PEB-Pacific Edge

[Greekwatchdog]

Arggh - it does indeed sound as though coverage will be removed:

"In conclusion, the Cxbladder line of tests all suffer from insufficient test validation, a foundational problem in which potentially confounding clinical circumstances include non-TCC neoplasms and malignancies and inflammatory conditions of the urinary tract. Cxbladder also demonstrates several population biases, including a foundational study from Holyoake in 2008 that only used Japanese patients from one location.28 Most of the primary literature regarding Cxbladder test development and performance is funded, if not directly written by, the test's parent company, Pacific Edge Diagnostics. This conflict of interest must be taken into account when reviewing these papers, particularly when there are issues not discussed in Pacific Edge Diagnostic funded papers that are subsequently addressed by non-funded studies, such as the 2019 Davidson study which identified increased false positives in patients with non-TCC malignancies.41 As a result, CxBladder tests are not reasonable and necessary to support positive outcomes in the management of bladder cancer, and are therefore, are not payable.'

Wonder what the hit to the SP is going to be???

Me thinks $0.05 to $0.075.

[Shareguy]

Me thinks $0.05 to $0.075.

Yes I agree.  The issue I see is I can't see a lot of institutional support or for that matter large retail investors stumping up for a CR.

[Pierre]

There is still the result of the AUA guidelines review to come, which may see CxBladderapproved for use.
Should that occur it would give PEB a pretty strong basis for appealing the Novitas decision.
I hope they keep their powder dry pending release of the AUA outcome before commencing legal action.

[raW tent Buffer]

Didn't the AUA update guidelines in 2024? Also from Novitas decision:

"... systemic reviews, meta-analyses and even guidelines from large expert organisations like the American Urological Association generally do not support the use of Cxbladder tests in patient care. At best, the guidelines "support their potential value in preventing unnecessary cystoscopies"..."

Seems like a little bit clutching at straws now to think that the AUA are gonna white knight this one. Disappointed as I dipped my speculative little toe in at 11c and like others I can see this down at 5c next week.

[LoungeLizard]

Didn't the AUA update guidelines in 2024? Also from Novitas decision:

"... systemic reviews, meta-analyses and even guidelines from large expert organisations like the American Urological Association generally do not support the use of Cxbladder tests in patient care. At best, the guidelines "support their potential value in preventing unnecessary cystoscopies"..."

Seems like a little bit clutching at straws now to think that the AUA are gonna white knight this one. Disappointed as I dipped my speculative little toe in at 11c and like others I can see this down at 5c next week.

Novitas's claim that the AUA are lukewarm on CXBladder seems contrary to their quite vocal support and positive submissions on behalf of CXBladder. The joint submission from the AUA and other other urological institutions said this:

"It is our belief that the proposed modifications to coverage criteria are incorrectly applied to
urine-based tumor markers, and thus finalizing the draft policy as written will have adverse
impacts on the provision of high-quality patient care while ultimately increasing system costs.

"Furthermore, the Draft LCD does not utilize the widely accepted standards for these tests found
in guidelines promulgated by the AUA and Society of Urologic Oncology (SUO). AUA guidelines
are the specialty of urology's well established and accepted governing resource and should be
included when promulgating an LCD of this nature."

They then went on to dismantle Novitas's concerns about demographic bias, and clinical evidence. Seems to me that the AUA have given a clear message to Novitas that they fully support CXBladder and for Novitas to suggest otherwise is a very shaky position to hold. If it did go to court it would be hard to see how Novitas could maintain this position.

That said, if the AUA really are supportive, they need to include CXBladder in their guidelines and to some extent, if they did that, and it became part of recommended standard urological procedure, it's hard to see how Novitas could continue to ignore it. Balls in the AUA's court to come out swinging.

[KW]

I imagine we will get a trading halt until they sort their interpretation of what this means out.

I think you mean there will be a trading halt until they figure out how to spin more bullsh*t to shareholders.

[850man]

Reading the Novitas release I note they mentioned a number of times "FDA approved" including in their approval of just one test from those impacted by this LCD:
"UroVysion: This FDA-approved adjunctive test is intended for use in conjunction with and not in lieu of current standard diagnostic procedures to aid in the initial diagnosis of bladder carcinoma in patients with persistent hematuria and subsequent monitoring for tumor recurrence in patients previously diagnosed with bladder cancer"

I wonder if it was a grave omission  by PEB not to seek FDA approval for CXB during the 2 years this LCD was being considered? FDA approval appears to carry some weight and expectedly so IMHO, easy to base a decision on what an officially designated government department says about a product you are  reviewing.

[snapiti]

I think you mean there will be a trading halt until they figure out how to spin more bullsh*t to shareholders.

perfect description on how this company operates

[Shareguy]

perfect description on how this company operates

Yes. They will no doubt dress this up with "plenty of spin"

For anyone looking at buying I would suggest they consider how much of his own money did the current ceo invest in shares other than some freebies...

And how many shares does the old CEO own currently......

I think the share price will settle over 7 c as there is still a lot of investors with that dream and analysts such as Craig's have for some time said that coverage loss is most likely, therefore already baked into the sp.

Good luck.

[winner (n)]

Yes. They will no doubt dress this up with "plenty of spin"

For anyone looking at buying I would suggest they consider how much of his own money did the current ceo invest in shares other than some freebies...

And how many shares does the old CEO own currently......

I think the share price will settle over 7 c as there is still a lot of investors with that dream and analysts such as Craig's have for some time said that coverage loss is most likely, therefore already baked into the sp.

Good luck.

At least the likes of ANZ won't be rushing to the exit doors

Bad news 'already baked into share price' is often phrase used by punters who desperately hope carnage won't be happening.

[Basil]

 I can't help wondering if Forbar might have another go at milking this for yet another capital raise underwriting fee.

This capital raise will be enough to see PEB through to commercial success and we really mean it this time.

[LoungeLizard]

I think anyone investing in PEB knows it is high risk / high return. Many investors have a few "fun" stocks their portfolio (gold mining anyone?) akin to spending $500 a year in lottery tickets or having a few days at the races.
 
I do, however, believe that PEBs' products have proven themselves time and again in trials and there seems to be a groundswell of industry support for bio-marking as a diagnostic tool. The main problem they have faced (together with covid) is that the US health/pharmaceutical industry is run like a cartel and is inherently resistant to change. As bonkers as some of his views are, RFK Jr has made it clear that he wants to open up both industries to cost saving initiatives. Good luck to him.

What the impact on the SP is going to be depends on the big investors like ANZ. If they exit their positions then all hell will break loose. If not, I doubt many retail investors will sell - we are in it for the long haul. Probably 6-7c and then maybe recovering depending on PEBS and the AUA's response. 

[Ferg]

What the impact on the SP is going to be depends on the big investors like ANZ. If they exit their positions then all hell will break loose. If not, I doubt many retail investors will sell - we are in it for the long haul. Probably 6-7c and then maybe recovering depending on PEBS and the AUA's response. 

Not far off....trading in the 5c-6c range in the first 40 minutes this morning.  Largest trades so far are 2 x blocks of ~400k shares.  The rest is rats and mice.

[Basil]

Did anyone proofread this before it was released?  Doesn't give a lot of confidence that they can't seem to put together a properly written statement despite having the entire weekend to do it...

Novitas finalizes non-coverage determination
13/01/2025, 09:24 NZDT, GENERAL
Cancer diagnostics company Pacific Edge (NZX, ASX: PEB) today notes that Novitas, the Medicare Administrative Contractor with jurisdiction for our US laboratory, on Thursday 9 January 2025 finalized a non-coverage determination that would end reimbursement for Cxbladder Triage, Detect and Monitor by Medicare.

The draft Local Coverage Determination (LCD) 'Genetic testing for oncology' (DL39365) has been finalized under a new title 'Genetic Testing in Oncology: Specific Tests' (L39365). The LCD reverses Novitas' July 2020 determination that provided for Medicare coverage of Cxbladder. If not challenged, the finalized LCD would become effective in 45 days from the date of publishing, with reimbursement of Pacific Edge's Cxbladder tests Triage, Detect and Monitor ceasing on 23 February 2025.

The new 'Genetic Testing in Oncology: Specific Tests' (L39365), acknowledges some shortcomings of the original draft LCD (DL39365), but remains flawed, particularly in its review of the clinical evidence underpinning Cxbladder tests.

Specifically, Novitas:

- Continues to misunderstand the current standard of care in evaluating hematuria patients, and the important role that biomarkers can play in stratifying patients with hematuria into those that would benefit from further potentially more invasive medical attention and those that would not.

- Fails to consider new peer reviewed evidence supporting the use of Cxbladder published since the revised draft determination in July 2023, despite having been notified of the evidence and stating in writing that it would incorporate that evidence in the review. Specifically, Novitas has not reviewed or cited:

- the ground-breaking STRATA randomized control study published in July 2024, which demonstrated the Clinical Utility (CU) of Cxbladder Triage and importantly that this study showed that clinicians undertook 59% fewer cystoscopies, when provided with a Triage test result; and

- the analytical validation data of Cxbladder Detect, Triage and Monitor published in September 2024.

- Repeats its flawed analysis of the existing clinical evidence for Cxbladder tests by focusing on the biomarker discovery study by Holyoake et al in 2008 and creates confounded conclusions by lumping the evidence in future publications from all assays together and not the clinical evidence supporting the individual products.

Pacific Edge Chairman Chris Gallaher said: "We are disappointed by Novitas' determination, which has been made despite strong representations from Pacific Edge, many key opinion leaders in urology, bladder cancer patient advocates and the molecular diagnostics industry.

"Nevertheless, it is an outcome for which Pacific Edge has prepared. Following the release of the draft determination (DL39365) in late July 2023, and in recognition of the elevated risk of a decision such as this, we restructured our business to reduce our cash burn.

"With the LCD finalized, we are now activating the contingency plans and strategies to further reduce our expense base until we regain reliable Medicare coverage. With $28.5 million in reserves as at the end of December 2024, the company the company is well placed to fund the re-coverage process if necessary and regain reimbursement for our tests," Mr Gallaher said.

Pacific Edge Chief Executive Dr Peter Meintjes said: "We are disappointed by a finalized LCD that misunderstands the science of biomarker discovery and diagnostic test development in the context of the standard of care in urology. We are do not understand its framing of Cxbladder as a screening test of asymptomatic patients and at the failure to acknowledge the views of the American Urological Association (AUA) and the practicing clinicians that derive value from the test.

"Furthermore, we cannot believe that Novitas would commit in writing to review our most recent evidence (the STRATA study and recent analytical validation data) as part of developing this LCD and then fail to do so. Ignoring a randomized controlled trial (classified as Level 1 Evidence) published during the lengthy deliberations on the LCD and the consensus of the urology community runs counter to the mandate of a US government health insurance program, Dr Meintjes said.

"Regardless, we are prepared to continue to do what is best for our investors, physicians and patients."

Dr Meintjes said the go-forward plans may include the following:

- Pursuing a preliminary injunction and legal challenge to the finalization of the LCD. Pacific Edge notes and recognizes the inherent uncertainty of success in these endeavors.

- Further review the structure of our operations and our strategy to reduce cash burn in line with our plan to regain reliable Medicare coverage.

- Submit to Novitas a Medicare coverage reconsideration request on the basis of the Journal of Urology's publication of the STRATA study and the updated Analytical Validation studies of Triage, Detect and Monitor.

- Continue to explore other strategic alternatives for Pacific Edge that could support the company through to regaining reliable Medicare coverage and advancing the commercialization of Cxbladder globally.

Dr Meintjes emphasized that the long-term focus of the company remains unchanged and that the team is looking forward to the outcome of the AUA's ongoing review of its microhematuria guideline following the publication of the STRATA study. The possibility of AUA Guidelines inclusion creates additional potential for a reconsideration request for Medicare coverage to Novitas.

Pacific Edge is currently unable to fully determine the impact of the new LCD on test volumes in the US market for the remainder of the 2025 financial year and beyond, but in 1H 25 Medicare and Medicare Advantage delivered ~5,300 commercial tests (~54% of US commercial tests) and ~$6.5m NZD in total operating revenue.

The company expects to continue to bill and receive reimbursement from contracted US payers without interruption, notably Kaiser Permanente and the US Veterans Administration, and from non-contracted private payers in line with historic reimbursement rates. Similarly, Pacific Edge expects collections from the enhanced patient responsibility and patient assistance programs to continue in line with the rates since the introduction of that program in July 2023.

Dr Meintjes said: "While this determination will have an impact on our current and future commercialization plans, it simultaneously emphasizes that our focus on rigorous clinical evidence generation as a path to gaining coverage certainty through guidelines inclusion is the right focus for our business. This program is at the center of our efforts to regain Medicare coverage.'

Pacific Edge will be hosting a conference call and webcast to discuss the determination today (Monday 13 January 2025) at 11.00am NZST:

This update will be available via webcast by the following link: www.virtualmeeting.co.nz/pebiu25 or by phone on the following toll-free numbers:

[Crackity]

the go-forward plans may include the following:
 
    - Pursuing a preliminary injunction and legal challenge to the finalization of the LCD. Pacific Edge notes and recognizes the inherent uncertainty of success in these endeavors though we will enjoy spending your money instructing lawyers at the best Michelin starred American restaurants.
 
    - Further review the structure of our operations and our strategy to reduce cash burn in line with our plan to regain reliable Medicare coverage however the executive team is safe till the money runs out.
 
    - Submit to Novitas a Medicare coverage reconsideration request on the basis of the Journal of Urology's publication of the STRATA study and the updated Analytical Validation studies of Triage, Detect and Monitor. Take that you ignorant fockers.
 
    - Continue to explore other strategic alternatives for Pacific Edge that could support the company through to receivership.