Pacific Edge Limited · NZX:PEB
Pacific Edge — FY2024 Earnings Presentation
43 slides from Pacific Edge's earnings presentation, May 21, 2024
Slide 1: Pacific Edge FY24 Financial Results
Pacific Edge FY 24 FINANCIAL RESULTS INVESTOR PRESENTATION Dr Peter Meintjes Chief Executive Officer Grant Gibson Chief Financial Officer 21 May 2024 Pacific Edge’s ordinary shares trade on the NZX and the ASX under the ticker code: PEB
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Pacific Edge Limited (PEL) solely PEL’s current views with respect to future events. Forward-looking Investment risk to provide interested parties with further information about PEL and its statements, by their very nature, invol
Slide 3: Agenda
AGENDA 1. FY 24 HIGHLIGHTS 2. STRATEGIC DELIVERY 3. FINANCIAL PERFORMANCE 4. ESG & OUTLOOK 5. QUESTIONS
Slide 4: FY24 Highlights: Prepared for All Outcomes as We Reduce Cash Burn
FY 24 HIGHLIGHTS: PREPARED FOR ALL OUTCOMES AS WE REDUCE CASH BURN 3%1 22% 24% GLOBAL TESTING GROWTH IN ($29.5M) DROP IN MONTHLY $50.3M VOLUMES OPERATING NET LOSS AFTER CASH BURN3 IN 2H CASH, CASH (TLT2) on FY 23 REVENUE on TAX 24 VS 1H 24 EQUIVALENTS3 FY 23 Operating revenue $23.9M Increase from ($
Slide 5: Value Creation Through Three Pillars
VALUE CREATION THROUGH THREE PILLARS INPUTS OUTPUTS ADOPTION, RETENTION AND EXCELLENT PATIENT EXPERIENCE OUR PEOPLE REVENUE AND ACCURATE RESULTS GENERATION EARLY DETECTION AND OUR PROCESSES CLINICALLY ACTIONABLE CARE OUR IP, KNOWLEDGE INNOVATION PIPELINE FOR AND EXPERIENCE CLINICAL APPLICATIONS OUR
Slide 6: Growth Slowed Amid Medicare Draft
GROWTH SLOWED AMID MEDICARE DRAFT FY 24 TOTAL LAB THROUGHPUT (TLT*) TEST VOLUMES BY TYPE (TLT*) • Global TLT increased 3% to 32,633 with test demand moderating amid proposed Medicare coverage changes & sales force reductions. 22% 22% • Global Commercial test volumes increased 2%. Global TLT is drive
Slide 7: Capital Preservation and New Revenue Sources Delivers Resilience
CAPITAL PRESERVATION AND NEW REVENUE SOURCES DELIVERS RESILIENCE COMMITTED TO MAINTAINING A STRONG BALANCE SHEET APAC & HEAD OFFICE STRATEGY SHIFT COMPLETE • Pacific Edge continues to manage its cash reserves so - in the event • Cash burn is now driven almost entirely by long-term strategic of an ad
Slide 8: Foundations for Growth - US Test Volumes Stabilise
FOUNDATIONS FOR GROWTH - US TEST VOLUMES STABILISE SMALLER SALES TEAM REDUCES TOP LINE THROUGHPUT US TOTAL TEST VOLUME* • Throughput has reduced by 22% from 7,816 test/quarter in Q4 23 to 6,099 in Q4 24 as the average sales team for the quarter 9,000 has reduced by 51%. 8,000 8,627 • Most-recent QoQ
Slide 9: Foundations for Growth - Sales Team Performance Improves
FOUNDATIONS FOR GROWTH – SALES TEAM PERFORMANCE IMPROVES SALES TEAM FOCUSED ON KEY PERFORMANCE INDICATORS US SALES FORCE EFFICIENCY 381 60.0 400 • Sales FTE down to an average of 16.0 in Q4 24 from 32.7 in Q4 350 23 as we focused on cash conservation. 50.0 288 292 AVERAGE SALES FTE 265 TESTS* /SALES
Slide 10: Foundations for Growth - US Cash Collections Improve
FOUNDATIONS FOR GROWTH - US CASH COLLECTIONS IMPROVE REIMBURSEMENT & CASH COLLECTIONS – A CORE COMPETENCY US COMMERCIAL TEST VOLUMES AND ASP* (US$) • Average Sales Price (ASP) per test increased 18% to US$613 in 2H 24 from US$519 in 2H 23 lifted by: $700 • Enhanced Patient Responsibility - patients
Slide 11: Selling Cxbladder's Clinical, Economic and Patient Value
SELLING CXBLADDER’S CLINICAL, ECONOMIC AND PATIENT VALUE For healthcare payers Cxbladder Detect offers substantial total cost savings per patient when used to intensify or de-intensify hematuria evaluation in patients presenting with microhematuria1 CURRENT PRACTICE (AUA GUIDELINES) CXBLADDER INTROD
Slide 12: Driving Growth in Asia Pacific and Consolidating New Zealand
DRIVING GROWTH IN ASIA PACIFIC AND CONSOLIDATING NEW ZEALAND COMMERCIAL TEST VOLUME GROWTH IN NEW MARKETS APAC TOTAL TEST VOLUMES* • Quarterly total test volumes steady across FY 24. 1,400 • Fewer evaluations and non-billable tests. 1,200 • Shift in emphasis to commercial tests. 1,165 1,139 1,199 1,
Slide 13: Strengthening Our Foundations
STRENGTHENING OUR FOUNDATIONS DIGITALIZATION, AUTOMATION & CUSTOMER EXPERIENCE EMR INTEGRATION DRIVES MOMENTUM AT KAISER Customer facing systems • Give customers options to connect with Pacific Edge to fit their needs and smooth workflows. • Electronic Medical Record (EMR) integrations. • Customer P
Slide 14: Simplifying the Cxbladder Value Proposition – Detect+ & Monitor+
SIMPLIFYING THE CXBLADDER VALUE PROPOSITION – DETECT+ & MONITOR+ ADDITION OF DNA BIOMARKERS ENHANCES TEST PERFORMANCE3 OUR FUTURE 1. RDM: Residual Disease Monitoring, 2. TRM: Therapeutic Response Monitoring 3. Lotan et al (2022) ‘Urinary Analysis of FGFR3 and TERT Gene Mutations Enhances Performance
Slide 15: Detect+ Pricing via Crosswalk Could Bolster Economics
DETECT+ PRICING VIA CROSSWALK COULD BOLSTER PACIFIC EDGE’S ECONOMICS DETECT+ PRICING – A POTENTIAL STEP CHANGE • Pricing of Detect+ is the next step in establishing reimbursement. • Crosswalk strategy for Detect+ is based on technological similarities to previously priced tests: • Existing CMS price
Slide 16: Awaiting 'Genetic Testing for Oncology' (DL 39365) Response
AWAITING ‘GENETIC TESTING FOR ONCOLOGY’ (DL 39365) RESPONSE KEY OPINION LEADERS UNITED IN OPPOSITION TO DL39365 27 July 2023 1 Novitas republishes draft LCD • Pacific Edge engaged with oncology diagnostics industry & urology community during the ‘Review and Comment’ period. • We have undertaken furt
Slide 17: Strategic Responses to the Impending Medicare Determination
STRATEGIC RESPONSES TO THE IMPENDING MEDICARE DETERMINATION OUR RESPONSE TO AN AFFIRMATION OF COVERAGE • Strategic review to accelerate the US adoption of Cxbladder among patients, clinicians, and healthcare payers. OUR RESPONSE TO A LOSS OF COVERAGE • Explore legal options supported by customers, i
Slide 18: Clinical Evidence Underpins Coverage and Guidelines Decisions
CLINICAL EVIDENCE UNDERPINS COVERAGE AND GUIDELINES DECISIONS Recognition in national guidelines is the best way to entrench Medicare coverage of Cxbladder and its adoption by other independently contracted healthcare systems www.auanet.org www.nccn.org www.uroweb.org • Globally the most influential
Slide 19: STRATA – The Strongest Evidence Yet for Guideline Inclusion
STRATA1 – THE STRONGEST EVIDENCE YET FOR GUIDELINE INCLUSION PARADIGM-SHIFTING STUDY DEMONSTRATES CLINICAL UTILITY OF TRIAGE USING CLINICAL EVIDENCE TO DRIVE CXBLADDER ADOPTION • STRATA is the first ever randomized controlled trial of a urine biomarker for hematuria evaluation: • Peer reviewed study
Slide 20: Increasing Cxbladder Brand Awareness at the AUA Conference
INCREASING CXBLADDER BRAND AWARENESS AT THE AUA CONFERENCE • AUA annual meeting is the largest and most influential event in the US and global urological calendar. Provides opportunity to engage over 10,000 urologists, urologic oncologists, advanced practice providers, and other healthcare professio
Slide 21: Clinical Evidence Catalysts for Coverage Certainty
CLINICAL EVIDENCE CATALYSTS FOR COVERAGE CERTAINTY MEDICARE RECONSIDERATION AND GUIDELINE INCLUSION REQUESTS (Reconsideration requests take Novitas1 approximately 12 months to process from the lodging of a valid request) Catalyst Test and evidence standard (2) Expected date of reconsideration reques
Slide 22: FDA Publishes Final Rule to Regulate Lab Developed Tests
FDA PUBLISHES FINAL RULE TO REGULATE LAB DEVELOPED TESTS US FDA REGULATION PUBLISHED. FACES HURDLES • The FDA1 published a final rule on 29 April 2024 asserting that it has the right to regulate LDTs like Cxbladder as Medical Devices under the Medical Device Amendments of 1976. • Enforcement discret
Slide 23: Research & Innovation – Focused on DNA Enhanced Products
RESEARCH & INNOVATION – FOCUSED ON DNA ENHANCED PRODUCTS READYING FOR THE LAUNCH OF NEW DETECT+ AND MONITOR+ • Ensure R&D, Digital and Lab Operations focus on the launch of Detect+ and Monitor+ • Simplifying Cxbladder: • Aim to reduce technician time, lower cost of goods, lower turnaround time, incr
Slide 24: FY24 Financial Performance
FY 24 FINANCIAL PERFORMANCE PACIFIC EDGE Cbiadcer <Y | PACIFIC EDGE
Slide 25: US Commercial Test Volume Growth Driving Revenue
US COMMERCIAL TEST VOLUME GROWTH DRIVING REVENUE RATE OF REVENUE GROWTH IN 2H 24 SLOWS AMID SALE FORCE REORGANIZATION PACIFIC EDGE OPERATING REVENUE REGIONAL REVENUE CONTRIBUTION $25,000 $23,907 ▲ $19,616 22% 95% $20,000 FY 24 5% $10,812 APAC $15,000 AMERICAS $10,909 $(000) $11,445 $10,000 $7,701 $6
Slide 26: A Runway Sufficient to Weather a Non-Coverage Determination
A RUNWAY SUFFICIENT TO WEATHER A NON-COVERAGE DETERMINATION CASH BURN SLOWS AS CAPITAL PRESERVATION PROGRAM DELIVERS $15,664 $15,617 $16,000 A STRONG BALANCE SHEET $120,000 $14,000 • Cash, cash equivalents and short term CASH AND CASH EQUIVALENTS ($000) $100,000 $105,412 $11,957 $11,913 deposits of
Slide 27: Revenue Grows with Increased Adoption of Cxbladder
REVENUE GROWS WITH INCREASED ADOPTION OF CXBLADDER GROWTH MODERATES IN 2H 24 WITH REORGANIZATION CRIMPING SALES 2H 24 1H 24 FY24 FY 23 FY 24 vs. 2H 24 vs. • Operating revenue increased 22% in FY 24 vs FY FINANCIAL PERIOD FY 23 1H 24 23 with increased volumes and an increase in average receipts. $000
Slide 28: Operating Expenses Fall in the Second Half
OPERATING EXPENSES FALL IN THE SECOND HALF INVESTMENT NOW FOCUSSED ON LONG-TERM STRATEGIC INITIATIVES 2H 24 1H 24 FY24 FY 23 FY 24 vs. 2H 24 vs. • Operating expenses are up 11% for FY 24 vs FY 23. FINANCIAL PERIOD FY 23 1H 24 • The 15% reduction in 2H vs. 1H 24 is due to the shift in $000 $000 $000
Slide 29: ESG, Summary and Outlook
ESG, SUMMARY AND OUTLOOK. PACIFIC EDGE Cbiadcer <Y | PACIFIC EDGE
Slide 30: ESG: Pacific Edge Is Founded on Improving Social Outcomes
ESG: PACIFIC EDGE IS FOUNDED ON IMPROVING SOCIAL OUTCOMES Mission To help improve people’s lives and patient outcomes by providing leading solutions for the early detection and management of cancer Vision A world where the early diagnosis and better treatment of cancer is within reach of everyone Cx
Slide 31: Advancing Social, Environmental and Governance Goals
ADVANCING SOCIAL, ENVIRONMENTAL AND GOVERNANCE GOALS • SOCIAL • Culture: High levels of staff engagement and participation in development opportunities; active promotion of diversity, inclusion and fair remuneration • Human Rights: Major suppliers reviewed for compliance with modern slavery and huma
Slide 32: Governance – Delivering Pacific Edge Stability
GOVERNANCE – DELIVERING PACIFIC EDGE STABILITY AN ORDERLY SUCCESSION PROGRAM • Board notices of retirement announced in March 2024 to deliver stability: • Chris Gallaher - appointed July 2016 - to retire from the Chair of CHRIS GALLAHER Pacific Edge following the appointment of a successor and a Cha
Slide 33: Summary and Outlook: Ready for All Outcomes
SUMMARY AND OUTLOOK: READY FOR ALL OUTCOMES • We expect to manage cash reserves if Medicare coverage is retained or until re-coverage in the event of a negative determination. • We will continue to: • Focus our business on the clinical development for Detect+ and Monitor+ for guidelines inclusion an
Slide 34: Appendix
5 SS & PACIFIC, EDGE = Choiadder att amen
Slide 35: Pacific Edge: Research, Innovation, Commercialization
PACIFIC EDGE: RESEARCH, INNOVATION, COMMERCIALIZATION Aug 2021 Cxbladder reaches 70% public healthcare 2012 coverage in NZ O’Sullivan et al: Cxbladder Detect Aug 2019 Oct 2021 performance Konety et al: PEB raises validation. Clinical Utility of $103.5m Nov 2023 2008 Cxb Detect in Journal of Urology
Slide 36: Bladder Cancer
BLADDER CANCER A SIGNIFICANT GLOBAL HEALTHCARE CHALLENGE INCIDENCE PER 100,000 OF THE POPULATION4 10th <1.7 1.7 to 2.7 2.7 to 5.3 5.3 to 8.6 >8.6 Most common cancer world- wide1 6th 17th Most common Most common cancer in men1 cancer in women1 >212K Annual deaths2 ~573K Annual cases ~70% and growing1
Slide 37: Cxbladder Is a Global Opportunity
CXBLADDER IS A GLOBAL OPPORTUNITY US$7.6b Total Addressable Market1 GLOBAL COMMERCIALIZATION • US is the focus of our growth efforts • New Zealand is a mature market • APAC in business development • Distribution considered in other markets on a case-by-case basis USA – Total Addressable Market (TAM)
Slide 38: Summary of Clinical Evidence
SUMMARY OF CLINICAL EVIDENCE Study Pop. Type Sensitivity (Sn) NPV Specificity (Sp) Comment AV Lotan et al., 2022 MH + GH* 97% 99.7% 90% Pooled data from US and Singapore cohorts (n=804) DRIVE (unpublished) (1) MH + GH* Study in progress Detect+ CV AUSSIE (unpublished) (4) MH + GH* Study to start thi
Slide 39: Footnotes for Clinical Evidence Summary
FOOTNOTES FOR CLINICAL EVIDENCE SUMMARY Footnotes 1 Observational study to validate performance characteristics and clinical utility of Cxbladder tests (Cxb Triage, Cxb Detect, Cxb Detect+). 2 Observational study to validate performance characteristics of Cxb Detect+ in patients with UC of the upper
Slide 40: References Summary of Clinical Evidence
REFERENCES SUMMARY OF CLINICAL EVIDENCE References + Detect Lotan et al., (2022). Urinary Analysis of FGFR3 and TERT Gene Mutations Enhances Performance of Cxbladder Tests and Improves Patient Risk Stratification. The Journal of Urology, 10-1097. Davidson et al., (2019). Inclusion of a molecular mar
Slide 41: Glossary
GLOSSARY • Sensitivity (Sn) - the frequency with which a test correctly identifies patients with a disease. • Specificity (Sp) - the frequency with which a test correctly identifies patients without a disease. • Negative Predictive Value (NPV) - the percentage of negative tests being true negatives
Slide 42: Pacific Edge Board and Management
PACIFIC EDGE BOARD AND MANAGEMENT CHRIS GALLAHER DR PETER MEINTJES Chairman Chief Executive Officer Chris has held senior positions in Peter is a molecular diagnostics and both CEO and CFO roles with large genomics leader focused on international companies and was a nascent market development of par
Slide 43: For More Information
FOR MORE INFORMATION: Dr. Peter Meintjes Chief Executive Officer email: peter.meintjes@pelnz.com Grant Gibson Chief Financial Officer email: grant.gibson@pelnz.com Pacific Edge 87 St David Street, PO Box 56, Dunedin, New Zealand P +64 3 577 6733 Within NZ 0800 555 562 email: investors@pacificedge.co