Pacific Edge raises $16m in share sale
Pacific Edge has raised $16 million in new equity in a placement of new ordinary shares — $1m more than it sought — after accepting over-subscriptions.
On Friday, the cancer diagnostics company announced a $20m capital raise, saying it was about ensuring it had the cash reserves to capitalise on recent clinical and commercial milestones, grow in non-Medicare channels in the United States and regain Medicare coverage of its tests.
It comprised a placement of $15m of new ordinary shares offered to selected investors and an offer of $5m of new shares to retail investors, by way of a share-purchase plan. The share issue was priced at $0.10 per share.
Yesterday, the company said the placement — which was well-supported by existing shareholders — was completed on Friday and was subject to shareholder approval.
It was now targeting the opening of a $5m offer to eligible retail investors at the same per share offer price in July or early August, with the ability to accept oversubscriptions.
In a statement to the NZX, chairman Chris Gallaher said the company was delighted with the investor support it had received.
The inclusion of Cxbladder in the American Urological Association's (AUA) new microhematuria guideline in February was significant and had allowed the company to view the non-coverage determination differently.
"We are leveraging the important AUA guideline to build on the commercial momentum we have already established, including our plans to regain Medicare coverage," he said.
Medicare coverage of the company's tests ceased after the Local Coverage Determination (LCD) became effective on April 24.
In a note on Pacific Edge's FY25 financial result also released on Friday, Forsyth Barr analysts described it as "relatively uneventful". Revenue was consistent with the firm's expectations and costs were slightly higher than expected.
Despite Pacific Edge being adamant for some time it had sufficient cash resources to navigate the LCD uncertainty, the analysts were not surprised by the capital raise.
It was the company's 11th equity raise since 2003 — cumulative raises totalled more than $260m — which would take its share count to more than 1billion from just under 10million in 2004.
Post-raise, its cash balance would be about $38m ($22.6 million at FY25) and the analysts estimated that was 16 to 18 months of cash on hand.
"While this is a supportive lifeline, even in the event of [Medicare] recoverage, we aren't convinced this is the last of PEB's raises," they said.
s ally.rae@odt.co.nz
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