PEB-Pacific Edge

[Left Field]

For those that may have missed this post on the NZX50 thread by Bulltrap

I took up some business with ForBar with their index commentary as a perk. Here's my take on their latest update (here if you have access):

• No changes to NZX50 or other S&P NZX indices expected
• VSL still iffy on meeting liquidity requirements, but expected to pass
• ERD is still next in line, followed by SEK, PEB, RAK and then SMI

I get the impression that ForBar doesn't know for sure if VSL passed liquidity in the Dec 2025 review. If it actually failed, it's likely it fails again, which would trigger VSL exit with ERD replacing it. Consider it an outside chance.

If ERD doesn't make it this time, I expect it'll lose its front-runner spot for the next review. It went 'parabolic' last year, and its September high of NZ$2.94 is still in the 6-month pricing window, giving it an average price (per ForBar) of $1.76. But then it literally went parabolic back to ground zero, down to around $0.90 this week. The average price is already following it down.

Meanwhile, PEB is on the resurgent, and the bull-bait case for the year is that it could regain both Medicare coverage and its spot on the NZX 50.

That said, let me make a case for SMI. Its primary listing is in Australia, so only some fraction of its free-float counts towards NZX index rankings. ForBar apparently have this fraction a bit under 25% - again, not sure if they get this from S&P or their own modelling. But I think this number is on the low side, noting that SMI's traded volume on the NZX is closer to a third of NZX+ASX, and that by mid-2024 when the NZX listing was announced over 40% of the share registry had NZ addresses.

The 'IWF' fraction actually used, according to the index methodology, comes from the number of shares registered in NZ. That's influenced by whether NZ-based investors bothered going through the tedious (and perhaps pointless) process of shunting their holdings over. I'm not aware of these numbers being available publicly, and S&P might get privileged info from the share registry (MUFG in this case) or maybe the exchanges.

(As an aside, until 2023 the IWF would've been based instead on what proportion of revenue came from NZ.)

The combined effects for SMI of an upward IWF revision, cap raisings, and further upward price moves, could easily put it in pole position for the June 2026 review.

Disc: Holding ERD through the potholes. It's been good to me in the past and my holding is all free carry. PEB likewise. Also holding SMI.

[Left Field]

Interesting update. Bodes well for the future.

https://www.nzx.com/announcements/468522

Cancer diagnostics company Pacific Edge (NZX, ASX: PEB) today announces its Dunedin laboratory has signed a service agreement with Singapore General Hospital (SGH), an important milestone in the company's strategy to drive the adoption of its tests in the Asia Pacific.

[Pierre]

Great news that Singapore General Hospital is now on board - and no involvement from Novitas!

The first step on the way to wider expansion into Asia Pacific region -   this can only be seen as very positive news.

Onward and upward.

[Habitz]

Is there a connection between the timing of this decision and the CAC contractor meeting last week. Being so close it's hard to ignore, Singapore was probably already 99 percent on board and waiting to hear how the meeting went before going public with the announcement. I'd be pleased if there is now a dominoe effect of other medical institutions. Momentum is building

[LoungeLizard]

Is there a connection between the timing of this decision and the CAC contractor meeting last week. Being so close it's hard to ignore, Singapore was probably already 99 percent on board and waiting to hear how the meeting went before going public with the announcement. I'd be pleased if there is now a dominoe effect of other medical institutions. Momentum is building

Agreed. The medical debate is over -  just need insurance providers to recognise that the urological community has moved on and are already adapting their practice to include bio-marking as a screening tool.

Singapore General Hospital's adoption of PEB"S tests could be a big deal if it helps open up the wider Asian market.

[Habitz]

With SGH now ordering Cxbladder, does this change PEB from a speculative gamble to a genuine investment, probably not yet but it strengthens the case. Curious if others see it the same way.

[winner (n)]

With SGH now ordering Cxbladder, does this change PEB from a speculative gamble to a genuine investment, probably not yet but it strengthens the case. Curious if others see it the same way.

Still a gamble still methinks ... even with Singapore on board they haven't got the same global presence as the likes of Truscreen

[Pierre]

With SGH now ordering Cxbladder, does this change PEB from a speculative gamble to a genuine investment, probably not yet but it strengthens the case. Curious if others see it the same way.

IMHO, PEB remains a very high risk case.

Even with the SGH agreement in place, plus inclusion in the AUA guidelines, and the support and evidence from Kaiser Permanente etc, it won't be until Novitas issues an LCD in PEB's favour that the gamble will be eliminated, or at least substantially reduced.

The chances of approval by Novitas appear to be much higher following the recent CAC meeting. However, if it doesn't occur, then it will be a very rocky road ahead for PEB and its shareholders.

I've been a shareholder and supporter since 2012, but will take whatever I can get to exit the company if Medicare coverage is denied this time.

It's still definitely a gamble.

[LoungeLizard]

PEB is still a gamble rather than than an "investment" but if it's success centres around the Novitas decision (which it does) you would have to say there's a greater chance than not that the gamble will pay off.

In fact, if Novitas were making their decision purely on clinical utility then the PEB tests would have a 100% chance of getting coverage.
But because Novitas have, so far, been very inconsistent and at times, downright illogical, then I would rate the chances of coverage qt around 70-80%.

Also, the upside (a positive decision) is the SP potentially rising to previous levels of $1.50 and perhaps even further. The downside (a negative decision) is the SP going back to below $10c.

In other words - it's worth the stretch  

[Left Field]

Another brick in the wall.....

https://www.nzx.com/announcements/468678

"The initiation of Cxbladder testing at Townsville University Hospital marks the continued adoption of the Cxbladder suite in Australia. Globally Cxbladder is now available in the US, Australasia, and Israel and in select markets throughout Asia and South America. In the US, the test has been used by over 5,000 urologists who have ordered more than 130,000 tests. In New Zealand, Cxbladder is accessible to around 70% of the population via public healthcare and every resident has the option of ordering the test online."


Good to see PEB has been busy diversifying & strengthening away from over reliance on USA.

[Pierre]

The potential use of CxB in primary care was discussed at the CAC meeting in February, and now this announcement of "nurse-led services" at Townsville hospital, is further evidence that PEB products could be used as a diagnostic tool by a wider range of medical clinicians and not be limited just to urologists.

If this trend continues, the demand could expand exponentially and result in significant sales growth at a much faster pace. 

PEB's future is looking brighter every day