PEB-Pacific Edge

[Left Field]

Good for ego's but not much else? PEB bags a small award.

https://www.linkedin.com/posts/technology-investment-network_taking-out-top-spot-in-the-absolute-it-supreme-activity-7130811735736795136-Uejb

Holders hoping PEB prove how good they are at 'scaling up' very soon.

[Left Field]

Good progress in tough times however net loss increases.....

https://www.nzx.com/announcements/422201

FINANCIAL AND PERFORMANCE HIGHLIGHTS
• Operating revenue increases 50% to $13.1 million; total revenue increases 22% to $16.6 million lifted by a 28% rise in commercial Cxbladder test volumes in the US market.
• Total laboratory throughput (TLT) of Cxbladder tests increases 22% to 18,229 tests, commercial tests increase to 15,401 tests; US ordering clinicians grow to 1,147, up 17.3% from the 978 at the end of Q2 23.
• Net loss after tax increases to $15.1 million from $10.2 million as the company had been investing to focus on top line growth. Expense growth has since been tempered through the restructure implemented in late Q2 24 that is not yet evident in operating expenditure.
• Cash and cash equivalents and short-term deposits at $62.2 million from $77.8 million at the end of March 2023.

OUTLOOK
Dr Meintjes said the finalization of the 'Genetic testing for oncology' Local Coverage Determination (DL39365) is the single biggest determinant of the company's prospects in the coming 12 months, with a decision due by 26 July 2024 (US Time).

"A non-coverage determination is likely to impact US volumes with the company considering processes that will see Medicare patients assuming responsibility for the payment for Cxbladder. Under such a scenario Pacific Edge, supported by its strong balance sheet, would continue to work towards regaining coverage within four years, with attempts made for re-coverage with every piece of new clinical evidence.

"Conversely, an affirmation of our status as covered by Medicare will be a catalyst for our US commercial operations, supported by a sales force that is now firmly focused on the Cxbladder proposition," Dr Meintjes said.

"Meanwhile, and irrespective of the Medicare outcome, we continue to expect an increase in volume from Kaiser Permanente, ex-US business serviced from our US laboratory and APAC business serviced from our New Zealand laboratory. We are continuing to work towards a national contract with Te Whatu Ora – Health New Zealand and to grow international testing volume in the medium term from our distribution agreements and growth markets in Australia, Latin America, Israel and Southeast Asia.

"We look forward to providing a further update in the New Year," Dr Meintjes said.

[LoungeLizard]

It's a pretty good result really, considering the effect the Novitas decision must have had on operations. The overhang from that decision is still casting a huge shadow on the SP, despite increasing throughput, revenue and  positive developments with Kaiser. The market is just in a wait and see mode, except for the odd punter.

[Shareguy]

Craig's think

Pacific Edge have delivered good YoY revenue growth of 50% to $13m, but Rob Morrison was disappointed with a lack of feed-through from well signaled cost cutting in the face of what we think is an imminent loss of Medicare coverage (which pays for 75% of PEB's revenues) and cash crunch. NPAT loss grew 44% to -$15m, and annualized cash burn increased 6% to -$33m – with just $62m of cash remaining this implies 2 years of cash left at current burn.

Fbar say

Result below expectations, driven by higher than expected costs with equity raise possible.

[LoungeLizard]

Craig's think

Pacific Edge have delivered good YoY revenue growth of 50% to $13m, but Rob Morrison was disappointed with a lack of feed-through from well signaled cost cutting in the face of what we think is an imminent loss of Medicare coverage (which pays for 75% of PEB's revenues) and cash crunch. NPAT loss grew 44% to -$15m, and annualized cash burn increased 6% to -$33m – with just $62m of cash remaining this implies 2 years of cash left at current burn.

Fbar say

Result below expectations, driven by higher than expected costs with equity raise possible.

Not sure where Craigs get their cash burn figures and projections from:

 "Cash and cash equivalents and short-term deposits at $62.2 million from $77.8 million at the end of March 2023. Pacific Edge expects the available cash to be sufficient to support the company through to regaining coverage in the event of a Medicare non-coverage determination, a process that may take up to four years."

[Shareguy]

Craigs latest says loss of Medicare coverage highly likely

Loss of Medicare coverage highly likely, recovery to take longer
Based on (i) continually negative commentary from Novitas, the entity which will decide whether Cxbladder retains Medicare coverage and (ii) a lack of significant new clinical evidence, we think loss of Medicare coverage (which pays for 60% of PEB's US tests) is more likely than when we last published in July. We expect loss to be effective from the start of FY25

[LoungeLizard]

Craigs latest says loss of Medicare coverage highly likely

Loss of Medicare coverage highly likely, recovery to take longer
Based on (i) continually negative commentary from Novitas, the entity which will decide whether Cxbladder retains Medicare coverage and (ii) a lack of significant new clinical evidence, we think loss of Medicare coverage (which pays for 60% of PEB's US tests) is more likely than when we last published in July. We expect loss to be effective from the start of FY25

Hard to understand, given the support from the medical profession and the savings that CXBladder can deliver, how Novitas can still maintain their position. Politics maybe. But it does sound as though PE are preparing the ground for a negative decision and then to reapply. They have, by their own projections, 4 years of cash to see through that process and in the meantime throughput and revenue is still increasing, despite everything. But hey, Craigs have been known to be wrong...

[Left Field]

Looks like ANZ haven't been listening to Craigs.... buying approx 9 mill PEB shares.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/422734/408687.pdf

[Shareguy]

Gosh Jarden and Harbour sold another 10m shares, only another 124 million to go. And then there is the index rebalance as out of the NZX50.  Hopefully ANZ want plenty more, otherwise...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/422976/408961.pdf

[Left Field]

ANZ still buying.... improving their DCA...... is it conviction or desperation !?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/423550/409619.pdf

[Pierre]

ANZ still buying.... improving their DCA...... is it conviction or desperation !?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/423550/409619.pdf

It must be conviction - they have bought another 20m shares and ANZ now holds almost 15% of PEB.They must be expecting a big payday sometime soon.

I topped up my holding too so I  hope they're right.

[Left Field]

It must be conviction - they have bought another 20m shares and ANZ now holds almost 15% of PEB.They must be expecting a big payday sometime soon.

I topped up my holding too so I  hope they're right.

ANZ certainly averaging down big time.

As at March 2023 FYAR they held 5.55% of PEB's shares or 45 mill shares.

As per the latest update they now own 14.8% of PEB or 120 mill shares.

If your DCA is less than ANZ's you should be 'well positioned." lol.

[Left Field]

Top of the leader board today (up about 9%) ....SP climbing up towards the 9c level now that ANZ has purchased its 75 mill shares at averages in the 7c region.

Some would say it just shows how institutions can manipulate things to their advantage on the NZX.

[LoungeLizard]

Anyone who topped up around the recent low of 7.5c mark must be pretty happy with the SP now at 11.6c. That's good business - A 50% gain in two weeks.
Very high volumes too - ANZ hoovering up shares that were dumped after PEB dropped out of the NZX50. Or are others buying? Hope it keeps going. I've been averaging down as I still think PEB have got a genuinely good product regardless of the Novitas decision at the end of July next year. It's one for the optimists though, I would concede that      

[Basil]

I have been known to occasionally bet on red on the Roulette wheel.  I'm always optimistic it will come in. I think PEB is pretty much a binary bet playing out in ultra slow motion, heads they do well, tails this ends in receivership, but I prefer the "cut" that Sky City take compared to the massive extraction from proceedings PEB management vacuum up.  As an aside from that, at least with Roulette, if you lose, it's over with quickly, you move on, take you loss on the chin and get on with life doing something more profitable.