Predictive Value (NPV). High sensitivity and high NPV will provide an accurate ruling out of patients who do not
have disease.
•Rule-In Tests: More conventional diagnostic process that identifies those people who have disease. The performance
metrics are usually high sensitivity and high specificity.
•LDT: Laboratory Developed Tests are a class of medical tests that are regulated under CLIA c.fthe FDA
•MAC: Medicare Accredited contractor. The CMS (see definition for CMS) have defined 9 regions across the US and
appointed MAC’s to administer their business for CMS patients. Pacific Edge’s MAC is NOVITAS. NOVITAS is the MAC that
administers the CMS business in the region where the Pacific Edge laboratory is located. All patient invoices for Cxbladder
tests carried out on CMS patients across the US are administered by NOVITAS under the LCD (See definition of LCD)
28FY21 Interim Results Presentation
---
INTERIM
FINANCIAL
STATEMENTS
FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2020
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
Note: These Financial Statements are to be read in conjunction with the Notes to the Financial Statements
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
STATEMENT OF COMPREHENSIVE INCOME
NOTES
UNAUDITED
SEPT 2020
6 MONTHS
($000)
UNAUDITED
SEPT 2019
6 MONTHS
($000)
AUDITED
MARCH 2020
12 MONTHS
($000)
REVENUE
Operating Revenue 43,326 2,285 4,370
Total Operating Revenue 3,326 2,285 4,370
Other Income4 558 282 584
Interest Income 173 115 249
Foreign Exchange Gain (Loss) 3 19 (5)
Total Revenue and Other Income 4,060 2,701 5,198
OPERATING EXPENSES
Laboratory Operations2,540 2,656 5,181
Research 2,339 1,974 3,916
Sales and Marketing 3,366 4,102 8,571
General and Administration 2,908 3,358 6,416
Total Operating Expenses5 11,153 12,090 24,084
NET (LOSS) BEFORE TAX(7,093) (9,389) (18,886)
Income Tax Expense---
(LOSS) FOR THE PERIOD AFTER TAX(7,093) (9,389) (18,886)
Items that may be reclassified to profit or loss:
Translation of Foreign Operations 14 (17) (96)
TOTAL COMPREHENSIVE (LOSS) atttributable
to equity holders of the Company
(7,079) (9,406) (18,982)
Earnings per share for profit attributable to the
equity holders of the Company during the period
Basic and Diluted Earnings per share (0.010) (0.018) (0.032)
Interim Financial Statements
Statement of Comprehensive Income 3
Statement of Changes in Equity 4
Balance Sheet 6
Statement of Cash Flows 7
Notes to the Financial Statements
1. Summary of Accounting Policies 8
2. Investment and Advances in Subsidiaries 11
3. Dividends 11
4. Revenue and Other Income 11
5. Operating Expenses 12
6. Segment Information 13
7. Share Capital 18
8. Reconciliation of Cash Used from Operating
Activities with Operating Net Loss 19
9. Contingent Liabilities 19
10. Contingent Assets 19
11. Capital Commitments 20
12. Right of Use Assets and Lease Liability 20
13. Subsequent Event 20
14. The Impact of Covid-19 20
15. Going Concern 21
16. Related Parties 22
17. Net Tangible Assets 23
3 2
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
STATEMENT OF CHANGES IN EQUITY
NOTES
SHARE
CAPITAL
RETAINED
EARNINGS
SHARE BASED
PAYMENTS
RESERVE
FOREIGN CURRENCY
TRANSLATION
RESERVE
TOTAL
EQUITY
($000)($000)($000)($000)($000)
UNAUDITED 6 MONTHS TO 30 SEPT 2019
Balance as at 31 March 2019 146,403 (137,877) 4,507 877 13,910
(Loss) After Tax - (9,389) - - (9,389)
Other Comprehensive Income - - - (17) (17)
TOTAL COMPREHENSIVE (LOSS) atttributable to equity holders of the Company - (9,389) - (17) (9,406)
Transactions with owners in their capacity as owners:
Issue of Share Capital7 - - - - -
Share Based Payments - Employee Remuneration7 112 - - - 112
Share Based Payments - Employee Share Options7 - 435 (115) - 320
Balance as at 30 September 2019 146,515 (146,831) 4,392 860 4,936
UNAUDITED 6 MONTHS TO 30 SEPT 2020
Balance as at 31 March 2020 165,423 (156,242) 4,542 781 14,504
(Loss) After Tax - (7,093) - - (7,093)
Other Comprehensive Income - - - 1414
TOTAL COMPREHENSIVE (LOSS) atttributable to equity holders of the Company - (7,093) - 14(7,079)
Transactions with owners in their capacity as owners:
Issue of Share Capital7 21,968 - - - 21,968
Share Based Payments - Employee Remuneration7 284 - - - 284
Share Based Payments - Employee Share Options7 348 404 38 - 790
Balance as at 30 September 2020 188,023 (162,931) 4,580 795 30,467
AUDITED 12 MONTHS TO 31 MARCH 2020
Balance as at 31 March 2019 146,403 (137,877) 4,507 877 13,910
(Loss) After Tax - (18,886) - - (18,886)
Other Comprehensive Income - - - (96) (96)
TOTAL COMPREHENSIVE (LOSS) atttributable to equity holders of the Company - (18,886) - (96) (18,982)
Transactions with owners in their capacity as owners:
Issue of Share Capital7 18,857 - - - 18,857
Share Based Payments - Employee Remuneration7 163 - - - 163
Share Based Payments - Employee Share Options7 - 521 35 - 556
Balance as at 31 March 2020 165,423 (156,242) 4,542 781 14,504
Note: These Financial Statements are to be read in conjunction with the Notes to the Financial Statements
5 4
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
For and on behalf of the Board of DirectorsDirector Director
Dated 25th day of November 2020
AS AT 30 SEPTEMBER 2020
BALANCE SHEET
NOTES
UNAUDITED
SEPT 2020
6 MONTHS
UNAUDITED
SEPT 2019
6 MONTHS
AUDITED
MARCH 2020
12 MONTHS
($000)($000)($000)
CURRENT ASSETS
Cash and Cash Equivalents 6,283 2,737 1,755
Short Term Deposits 23,000 2,000 13,029
Receivables1,656 952 642
Inventory 791 828 796
Other Assets 760 923 694
Total Current Assets32,490 7,440 16,916
NON-CURRENT ASSETS
Property, Plant and Equipment 664 661 652
Right of Use Assets123,652 1,500 1,581
Intangible Assets 176 208 179
Total Non-Current Assets4,492 2,369 2,412
TOTAL ASSETS36,982 9,809 19,328
CURRENT LIABILITIES
Payables and Accruals 2,136 3,372 3,270
Borrowings14 803 --
Lease Liabilities12 1,264 1,149 983
Total Current Liabilities4,203 4,521 4,253
NON-CURRENT LIABILITIES
Lease Liabilities122,312 352 571
Total Non-Current Liabilities2,312 352 571
TOTAL LIABILITIES6,515 4,873 4,824
NET ASSETS30,467 4,936 14,504
Represented by:
EQUITY
Share Capital7 188,023 146,515 165,423
Accumulated Losses(162,931) (146,831) (156,242)
Share Based Payments Reserve4,580 4,392 4,542
Foreign Translation Reserve 795 860 781
TOTAL EQUITY30,467 4,936 14,504
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
STATEMENT OF CASH FLOWS
NOTES
UNAUDITED
SEPT 2020
6 MONTHS
UNAUDITED
SEPT 2019
6 MONTHS
AUDITED
MARCH 2020
12 MONTHS
($000)($000)($000)
CASH FLOWS TO OPERATING ACTIVITIES
Cash was provided from:
Receipts from Customers2,553 2,350 4,431
Receipts from Grant Providers277 641 1,184
Interest Received 183 161 241
3,013 3,152 5,856
Cash was disbursed to:
Payments to Suppliers and Employees 10,739 10,511 21,190
Net GST cash outflow (inflow) (47) 46 51
10,692 10,557 21,241
Net Cash Flows To Operating Activities8(7,679) (7,405) (15,385)
CASH FLOWS TO INVESTING ACTIVITIES:
Cash was provided from:
Proceeds from Short Term Deposits 13,029 8,000 8,000
13,029 8,000 8,000
Cash was disbursed to:
Purchase of Short Term Deposits 23,000 2,000 13,029
Capital Expenditure on Plant and Equipment 140 41 116
Capital Expenditure on Intangible Assets 42 30 67
23,182 2,071 13,212
Net Cash Flows To Investing Activities (10,153) 5,929 (5,212)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash was received from:
Proceeds from Borrowings14803 - -
Ordinary Shares Issued7 22,204 - 20,136
23,007 - 20,136
Cash was disbursed to:
Repayment of Leases 654 609 1,211
Issue Expenses7 32 3 1,280
686 612 2,491
Net Cash Flows From Financing Activities22,321(612) 17,645
Net Increase (Decrease) in Cash Held4,489(2,088) (2,952)
Add Opening Cash Brought Forward 1,755 4,847 4,847
Effect of exchange rate changes on net cash 39 (22) (140)
Ending Cash Carried Forward 6,283 2,737 1,755
Note: These Financial Statements are to be read in conjunction with the Notes to the Financial StatementsNote: These Financial Statements are to be read in conjunction with the Notes to the Financial Statements
7 6
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
1 . SUMMARY OF ACCOUNTING POLICIES
The unaudited interim financial statements (“Interim Financial Statements”) presented
are those of Pacific Edge Limited (“Company”) and its subsidiaries (“Group”). The
Company is registered and domiciled in New Zealand for the purpose of developing
and commercialising new diagnostic and prognostic tools for the early detection and
management of cancers. Pacific Edge Diagnostics New Zealand Limited and Pacific Edge
Diagnostics USA Limited manage and operate the laboratories used for the detection
of bladder cancer. Pacific Edge Pty Limited’s purpose is to research and develop the
Cxbladder products and other prognostic tools. Pacific Edge Diagnostics Singapore Pte
Limited’s purpose is the sales and marketing of bladder cancer products and assisting with
research and development and Pacific Edge Analytical Services Limited is a dormant entity.
The Company is a for profit entity, registered in New Zealand under the Companies Act
1993 and is a reporting entity for the purposes of the Financial Markets Conduct Act 2013.
The Company is listed on the New Zealand Stock Exchange (NZX).
a) Basis of Preparation of Financial Statements
The Interim Financial Statements for the six months ended 30 September 2020 have
been prepared in accordance with New Zealand Generally Accepted Accounting Practice
(GAAP) and the Financial Markets Conduct Act 2013. The Group is designated as a
profit-oriented entity for financial reporting purposes.
The Interim Financial Statements have been prepared in accordance with NZ IAS 34 -
Interim Financial Reporting. In complying with NZ IAS 34, these consolidated Interim
Financial Statements also comply with IAS 34 - Interim Financial Reporting and should
be read in conjunction with the Company’s 2020 Annual Report. The Interim Financial
Statements for the six months ended 30 September 2020 are unaudited. Comparative
balances for 30 September 2019 are unaudited, whilst the comparative balances for 31
March 2020 are audited.
The Interim Financial Statements are prepared on the basis of historical cost, except where
otherwise identified. The presentational currency used in the preparation of the financial
statements is New Zealand dollars and all values are rounded to the nearest thousand
dollars ($000).
b) Accounting Policies and Accounting Estimates
All significant accounting policies have been applied on a basis consistent with those used in
the audited financial statements of Pacific Edge Limited for the year ended 31 March 2020.
There has been a change in a Critical Accounting Estimate for commercial test revenue
recognised in the US. This has resulted in Operating Revenue increasing by $769,835 for
the reporting period ended 30 September 2020.
US revenue recognition from tests performed
NZ IFRS 15: Revenue from contracts with customers requires Directors to apply significant
judgement to determine whether revenue can be recognised in advance of the receipt of cash.
The significant judgements adopted by the Group in applying NZ IFRS 15 criteria include:
- Determining if a contract with the customer exists;
- The rights of each party are identified;
- Payment terms are identified;
- The contract has commercial substance; and
- Determining whether it is probable that the entity will collect the consideration to
which it is entitled.
The Group performs Cxbladder tests when requested by a patient’s physician. At the point
the test results are returned to the physician, the Group has satisfied its performance
obligation and has the right to issue an invoice. The Group has determined a contract
exists, and payment terms are identified, the contract has commercial substance and the
rights of each party have been identified.
For the prior comparative periods (31 March 2020 and 30 September 2019) the Group had
judged it is not probable that any consideration will be received from Centers for Medicare
and Medicaid Services (CMS) as inclusion in the Local Coverage Determination (LCD) with
the CMS had not yet been obtained, and that for customers covered by private insurance,
or with no insurance cover, the Group could not reliably estimate both the probability and
size of payment received. The Group therefore recognised Operating Revenue from the
US when cash was received, with no revenue accrual for tests performed but unpaid at
balance date.
On the 3rd July 2020, Pacific Edge received notice of inclusion in the LCD, resulting in the
Company receiving reimbursement for Cxbladder Monitor and Detect tests performed
after 1 July 2020 for patients covered by the Centers for Medicare and Medicaid Services
(CMS) across the US that are deemed medically necessary. Reimbursement for these tests
is at the already determined national CMS price for Cxbladder of US$760 per test. The CMS
provides healthcare coverage for all US citizens over 65 years. CMS tests currently make up
approximately 40% of Pacific Edge’s current Commercial Tests in the US.
Since Cxbladder’s inclusion in the LCD, the Group has been able to reliably estimate
both the probability and size of payment received from the CMS. The inclusion within
LCD combined with the growing support for the use of Cxbladder within the US has also
allowed the Group to reliably estimate both the probability and size of payment received
from customers covered by Medicare Advantage.
The remaining tests covered by private insurance, or with no insurance cover, have not
been included in the revenue accrual until further history provides the basis on which a
reliable estimate of both the probability and size of payment received can be made.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
9 8
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
The Group has included in Operating Revenue recognition of revenue for tests performed
for both Medicare and Medicare Advantage from 1 July 2020 (date at which Cxbladder
was included within the LCD and reimbursement commenced) to 30 September 2020 for
which payment has not been received by 30 September 2020. The amount included in
both Operating Revenue in the Statement of Comprehensive Income and in Receivables in
the Balance Sheet is US$493,310 (NZ$769,835).
Strong subsequent cash receipt from 1 October 2020 until the 25th November 2020
supports the accrual of revenue for the period ending 30 September 2020.
Rest of World revenue recognition from tests performed
There has been no change in accounting policy or estimates for Operating Revenue for the
Rest of World. The Group performs Cxbladder tests when requested by a patient’s physician
in New Zealand, Australia and Singapore. At the point the test results are returned to the
physician, the Group has satisfied its performance obligation and an invoice is issued to the
customer, therefore revenue is recognised when the invoice is issued.
c) Authorisation
The Interim Financial Statements were authorised by the Board of Directors on 25th
November 2020. The Annual Financial Statements for the year ended 31 March 2020 were
authorised by the Board of Directors on 28th May 2020.
d) Audit
The Interim Financial Statements have not been audited. The comparative full year
financial results for the year ended 31 March 2020 have been audited.
e) Basis of Consolidation
The following entities and the basis of their inclusion for consolidation in these Interim
Financial Statements are as follows:
Ownership Interests
& Voting Rights
Name of Subsidiary
Place of
Incorporation
(or registration)
and Operation
Principal Activity
30 Sept
2020
(%)
30 Sept
2019
(%)
Pacific Edge Diagnostics
New Zealand Limited
New Zealand
Commercial Laboratory
Operation
100100
Pacific Edge Pty LimitedAustralia
Biotechnology Research
& Development
100100
Pacific Edge Diagnostics
USA Limited
USA
Commercial Laboratory
Operation
100100
Pacific Edge Diagnostics
Singapore Pte Limited
Singapore
Commercial Sales and
Biotechnology Research
& Development
100100
Pacific Edge Analytical
Services Limited
New ZealandDormant Company100100
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
2. INVESTMENT AND ADVANCES IN SUBSIDIARIES
The consolidated Interim Financial Statements incorporate the assets and liabilities and
results of Pacific Edge Diagnostics New Zealand Limited, Pacific Edge Diagnostics USA
Limited, Pacific Edge Diagnostics Singapore Pte Limited, Pacific Edge Analytical Services
Limited and Pacific Edge Pty Limited, all of which are 100% owned by the Company.
Subsidiaries have a 31 March balance date. The investments in and advances to subsidiaries
are eliminated on consolidation in the Group financial statements.
3. DIVIDENDS
The Company does not propose to pay dividends to shareholders similar to previous years.
This policy continues.
4. REVENUE AND OTHER INCOME
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Cxbladder Sales - Recognised at a point in timeCxbladder Sales - Recognised at a point in time
- US- US2,9062,906 1,984 1,984 3,778 3,778
- Rest of World- Rest of World 420 420 301 301 592 592
Total Operating Revenue Total Operating Revenue 3,3263,326 2,285 2,285 4,370 4,370
Other IncomeOther Income
Grant RevenueGrant Revenue 303 303 49 49 98 98
Research Rebate ReceivedResearch Rebate Received 255 255 233 233 486 486
Total Other IncomeTotal Other Income558558 282 282 584 584
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
11 10
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
5. OPERATING EXPENSES
The note below highlights the expenses shown within total operating expenses. These
items are then split across functions laboratory, research, sales and marketing and general
and administration as reported in the Annual Report.
Notes
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Operating ExpensesOperating Expenses
AmortisationAmortisation 44 44 58 58 122 122
Auditors Remuneration Auditors Remuneration
- Group year end financial statements- Group year end financial statements 68 68 73 73 129 129
- Half year review of financial statements- Half year review of financial statements 29 21 21
- R&D review of Callaghan Innovation - - 4 4 -
- Foreign statutory financial statements6 - 21
103 98 171
DepreciationDepreciation 106 79 173
Depreciation on Right of Use AssetsDepreciation on Right of Use Assets 569 569 571 571 1,132 1,132
Directors FeesDirectors Fees 151 169 321
Employee BenefitsEmployee Benefits 4,376 4,376 5,558 5,558 11,228 11,228
Employee Share Scheme ExpensesEmployee Share Scheme Expenses 284 284 115 115 163 163
Employee Share OptionsEmployee Share Options 585 585 318 318 556 556
Interest on Lease LiabilitiesInterest on Lease Liabilities 37 37 48 48 65 65
Rental and Lease Expense*Rental and Lease Expense* 19 20 22
Other Operating ExpensesOther Operating Expenses4,8794,879 5,056 5,056 10,13110,131
Total Operating ExpensesTotal Operating Expenses 11,153 11,153 12,090 12,090 24,084 24,084
*Due to the adoption of NZ IFRS 16, this now only includes short term, low value and variable lease
payments, the remaining payments are now represented by depreciation on right of use assets and
interest on lease liabilities.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
Employee Share Options
Employee Share Options are a non-cash expense. Refer to Note 8 of the Annual Report for
details of the accounting policy for Employee Share Schemes.
Employee Share Scheme
Employee Share Scheme Expenses are a non-cash expense. These relate to shares issued
to employees in lieu of cash bonuses.
Other Operating Expenses
The major categories of expenditure which make up operating expenses, but are not
disclosed separately above: Laboratory costs, Information Technology costs, Compliance
and Regulatory costs, NZX and Registry fees, Investor Relations costs, Consultants and
Contractors.
6. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision-maker. The chief operating decision-maker,
who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive Officer who makes strategic
decisions.
There are two operating segments at balance date:
1. Commercial: The sales, marketing, laboratory and support operations to run the
commercial businesses worldwide.
2. Research: The research and development of diagnostic and prognostic products for
human cancer.
The reportable operating segment Commercial derives its revenue primarily from sales
of Cxbladder tests and the reportable operating segment Research derives its revenue
primarily from Grant Revenue. The Chief Executive Officer assesses the performance of
the operating segments based on net (loss) for the period.
Segment income, expenses and profitability are presented on a gross basis excluding
inter-segment eliminations to best represent the performance of each segment operating
as independent business units. The segment information provided to the Chief Executive
Officer for the reportable segment described above, for the six months ended
30 September 2020, is shown on the following page.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
13 12
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
Unaudited 6 Months
to 30 September 2020
Commercial
($000)
Research
($000)
Less:
Eliminations
($000)
Total
External
Income
($000)
Income
Operating Revenue - External3,326 - - 3,326
- Internal - - - -
Other Income 151806 (399)558
Interest Income - 173 - 173
Foreign Exchange Gain 2 1 - 3
Total Income3,479 980 (399)4,060
Expenses
Expenses 5,866 4,967 (399) 10,434
Depreciation & Amortisation 503 216 - 719
Total Operating Expenses 6,369 5,183 (399) 11,153
Loss Before Tax(2,890)(4,203)-(7,093)
Income Tax Expense - - - -
Loss After Tax(2,890)(4,203)-(7,093)
Net Cash Flow to Operating Activities(4,053) (3,626) - (7,679)
Audited 12 Months
to 31 March 2020
Commercial
($000)
Research
($000)
Less:
Eliminations
($000)
Total
External
Income
($000)
Income
Operating Revenue - External 4,370 - - 4,370
- Internal - - - -
Other Income 376 1,381 (1,173) 584
Interest Income 6 245 (2) 249
Foreign Exchange Gain - (5) - (5)
Total Income 4,752 1,621 (1,175) 5,198
Expenses
Expenses 15,093 8,740 (1,175) 22,658
Depreciation & Amortisation 1,015 411 - 1,426
Total Operating Expenses16,108 9,151 (1,175) 24,084
Loss Before Tax (11,356) (7,530) - (18,886)
Income Tax Expense- - - -
Loss After Tax (11,356) (7,530) - (18,886)
Net Cash Flow to Operating Activities (9,910) (5,475) - (15,385)
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
Unaudited 6 Months
to 30 September 2019
Commercial
($000)
Research
($000)
Less:
Eliminations
($000)
Total
External
Income
($000)
Income
Operating Revenue - External 2,280 5 - 2,285
- Internal - - - -
Other Income 180 522 (420) 282
Interest Income 1 116 (2) 115
Foreign Exchange Gain 2 16 1 19
Total Income 2,463 659 (421) 2,701
Expenses
Expenses 7,194 4,609 (421) 11,382
Depreciation & Amortisation 513 195 - 708
Total Operating Expenses 7,707 4,804 (421) 12,090
Loss Before Tax (5,244) (4,145) - (9,389)
Income Tax Expense- - - -
Loss After Tax (5,244) (4,145) - (9,389)
Net Cash Flow to Operating Activities (4,349) (3,056) - (7,405)
Eliminations
These are the intercompany transactions between the subsidiaries and the Parent.
These are eliminated on consolidation of Group results.
Total Laboratory Throughput: (unaudited)
Commercial
(#tests)
Research
(#tests)
Total
(#tests)
Six months ended 30 September 2020 5,591* 1,273* 6,864*
Twelve months ended 31 March 2020 13,627 3,234 16,861
Six months ended 30 September 2019 6,573 1,574 8,147
* Refer to note 14 for further details of the impact of Covid-19 on test numbers.
Laboratory Throughput is a key metric for the Group: Laboratory Throughput provides
evidence of the usage of Cxbladder products globally and the rates of adoption between
different customer segments. Total Laboratory Throughput includes Commercial Tests,
which are invoiced to customers and Research Tests which are not considered to be
billable as these tests relate to user programs or other non-chargeable activities.
Commercial test numbers are also a key metric for the Group: Commercial Tests are those
tests for which the Company is actively seeking reimbursement and cash receipts, and
tests performed at no charge in order to gain new customers.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
15 14
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
Segment Assets and Liabilities Information:
As at 30 September 2020
Commercial
($000)
Research
($000)
Total
($000)
Total Assets5,805 31,177 36,982
Total Liabilities4,895 1,620 6,515
As at 31 March 2020
Commercial
($000)
Research
($000)
Total
($000)
Total Assets 2,374 16,954 19,328
Total Liabilities 2,842 1,982 4,824
As at 30 September 2019
Commercial
($000)
Research
($000)
Total
($000)
Total Assets 3,151 6,658 9,809
Total Liabilities 3,421 1,452 4,873
Additions to non-current assets for the period include:
Commercial
($000)
Research
($000)
Total
($000)
Property, Plant & Equipment 80 91 171
Right of Use Assets2,694 16 2,710
Intangible Assets 22 30 52
Total Additions to Non-Current Assets2,796 137 2,933
The amounts provided to the Chief Executive Officer with respect to total assets and total
liabilities are measured in a manner consistent with that of the financial statements. These
assets and liabilities are allocated based on the operation of the segment and the physical
location of the asset.
There are no unallocated assets or liabilities.
Geographic Split of Revenue and Non-Current Assets
The Group generates most of the operating revenue from Commercial tests from the
US and New Zealand, and also receives Grant Revenue from the US, Australia and New
Zealand. Rest of World consists of Revenue from Australia and Singapore.
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Operating and Grant RevenueOperating and Grant Revenue
USUS2,906*2,906* 1,987 1,987 3,778 3,778
New ZealandNew Zealand 584 341 675
Rest of WorldRest of World 394 394 239 239 501 501
Total Operating and Grant RevenueTotal Operating and Grant Revenue3,8843,884 2,567 2,567 4,954 4,954
* US Operating and Grant Revenue for the 6 months to September 2020 includes Accrual Revenue, not
included in prior reported periods. Refer to note 1(b) for details.
The US accounted for 60% of non-current assets (March 2020: 37% and September 2019:
54%). Non-current assets located in New Zealand accounted for 39% of the Group’s total
(March 2020: 61% and September 2019: 45%), with Rest of World consisting of non-current
assets in Australia and Signgapore, holding 1% of the Group’s total (March 2020: 2%,
September 2019: 1%).
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Non-Current AssetsNon-Current Assets
USUS2,702*2,702* 1,284 1,284 885 885
New ZealandNew Zealand 1,736 1,062 1,478
Rest of WorldRest of World 54 54 23 23 49 49
Total Non-Current AssetsTotal Non-Current Assets4,4924,492 2,369 2,369 2,412 2,412
* Increase in Non-Current Assets for the 6 months to September 2020 is impacted by Right of Use Asset
increase from resigning of Lease. Refer to Note 12.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
17 16
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
7. SHARE CAPITAL
Sept 2020
6 Months
Shares (000)
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Opening Balance 689,652 165,423 146,403 146,403
Issue of Ordinary Shares - Rights Issue
and Direct Offers
1
33,847 22,000 - 20,136
Issue of Ordinary Shares - Exercise of
Share Options
2
620 348 - -
Issue of Ordinary Shares - Employee
Remuneration
3
645 284 115 163
Less: Issue Expenses - (32) (3) (1,279)
Movement35,112 22,600 112 19,020
Closing Balance724,764 188,023 146,515 165,423
There are 724,763,562 (March 2020: 689,652,227 and September 2019: 511,381,538)
Ordinary Shares on issue.
All fully paid shares in the Company have equal voting rights and equal rights to dividends.
All Ordinary Shares are fully paid and have no par value.
1
During the period 33,846,154 shares were issued under private placements at an average price of $0.65 per
share. (2020: 178,026,769, $0.11)
2
During the period 619,999 share options were exercised at an average price of $0.33 per share (2020: Nil)
3
During the period 645,182 shares were issued as part of employees remuneration in lieu of cash payments at an
average price of $0.44 per share. (2020: 753,994, $0.22)
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
8. RECONCILIATION OF CASH USED FROM OPERATING ACTIVITIES WITH
OPERATING NET LOSS
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Net Loss for the Period(7,093) (9,389) (18,886)
Add Non Cash Items:
Depreciation 106 79 173
Amortisation 44 58 123
Employee Share Options 585 318 556
Employee bonuses paid in shares in lieu of cash 284 115 163
Depreciation on right of use assets 569 571 1,131
Interest on finance leases shown in lease repayments 37 48 65
Total Non Cash Items 1,625 1,189 2,211
Add Movements in Other Working Capital items:
(Increase) in Receivables and Other Assets(1,081)- 539
(Increase) in Inventory 6 14 46
Increase/(Decrease) in Payables and Accruals (1,133) 799 698
Effect of exchange rates on net cash (3) (18) 7
Total Movement in Other Working Capital(2,211) 795 1,290
Net Cash Flows to Operating Activities(7,679) (7,405) (15,385)
9. CONTINGENT LIABILITIES
There were no known contingent liabilities at 30 September 2020 (March 2020: Nil and
September 2019: Nil). The Company and Group have not granted any securities in respect
of liabilities payable by any other party whatsoever.
10. CONTINGENT ASSETS
Approximately 40% of Cxbladder tests performed by the Group in the US up to 30th June
2020 relate to patients covered by the Centers for Medicare and Medicaid Services (CMS).
The Group invoiced CMS for test performed for all patients with CMS coverage, however
no revenue from these tests has been recognised.
On 3rd July 2020 the Company received a positive coverage decision from CMS, which
results in the Company receiving reimbursement from CMS for all Cxbladder Monitor and
Detect tests performed after 1 July 2020 for patients covered by the CMS across the US
that are deemed medically necessary. Reimbursement for these tests is at the already
determined national CMS price for Cxbladder of US$760 per test.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
19 18
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
The Company has commenced discussions with Novitas Solutions Inc who administer the
health insurance for the Centers for Medicare & Medicaid CMS seeking reimbursement for
tests performed prior to 30 June 2020 for patients covered by the CMS.
Tests performed prior to 30 June 2020 for CMS total 22,634.
No revenue has been recognised for these tests as they do not meet the definition of
revenue as per IFRS 15 - Revenue from Contracts with Customers, as there is no certainty
of any reimbursement on any of these tests performed prior to 30 June 2020, and
there is no ability to reliably estimate the level of consideration that would be received if
agreement can be reached with Novitas Solutions Inc over these previously performed
tests.
11. CAPITAL COMMITMENTS
There are no capital commitments at 30 September 2020 (March 2020: Nil and
September 2019: Nil).
12. RIGHT OF USE ASSET AND LEASE LIABILITY
During the six months to 30 September 2020, Pacific Edge Diagnostics USA Limited
resigned the lease on the offices and laboratory in Hershey, Pennsylvania, for a further
three years commencing 1 December 2020. The lease, including embedded operating
costs related to the property have resulted in an increase in the Right of Use Asset and
Lease Liability of US $1.500m (NZ $2.272m).
13. SUBSEQUENT EVENTS
There have been no subsequent events.
14. THE IMPACT OF COVID-19
In the markets the Group operates in, measures have been employed by Governments in
an attempt to limit the spread of the Covid-19 virus. This restricted the ability for people
to visit clinics and have tests performed for the occurrence of bladder cancer. This has
resulted in reduced Test Throughput quantities seen by the Group in the six months to 30
September 2020 with Test Throughput of 6,864. This is 84% of the Test Throughput for
the six months ended 30 September 2019 (8,147), and 79% of the Test Throughput for the
six months ended 31 March 2020 (8,714).
The Company has seen Test Throughput increase from the lows seen April and May 2020
(average of 854 tests per month, down 41% on the average for April and May 2019), to Test
Throughput of 1,431 for the month of September 2020 (up 8% on the Test Throughput for
September 2019).
As a result of the reduced throughput from patients visiting clinics, the Company has
seen increased adoption of the unique in-home sampling system which allows patients to
perform tests at home, with the results provided to their urologists. The Group has also
seen increased sales activity with institutions as they seek alternative methods to treat
their patients remotely.
The Group has also been able to reduce costs to offset reduced Test Throughput, with
Operating Expenses for the six months to 30 September 2020 down 8% on the expenses
for the six months to 30 September 2019, and down 7% on the six months to 31 March
2020. The Group has also received support in the form of Covid-19 relief packages from
the Governments in New Zealand, Australia, Singapore and the US.
During the six months ending 30 September 2020, Pacific Edge Diagnostics USA Limited
received US $530,242 (NZ $803,034) via the Paycheck Protection Program. The funds
were provided as a loan to companies to support the retention of US staff during the
Covid pandemic. Based on meeting criteria relating to staff retention, companies can
apply to have this loan and accrued interest forgiven. The amount of loan forgiven will be
reduced if the borrower terminates employees or reduces salaries during the forgiveness
period. Pacific Edge Diagnostics USA Limited has applied for the loan to be forgiven, but
at reporting date is yet to receive confirmation that this has occurred, resulting in the
funds received being classified as Borrowings. Successful confirmation of loan forgiveness
will result in the Borrowings stated in the 30 September 2020 Balance Sheet being
recorded as Grant Revenue in the Statement of Comprehensive Income. Should the loan
not be forgiven, Pacific Edge Diagnostics USA Limited will be required to repay the loan
within a two year period from issue (April 2020) and pay interest at 1%.
Due to the unpredictability in test quantities from Covid-19, the Directors continue to
closely monitor movements in test quantities for the Group and continue to take action
where appropriate.
15. GOING CONCERN
The Interim Financial Statements have been prepared on the going concern basis which
assumes that the Company will have sufficient cash to pay its debts as they fall due for a
minimum of 12 months from the signing of the Interim Financial Statements.
As at 30 September 2020, the Company had $29.283m of cash and cash equivalents
on hand (March 2020: $14.784m and September 2019: $4.737m). The Company had net
assets of $30.467m at 30 September 2020 (March 2020: $14.504m and September 2019:
$4.936m) and cash receipts totalling $3.013m were received in the six month period to
30 September 2020 (twelve months ending 31 March 2020: $5.856m and six months
ending 30 September 2019: $3.152m). Net cash out flows from operating activities for the
six month period to 30 September 2020 were $7.679m (twelve months ending 31 March
2020: $15.385m and six months ending 30 September 2019: $7.405m).
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
21 20
PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020PACIFIC EDGE LIMITED INTERIM FINANCIAL STATEMENTS 2020
While the Company continues to incur operating losses, the Company remains solvent, has
$29.383m in cash as at 30 September 2020 and continues to pay its debts as they fall due.
The Company obtained two significant commercial milestones in the six months to
30 September 2020, which have increased Cash Receipts from Customers for the six
months to 30 September, and will have a positive impact on future revenues for the
Company.
The first of these announced on 17th June 2020 was that the Company and US healthcare
provider, Kaiser Permanente, have reached agreement for the commercial use of Pacific
Edge’s Cxbladder tests. Kaiser Permanente is one of the largest non-profit healthcare
providers in the US, with over 12 million members. It operates 39 hospitals and employs
approximately 23,000 physicians, and is expected to drive increased test numbers from
November 2020 on completion of systems integration work.
The second of these announced on 3rd July 2020 was the positive LCD decision,
resulting in the Company receiving reimbursement for all Cxbladder Monitor and Detect
tests performed after 1 July 2020 for patients covered by the Centers for Medicare
and Medicaid Services (CMS) across the US that are deemed medically necessary.
Reimbursement for these tests is at the already determined national CMS price for
Cxbladder of US $760 per test. The CMS provides healthcare coverage for all US citizens
over 65 years. CMS tests currently make up approximately 40% of Pacific Edge’s current
Commercial Tests in the US.
The obtainment of these commercial milestones have had, and will continue to have
a significant positive impact on the Company’s financial position. The Company
also continues to progress commercial negotiations with targeted large scale health
organisations in the US and whilst these negotiations are taking longer than expected to
complete, the Company continues to make good progress with these negotiations.
The Board of Directors has reviewed the forecasts of the Group and are satisfied that
based on their review, there will be adequate cash flows generated from operating and
financing activities to meet the obligations of the Group for at least twelve months from
signing the financial statements.
16. RELATED PARTIES
Details of all related party relationships have been disclosed in the annual report for the
year ended 31 March 2020. No new transactions with directors occurred that would be
considered a related party.
For the period ended 30 September 2020, the CEO received incentive payments totalling
$286,582, consisting of cash ($230,791) and shares ($55,791). These incentive payments
include payment of the FY20 incentives due, plus an additional incentive payment for
the achievement of two significant commercial milestones – the agreement with Kaiser
Permanente and the positive LCD decison.
The CEO was granted 750,000 share options in June 2020 under the Long-Term Incentive
component of their remuneration package.
17. NET TANGIBLE ASSETS
Net Tangible Assets per share is a non-GAAP measure that is required to be disclosed by
the NZX Listing Rules. The calculation of the Group’s Net Tangible Assets per share and it’s
reconciliation to the consolidated balance sheet is presented below.
Unaudited
Sept 2020
6 Months
($000)
Unaudited
Sept 2019
6 Months
($000)
Audited
March 2020
12 Months
($000)
Total Assets36,9829,80919,328
Less Intangible Assets176 208 179
Less Total Liabilities 6,515 4,873 4,824
Net Tangible Assets30,291 4,728 14,325
Number of Shares Issued (000’s)724,764511,382689,652
Net Tangible Assets per share$0.042$0.009$0.021
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
23 22
87 St David Street, PO Box 56, Dunedin, New Zealand
P +64 3 479 5800 F +64 3 479 5801
www.pacificedgedx.com
---
Pacific Edge Limited
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Pacific Edge Limited
Reporting Period 6 months to 30 September 2020
Previous Reporting Period 6 months to 30 September 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
- Operating revenue $3,326
- Other income $734
Operating Revenue- 46%
Increase
Other Income - 76% Increase
Total Revenue $4,060 50% Increase
Net profit/(loss) from
continuing operations
($7,093) 25% Improvement
Total net profit/(loss) ($7,079) 25% Improvement
Interim/Final Dividend
Amount per Quoted Equity
Security
The Company does not propose to pay dividends to
shareholders
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.042 $0.009
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
For commentary on the results, please refer to the commentary
in the released NZX release. Further information is also set out
in the unaudited financial statements of the Company for the 6
months to 30 September 2020 which accompany this
information.
Authority for this announcement
Name of person authorised
to make this announcement
Grant Gibson, Chief Financial Officer
Contact person for this
announcement
Grant Gibson
Contact phone number 03 479 8510
Contact email address grant.gibson@pelnz.com
Date of release through MAP 26 November 2020
Unaudited financial statements accompany this announcement.
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.