Pacific Edge Limited · NZX:PEB
Pacific Edge — H1 2021 Earnings Presentation
28 slides from Pacific Edge's earnings presentation, November 2020
Slide 1: Pacific Edge Interim Financial Results Presentation
PACIFIC EDGE INTERIM FINANCIAL RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020 1
Slide 2: Disclaimer
DISCLAIMER Information The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Pacific Edge Limited. The information in this present
Slide 3: Key Events and Commercial Milestones
KEY EVENTS AND COMMERCIAL MILESTONES • LOCAL COVERAGE DETERMINATION INCLUSION: Effective from 1 July for Cxbladder Detect and Cxbladder Monitor for patients covered under Centers for Medicare and Medicaid Services (CMS) in the USA. Three-month contribution in 1H21, inclusive of accruals. • COMMERCIA
Slide 4: COVID-19 Impact and Response
COVID-19 IMPACT AND RESPONSE • Restrictions on patients accessing • Pacific Edge operated as an essential business during medical care and testing. COVID restrictions in NZ and the USA. • Significant reduction in Total • Took steps to preserve cash and provide flexibility to Laboratory Throughput du
Slide 5: Adapting to COVID-19: Telehealth and Patient In-Home Sampling
ADAPTING TO COVID-19: TELEHEALTH and PATIENT IN-HOME SAMPLING • Dramatic increase in the use of telehealth as the primary mode of consultation for patient1. • Telehealth growth in the US supported by FDA and CMS, seen as a significant change in the US healthcare landscape. • Cxbladder’s patient in-h
Slide 6: LCD Inclusion Is a Transformational Reimbursement Milestone
LCD INCLUSION IS A TRANSFORMATIONAL CONSECUTIVE RECORD REVENUE MONTHS OVER THE FOUR MONTHS POST LCD IN JULY. REIMBURSEMENT MILESTONE • Two-months of cash contribution included in the 1H21 reporting period, plus accruals for expected cash receipts for tests not yet paid1 to 30 September. Successful i
Slide 7: Commercial Testing Underway with Kaiser Permanente
COMMERCIAL TESTING UNDERWAY WITH KAISER PERMANENTE Agreement reached with Kaiser Permanente, one of the USA’s largest non-profit healthcare providers, to commercially use all Cxbladder products nationally. ACTIVITY TO DATE: • Focus on integration of Cxbladder into Kaiser Permanente’s systems. Comple
Slide 8: Scale-Up of Commercial Operations in USA
SCALE-UP OF COMMERCIAL OPERATIONS IN USA Strengthened leadership team, recruited sales executive and sales reps to drive the growth following LCD and Kaiser Permanente commercial outcomes. • LARGE UROLOGY GROUPS, COMMUNITY PRACTICES AND PRIVATE PAYERS: Strengthened frontline US commercial team - add
Slide 9: Growing Evaluation and Use of Cxbladder by Large Healthcare Institutions
GROWING EVALUATION AND USE OF CXBLADDER BY LARGE HEALTHCARE INSTITUTIONS USA USA SOUTH EAST ASIA • Kaiser Permanente • University of California-San • Singapore General Hospital • Carolina Urologic Research Diego • Tan Tock Seng Center • University of California-San • Khoo Tech Puat Hospital • City o
Slide 10: Financial Result
FINANCIAL RESULT For six months ended 30 September 2020
Slide 11: A Big Step Forward for Pacific Edge in 1H21
A BIG STEP FORWARD FOR PACIFIC EDGE IN 1H21 OPERATING REVENUE TOTAL COMPREHENSIVE TOTAL LABORATORY INCREASED LOSS REDUCED THROUGHPUT +46% to $3.3 million Improved 25% to $(7.1)m Down 16% on pcp due to COVID-19 6,864 tests OPERATING EXPENSES REDUCED NET CASH, CASH EQUIVALENTS AND SHORT COMMERCIAL TES
Slide 12: Total Laboratory Throughput and Commercial Tests
TOTAL LABORATORY THROUGHPUT AND COMMERCIAL TESTS COMMERCIAL TEST NUMBERS Monthly Average COVID-19 restrictions affecting access to medical centres June to September 2020: and testing for patients, particularly in April and May. ongoing recovery post Average commercial Significant impact on test thro
Slide 13: USA Remains Our Primary Market
USA REMAINS OUR PRIMARY MARKET USA 72% of TLT 71% of commercial tests 87% of Operating Revenue 6,864 South East Asia Total Laboratory Throughput (TLT) Rest of World 28% of TLT Australia 5,591 29% of commercial tests Commercial Tests 13% of Operating Revenue New Zealand FY21 Interim Results Presentat
Slide 14: Multiple Cxbladder Products Adds Depth to Our Market
MULTIPLE CXBLADDER PRODUCTS ADDS DEPTH TO OUR MARKET Rest of World Monitor Triage 28% 24% 27% Total Laboratory Total Laboratory Throughput Throughput by Region by Test (as at 30 Sept 2020) (as at 30 Sept 2020) USA 72% Detect 49% FY21 Interim Results Presentation 14
Slide 15: Strong Financials in a COVID-19 Dominated Half
STRONG FINANCIALS IN A COVID-19 DOMINATED HALF (NZ$’000) 1H211 1H201 % Change Operating Revenue2 (test sales) 3,326 2,285 46% ü Total Revenue 4,060 2,701 50% ü Operating Expenses 11,153 12,090 (8)% ü Total Comprehensive Loss 7,079 9,406 (25)% ü Cash Receipts from Customers 2,553 2,350 9% ü Net Opera
Slide 16: Strong Revenue Growth Driven by Accelerating Reimbursement
STRONG REVENUE GROWTH DRIVEN BY ACCELERATING REIMBURSEMENT First Half Revenue Comparison 3.5 • Total operating revenue increased 46% on pcp. 3.0 0.8 • Revenue growth primarily driven by reimbursement 2.5 of CMS tests from 1 July onwards. • 1H21 included a 3 month revenue contribution from $Millions
Slide 17: Strong Revenue Growth Despite COVID-19
STRONG REVENUE GROWTH DESPITE COVID-19 OPERATING REVENUE 1H21 OPERATING REVENUE Total operating revenue: SPLIT BY GEOGRAPHY • U.S. increased 46% v 1H20 THREE MONTHS REVENUE 4 CONTRIBUTION FROM LCD INCLUSION IN 1H21 • ROW increased 40% v 1H20 3 COVID-19 • U.S. accounted for 87% of total IMPACTED FROM
Slide 18: Reduction in Monthly Cash Burn
REDUCTION IN MONTHLY CASH BURN CASH BURN • 1H21 average monthly cash burn -1.1 reduced 6% on pcp and 15% on 2H20. 1H19 2H19 1H20 2H20 1H21 -1.2 • Q221 average monthly cash burn reduced 23% on pcp – driven by CMS NZD Millions -1.3 reimbursement. • LCD coverage has significantly -1.4 improved cash con
Slide 19: Significant Improvement in Cash Payment Terms
SIGNIFICANT IMPROVEMENT IN CASH PAYMENT TERMS • Key reimbursement events driving improving AVERAGE DAYS TO PAYMENT ON US time to payment for most tests. TESTS 100 • Significant improvement in cash conversion Pre-LCD driven by LCD inclusion. 80 • CMS tests paid in approximately 30 days. 60 • Other US
Slide 20: Growth Catalysts and Outlook
GROWTH CATALYSTS AND OUTLOOK For all markets our key objectives remain; achieving commercial contracts with large institutional healthcare customers, growing sales to existing customers, gaining stronger inclusion in guidelines and targeting private payers for coverage inclusion
Slide 21: Significant Recent Progress Underpins Future Growth
SIGNIFICANT RECENT PROGRESS UNDERPINS FUTURE GROWTH SIGNIFICANT COMMERCIAL AND REIMBURSEMENT MILESTONES ACHIEVED IN THE US • Inclusion in LCD and commercial agreement with Kaiser Permanente COMPETITIVE ADVANTAGE CONTINUES TO GROW • Clinical validation, published evidence, inclusion in guidelines, In
Slide 22: Accelerating U.S. Growth Is Our Key Objective
ACCELERATING U.S. GROWTH IS OUR KEY OBJECTIVE • Investment into expanded commercial operations in USA. • Leverage LCD inclusion to gain reimbursement coverage with private payers (insurance companies). • Leverage Kaiser Permanente agreement to complete commercial agreements with other healthcare ins
Slide 23: Continuing Progress in Rest of World Markets
CONTINUING PROGRESS IN ‘REST OF WORLD’ MARKETS NEW ZEALAND AUSTRALIA AND SOUTH EAST ASIA (SEA) • Bring NZ business to a cash-flow positive position. • Transition Australia and Singapore public health care providers from their clinical • Extend commercial coverage by public healthcare studies to a co
Slide 24: Strong Growth Outlook for 2H21 and Beyond
STRONG GROWTH OUTLOOK FOR 2H21 AND BEYOND • Momentum has continued into the second half of FY21 with U.S. cash receipts for October increasing 68% on pcp. • Test use and revenue growth expected to continue to escalate in 2H21 and beyond. • Expect increasing number of commercial tests from CMS and Ka
Slide 25: Enquiries to: David Darling, Chief Executive Officer
Enquiries to: David Darling www.pacificedge.co.nz Chief Executive Officer www.cxbladder.com Pacific Edge Limited www.pacificedgedx.com Tel: +64 3 479 5802 Mobile: +64 21 797981 Email: david.darling@pelnz.com FY21 Interim Results Presentation 25
Slide 26: Cxbladder's Pivotal Commercial Customers
CXBLADDER’S PIVOTAL COMMERCIAL CUSTOMERS
Slide 27: Glossary
GLOSSARY • CMS: Centres for Medicare and Medicaid in the US. Provide insurance coverage for healthcare of all US citizens over the age of 65 years. This is approximately 62 million patients. • Commercial Tests: Tests that have been analysed by Pacific Edge, for a specific customer, including the Use
Slide 28: Glossary
GLOSSARY • Rule-Out Tests: A relatively new form of diagnostic process requiring performance metrics of high sensitivity and a high Negative Predictive Value (NPV). High sensitivity and high NPV will provide an accurate ruling out of patients who do not have disease. • Rule-In Tests: More convention